Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 333-179121 | |
Entity Registrant Name | Hughes Satellite Systems Corporation | |
Entity Incorporation, State or Country Code | CO | |
Entity Tax Identification Number | 45-0897865 | |
Entity Address, Address Line One | 100 Inverness Terrace East, | |
Entity Address, City or Town | Englewood, | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80112-5308 | |
City Area Code | (303) | |
Local Phone Number | 706-4000 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,078 | |
Entity Central Index Key | 0001533758 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||||
Cash and cash equivalents | $ 1,228,361 | $ 1,139,435 | $ 847,823 | |
Marketable investment securities | 524,941 | 652,835 | ||
Trade accounts receivable and contract assets, net | 187,812 | 196,520 | ||
Other current assets, net | 315,371 | 301,652 | ||
Total current assets | 2,256,485 | 2,290,442 | ||
Non-current assets: | ||||
Property and equipment, net | 1,750,561 | 1,857,581 | ||
Operating lease right-of-use assets | 119,711 | 113,399 | ||
Goodwill | 509,315 | 506,953 | ||
Regulatory authorizations, net | 411,243 | 412,363 | 400,043 | |
Other intangible assets, net | 25,663 | 29,321 | ||
Other investments, net | 108,952 | 110,040 | ||
Other non-current assets, net | 256,775 | 251,936 | ||
Total non-current assets | 3,182,220 | 3,281,593 | ||
Total assets | 5,438,705 | 5,572,035 | ||
Current liabilities: | ||||
Trade accounts payable | 106,339 | 121,552 | ||
Contract liabilities | 99,266 | 101,060 | ||
Accrued expenses and other current liabilities | 231,890 | 258,417 | ||
Total current liabilities | 437,495 | 481,029 | ||
Non-current liabilities: | ||||
Long-term debt | 2,390,218 | 2,389,168 | ||
Deferred tax liabilities, net | 381,221 | 380,316 | ||
Operating lease liabilities | 105,457 | 96,879 | ||
Other non-current liabilities | 88,596 | 90,480 | ||
Total non-current liabilities | 2,965,492 | 2,956,843 | ||
Total liabilities | 3,402,987 | 3,437,872 | ||
Commitments and contingencies | ||||
Shareholder's equity: | ||||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding at both March 31, 2020 and December 31, 2019 | 0 | 0 | ||
Common stock, $0.01 par value, 1,000,000 shares authorized, 1,078 shares issued and outstanding at both March 31, 2020 and December 31, 2019 | 0 | 0 | ||
Additional paid-in capital | 1,483,747 | 1,478,636 | ||
Accumulated other comprehensive income (loss) | (154,033) | (84,636) | ||
Accumulated earnings (losses) | 647,775 | 664,415 | ||
Total Hughes Satellite Systems Corporation shareholder's equity | 1,977,489 | 2,058,415 | ||
Non-controlling interests | 58,229 | 75,748 | ||
Total shareholder's equity | 2,035,718 | 2,134,163 | $ 2,392,495 | |
Total liabilities and shareholder's equity | $ 5,438,705 | $ 5,572,035 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
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 - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue: | ||
Total revenue | $ 467,547 | $ 455,199 |
Costs and expenses: | ||
Selling, general and administrative expenses | 115,860 | 102,337 |
Research and development expenses | 6,254 | 6,888 |
Depreciation and amortization | 125,965 | 112,411 |
Total costs and expenses | 437,872 | 408,729 |
Operating income (loss) | 29,675 | 46,470 |
Other income (expense): | ||
Interest income, net | 8,892 | 17,997 |
Interest expense, net of amounts capitalized | (42,192) | (57,915) |
Gains (losses) on investments, net | (164) | (346) |
Equity in earnings (losses) of unconsolidated affiliates, net | (1,087) | (1,072) |
Foreign currency transaction gains (losses), net | (7,528) | 211 |
Other, net | (278) | (165) |
Total other income (expense), net | (42,357) | (41,290) |
Income (loss) from continuing operations before income taxes | (12,682) | 5,180 |
Income tax benefit (provision), net | (5,231) | (4,872) |
Net income (loss) from continuing operations | (17,913) | 308 |
Net income (loss) from discontinued operations | 0 | 22,724 |
Net income (loss) | (17,913) | 23,032 |
Less: Net loss (income) attributable to non-controlling interests | 3,442 | (806) |
Net income (loss) attributable to Hughes Satellite Systems Corporation | (14,471) | 22,226 |
Services and other revenue | ||
Revenue: | ||
Total revenue | 410,238 | 403,485 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 143,885 | 142,086 |
Equipment revenue | ||
Revenue: | ||
Total revenue | 57,309 | 51,714 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | $ 45,908 | $ 45,007 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (17,913) | $ 23,032 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation | (82,836) | (838) |
Unrealized gains (losses) on available-for-sale debt securities | (2,479) | 2,353 |
Other | (405) | 33 |
Amounts reclassified to net income (loss): | ||
Realized losses (gains) on available-for-sale debt securities | 0 | (385) |
Total other comprehensive income (loss) | (85,720) | 1,163 |
Comprehensive income (loss) | (103,633) | 24,195 |
Less: Comprehensive loss (income) attributable to non-controlling interests | 19,765 | (806) |
Comprehensive income (loss) attributable to Hughes Satellite Systems Corporation | $ (83,868) | $ 23,389 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHARESHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Earnings (Losses) | Non-controlling Interests |
Beginning balance at Dec. 31, 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 | |||
Purchase of non-controlling interest | (7,313) | (2,666) | (4,647) | ||
Other comprehensive income (loss) | 1,163 | 1,163 | 0 | ||
Net income (loss) | 23,032 | 22,226 | 806 | ||
Other, net | (323) | (323) | |||
Ending balance at Mar. 31, 2019 | 2,410,487 | 1,765,481 | (82,611) | 716,183 | 11,434 |
Beginning balance at Dec. 31, 2019 | 2,134,163 | 1,478,636 | (84,636) | 664,415 | 75,748 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 1,457 | 1,457 | |||
Issuance of equity and contribution of assets pursuant to the Yahsat JV formation | 2,824 | 4,338 | (1,514) | ||
Contribution by non-controlling interest holder | 4,000 | 4,000 | |||
Other comprehensive income (loss) | (85,720) | (69,397) | (16,323) | ||
Net income (loss) | (17,913) | (14,471) | (3,442) | ||
Other, net | (684) | (684) | |||
Ending balance at Mar. 31, 2020 | $ 2,035,718 | $ 1,483,747 | $ (154,033) | $ 647,775 | $ 58,229 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (17,913) | $ 23,032 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||
Depreciation and amortization | 125,965 | 143,530 |
Losses (gains) on investments, net | 164 | 346 |
Equity in losses (earnings) of unconsolidated affiliates, net | 1,087 | 1,072 |
Foreign currency transaction losses (gains), net | 7,528 | (211) |
Deferred tax provision (benefit), net | 1,526 | 9,936 |
Stock-based compensation | 1,457 | 1,433 |
Amortization of debt issuance costs | 1,050 | 2,010 |
Other, net | (810) | 1,370 |
Changes in assets and liabilities, net: | ||
Trade accounts receivable and contract assets, net | (8,162) | (19,228) |
Other current assets, net | (21,268) | (11,098) |
Trade accounts payable | (10,984) | 8,122 |
Contract liabilities | (3,213) | 17,931 |
Accrued expenses and other current liabilities | (5,007) | (13,450) |
Non-current assets and non-current liabilities, net | (6,196) | 6,170 |
Net cash flows from operating activities | 65,224 | 170,965 |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | (365,877) | (240,188) |
Sales and maturities of marketable investment securities | 490,020 | 468,745 |
Expenditures for property and equipment | (91,517) | (73,929) |
Expenditures for externally marketed software | (8,638) | (7,600) |
Net cash flows from investing activities | 23,988 | 147,028 |
Cash flows from financing activities: | ||
Repurchase of the 2019 Senior Secured Notes | 0 | (8,046) |
Payment of finance lease obligations | (215) | (9,882) |
Payment of in-orbit incentive obligations | (203) | (1,573) |
Contribution by non-controlling interest holder | 4,000 | 0 |
Purchase of non-controlling interest | 0 | (7,312) |
Other, net | 979 | 0 |
Net cash flows from financing activities | 4,561 | (26,813) |
Effect of exchange rates on cash and cash equivalents | (4,618) | (117) |
Net increase (decrease) in cash and cash equivalents | 89,155 | 291,063 |
Cash and cash equivalents, including restricted amounts, beginning of period | 1,140,322 | 848,619 |
Cash and cash equivalents, including restricted amounts, end of period | $ 1,229,477 | $ 1,139,682 |
Organization and Business Activ
Organization and Business Activities | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS ACTIVITIES | ORGANIZATION AND BUSINESS ACTIVITIES Principal Business Hughes Satellite Systems Corporation (which, together with its subsidiaries, is referred to as “HSSC,” the “Company,” “we,” “us” and “our”) is a holding company and a subsidiary of EchoStar Corporation (“EchoStar”). We are a global provider of broadband satellite technologies, broadband internet services for consumer customers, which include home and small to medium-sized businesses, and satellite services. We also deliver innovative network technologies, managed services and communications solutions for enterprise customers, which include aeronautical and government enterprises. We operate in the following two business segments: • Hughes — which provides broadband satellite technologies and broadband internet services to domestic and international consumer customers and broadband network technologies, managed services, equipment, hardware, satellite services and communication solutions to service providers and enterprise customers. The Hughes segment also designs, provides and installs gateway and terminal equipment to customers for other satellite systems. In addition, our Hughes segment designs, develops, constructs and provides telecommunication networks comprising satellite ground segment systems and terminals to mobile system operators and our enterprise customers. • ESS — which uses certain of our owned and leased in-orbit satellites and related licenses to provide satellite services on a full-time and/or occasional-use basis to U.S. government service providers, internet service providers, broadcast news organizations, content providers and private enterprise customers. Our operations also include various corporate departments (primarily Executive, Treasury, Strategic Development, Human Resources, IT, Finance, Accounting, Real Estate and Legal) and other activities that have not been assigned to our business 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 . We also divide our operations by primary geographic market as follows: (i) North America (the U.S. and its territories, Mexico, and Canada); (ii) South and Central America and; (iii) All other (Asia, Africa, Australia, Europe, India, and the Middle East). Refer to Note 13 . Segment Reporting for further detail . In September 2019, pursuant to a master transaction agreement (the “Master Transaction Agreement”) with DISH Network Corporation (“DISH”) and a wholly-owned subsidiary of DISH (“Merger Sub”), (i) EchoStar and its subsidiaries and we and our subsidiaries transferred certain real property and the various businesses, products, licenses, technology, revenues, billings, operating activities, assets and liabilities primarily related to the former portion of our ESS segment that managed, marketed and provided (1) broadcast satellite services primarily to DISH and its subsidiaries (together with DISH, “DISH Network”) and EchoStar’s joint venture Dish Mexico, S. de R.L. de C.V. (“Dish Mexico”) and its subsidiaries, and (2) telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network and a portion of EchoStar’s and our other businesses (collectively, the “BSS Business”) to one of our former subsidiaries, EchoStar BSS Corporation (“BSS Corp.”), (ii) EchoStar distributed to each holder of shares of EchoStar’s Class A or Class B common stock entitled to receive consideration in the transaction an amount of shares of common stock of BSS Corp., par value $0.001 per share (“BSS Common Stock”), equal to one share of BSS Common Stock for each share of EchoStar’s Class A or Class B common stock owned by such EchoStar stockholder (the “Distribution”); and (iii) immediately after the Distribution, (1) Merger Sub merged with and into BSS Corp. (the “Merger”), such that BSS Corp. became a wholly-owned subsidiary of DISH and with DISH then owning and operating the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”). Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. As a result of the BSS Transaction, the financial results of the BSS Business, except for certain real estate that transferred in the transaction, are presented as discontinued operations and, as such, excluded from continuing operations and segment results for the three months ended March 31, 2019, as presented in these unaudited Condensed Consolidated Financial Statements and the accompanying notes (collectively, the “Condensed Consolidated Financial Statements”). All amounts in the following footnotes reference results from continuing operations unless otherwise noted. Refer to Note 4 . Discontinued Operations |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These Condensed Consolidated Financial Statements are prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required for complete financial statements prepared in conformity with U.S. GAAP. In our opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. However, our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. All amounts presented in these Condensed Consolidated Financial Statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted. Refer to Note 2. Summary of Significant Accounting Policies to the consolidated financial statements in our Form 10-K for a summary and discussion of our significant accounting policies, except as updated below. Use of Estimates We are required to make certain estimates and assumptions that affect the amounts reported in these Condensed Consolidated Financial Statements. The most significant estimates and assumptions are used in determining: (i) inputs used to recognize revenue over time, including amortization periods for deferred contract acquisition costs; (ii) allowances for doubtful accounts; (iii) deferred taxes and related valuation allowances, including uncertain tax positions; (iv) loss contingencies; (v) fair value of financial instruments; (vi) fair value of assets and liabilities acquired in business combinations; and (vii) asset impairment testing. We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts and such differences may be material to our consolidated financial statements. Additionally, changing economic and other conditions may increase the inherent uncertainty in the estimates and assumptions indicated above. We review our estimates and assumptions periodically and the effects of revisions thereto are reflected in the period they occur or prospectively if the revised estimates or assumptions affect future periods. Principles of Consolidation We consolidate all entities in which we have a controlling financial interest. We are deemed to have a controlling financial interest in variable interest entities in which we are the primary beneficiary and in other entities in which we own more than 50% of the outstanding voting shares and other shareholders do not have substantive rights to participate in management. For entities we control but do not wholly own, we record a non-controlling interest within shareholder’s equity for the portion of the entity’s equity attributed to the non-controlling ownership interests. All significant intercompany balances and transactions have been eliminated in consolidation. Reclassification Certain prior period amounts have been reclassified to conform with the current period presentation. Recently Adopted Accounting Pronouncements Credit Losses On January 1, 2020, we adopted Accounting Standards Update (“ASU”) No. 2016-13 - Financial Instruments - Credit Losses (Topic 326) , as amended, and codified in Accounting Standards Codification Topic 326 (“ASC 326”). ASC 326 introduces a new approach to the periodic estimation of credit losses for certain financial assets 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 that have experienced credit deterioration since their original purchase. We have elected to apply the requirements of the new standard prospectively and we recognized a cumulative effect of adoption of $2.2 million to Accumulated earnings (losses) as of January 1, 2020. Based on this election, we did not restate our comparative Condensed Consolidated Financial Statements and they continue to be reported under the accounting standards in effect for the periods before January 1, 2020. The following describes the accounting impacts, by major balance sheet line item, of our adoption of this new standard based on the relevant types of losses that we and our equity method investees may be subject to: • Trade Accounts Receivable and Contract Assets, Net — Our trade accounts receivables and contract assets consist of amounts due from both our consumer and enterprise customers. Our receivables and related credit losses for our consumer customers are limited due to policies that require advance payment for services, predominant use of credit card and ACH payment processes, and our ability to promptly terminate service when timely payments are not received. However, for our enterprise customers, we estimate expected credit losses on a collective basis based on our historical loss experience, as adjusted to reflect changes in relevant factors, such as macroeconomic conditions and customer mix, that can significantly impact collectability. We apply our collective estimation processes separately to several pools of receivables that share common risk characteristics, generally based on the customers’ geographical location. Customers with significant past-due balances or other atypical characteristics are excluded from our collective analysis and evaluated on a case-by-case basis. Our estimates of expected credit losses for such receivables reflect significant judgments that consider customer-specific matters such as the customer’s financial condition, payment history, and recent developments in the customer’s business and industry. Due to the short-term nature of our trade receivables and contract assets, forecasts about the future have limited relevance to our expected credit loss estimates. We record our customer related estimated credit losses as a component of our bad debt expense as reported in Selling, general and administrative expenses . • Other Current Assets, Net, and Other Non-current Assets, Net — We estimate expected credit losses for receivables with payment terms longer than one year separately by borrower, due to the unique risk characteristics of such receivables. We generally use discounted cash flow techniques to estimate such credit losses. In applying such techniques, we may estimate principal and interest cash flows under probability-weighted scenarios that consider entity-specific matters and forecasted economic conditions. The majority of our other non-current receivables are from entities in the telecommunications industry. The collection of contractual principal and interest on these receivables is highly dependent on the future business operations of those entities. Our estimation of expected credit losses for such receivables requires significant judgment about matters specific to the borrower and their industry. Accordingly, our actual collection experience may differ from the assumptions reflected in our expected credit loss estimates. We record our estimated credit losses as a component of our bad debt expense as reported in Selling, general and administrative expenses . Financial Impact of Adoption. Our adoption of this new standard resulted in the following adjustments to our Condensed Consolidated Balance Sheet: Balance at December 31, 2019 Adoption of Balance at Trade accounts receivable and contract assets, net $ 196,520 $ (13,672 ) $ 182,848 Other current assets, net $ 301,652 $ 6,723 $ 308,375 Other non-current assets, net $ 251,936 $ 4,050 $ 255,986 Total assets $ 5,572,035 $ (2,899 ) $ 5,569,136 Deferred tax liabilities, net $ 380,316 $ (490 ) $ 379,826 Accumulated earnings (losses) $ 664,415 $ (2,169 ) $ 662,246 Non-controlling interests $ 75,748 $ (240 ) $ 75,508 Total shareholder's equity $ 2,134,163 $ (2,409 ) $ 2,131,754 Total liabilities and shareholder's equity $ 5,572,035 $ (2,899 ) $ 5,569,136 The application of ASC 326 requirements did not materially affect our Condensed Consolidated Statements of Operations for the three months ended March 31, 2020. Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) . ASU 2019-12 is part of the FASB’s overall simplification initiative and seeks to simplify the accounting for income taxes by updating certain guidance and removing certain exceptions. The updated guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. Early adoption is permitted. We are currently assessing the impact of adopting this new guidance. In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates (“IBORs”) to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. The guidance may be applied upon issuance of ASC 848 through December 31, 2022. We are currently assessing the impact of adopting this new guidance, but do not expect it to have a material impact on our consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Contract Balances The following table presents the components of our contract balances: As of March 31, 2020 December 31, 2019 Trade accounts receivable and contract assets, net: Sales and services $ 147,288 $ 152,632 Leasing 4,194 4,016 Total trade accounts receivable 151,482 156,648 Contract assets 46,938 63,649 Allowance for doubtful accounts (10,608 ) (23,777 ) Total trade accounts receivable and contract assets, net $ 187,812 $ 196,520 Contract liabilities: Current $ 99,266 $ 101,060 Non-current 9,426 10,572 Total contract liabilities $ 108,692 $ 111,632 For the three months ended March 31, 2020 and 2019 , we recognized revenue of $52.2 million and $39.5 million , respectively, that were previously included in the contract liability balances as of December 31, 2019 and 2018 , respectively. The following table presents the activity in our allowance for doubtful accounts: Balance at Credit Losses (1) Deductions Foreign Currency Translation Balance at For the three months ended: March 31, 2020 $ 23,777 $ (5,754 ) $ (6,325 ) $ (1,090 ) $ 10,608 March 31, 2019 $ 16,604 $ 4,177 $ (6,738 ) $ (15 ) $ 14,028 (1) The impact of adopting ASC 326 on January 1, 2020 was a net decrease to our allowance for doubtful accounts largely driven by a $13.4 million reclassification to Other current assets, net and Other non-current assets, net , offset by a $2.9 million adjustment to Accumulated earnings (losses) . Contract Acquisition Costs The following table presents our unamortized contract acquisition costs: As of March 31, 2020 December 31, 2019 Unamortized contract acquisition costs $ 110,397 $ 113,592 The following table presents the amortization of our contract acquisition costs: For the three months 2020 2019 Amortization expense $ 25,431 $ 21,115 Transaction Price Allocated to Remaining Performance Obligations As of March 31, 2020 , the remaining performance obligations for our customer contracts with original expected durations of more than one year was $736.6 million . We expect to recognize 39.6% of our remaining performance obligations of these contracts as revenue in the next twelve months. This amount e xcludes agreements with consumer customers in our Hughes segment, our leasing arrangements and agreements with certain customers under which collectability of all amounts due through the term of contracts is uncertain. Disaggregation of Revenue Geographic Information The following table presents our revenue from customer contracts disaggregated by primary geographic market and by segment: Hughes ESS Corporate and Other Consolidated For the three months ended March 31, 2020 North America $ 382,715 $ 4,652 $ (285 ) $ 387,082 South and Central America 33,956 — — 33,956 Other 41,811 — 4,698 46,509 Total revenue $ 458,482 $ 4,652 $ 4,413 $ 467,547 For the three months ended March 31, 2019 North America $ 367,829 $ 4,033 $ 1,005 $ 372,867 South and Central America 26,863 — — 26,863 Other 50,645 — 4,824 55,469 Total revenue $ 445,337 $ 4,033 $ 5,829 $ 455,199 Nature of Products and Services The following table presents our revenue disaggregated by the nature of products and services and by segment: Hughes ESS Corporate and Other Consolidated For the three months ended March 31, 2020 Services and other revenue: Services $ 390,000 $ 2,765 $ — $ 392,765 Lease revenue 11,173 1,887 4,413 17,473 Total services and other revenue 401,173 4,652 4,413 410,238 Equipment revenue: Equipment 24,839 — — 24,839 Design, development and construction services 31,557 — — 31,557 Lease revenue 913 — — 913 Total equipment revenue 57,309 — — 57,309 Total revenue $ 458,482 $ 4,652 $ 4,413 $ 467,547 For the three months ended March 31, 2019 Services and other revenue: Services $ 380,783 $ 2,817 $ 322 $ 383,922 Lease revenue 12,840 1,216 5,507 19,563 Total services and other revenue 393,623 4,033 5,829 403,485 Equipment revenue: Equipment 25,960 — — 25,960 Design, development and construction services 25,066 — — 25,066 Lease revenue 688 — — 688 Total equipment revenue 51,714 — — 51,714 Total revenue $ 445,337 $ 4,033 $ 5,829 $ 455,199 Lease Revenue The following table presents our lease revenue by type of lease: For the three months 2020 2019 Sales-type lease revenue: Revenue at lease commencement $ 913 $ 688 Interest income 69 252 Total sales-type lease revenue 982 940 Operating lease revenue 17,404 19,311 Total lease revenue $ 18,386 $ 20,251 Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $6.6 million and $6.5 million as of March 31, 2020 and December 31, 2019 , respectively. The following table presents future operating lease payments to be received as of March 31, 2020 : Amounts Year ending December 31, 2020 (remainder) $ 27,691 2021 34,910 2022 32,052 2023 30,285 2024 28,219 2025 and beyond 123,520 Total lease payments $ 276,677 The following table presents amounts for assets subject to operating leases, which are included in Property and equipment, net : As of March 31, 2020 December 31, 2019 Cost Accumulated Depreciation Net Cost Accumulated Depreciation Net Customer premises equipment $ 1,488,031 $ (1,123,861 ) $ 364,170 $ 1,458,298 $ (1,074,968 ) $ 383,330 Satellites 104,620 (33,104 ) 71,516 104,620 (31,360 ) 73,260 Total $ 1,592,651 $ (1,156,965 ) $ 435,686 $ 1,562,918 $ (1,106,328 ) $ 456,590 The following table presents depreciation expense for assets subject to operating leases, which is included in Depreciation and amortization : For the three months 2020 2019 Customer premises equipment $ 49,504 $ 49,712 Satellites 1,744 1,737 Real estate — 217 Total $ 51,248 $ 51,666 |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATION | DISCONTINUED OPERATIONS BSS Business The following table presents the financial results of our discontinued operations for the BSS Business for the three months ended March 31, 2019: Amounts Revenue: Services and other revenue - DISH Network $ 70,826 Services and other revenue - other 6,400 Total revenue 77,226 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) 10,217 Selling, general and administrative expenses 20 Depreciation and amortization 31,119 Total costs and expenses 41,356 Operating income (loss) 35,870 Other income (expense): Interest expense (6,498 ) Total other income (expense), net (6,498 ) Income (loss) from discontinued operations before income taxes 29,372 Income tax benefit (provision), net (6,648 ) Net income (loss) from discontinued operations $ 22,724 No assets or liabilities attributable to our discontinued operations of the BSS Business were held by us as of March 31, 2020 or December 31, 2019 . The following table presents the significant supplemental cash flow information and adjustments to reconcile net income to net cash flow from operating activities for discontinued operations of the BSS Business for the three months ended March 31, 2019: Amounts Operating activities: Net income (loss) from discontinued operations $ 22,724 Depreciation and amortization $ 31,119 Investing activities: Expenditures for property and equipment $ 108 Financing activities: Payment of finance lease obligations $ 9,597 Payment of in-orbit incentive obligations $ 1,035 Terminated or Transferred Related Party Agreements Effective September 10, 2019, the following agreements were terminated or transferred to DISH Network as part of the BSS Transaction. Unless noted differently below, we have no further obligations and have neither earned additional revenue nor incurred additional expense, as applicable, under or in connection with these agreements after the consummation of the BSS Transaction. DBS Transponder Lease. EchoStar leased satellite capacity from us on eight direct broadcast satellite (“DBS”) transponders on the QuetzSat-1 satellite through November 2021, after which EchoStar had certain options to renew the agreement on a year-to year basis through the end of life of the QuetzSat-1 satellite. EchoStar XXIII Launch Facilitation and Operational Control Agreement. As part of applying for the launch license for the EchoStar XXIII satellite through the UK Space Agency, we and a subsidiary of EchoStar, EchoStar Operating L.L.C. (“EOC”), entered into an agreement in March 2016 to transfer to us EOC’s launch service contracts for the EchoStar XXIII satellite and to grant us certain rights to control its in-orbit operations. EOC retained ownership of the satellite and agreed to make additional payments to us for amounts that we were required to pay under the launch service contract. In 2016, we recorded additions to Other non-current assets, net and corresponding increases in Additional paid-in capital in the Condensed Consolidated Balance Sheet to reflect EOC’s cumulative payments under the launch service contract prior to the transfer date and to reflect EOC’s funding of additional cash payments to the launch service provider. The EchoStar XXIII satellite was successfully launched in March 2017. We recorded decreases in Other non-current assets, net and Additional paid-in capital of $62.0 million , representing the carrying amount of the launch service contract at the time of launch to reflect the consumption of the contract’s economic benefits by EOC. Satellite Capacity Leased to DISH Network. We entered into certain agreements to lease satellite capacity pursuant to which we provided satellite services to DISH Network on certain satellites, as listed below, owned or leased by us. The fees for the services provided under these agreements depended, among other things, upon the orbital location of the applicable satellite, the number of transponders that provided services on the applicable satellite and the length of the service arrangements. The terms of each of the agreements are 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 satellite, the EchoStar X satellite, the EchoStar XI satellite and the EchoStar XIV satellite. • EchoStar XII — DISH Network leased satellite capacity from us on the EchoStar XII satellite. • EchoStar XVI — In December 2009, we entered into an agreement to lease satellite capacity to DISH Network, pursuant to which DISH Network leased satellite capacity from us on the EchoStar XVI satellite beginning in January 2013. • Nimiq 5 Agreement — In September 2009, we entered into an agreement with Telesat Canada to lease satellite capacity from Telesat Canada on all 32 direct broadcast satellite (“DBS”) transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we entered into an agreement with DISH Network, pursuant to which DISH Network leased satellite capacity from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement (the “DISH Nimiq 5 Agreement”). Under the terms of the DISH Nimiq 5 Agreement, DISH Network made certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service. Following the consummation of the BSS Transaction, we retained certain obligations related to DISH Network’s performance under the Telesat Transponder Agreement. • QuetzSat-1 Agreement — In November 2008, we entered into an agreement to lease satellite capacity from SES Latin America, which provided, 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 leased 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, we and DISH Network entered into an agreement pursuant to which we leased back from DISH Network certain satellite capacity on five DBS transponders on the QuetzSat-1 satellite. TT&C Agreement. Effective January 2012, we entered into a TT&C agreement pursuant to which we provided TT&C services to DISH Network, which we subsequently amended (the “2012 TT&C Agreement”). The fees for services provided under the 2012 TT&C Agreement were calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which varied depending on the nature of the services provided. Real Estate Lease. During 2017, EchoStar and certain of its and our subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries whereby EchoStar and certain of its and our subsidiaries received all the shares of preferred tracking stock previously issued by EchoStar and Hughes Satellite Systems Corporation (the “Tracking Stock”) in exchange for 100% of the equity interests of certain of EchoStar’s subsidiaries that held substantially all of the former EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). Prior to the Share Exchange, a subsidiary of 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 and DISH Network amended this agreement to, among other things, provide for a continued lease to DISH Network of the portion of the property we retained (the “Cheyenne Data Center”). The rent on a per square foot basis for the lease was comparable to per square foot rental rates of similar commercial property in the same geographic area at the time of the lease or subsequent amendments, and DISH Network was responsible for its portion of the taxes, insurance, utilities and maintenance of the premises. In connection with the BSS Transaction, we transferred the Cheyenne Data Center to DISH Network. This lease does not qualify for discontinued operations treatment, and therefore the revenue from it has not been treated as discontinued operations. |
Business Combinations (Notes)
Business Combinations (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | BUSINESS COMBINATIONS In May 2019, we entered into an agreement with Al Yah Satellite Communications Company PrJSC (“Yahsat”) pursuant to which, in November 2019, Yahsat contributed its satellite communications services business in Brazil to one of our Brazilian subsidiaries in exchange for a 20% equity ownership interest in that subsidiary (the “Yahsat Brazil JV Transaction”). The combined business provides broadband internet services and enterprise solutions in Brazil using the Telesat T19V satellite, the Eutelsat 65W satellite and Yahsat’s Al Yah 3 satellite. The results of operations related to the business we acquired from Yahsat have been included in these Condensed Consolidated Financial Statements from the date of acquisition. Through March 31, 2020, we have incurred $1.6 million of costs associated with the closing of the Yahsat Brazil JV Transaction. All assets and liabilities acquired from Yahsat have been recorded at fair value. The following table presents our updated preliminary allocation of the purchase price: Amounts Assets: Cash and cash equivalents $ 7,858 Other current assets, net 7,106 Property and equipment 86,983 Regulatory authorization 4,498 Goodwill 6,328 Other non-current assets, net 1,502 Total assets $ 114,275 Liabilities: Trade accounts payable $ 3,879 Accrued expenses and other current liabilities 4,796 Total liabilities $ 8,675 Total purchase price (1) $ 105,600 (1) Based on the value determined for the equity ownership interest issued by our Brazilian subsidiary as consideration for the business acquired by us in the Yahsat Brazil JV Transaction. The following preliminary valuation of the acquired assets was derived using primarily unobservable Level 3 inputs, which require significant management judgment and estimation: Amounts Satellite payload $ 49,363 Regulatory authorization 4,498 Total $ 53,861 The satellite payload and regulatory authorization were valued using an income approach and are being amortized over seven and 11 years , respectively. We recognized goodwill of $6.3 million , including a currency translation adjustment of $1.2 million . The goodwill is attributable to expected synergies, the projected long-term business growth in current and new markets and an assembled workforce. This goodwill has been allocated entirely to our Hughes segment. |
Marketable Investment Securitie
Marketable Investment Securities | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE INVESTMENT SECURITIES | The following table presents our Marketable investment securities : As of March 31, 2020 December 31, 2019 Marketable investment securities: Debt securities: Available-for-sale: Corporate bonds $ 319,295 $ 411,706 Other debt securities 205,569 240,888 Total available-for-sale debt securities 524,864 652,594 Equity securities 77 241 Total marketable investment securities $ 524,941 $ 652,835 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 . Available-for-Sale The following table presents the components of our available-for-sale debt securities: Amortized Unrealized Estimated Cost Gains Losses Fair Value As of March 31, 2020 Corporate bonds $ 321,466 $ — $ (2,171 ) $ 319,295 Other debt securities 205,569 — — 205,569 Total available-for-sale debt securities $ 527,035 $ — $ (2,171 ) $ 524,864 As of December 31, 2019 Corporate bonds $ 411,312 $ 395 $ (1 ) $ 411,706 Other debt securities 240,887 1 — 240,888 Total available-for-sale debt securities $ 652,199 $ 396 $ (1 ) $ 652,594 The following table presents the activity on our available-for-sale debt securities: For the three months 2020 2019 Proceeds from sales $ 10,000 $ 311,823 Gains (losses) on sales, net $ — $ 385 As of March 31, 2020 , we have $491.9 million of available-for-sale debt securities with contractual maturities of one year or less and $33.0 million Equity Securities The following table presents the activity of our equity securities: For the three months 2020 2019 Gains (losses) on investments, net $ (164 ) $ (732 ) For the three months ended March 31, 2020 and 2019, we did not have any sales of equity securities. Fair Value Measurements The following table presents our marketable investment securities categorized by the fair value hierarchy, certain of which have historically experienced volatility: As of March 31, 2020 December 31, 2019 Level 1 Level 2 Total Level 1 Level 2 Total Available-for-sale debt securities: Corporate bonds $ — $ 319,295 $ 319,295 $ — $ 411,706 $ 411,706 Other debt securities — 205,569 205,569 — 240,888 240,888 Total available-for-sale debt securities — 524,864 524,864 — 652,594 652,594 Equity securities 77 — 77 241 — 241 Total marketable investment securities $ 77 $ 524,864 $ 524,941 $ 241 $ 652,594 $ 652,835 As of March 31, 2020 and December 31, 2019 , we did not have any investments that were categorized within Level 3 of the fair value hierarchy. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The following tables presents the components of Property and equipment, net : As of March 31, 2020 December 31, 2019 Property and equipment, net: Satellites, net $ 1,059,542 $ 1,127,521 Other property and equipment, net 691,019 730,060 Total property and equipment, net $ 1,750,561 $ 1,857,581 Satellites As of March 31, 2020 , our operating satellite fleet consisted of eight satellites , five of which are owned and three of which are leased. They are all in geosynchronous orbit, approximately 22,300 miles above the equator. The following table presents our owned and leased satellites: Satellite Segment Launch Date Nominal Degree Orbital Location (Longitude) Depreciable Life (In Years) Owned: SPACEWAY 3 (1) Hughes August 2007 95 W 10 EchoStar XVII Hughes July 2012 107 W 15 EchoStar XIX Hughes December 2016 97.1 W 15 Al Yah 3 (2) Hughes January 2018 20 W 7 EchoStar IX (3) ESS August 2003 121 W 12 Finance leases: Eutelsat 65 West A Hughes March 2016 65 W 15 Telesat T19V Hughes July 2018 63 W 15 EchoStar 105/SES-11 ESS October 2017 105 W 15 (1) Depreciable life represents the remaining useful life as of June 8, 2011, the date EchoStar completed its acquisition of Hughes Communications, Inc. and its subsidiaries (the “Hughes Acquisition”). (2) Upon consummation of our joint venture with Yahsat in Brazil in November 2019, we acquired the Brazilian Ka-band payload on this satellite. Depreciable life represents the remaining useful life as of November 2019. (3) We own the Ka-band and Ku-band payloads on this satellite. The following table presents the components of our satellites, net: Depreciable Life (In Years) As of March 31, 2020 December 31, 2019 Satellites, net: Satellites - owned 7 to 15 $ 1,503,580 $ 1,516,006 Satellites - acquired under finance leases 15 352,206 381,162 Total satellites 1,855,786 1,897,168 Accumulated depreciation: Satellites - owned (739,859 ) (713,259 ) Satellites - acquired under finance leases (56,385 ) (56,388 ) Total accumulated depreciation (796,244 ) (769,647 ) Total satellites, net $ 1,059,542 $ 1,127,521 The following table presents the depreciation expense and capitalized interest associated with our satellites: For the three months 2020 2019 Depreciation expense: Satellites - owned $ 27,068 $ 27,010 Satellites acquired under finance leases 6,013 6,490 Total depreciation expense $ 33,081 $ 33,500 Capitalized interest $ 637 $ 147 Satellite Commitments As of March 31, 2020 and December 31, 2019 , our satellite-related obligations were $245.5 million and $256.9 million , respectively. These primarily include payments pursuant to regulatory authorizations, non-lease costs associated with our finance lease satellites, in-orbit incentives relating to certain satellites and commitments for satellite service arrangements. In certain circumstances, the dates on which we are obligated to pay our contractual obligations could change. Satellite Anomalies and Impairments We are not aware of any anomalies with respect to our owned or leased satellites or payloads that have had any significant adverse effect on their remaining useful lives, the commercial operation of the satellites or payloads or our operating results or financial position as of and for the three months ended March 31, 2020 . Satellite Insurance We generally do not carry in-orbit insurance on our satellites or payloads because we have assessed that the cost of insurance is not economical relative to the risk of failures. Therefore, we generally bear the risk of any in-orbit failures. Pursuant to the terms of the agreements governing certain portions of our long-term debt and our joint venture agreements with Yahsat, we are required, subject to certain limitations on coverage, to maintain only for the SPACEWAY 3 satellite, the EchoStar XVII satellite and the Al Yah 3 Brazilian payload, insurance or other contractual arrangements during the commercial in-orbit service of such satellite or payload. Our other satellites and payloads, either in orbit or under construction, are not covered by launch or in-orbit insurance or other contractual arrangements. We will continue to assess circumstances going forward and make insurance-related decisions on a case-by-case basis. Fair Value of In-Orbit Incentives As of March 31, 2020 and December 31, 2019 , the fair values of our in-orbit incentive obligations from our continuing operations, based on measurements categorized within Level 2 of the fair value hierarchy, approximated their carrying amounts of $56.2 million and $57.0 million |
Regulatory Authorizations
Regulatory Authorizations | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
REGULATORY AUTHORIZATIONS | REGULATORY AUTHORIZATIONS The following table presents the components of our Regulatory authorizations, net : Finite lived Cost Accumulated Amortization Total Indefinite lived Total Balance, December 31, 2018 $ — $ — $ — $ 400,043 $ 400,043 Balance, March 31, 2019 $ — $ — $ — $ 400,043 $ 400,043 Balance, December 31, 2019 $ 12,524 $ (161 ) $ 12,363 $ 400,000 $ 412,363 Amortization expense — (100 ) (100 ) — (100 ) Foreign currency translation (1,020 ) — (1,020 ) — (1,020 ) Balance, March 31, 2020 $ 11,504 $ (261 ) $ 11,243 $ 400,000 $ 411,243 Weighted average useful life 14 years Finite Lived Assets In November 2019, we were granted an S-Band spectrum license for terrestrial rights in Mexico for $7.9 million . The acquired asset is subject to amortization over a period of 15 years . In November 2019, we also acquired Ka-band spectrum rights for $4.5 million , upon consummation of the Yahsat Brazil JV Transaction, which are subject to amortization over a period of 11 years . |
Other Investments
Other Investments | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
OTHER INVESTMENTS | OTHER INVESTMENTS The following table presents the components of Other investments, net : As of March 31, 2020 December 31, 2019 Other investments, net: Equity method investments $ 101,601 $ 102,689 Other equity investments 7,351 7,351 Total other investments, net $ 108,952 $ 110,040 Equity Method Investments Deluxe/EchoStar LLC We own 50% of Deluxe/EchoStar LLC (“Deluxe”) , a joint venture that we entered into in 2010 to build an advanced digital cinema satellite distribution network targeting delivery to digitally equipped theaters in the U.S. and Canada. We recognized revenue from Deluxe for transponder services and the sale of broadband equipment of $1.3 million and $0.9 million for the three months ended March 31, 2020 and 2019 , respectively. As of March 31, 2020 and December 31, 2019 , we had trade accounts receivable from Deluxe of $1.0 million and $0.6 million , respectively. Broadband Connectivity Solutions (Restricted) Limited In August 2018, we entered into an agreement with Yahsat to establish a new entity, Broadband Connectivity Solutions (Restricted) Limited (together with its subsidiaries, “BCS”), to provide commercial Ka-band satellite broadband services across Africa, the Middle East and southwest Asia operating over Yahsat’s Al Yah 2 and Al Yah 3 Ka-band satellites. The transaction was consummated in December 2018 when we invested $100.0 million in cash in exchange for a 20% interest in BCS. Under the terms of the agreement, we may also acquire, for further cash investments, additional ownership interests in BCS in the future provided certain conditions are met. We supply network operations and management services and equipment to BCS. We recognized revenue from BCS for such services and equipment of $1.7 million and $2.3 million for the three months ended March 31, 2020 and 2019 , respectively. As of March 31, 2020 and December 31, 2019 , we had trade accounts receivable from BCS of $4.5 million and $5.2 million Other Equity Investments During the three months ended March 31, 2020 and 2019 , we did not identify any observable price changes requiring an adjustment to our investments. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The following table presents the carrying amounts and fair values of our Long-term debt : Effective interest rates As of March 31, 2020 December 31, 2019 Carrying Fair Carrying Fair Senior Secured Notes: 5 1/4% Senior Secured Notes due 2026 5.320% $ 750,000 $ 748,133 $ 750,000 $ 825,308 Senior Unsecured Notes: 7 5/8% Senior Unsecured Notes due 2021 8.062% 900,000 922,527 900,000 963,783 6 5/8% Senior Unsecured Notes due 2026 6.688% 750,000 770,715 750,000 833,903 Less: Unamortized debt issuance costs (9,782 ) (10,832 ) Total long-term debt $ 2,390,218 $ 2,441,375 $ 2,389,168 $ 2,622,994 No amounts on our long-term debt are due during the next twelve months. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, 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 partially offset by a valuation allowance, changes in tax laws and relative changes in unrecognized tax benefits. Additionally, our effective tax rate can be affected by the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income or loss is lower. Our income tax provision was $5.2 million for the three months ended March 31, 2020 compared to $4.9 million for the three months ended March 31, 2019 . Our estimated effective income tax rate was (41.2)% and 94.1% for the three months ended March 31, 2020 and 2019 , respectively. The variations in our effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2020 were primarily due to the increase in our valuation allowance associated with certain foreign losses and the impact of state and local taxes, partially offset by the change in net unrealized losses that are capital in nature, permanent book tax differences and research and experimentation credits. 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 the increase in our valuation allowance associated with certain foreign losses and the impact of state and local taxes, partially offset by the change in net unrealized losses that are capital in nature and research and experimentation credits. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in March 2020. The CARES Act features significant tax provisions and other measures to assist individuals and businesses impacted by the economic effects of the COVID-19 pandemic, including a five-year carryback of net operating losses, relaxation of Section 163(j) interest deduction limitations, acceleration of Alternative Minimum Tax refunds, relief for payroll tax and tax credits for employers who retain employees. These provisions did not affect our income tax provision for the three months ended March 31, 2020 . |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Patents and Intellectual Property Many entities, including some of our competitors, have or may have in the future patents and other intellectual property rights that cover or affect products or services directly or indirectly related to those that we offer. We may not be aware of all patents and other intellectual property rights that our products and services may potentially infringe. Damages in patent infringement cases can be substantial, and in certain circumstances can be tripled. Further, we cannot estimate the extent to which we may be required in the future to obtain licenses with respect to intellectual property rights held by others and the availability and cost of any such licenses. Various parties have asserted patent and other intellectual property rights with respect to our products and services. We cannot be certain that these parties do not own the rights they claim, that these rights are not valid or that our products and services do not infringe on these rights. Further, we cannot be certain that we would be able to obtain licenses from these parties on commercially reasonable terms or, if we were unable to obtain such licenses, that we would be able to redesign our products and services to avoid infringement. Certain Arrangements with DISH Network In connection with 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 EchoStar will generally only be liable for its and its subsidiaries’ 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. In connection with the Share Exchange and the BSS Transaction, EchoStar and certain of its and our subsidiaries entered into the Share Exchange Agreement and the Master Transaction Agreement, respectively, and other agreements which provide, among other things, for the division of certain liabilities, including liabilities relating to taxes, intellectual property and employees and liabilities resulting from litigation and the assumption of certain liabilities that relate to the transferred businesses and assets. These agreements also contain additional indemnification provisions between EchoStar and us and DISH Network for, in the case of the Share Exchange, certain pre-existing liabilities and legal proceedings and, in the case of the BSS Transaction, certain losses with respect to breaches of certain representations and covenants and certain liabilities. Litigation We are involved in a number of legal proceedings against us concerning matters arising in connection with the conduct of our business activities. Many of these proceedings are at preliminary stages and/or seek an indeterminate amount of damages. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable and to determine if accruals are appropriate. We record an accrual for litigation and other loss contingencies when we determine that a loss is probable and the amount of the loss can be reasonably estimated. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made. There can be no assurance that legal proceedings against us will be resolved in amounts that will not differ from the amounts of our recorded accruals. Legal fees and other costs of defending legal proceedings are charged to expense as incurred. For certain proceedings, management is unable to predict with any degree of certainty the outcome or provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons: (i) the proceedings are in various stages; (ii) damages have not been sought or specified; (iii) damages are unsupported, indeterminate and/or exaggerated in management’s opinion; (iv) there is uncertainty as to the outcome of pending trials, appeals, motions or other proceedings; (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties are involved (as with many patent-related cases). Except as described below, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material effect on our financial condition, operating results or cash flows, though there is no assurance that the resolution and outcomes of these proceedings, individually or in the aggregate, will not be material to our financial condition, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period. We intend to vigorously defend the proceedings against us. In the event that a court, tribunal, other body or jury ultimately rules against us, we may be subject to adverse consequences, including, without limitation, substantial damages, which may include treble damages, fines, penalties, compensatory damages and/or other equitable or injunctive relief that could require us to materially modify our business operations or certain products or services that we offer to our consumers. 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”). In December 2019, we entered into a comprehensive settlement agreement with Elbit pursuant to which we paid a total of $33.0 million in satisfaction of all amounts relating to these matters and all open proceedings, including appeals, were dismissed with prejudice. Shareholder Litigation On July 2, 2019, the City of Hallandale Beach Police Officers’ and Firefighters’ Personnel Retirement Trust, purporting to sue on behalf of a class of EchoStar’s stockholders, filed a complaint in the District Court of Clark County, Nevada against EchoStar’s directors, Charles W. Ergen, R. Stanton Dodge, Anthony M. Federico, Pradman P. Kaul, C. Michael Schroeder, Jeffrey R. Tarr, William D. Wade, and Michael T. Dugan; our and EchoStar’s officer, David J. Rayner; EchoStar; Hughes Satellite Systems Corporation; our former subsidiary BSS Corp.; and DISH and its subsidiary Merger Sub. On September 5, 2019, the defendants filed motions to dismiss. On October 11, 2019, the plaintiffs filed an amended complaint removing Messrs. Dodge, Federico, Kaul, Schroeder, Tarr and Wade as defendants. The amended complaint alleges that Mr. Ergen, as EchoStar’s controlling stockholder, breached fiduciary duties to EchoStar’s minority stockholders by structuring the BSS Transaction with inadequate consideration and improperly influencing EchoStar’s and Hughes Satellite Systems Corporation’s boards of directors to approve the BSS Transaction. The amended complaint also alleges that the other defendants aided and abetted such alleged breaches. The plaintiffs seek equitable and monetary relief, including the issuance of additional DISH Common Stock, and other costs and disbursements, including attorneys’ fees on behalf of the purported class. On November 11, 2019, we and the other defendants filed separate motions to dismiss plaintiff’s amended complaint and during a hearing on January 13, 2020 the court denied these motions. On February 10, 2020, we and the other defendants filed answers to the amended complaint. We intend to vigorously defend this case. We cannot predict its outcome with any degree of certainty . License Fee Dispute with Government of India, Department of Telecommunications In 1994, the Government of India promulgated a “National Telecommunications Policy” under which the government liberalized the telecommunications sector and required telecommunications service providers to pay fixed license fees. Pursuant to this policy, our subsidiary Hughes Communications India Private Limited (“HCIPL”), formerly known as Hughes Escorts Communications Limited, obtained a license to operate a data network over satellite using VSAT systems. In 1999, HCIPL’s license was amended pursuant to a new government policy that eliminated the fixed license fees and instead required each telecommunications service provider to pay license fees based on its adjusted gross revenue (“AGR”). In March 2005, the Indian Department of Telecommunications (“DOT”) notified HCIPL that, based on its review of HCIPL’s audited accounts and AGR statements, HCIPL must pay additional license fees, interest on such fees and penalties and interest on the penalties. HCIPL responded that the DOT had improperly calculated its AGR by including revenue from licensed and unlicensed activities. The DOT rejected this explanation and in 2006, HCIPL filed a petition with an administrative tribunal (the “Tribunal”), challenging the DOT’s calculation of its AGR. The DOT also issued license fee assessments to other telecommunications service providers and a number of similar petitions were filed by several other such providers with the Tribunal. These petitions were amended, consolidated, remanded and re-appealed several times. On April 23, 2015, the Tribunal issued a judgment affirming the DOT’s calculation of AGR for the telecommunications service providers but reversing the DOT’s imposition of interest, penalties and interest on such penalties as excessive. Over subsequent years, the DOT and HCIPL and other telecommunications service providers, respectively, filed several appeals of the Tribunal’s ruling. On October 24, 2019, the Supreme Court of India (“Supreme Court”) issued an order (the “Order”) affirming the license fee assessments imposed by the DOT, including its imposition of interest, penalties and interest on the penalties, but without indicating the amount HCPIL is required to pay the DOT, and ordering payment by January 23, 2020. On November 23, 2019, HCIPL and other telecommunication service providers filed a petition asking the Supreme Court to reconsider its decision. The petition was denied on January 20, 2020. On January 22, 2020, HCIPL and other telecommunication service providers filed an application requesting that the Supreme Court modify the Order to permit the DOT to calculate the final amount due and extend HCPIL’s and the other telecommunication service providers’ payment deadline. On February 14, 2020, the Supreme Court denied this application and directed us and the other telecommunication service providers to explain why the Supreme Court should not initiate contempt proceedings for failure to pay the amounts due. During a hearing on March 18, 2020, the Supreme Court ordered that all amounts that were due before the Supreme Court in October 2019 must be paid, including interest, penalties and interest on the penalties. The Supreme Court also ordered that the parties appear for a further hearing addressing, potentially among other things, a proposal by the DOT to allow for extended or deferred payments of amounts due. This hearing was postponed due to the COVID-19 pandemic and not yet rescheduled. To date, the DOT has issued HCIPL written assessments totaling $28.4 million , comprised of $4.0 million for additional license fees, $4.1 million for penalties and $20.3 million for interest and interest on penalties. In the first quarter of 2020, HCIPL paid the DOT $2.9 million with respect to this matter. As a result of the Supreme Court’s orders in this matter, HCIPL’s payments to date and the impact of foreign exchange rates, and using the DOT’s methodology as reflected in the assessments HCIPL has received as of the date of the Order, we have recorded an accrual of $77.1 million as of March 31, 2020 , comprised of $3.8 million for additional license fees, $3.9 million for penalties and $69.4 million for interest and interest on penalties. We had recorded an accrual of $80.2 million as of December 31, 2019 . Any eventual payments made with respect to the ultimate outcome of this matter may be different from our accrual and such differences could be significant. Other In addition to the above actions, we are subject to various other legal proceedings and claims, which arise in the ordinary course of business. As part of our ongoing operations, we are subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as by governmental/regulatory authorities responsible for enforcing the laws and regulations to which we may be subject. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the federal government. Some states have adopted similar state whistleblower and false claims provisions. In addition, we from time to time receive inquiries from federal, state and foreign agencies regarding compliance with various laws and regulations. In our opinion, the amount of ultimate liability with respect to any of these other actions is unlikely to materially affect our financial position, results of operations or cash flows, though the resolutions and outcomes, individually or in the aggregate, could be material to our financial position, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period. 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, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Business segments are components of an enterprise for which separate financial information is available and regularly evaluated by our chief operating decision maker (“CODM”), who is our Chief Executive Officer. We operate in two business segments, Hughes and ESS, as described in Note 1. Organization and Business Activities . The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, net income (loss) from discontinued operations and net income (loss) attributable to non-controlling interests (“EBITDA”). Total assets by segment have not been reported herein because the information is not provided to our CODM on a regular basis. The following table presents revenue, EBITDA and capital expenditures for each of our business segments. Capital expenditures are net of refunds and other receipts related to our property and equipment. Hughes ESS Corporate and Other Consolidated For the three months ended March 31, 2020 External revenue $ 458,482 $ 4,367 $ 4,698 $ 467,547 Intersegment revenue — 285 (285 ) — Total revenue $ 458,482 $ 4,652 $ 4,413 $ 467,547 EBITDA $ 154,641 $ 2,030 $ (6,646 ) $ 150,025 Capital expenditures $ 91,517 $ — $ — $ 91,517 For the three months ended March 31, 2019 External revenue $ 445,337 $ 3,852 $ 6,010 $ 455,199 Intersegment revenue — 181 (181 ) — Total revenue $ 445,337 $ 4,033 $ 5,829 $ 455,199 EBITDA $ 161,132 $ 1,729 $ (6,158 ) $ 156,703 Capital expenditures $ 73,821 $ — $ — $ 73,821 The following table reconciles Income (loss) from continuing operations before income taxes in the Condensed Consolidated Statements of Operations to EBITDA: For the three months 2020 2019 Income (loss) from continuing operations before income taxes $ (12,682 ) $ 5,180 Interest income, net (8,892 ) (17,997 ) Interest expense, net of amounts capitalized 42,192 57,915 Depreciation and amortization 125,965 112,411 Net loss (income) attributable to non-controlling interests 3,442 (806 ) EBITDA $ 150,025 $ 156,703 |
Related Party Transactions - Ec
Related Party Transactions - EchoStar | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS - ECHOSTAR The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Services and Other Revenue - EchoStar The following table presents our Services and other revenue from EchoStar: For the three months 2020 2019 Services and other revenue - EchoStar $ 4,699 $ 4,474 The following table presents the corresponding related party receivables: As of March 31, 2020 December 31, 2019 Related party receivables - EchoStar - current $ 131,948 $ 131,892 Related party receivables - EchoStar - non-current 19,412 19,759 Total related party receivables - EchoStar $ 151,360 $ 151,651 Receivables . EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current . No repayment schedule for these receivables has been determined. 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 other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded the revenue related to these services within Services and other revenue - EchoStar of $4.7 million and $5.0 million for the three months ended March 31, 2020 and 2019 , respectively. Additionally, w e have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5% , that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current Operating Expenses - EchoStar The following table presents our operating expenses related to EchoStar: For the three months 2020 2019 Operating expenses - EchoStar $ 12,642 $ 13,306 The following table presents the corresponding related party payables: As of March 31, 2020 December 31, 2019 Related party payables - EchoStar - current $ 13,793 $ 11,132 Related party payables - EchoStar - non-current 23,748 23,980 Total related party payables - EchoStar $ 37,541 $ 35,112 Payables . We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current . No repayment schedule for these payables has been determined. Shared Corporate Services . We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. Effective March 2017, and as a result of the Share Exchange, we implemented a new methodology for determining the cost of these shared corporate services. We and EchoStar, including EchoStar’s other subsidiaries, may each terminate a particular shared corporate service for any reason upon at least 30 days ’ notice. We recorded these expenses within Operating expenses - EchoStar for shared corporate services received from EchoStar and its other subsidiaries of $4.4 million and $2.8 million for the three months ended March 31, 2020 and 2019 , respectively. Real Estate . We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy. Cash Advances . EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 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 within Related party payables - EchoStar - non-current. 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. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $0.3 million and $0.4 million for the three months ended March 31, 2020 and 2019 Other Agreements BSS Transaction . Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement, and as part of the BSS Transaction, we and our subsidiaries transferred certain of the BSS Business to BSS Corp., and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. See Note 1. Organization and Business Activities for further information. 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 HSSC’s common stock that were then issued to a subsidiary of EchoStar. RELATED PARTY TRANSACTIONS - DISH NETWORK Overview EchoStar and DISH have operated as separate publicly-traded companies since 2008. A substantial majority of the voting power of the shares of each of EchoStar and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family. I n addition, prior to March 2017, DISH Network owned the Tracking Stock, which in the aggregate represented an 80% economic interest in the residential retail satellite broadband business of our Hughes segment. The Tracking Stock was retired in March 2017. In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we , EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network , on the one hand, obtains certain products, services and rights from us , EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future. The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Services and Other Revenue — DISH Network The following table presents our Services and other revenue from DISH Network: For the three months ended March 31, 2020 2019 Services and other revenue - DISH Network $ 7,587 $ 11,545 The following table presents the related trade accounts receivable: As of March 31, 2020 December 31, 2019 Trade accounts receivable - DISH Network $ 9,955 $ 8,876 Satellite Capacity Leased to DISH Network. We have entered into an agreement and have previously entered into a now terminated agreement to lease satellite capacity pursuant to which we have provided satellite services to DISH Network on certain satellites owned or leased by us. The fees for the services provided under these agreements depend upon, among other things, 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 these agreements are set forth below: • 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. • 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. 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 Hughes Acquisition, TerreStar and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services for TerreStar’s ground-based communications equipment (the “TerreStar Agreements”). In December 2017, we and DISH Network amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DISH Network generally has the right to continue to receive warranty services from us for our products on a month-to-month basis unless terminated by DISH Network upon at least 21 days ’ written notice to us. DISH Network generally has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis unless 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. In March 2020, we entered into an agreement with DISH Network pursuant to which we perform certain work and provide certain credits to amounts owed to us under the TerreStar Agreements in exchange for DISH Network’s granting us rights to use certain satellite capacity under the Amended and Restated Professional Services Agreement (as defined below). 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 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 all 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. Hughes Equipment and Services Agreement . In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days ‘ written notice to us or by us with at least 365 days ’ written notice to DISH Network. Operating Expenses — DISH Network The following table presents our operating expenses related to DISH Network: For the three months ended March 31, 2020 2019 Operating expenses - DISH Network $ 1,137 $ 714 The following table presents the related trade accounts payable: As of March 31, 2020 December 31, 2019 Trade accounts payable - DISH Network $ 610 $ 502 Amended and Restated Professional Services Agreement . In connection with the Spin-off, EchoStar entered into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”). In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement (as amended to date, 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 (collectively, the “TT&C Antennas”). In September 2019, in connection with the BSS Transaction, EchoStar and DISH further amended the Amended and Restated Professional Services Agreement to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 14 . Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 2021 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 entered into an agreement with DISH Network for 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 agreement for a five-year period ending in August 2022. We and DISH Network amended this agreement to, among other things, terminate this agreement in March 2019. The rent on a per square foot basis for the lease was comparable to per square foot rental rates of similar commercial property in the same geographic area at the time of the lease, and we were 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 October 2019, we provided a termination notice for our New Braunfels, Texas agreement to be effective May 2020. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. Generally, we may renew our collocation and antenna space agreements for three -year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 180 days ’ prior written notice. The fees for the services provided under these agreements depend on the number of racks located at the location. In connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network will provide us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing no later than October 2020, with four three-year renewal terms, with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. Hughes Broadband Master Services Agreement . In March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our HughesNet service and related equipment and other telecommunication services and (ii) installs HughesNet service equipment with respect to activations generated by DISH Network. Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The Hughes Broadband MSA has an initial term of five years through March 2022 with automatic renewal for successive one -year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days ’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $4.6 million and $4.8 million for the three months ended March 31, 2020 and 2019 , respectively. 2019 TT&C Agreement . In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). The fees for services provided under the 2019 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months ’ notice. Other Receivables - DISH Network Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Code, because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar and its subsidiaries will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed. In light of the Tax Sharing Agreement, among other things, and in connection with EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount of that includes the federal tax benefit DISH received as a result of our operations. In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network. Other Agreements Master Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) we completed the Distribution ; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by the parties, including EchoStar’s representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities. EchoStar and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively. BSS Transaction Intellectual Property and Technology License Agreement. Effective September 2019, in connection with the BSS Transaction, we , EchoStar and DISH Network entered into an intellectual property and technology license agreement (the “BSS IPTLA”) pursuant to which we , EchoStar and its other subsidiaries and DISH Network license to each other certain intellectual property and technology. The BSS IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the BSS IPTLA, we , EchoStar and its other subsidiaries granted to DISH Network a license to our and their intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the BSS Business acquired pursuant to the BSS Transaction, including a limited license to use the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks during a transition period. EchoStar retains full ownership of the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks. In addition, DISH Network granted a license back to us, EchoStar and its other subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in our , EchoStar and its other subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the BSS Transaction. BSS Transaction Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction. Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect. BSS Transaction Employee Matters Agreement . Effective September 2019, in connection with the BSS Transaction, EchoStar and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except that EchoStar is responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred |
Related Party Transactions - DI
Related Party Transactions - DISH Network (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS - ECHOSTAR The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Services and Other Revenue - EchoStar The following table presents our Services and other revenue from EchoStar: For the three months 2020 2019 Services and other revenue - EchoStar $ 4,699 $ 4,474 The following table presents the corresponding related party receivables: As of March 31, 2020 December 31, 2019 Related party receivables - EchoStar - current $ 131,948 $ 131,892 Related party receivables - EchoStar - non-current 19,412 19,759 Total related party receivables - EchoStar $ 151,360 $ 151,651 Receivables . EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current . No repayment schedule for these receivables has been determined. 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 other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded the revenue related to these services within Services and other revenue - EchoStar of $4.7 million and $5.0 million for the three months ended March 31, 2020 and 2019 , respectively. Additionally, w e have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5% , that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current Operating Expenses - EchoStar The following table presents our operating expenses related to EchoStar: For the three months 2020 2019 Operating expenses - EchoStar $ 12,642 $ 13,306 The following table presents the corresponding related party payables: As of March 31, 2020 December 31, 2019 Related party payables - EchoStar - current $ 13,793 $ 11,132 Related party payables - EchoStar - non-current 23,748 23,980 Total related party payables - EchoStar $ 37,541 $ 35,112 Payables . We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current . No repayment schedule for these payables has been determined. Shared Corporate Services . We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. Effective March 2017, and as a result of the Share Exchange, we implemented a new methodology for determining the cost of these shared corporate services. We and EchoStar, including EchoStar’s other subsidiaries, may each terminate a particular shared corporate service for any reason upon at least 30 days ’ notice. We recorded these expenses within Operating expenses - EchoStar for shared corporate services received from EchoStar and its other subsidiaries of $4.4 million and $2.8 million for the three months ended March 31, 2020 and 2019 , respectively. Real Estate . We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy. Cash Advances . EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 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 within Related party payables - EchoStar - non-current. 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. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $0.3 million and $0.4 million for the three months ended March 31, 2020 and 2019 Other Agreements BSS Transaction . Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement, and as part of the BSS Transaction, we and our subsidiaries transferred certain of the BSS Business to BSS Corp., and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. See Note 1. Organization and Business Activities for further information. 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 HSSC’s common stock that were then issued to a subsidiary of EchoStar. RELATED PARTY TRANSACTIONS - DISH NETWORK Overview EchoStar and DISH have operated as separate publicly-traded companies since 2008. A substantial majority of the voting power of the shares of each of EchoStar and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family. I n addition, prior to March 2017, DISH Network owned the Tracking Stock, which in the aggregate represented an 80% economic interest in the residential retail satellite broadband business of our Hughes segment. The Tracking Stock was retired in March 2017. In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we , EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network , on the one hand, obtains certain products, services and rights from us , EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future. The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Services and Other Revenue — DISH Network The following table presents our Services and other revenue from DISH Network: For the three months ended March 31, 2020 2019 Services and other revenue - DISH Network $ 7,587 $ 11,545 The following table presents the related trade accounts receivable: As of March 31, 2020 December 31, 2019 Trade accounts receivable - DISH Network $ 9,955 $ 8,876 Satellite Capacity Leased to DISH Network. We have entered into an agreement and have previously entered into a now terminated agreement to lease satellite capacity pursuant to which we have provided satellite services to DISH Network on certain satellites owned or leased by us. The fees for the services provided under these agreements depend upon, among other things, 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 these agreements are set forth below: • 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. • 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. 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 Hughes Acquisition, TerreStar and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services for TerreStar’s ground-based communications equipment (the “TerreStar Agreements”). In December 2017, we and DISH Network amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DISH Network generally has the right to continue to receive warranty services from us for our products on a month-to-month basis unless terminated by DISH Network upon at least 21 days ’ written notice to us. DISH Network generally has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis unless 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. In March 2020, we entered into an agreement with DISH Network pursuant to which we perform certain work and provide certain credits to amounts owed to us under the TerreStar Agreements in exchange for DISH Network’s granting us rights to use certain satellite capacity under the Amended and Restated Professional Services Agreement (as defined below). 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 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 all 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. Hughes Equipment and Services Agreement . In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days ‘ written notice to us or by us with at least 365 days ’ written notice to DISH Network. Operating Expenses — DISH Network The following table presents our operating expenses related to DISH Network: For the three months ended March 31, 2020 2019 Operating expenses - DISH Network $ 1,137 $ 714 The following table presents the related trade accounts payable: As of March 31, 2020 December 31, 2019 Trade accounts payable - DISH Network $ 610 $ 502 Amended and Restated Professional Services Agreement . In connection with the Spin-off, EchoStar entered into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”). In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement (as amended to date, 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 (collectively, the “TT&C Antennas”). In September 2019, in connection with the BSS Transaction, EchoStar and DISH further amended the Amended and Restated Professional Services Agreement to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 14 . Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 2021 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 entered into an agreement with DISH Network for 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 agreement for a five-year period ending in August 2022. We and DISH Network amended this agreement to, among other things, terminate this agreement in March 2019. The rent on a per square foot basis for the lease was comparable to per square foot rental rates of similar commercial property in the same geographic area at the time of the lease, and we were 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 October 2019, we provided a termination notice for our New Braunfels, Texas agreement to be effective May 2020. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. Generally, we may renew our collocation and antenna space agreements for three -year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 180 days ’ prior written notice. The fees for the services provided under these agreements depend on the number of racks located at the location. In connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network will provide us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing no later than October 2020, with four three-year renewal terms, with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. Hughes Broadband Master Services Agreement . In March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our HughesNet service and related equipment and other telecommunication services and (ii) installs HughesNet service equipment with respect to activations generated by DISH Network. Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The Hughes Broadband MSA has an initial term of five years through March 2022 with automatic renewal for successive one -year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days ’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $4.6 million and $4.8 million for the three months ended March 31, 2020 and 2019 , respectively. 2019 TT&C Agreement . In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). The fees for services provided under the 2019 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months ’ notice. Other Receivables - DISH Network Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Code, because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar and its subsidiaries will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed. In light of the Tax Sharing Agreement, among other things, and in connection with EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount of that includes the federal tax benefit DISH received as a result of our operations. In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network. Other Agreements Master Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) we completed the Distribution ; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by the parties, including EchoStar’s representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities. EchoStar and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively. BSS Transaction Intellectual Property and Technology License Agreement. Effective September 2019, in connection with the BSS Transaction, we , EchoStar and DISH Network entered into an intellectual property and technology license agreement (the “BSS IPTLA”) pursuant to which we , EchoStar and its other subsidiaries and DISH Network license to each other certain intellectual property and technology. The BSS IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the BSS IPTLA, we , EchoStar and its other subsidiaries granted to DISH Network a license to our and their intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the BSS Business acquired pursuant to the BSS Transaction, including a limited license to use the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks during a transition period. EchoStar retains full ownership of the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks. In addition, DISH Network granted a license back to us, EchoStar and its other subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in our , EchoStar and its other subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the BSS Transaction. BSS Transaction Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction. Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect. BSS Transaction Employee Matters Agreement . Effective September 2019, in connection with the BSS Transaction, EchoStar and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except that EchoStar is responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred |
Related Party - Other (Notes)
Related Party - Other (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS - ECHOSTAR The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Services and Other Revenue - EchoStar The following table presents our Services and other revenue from EchoStar: For the three months 2020 2019 Services and other revenue - EchoStar $ 4,699 $ 4,474 The following table presents the corresponding related party receivables: As of March 31, 2020 December 31, 2019 Related party receivables - EchoStar - current $ 131,948 $ 131,892 Related party receivables - EchoStar - non-current 19,412 19,759 Total related party receivables - EchoStar $ 151,360 $ 151,651 Receivables . EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current . No repayment schedule for these receivables has been determined. 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 other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded the revenue related to these services within Services and other revenue - EchoStar of $4.7 million and $5.0 million for the three months ended March 31, 2020 and 2019 , respectively. Additionally, w e have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5% , that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current Operating Expenses - EchoStar The following table presents our operating expenses related to EchoStar: For the three months 2020 2019 Operating expenses - EchoStar $ 12,642 $ 13,306 The following table presents the corresponding related party payables: As of March 31, 2020 December 31, 2019 Related party payables - EchoStar - current $ 13,793 $ 11,132 Related party payables - EchoStar - non-current 23,748 23,980 Total related party payables - EchoStar $ 37,541 $ 35,112 Payables . We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current . No repayment schedule for these payables has been determined. Shared Corporate Services . We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. Effective March 2017, and as a result of the Share Exchange, we implemented a new methodology for determining the cost of these shared corporate services. We and EchoStar, including EchoStar’s other subsidiaries, may each terminate a particular shared corporate service for any reason upon at least 30 days ’ notice. We recorded these expenses within Operating expenses - EchoStar for shared corporate services received from EchoStar and its other subsidiaries of $4.4 million and $2.8 million for the three months ended March 31, 2020 and 2019 , respectively. Real Estate . We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy. Cash Advances . EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 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 within Related party payables - EchoStar - non-current. 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. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $0.3 million and $0.4 million for the three months ended March 31, 2020 and 2019 Other Agreements BSS Transaction . Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement, and as part of the BSS Transaction, we and our subsidiaries transferred certain of the BSS Business to BSS Corp., and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. See Note 1. Organization and Business Activities for further information. 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 HSSC’s common stock that were then issued to a subsidiary of EchoStar. RELATED PARTY TRANSACTIONS - DISH NETWORK Overview EchoStar and DISH have operated as separate publicly-traded companies since 2008. A substantial majority of the voting power of the shares of each of EchoStar and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family. I n addition, prior to March 2017, DISH Network owned the Tracking Stock, which in the aggregate represented an 80% economic interest in the residential retail satellite broadband business of our Hughes segment. The Tracking Stock was retired in March 2017. In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we , EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network , on the one hand, obtains certain products, services and rights from us , EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future. The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Services and Other Revenue — DISH Network The following table presents our Services and other revenue from DISH Network: For the three months ended March 31, 2020 2019 Services and other revenue - DISH Network $ 7,587 $ 11,545 The following table presents the related trade accounts receivable: As of March 31, 2020 December 31, 2019 Trade accounts receivable - DISH Network $ 9,955 $ 8,876 Satellite Capacity Leased to DISH Network. We have entered into an agreement and have previously entered into a now terminated agreement to lease satellite capacity pursuant to which we have provided satellite services to DISH Network on certain satellites owned or leased by us. The fees for the services provided under these agreements depend upon, among other things, 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 these agreements are set forth below: • 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. • 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. 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 Hughes Acquisition, TerreStar and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services for TerreStar’s ground-based communications equipment (the “TerreStar Agreements”). In December 2017, we and DISH Network amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DISH Network generally has the right to continue to receive warranty services from us for our products on a month-to-month basis unless terminated by DISH Network upon at least 21 days ’ written notice to us. DISH Network generally has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis unless 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. In March 2020, we entered into an agreement with DISH Network pursuant to which we perform certain work and provide certain credits to amounts owed to us under the TerreStar Agreements in exchange for DISH Network’s granting us rights to use certain satellite capacity under the Amended and Restated Professional Services Agreement (as defined below). 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 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 all 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. Hughes Equipment and Services Agreement . In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days ‘ written notice to us or by us with at least 365 days ’ written notice to DISH Network. Operating Expenses — DISH Network The following table presents our operating expenses related to DISH Network: For the three months ended March 31, 2020 2019 Operating expenses - DISH Network $ 1,137 $ 714 The following table presents the related trade accounts payable: As of March 31, 2020 December 31, 2019 Trade accounts payable - DISH Network $ 610 $ 502 Amended and Restated Professional Services Agreement . In connection with the Spin-off, EchoStar entered into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”). In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement (as amended to date, 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 (collectively, the “TT&C Antennas”). In September 2019, in connection with the BSS Transaction, EchoStar and DISH further amended the Amended and Restated Professional Services Agreement to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 14 . Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 2021 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 entered into an agreement with DISH Network for 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 agreement for a five-year period ending in August 2022. We and DISH Network amended this agreement to, among other things, terminate this agreement in March 2019. The rent on a per square foot basis for the lease was comparable to per square foot rental rates of similar commercial property in the same geographic area at the time of the lease, and we were 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 October 2019, we provided a termination notice for our New Braunfels, Texas agreement to be effective May 2020. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. Generally, we may renew our collocation and antenna space agreements for three -year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 180 days ’ prior written notice. The fees for the services provided under these agreements depend on the number of racks located at the location. In connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network will provide us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing no later than October 2020, with four three-year renewal terms, with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. Hughes Broadband Master Services Agreement . In March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our HughesNet service and related equipment and other telecommunication services and (ii) installs HughesNet service equipment with respect to activations generated by DISH Network. Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The Hughes Broadband MSA has an initial term of five years through March 2022 with automatic renewal for successive one -year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days ’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $4.6 million and $4.8 million for the three months ended March 31, 2020 and 2019 , respectively. 2019 TT&C Agreement . In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). The fees for services provided under the 2019 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months ’ notice. Other Receivables - DISH Network Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Code, because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar and its subsidiaries will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed. In light of the Tax Sharing Agreement, among other things, and in connection with EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount of that includes the federal tax benefit DISH received as a result of our operations. In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network. Other Agreements Master Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) we completed the Distribution ; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by the parties, including EchoStar’s representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities. EchoStar and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively. BSS Transaction Intellectual Property and Technology License Agreement. Effective September 2019, in connection with the BSS Transaction, we , EchoStar and DISH Network entered into an intellectual property and technology license agreement (the “BSS IPTLA”) pursuant to which we , EchoStar and its other subsidiaries and DISH Network license to each other certain intellectual property and technology. The BSS IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the BSS IPTLA, we , EchoStar and its other subsidiaries granted to DISH Network a license to our and their intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the BSS Business acquired pursuant to the BSS Transaction, including a limited license to use the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks during a transition period. EchoStar retains full ownership of the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks. In addition, DISH Network granted a license back to us, EchoStar and its other subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in our , EchoStar and its other subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the BSS Transaction. BSS Transaction Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction. Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect. BSS Transaction Employee Matters Agreement . Effective September 2019, in connection with the BSS Transaction, EchoStar and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except that EchoStar is responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred |
Supplemental Financial Informat
Supplemental Financial Information | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL FINANCIAL INFORMATION Research and Development The following table presents the research and development costs incurred in connection with customers’ orders: For the three months ended March 31, 2020 2019 Cost of sales - equipment (exclusive of depreciation and amortization) $ 6,692 $ 5,395 Research and development expenses $ 6,254 $ 6,888 Cash and Cash Equivalents and Restricted Cash The following table reconciles Cash and cash equivalents and restricted cash, as presented in the Condensed Consolidated Balance Sheets, to the total of the same as presented in the Condensed Consolidated Statements of Cash Flows: For the three months ended March 31, 2020 2019 Cash and cash equivalents, including restricted amounts, beginning of period: Cash and cash equivalents $ 1,139,435 $ 847,823 Restricted cash 887 796 Total cash and cash equivalents, included restricted amounts, beginning of period $ 1,140,322 $ 848,619 Cash and cash equivalents, including restricted amounts, end of period: Cash and cash equivalents $ 1,228,361 $ 1,138,711 Restricted cash 1,116 971 Total cash and cash equivalents, included restricted amounts, end of period $ 1,229,477 $ 1,139,682 Other Current Assets, Net and Other Non-Current Assets, Net The following table presents the components of Other current assets, net , and Other non-current assets, net : As of March 31, 2020 December 31, 2019 Other current assets, net: Trade accounts receivable - DISH Network $ 9,955 $ 8,876 Inventory 88,302 79,474 Prepaids and deposits 47,055 42,324 Contract acquisition costs, net 14,290 16,869 Related party receivables - EchoStar 131,948 131,892 Other, net 23,821 22,217 Total other current assets, net $ 315,371 $ 301,652 Other non-current assets, net: Restricted cash $ 1,116 $ 887 Deferred tax assets, net 7,098 7,215 Capitalized software, net 104,401 101,786 Contract acquisition costs, net 96,107 96,723 Contract fulfillment costs, net 2,782 3,010 Related party receivables - EchoStar 19,412 19,759 Other, net 25,859 22,556 Total other non-current assets, net $ 256,775 $ 251,936 The following table presents the activity in our allowance for doubtful accounts, which is included within Other, net in each of Other current assets, net and Other non-current assets, net in the table above : Balance at Credit Losses (1) Deductions Foreign Currency Translation Balance at For the three months ended March 31, 2020 Other current assets, net $ — $ 1,595 $ — $ — $ 1,595 Other non-current assets, net $ — $ 13,379 $ — $ (358 ) $ 13,021 (1) The impact of adopting ASC 326 on January 1, 2020 was a net increase to our allowance for doubtful accounts largely driven by a $13.4 million reclassification from Trade accounts receivables and contracts assets, net . Accrued Expenses and Other Current Liabilities and Other Non-Current Liabilities The following table presents the components of Accrued expenses and other current liabilities and Other non-current liabilities : As of March 31, 2020 December 31, 2019 Accrued expenses and other current liabilities: Trade accounts payable - DISH Network $ 610 $ 502 Accrued interest 35,905 32,184 Accrued compensation 31,707 42,846 Accrued taxes 7,534 18,493 Operating lease obligation 13,393 14,112 Related party payables - EchoStar 13,793 11,132 Other 128,948 139,148 Total accrued expenses and other current liabilities $ 231,890 $ 258,417 Other non-current liabilities: Related party payables - EchoStar $ 23,748 $ 23,980 Other 64,848 66,500 Total other non-current liabilities $ 88,596 $ 90,480 Inventory The following table presents the components of inventory: As of March 31, 2020 December 31, 2019 Raw materials $ 8,399 $ 4,240 Work-in-process 9,421 6,979 Finished goods 70,482 68,255 Total inventory $ 88,302 $ 79,474 Supplemental and Non-cash Investing and Financing Activities The following table presents the supplemental and non-cash investing and financing activities: For the three months ended March 31, 2020 2019 Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized $ 49,563 $ 54,277 Cash paid for income taxes $ 716 $ 652 Non-cash investing and financing activities: Increase (decrease) in capital expenditures included in accounts payable, net $ (5,359 ) $ (2,163 ) |
Supplemental Guarantor and Non-
Supplemental Guarantor and Non-Guarantor Financial Information | 3 Months Ended |
Mar. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION Certain of our wholly-owned subsidiaries (together, the “Guarantor Subsidiaries”) have fully and unconditionally guaranteed, on a joint and several basis, the obligations of our 5 1/4% Senior Secured Notes due August 1, 2026, 7 5/8% Senior Unsecured Notes due 2021 and 6 5/8% Senior Unsecured Notes due August 1, 2026 (collectively, the “Notes”). The indentures governing the Notes contain restrictive covenants that, among other things, impose limitations on our ability and the ability of certain of our subsidiaries to pay dividends or make distributions, incur additional debt, make certain investments, create liens or enter into sale and leaseback transactions, merge or consolidate with another company, transfer and sell assets, enter into transactions with affiliates or allow to exist certain restrictions on the ability of certain of our subsidiaries to pay dividends, make distributions, make other payments, or transfer assets to us. In lieu of separate financial statements of the Guarantor Subsidiaries, we have prepared the accompanying condensed consolidating financial information in accordance with Rule 3-10(f) of Regulation S-X. This includes: • the accompanying condensed balance sheet; • the accompanying condensed statement of operations and comprehensive income (loss); and • the accompanying condensed statement of cash flows. This also includes consolidating financial information as follows: • the Guarantor Subsidiaries on a combined basis; • the non-guarantor subsidiaries of HSSC on a combined basis; and • the eliminations necessary to arrive at the corresponding information of HSSC on a consolidated basis. This accompanying condensed consolidating financial information should be read in conjunction with these Condensed Consolidated Financial Statements. Condensed Consolidating Balance Sheet as of March 31, 2020 HSSC Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 1,174,650 $ 19,878 $ 33,833 $ — $ 1,228,361 Marketable investment securities 524,864 77 — — 524,941 Trade accounts receivable and contract assets, net — 131,579 56,233 — 187,812 Other current assets 93,526 655,191 109,288 (542,634 ) 315,371 Total current assets 1,793,040 806,725 199,354 (542,634 ) 2,256,485 Non-current assets: Property and equipment, net — 1,425,670 324,891 — 1,750,561 Operating lease right-of-use assets — 96,944 22,767 — 119,711 Goodwill — 504,173 5,142 — 509,315 Regulatory authorizations, net — 400,000 11,243 — 411,243 Other intangible assets, net — 25,663 — — 25,663 Other investments, net — 108,952 — — 108,952 Investment in subsidiaries 2,823,219 207,664 — (3,030,883 ) — Other non-current assets, net 18,179 288,132 43,055 (92,591 ) 256,775 Total non-current assets 2,841,398 3,057,198 407,098 (3,123,474 ) 3,182,220 Total assets $ 4,634,438 $ 3,863,923 $ 606,452 $ (3,666,108 ) $ 5,438,705 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ — $ 87,132 $ 19,207 $ — $ 106,339 Contract liabilities — 93,741 5,525 — 99,266 Accrued expenses and other current liabilities 266,731 311,723 196,070 (542,634 ) 231,890 Total current liabilities 266,731 492,596 220,802 (542,634 ) 437,495 Non-current liabilities: Long-term debt 2,390,218 — — — 2,390,218 Deferred tax liabilities, net — 398,786 — (17,565 ) 381,221 Operating lease liabilities — 86,603 18,854 — 105,457 Other non-current liabilities — 63,401 100,221 (75,026 ) 88,596 Total non-current liabilities 2,390,218 548,790 119,075 (92,591 ) 2,965,492 Total liabilities 2,656,949 1,041,386 339,877 (635,225 ) 3,402,987 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 1,977,489 2,822,537 208,346 (3,030,883 ) 1,977,489 Non-controlling interests — — 58,229 — 58,229 Total shareholder's equity 1,977,489 2,822,537 266,575 (3,030,883 ) 2,035,718 Total liabilities and shareholder's equity $ 4,634,438 $ 3,863,923 $ 606,452 $ (3,666,108 ) $ 5,438,705 Condensed Consolidating Balance Sheet as of December 31, 2019 HSSC Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 1,057,903 $ 32,338 $ 49,194 $ — $ 1,139,435 Marketable investment securities 652,594 241 — — 652,835 Trade accounts receivable and contract assets, net — 129,722 66,798 — 196,520 Other current assets 93,536 602,337 107,959 (502,180 ) 301,652 Total current assets 1,804,033 764,638 223,951 (502,180 ) 2,290,442 Non-current assets: Property and equipment, net — 1,459,151 398,430 — 1,857,581 Operating lease right-of-use assets — 89,106 24,293 — 113,399 Goodwill — 504,173 2,780 — 506,953 Regulatory authorizations, net — 400,000 12,363 — 412,363 Other intangible assets, net — 29,321 — — 29,321 Other investments, net — 110,040 — — 110,040 Investment in subsidiaries 2,876,572 282,163 — (3,158,735 ) — Other non-current assets, net 10,672 772,193 42,557 (573,486 ) 251,936 Total non-current assets 2,887,244 3,646,147 480,423 (3,732,221 ) 3,281,593 Total assets $ 4,691,277 $ 4,410,785 $ 704,374 $ (4,234,401 ) $ 5,572,035 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ — $ 102,744 $ 18,808 $ — $ 121,552 Contract liabilities — 96,485 4,575 — 101,060 Accrued expenses and other current liabilities 243,694 314,583 202,320 (502,180 ) 258,417 Total current liabilities 243,694 513,812 225,703 (502,180 ) 481,029 Non-current liabilities: Long-term debt 2,389,168 — — — 2,389,168 Deferred tax liabilities, net — 390,288 — (9,972 ) 380,316 Operating lease liabilities — 77,366 19,513 — 96,879 Other non-current liabilities — 553,518 100,476 (563,514 ) 90,480 Total non-current liabilities 2,389,168 1,021,172 119,989 (573,486 ) 2,956,843 Total liabilities 2,632,862 1,534,984 345,692 (1,075,666 ) 3,437,872 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 2,058,415 2,875,801 282,934 (3,158,735 ) 2,058,415 Non-controlling interests — — 75,748 — 75,748 Total shareholder's equity 2,058,415 2,875,801 358,682 (3,158,735 ) 2,134,163 Total liabilities and shareholder's equity $ 4,691,277 $ 4,410,785 $ 704,374 $ (4,234,401 ) $ 5,572,035 Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) For the Three Months Ended March 31, 2020 HSSC Guarantor Non-Guarantor Eliminations Total Revenue: Services and other revenue $ — $ 354,399 $ 64,928 $ (9,089 ) $ 410,238 Equipment revenue — 65,586 5,410 (13,687 ) 57,309 Total revenue — 419,985 70,338 (22,776 ) 467,547 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 110,471 42,063 (8,649 ) 143,885 Cost of sales - equipment (exclusive of depreciation and amortization) — 55,374 4,221 (13,687 ) 45,908 Selling, general and administrative expenses — 95,818 20,482 (440 ) 115,860 Research and development expenses — 6,109 145 — 6,254 Depreciation and amortization — 99,359 26,606 — 125,965 Total costs and expenses — 367,131 93,517 (22,776 ) 437,872 Operating income (loss) — 52,854 (23,179 ) — 29,675 Other income (expense): Interest income 7,953 971 891 (923 ) 8,892 Interest expense, net of amounts capitalized (40,472 ) (613 ) (2,030 ) 923 (42,192 ) Gains (losses) on investments, net — (164 ) — — (164 ) Equity in earnings (losses) of unconsolidated affiliates, net — (1,087 ) — — (1,087 ) Equity in earnings (losses) of subsidiaries, net 10,630 (29,167 ) — 18,537 — Foreign currency transaction gains (losses), net — (2 ) (7,526 ) — (7,528 ) Other, net — (275 ) (3 ) — (278 ) Total other income (expense), net (21,889 ) (30,337 ) (8,668 ) 18,537 (42,357 ) Income (loss) from continuing operations before income taxes (21,889 ) 22,517 (31,847 ) 18,537 (12,682 ) Income tax benefit (provision), net 7,418 (11,804 ) (845 ) — (5,231 ) Net income (loss) (14,471 ) 10,713 (32,692 ) 18,537 (17,913 ) Less: Net loss (income) attributable to non-controlling interests — — 3,442 — 3,442 Net income (loss) attributable to Hughes Satellite Systems Corporation $ (14,471 ) $ 10,713 $ (29,250 ) $ 18,537 $ (14,471 ) Comprehensive income (loss): Net income (loss) $ (14,471 ) $ 10,713 $ (32,692 ) $ 18,537 $ (17,913 ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — (82,836 ) — (82,836 ) Unrealized gains (losses) on available-for-sale securities (2,479 ) — — — (2,479 ) Other — — (405 ) — (405 ) Equity in other comprehensive income (loss) (66,918 ) (66,918 ) — 133,836 — Total other comprehensive income (loss), net of tax (69,397 ) (66,918 ) (83,241 ) 133,836 (85,720 ) Comprehensive income (loss) (83,868 ) (56,205 ) (115,933 ) 152,373 (103,633 ) Less: Comprehensive loss (income) attributable to non-controlling interests — — 19,765 — 19,765 Comprehensive income (loss) attributable to Hughes Satellite Systems Corporation $ (83,868 ) $ (56,205 ) $ (96,168 ) $ 152,373 $ (83,868 ) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) For the Three Months Ended March 31, 2019 HSSC Guarantor Non-Guarantor Eliminations Total Revenue: Services and other revenue $ — $ 352,591 $ 59,696 $ (8,802 ) $ 403,485 Equipment revenue — 52,649 9,415 (10,350 ) 51,714 Total revenue — 405,240 69,111 (19,152 ) 455,199 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 110,862 39,333 (8,109 ) 142,086 Cost of sales - equipment (exclusive of depreciation and amortization) — 48,499 6,858 (10,350 ) 45,007 Selling, general and administrative expenses — 86,465 16,565 (693 ) 102,337 Research and development expenses — 6,743 145 — 6,888 Depreciation and amortization — 96,704 15,707 — 112,411 Total costs and expenses — 349,273 78,608 (19,152 ) 408,729 Operating income (loss) — 55,967 (9,497 ) — 46,470 Other income (expense): Interest income 17,409 926 559 (897 ) 17,997 Interest expense, net of amounts capitalized (56,361 ) (1,134 ) (1,317 ) 897 (57,915 ) 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 ) — Foreign currency transaction gains (losses), net — (19 ) 230 — 211 Other, net 309 (398 ) (76 ) — (165 ) Total other income (expense), net 13,556 (10,831 ) (604 ) (43,411 ) (41,290 ) Income (loss) from continuing operations before income taxes 13,556 45,136 (10,101 ) (43,411 ) 5,180 Income tax benefit (provision), net 8,670 (15,568 ) 2,026 — (4,872 ) Net income (loss) from continuing operations 22,226 29,568 (8,075 ) (43,411 ) 308 Net income (loss) from discontinued operations — 22,724 — — 22,724 Net income (loss) 22,226 52,292 (8,075 ) (43,411 ) 23,032 Less: Net loss (income) attributable to non-controlling interests — — (806 ) — (806 ) Net income (loss) attributable to Hughes Satellite Systems Corporation $ 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 2,353 — — — 2,353 Other — — 33 — 33 Equity in other comprehensive income (loss) (805 ) (805 ) — 1,610 — Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale securities (385 ) — — — (385 ) Total other comprehensive income (loss), net of tax 1,163 (805 ) (805 ) 1,610 1,163 Comprehensive income (loss) 23,389 51,487 (8,880 ) (41,801 ) 24,195 Less: Comprehensive loss (income) attributable to non-controlling interests — — (806 ) — (806 ) Comprehensive income (loss) attributable to Hughes Satellite Systems Corporation $ 23,389 $ 51,487 $ (9,686 ) $ (41,801 ) $ 23,389 Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2020 HSSC Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities: Net income (loss) $ (14,471 ) $ 10,713 $ (32,692 ) $ 18,537 $ (17,913 ) Adjustments to reconcile net income (loss) to net cash flows from operating activities (22,215 ) 95,031 28,858 (18,537 ) 83,137 Net cash flows from operating activities (36,686 ) 105,744 (3,834 ) — 65,224 Cash flows from investing activities: Purchases of marketable investment securities (365,877 ) — — — (365,877 ) Sales and maturities of marketable investment securities 490,020 — — — 490,020 Expenditures for property and equipment — (61,134 ) (30,383 ) — (91,517 ) Expenditures for externally marketed software — (8,638 ) — — (8,638 ) Distributions (contributions) and advances 29,290 (18,939 ) — (10,351 ) — Net cash flows from investing activities 153,433 (88,711 ) (30,383 ) (10,351 ) 23,988 Cash flows from financing activities: Payment of finance lease obligations — — (215 ) — (215 ) Payment of in-orbit incentive obligations — (203 ) — — (203 ) Contribution by non-controlling interest holder — — 4,000 — 4,000 Other, net — — 979 — 979 Contributions (distributions) and advances — (29,290 ) 18,939 10,351 — Net cash flows from financing activities — (29,493 ) 23,703 10,351 4,561 Effect of exchange rates on cash and cash equivalents — — (4,618 ) — (4,618 ) Net increase (decrease) in cash and cash equivalents 116,747 (12,460 ) (15,132 ) — 89,155 Cash and cash equivalents, including restricted amounts, beginning of period 1,057,903 32,338 50,081 — 1,140,322 Cash and cash equivalents, including restricted amounts, end of period $ 1,174,650 $ 19,878 $ 34,949 $ — $ 1,229,477 Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2019 HSSC Guarantor Non-Guarantor 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 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: Repurchase of the 2019 Senior Secured Notes (8,046 ) — — — (8,046 ) Payment of finance lease obligations — (9,597 ) (285 ) — (9,882 ) Payment of in-orbit incentive obligations — (1,573 ) — — (1,573 ) Purchase of non-controlling interest (7,312 ) — — — (7,312 ) Contributions (distributions) and advances — (111,020 ) 32,949 78,071 — 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 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 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These Condensed Consolidated Financial Statements are prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required for complete financial statements prepared in conformity with U.S. GAAP. In our opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. However, our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. All amounts presented in these Condensed Consolidated Financial Statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted. |
Use of Estimates | Use of Estimates We are required to make certain estimates and assumptions that affect the amounts reported in these Condensed Consolidated Financial Statements. The most significant estimates and assumptions are used in determining: (i) inputs used to recognize revenue over time, including amortization periods for deferred contract acquisition costs; (ii) allowances for doubtful accounts; (iii) deferred taxes and related valuation allowances, including uncertain tax positions; (iv) loss contingencies; (v) fair value of financial instruments; (vi) fair value of assets and liabilities acquired in business combinations; and (vii) asset impairment testing. We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts and such differences may be material to our consolidated financial statements. Additionally, changing economic and other conditions may increase the inherent uncertainty in the estimates and assumptions indicated above. We review our estimates and assumptions periodically and the effects of revisions thereto are reflected in the period they occur or prospectively if the revised estimates or assumptions affect future periods. |
Principles of Consolidation | Principles of Consolidation We consolidate all entities in which we have a controlling financial interest. We are deemed to have a controlling financial interest in variable interest entities in which we are the primary beneficiary and in other entities in which we own more than 50% of the outstanding voting shares and other shareholders do not have substantive rights to participate in management. For entities we control but do not wholly own, we record a non-controlling interest within shareholder’s equity for the portion of the entity’s equity attributed to the non-controlling ownership interests. All significant intercompany balances and transactions have been eliminated in consolidation. |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform with the current period presentation. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements Credit Losses On January 1, 2020, we adopted Accounting Standards Update (“ASU”) No. 2016-13 - Financial Instruments - Credit Losses (Topic 326) , as amended, and codified in Accounting Standards Codification Topic 326 (“ASC 326”). ASC 326 introduces a new approach to the periodic estimation of credit losses for certain financial assets 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 that have experienced credit deterioration since their original purchase. We have elected to apply the requirements of the new standard prospectively and we recognized a cumulative effect of adoption of $2.2 million to Accumulated earnings (losses) as of January 1, 2020. Based on this election, we did not restate our comparative Condensed Consolidated Financial Statements and they continue to be reported under the accounting standards in effect for the periods before January 1, 2020. The following describes the accounting impacts, by major balance sheet line item, of our adoption of this new standard based on the relevant types of losses that we and our equity method investees may be subject to: • Trade Accounts Receivable and Contract Assets, Net — Our trade accounts receivables and contract assets consist of amounts due from both our consumer and enterprise customers. Our receivables and related credit losses for our consumer customers are limited due to policies that require advance payment for services, predominant use of credit card and ACH payment processes, and our ability to promptly terminate service when timely payments are not received. However, for our enterprise customers, we estimate expected credit losses on a collective basis based on our historical loss experience, as adjusted to reflect changes in relevant factors, such as macroeconomic conditions and customer mix, that can significantly impact collectability. We apply our collective estimation processes separately to several pools of receivables that share common risk characteristics, generally based on the customers’ geographical location. Customers with significant past-due balances or other atypical characteristics are excluded from our collective analysis and evaluated on a case-by-case basis. Our estimates of expected credit losses for such receivables reflect significant judgments that consider customer-specific matters such as the customer’s financial condition, payment history, and recent developments in the customer’s business and industry. Due to the short-term nature of our trade receivables and contract assets, forecasts about the future have limited relevance to our expected credit loss estimates. We record our customer related estimated credit losses as a component of our bad debt expense as reported in Selling, general and administrative expenses . • Other Current Assets, Net, and Other Non-current Assets, Net — We estimate expected credit losses for receivables with payment terms longer than one year separately by borrower, due to the unique risk characteristics of such receivables. We generally use discounted cash flow techniques to estimate such credit losses. In applying such techniques, we may estimate principal and interest cash flows under probability-weighted scenarios that consider entity-specific matters and forecasted economic conditions. The majority of our other non-current receivables are from entities in the telecommunications industry. The collection of contractual principal and interest on these receivables is highly dependent on the future business operations of those entities. Our estimation of expected credit losses for such receivables requires significant judgment about matters specific to the borrower and their industry. Accordingly, our actual collection experience may differ from the assumptions reflected in our expected credit loss estimates. We record our estimated credit losses as a component of our bad debt expense as reported in Selling, general and administrative expenses . Financial Impact of Adoption. Our adoption of this new standard resulted in the following adjustments to our Condensed Consolidated Balance Sheet: Balance at December 31, 2019 Adoption of Balance at Trade accounts receivable and contract assets, net $ 196,520 $ (13,672 ) $ 182,848 Other current assets, net $ 301,652 $ 6,723 $ 308,375 Other non-current assets, net $ 251,936 $ 4,050 $ 255,986 Total assets $ 5,572,035 $ (2,899 ) $ 5,569,136 Deferred tax liabilities, net $ 380,316 $ (490 ) $ 379,826 Accumulated earnings (losses) $ 664,415 $ (2,169 ) $ 662,246 Non-controlling interests $ 75,748 $ (240 ) $ 75,508 Total shareholder's equity $ 2,134,163 $ (2,409 ) $ 2,131,754 Total liabilities and shareholder's equity $ 5,572,035 $ (2,899 ) $ 5,569,136 The application of ASC 326 requirements did not materially affect our Condensed Consolidated Statements of Operations for the three months ended March 31, 2020. Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) . ASU 2019-12 is part of the FASB’s overall simplification initiative and seeks to simplify the accounting for income taxes by updating certain guidance and removing certain exceptions. The updated guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. Early adoption is permitted. We are currently assessing the impact of adopting this new guidance. In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates (“IBORs”) to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. The guidance may be applied upon issuance of ASC 848 through December 31, 2022. We are currently assessing the impact of adopting this new guidance, but do not expect it to have a material impact on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Financial Impact of Adoption. Our adoption of this new standard resulted in the following adjustments to our Condensed Consolidated Balance Sheet: Balance at December 31, 2019 Adoption of Balance at Trade accounts receivable and contract assets, net $ 196,520 $ (13,672 ) $ 182,848 Other current assets, net $ 301,652 $ 6,723 $ 308,375 Other non-current assets, net $ 251,936 $ 4,050 $ 255,986 Total assets $ 5,572,035 $ (2,899 ) $ 5,569,136 Deferred tax liabilities, net $ 380,316 $ (490 ) $ 379,826 Accumulated earnings (losses) $ 664,415 $ (2,169 ) $ 662,246 Non-controlling interests $ 75,748 $ (240 ) $ 75,508 Total shareholder's equity $ 2,134,163 $ (2,409 ) $ 2,131,754 Total liabilities and shareholder's equity $ 5,572,035 $ (2,899 ) $ 5,569,136 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract with Customer, Asset and Liability | The following table presents the components of our contract balances: As of March 31, 2020 December 31, 2019 Trade accounts receivable and contract assets, net: Sales and services $ 147,288 $ 152,632 Leasing 4,194 4,016 Total trade accounts receivable 151,482 156,648 Contract assets 46,938 63,649 Allowance for doubtful accounts (10,608 ) (23,777 ) Total trade accounts receivable and contract assets, net $ 187,812 $ 196,520 Contract liabilities: Current $ 99,266 $ 101,060 Non-current 9,426 10,572 Total contract liabilities $ 108,692 $ 111,632 |
Contract Acquisition Costs | The following table presents our unamortized contract acquisition costs: As of March 31, 2020 December 31, 2019 Unamortized contract acquisition costs $ 110,397 $ 113,592 The following table presents the amortization of our contract acquisition costs: For the three months 2020 2019 Amortization expense $ 25,431 $ 21,115 |
Schedule of Allowance for Doubtful Accounts Activity | The following table presents the activity in our allowance for doubtful accounts: Balance at Credit Losses (1) Deductions Foreign Currency Translation Balance at For the three months ended: March 31, 2020 $ 23,777 $ (5,754 ) $ (6,325 ) $ (1,090 ) $ 10,608 March 31, 2019 $ 16,604 $ 4,177 $ (6,738 ) $ (15 ) $ 14,028 (1) The impact of adopting ASC 326 on January 1, 2020 was a net decrease to our allowance for doubtful accounts largely driven by a $13.4 million reclassification to Other current assets, net and Other non-current assets, net , offset by a $2.9 million adjustment to Accumulated earnings (losses) . The following table presents the activity in our allowance for doubtful accounts, which is included within Other, net in each of Other current assets, net and Other non-current assets, net in the table above : Balance at Credit Losses (1) Deductions Foreign Currency Translation Balance at For the three months ended March 31, 2020 Other current assets, net $ — $ 1,595 $ — $ — $ 1,595 Other non-current assets, net $ — $ 13,379 $ — $ (358 ) $ 13,021 (1) The impact of adopting ASC 326 on January 1, 2020 was a net increase to our allowance for doubtful accounts largely driven by a $13.4 million reclassification from Trade accounts receivables and contracts assets, net . |
Schedule of Disaggregation of Revenue | The following table presents our revenue from customer contracts disaggregated by primary geographic market and by segment: Hughes ESS Corporate and Other Consolidated For the three months ended March 31, 2020 North America $ 382,715 $ 4,652 $ (285 ) $ 387,082 South and Central America 33,956 — — 33,956 Other 41,811 — 4,698 46,509 Total revenue $ 458,482 $ 4,652 $ 4,413 $ 467,547 For the three months ended March 31, 2019 North America $ 367,829 $ 4,033 $ 1,005 $ 372,867 South and Central America 26,863 — — 26,863 Other 50,645 — 4,824 55,469 Total revenue $ 445,337 $ 4,033 $ 5,829 $ 455,199 The following table presents our revenue disaggregated by the nature of products and services and by segment: Hughes ESS Corporate and Other Consolidated For the three months ended March 31, 2020 Services and other revenue: Services $ 390,000 $ 2,765 $ — $ 392,765 Lease revenue 11,173 1,887 4,413 17,473 Total services and other revenue 401,173 4,652 4,413 410,238 Equipment revenue: Equipment 24,839 — — 24,839 Design, development and construction services 31,557 — — 31,557 Lease revenue 913 — — 913 Total equipment revenue 57,309 — — 57,309 Total revenue $ 458,482 $ 4,652 $ 4,413 $ 467,547 For the three months ended March 31, 2019 Services and other revenue: Services $ 380,783 $ 2,817 $ 322 $ 383,922 Lease revenue 12,840 1,216 5,507 19,563 Total services and other revenue 393,623 4,033 5,829 403,485 Equipment revenue: Equipment 25,960 — — 25,960 Design, development and construction services 25,066 — — 25,066 Lease revenue 688 — — 688 Total equipment revenue 51,714 — — 51,714 Total revenue $ 445,337 $ 4,033 $ 5,829 $ 455,199 |
Schedule of Operating Lease Revenue | The following table presents our lease revenue by type of lease: For the three months 2020 2019 Sales-type lease revenue: Revenue at lease commencement $ 913 $ 688 Interest income 69 252 Total sales-type lease revenue 982 940 Operating lease revenue 17,404 19,311 Total lease revenue $ 18,386 $ 20,251 |
Schedule of Sales-type Lease Revenue | The following table presents our lease revenue by type of lease: For the three months 2020 2019 Sales-type lease revenue: Revenue at lease commencement $ 913 $ 688 Interest income 69 252 Total sales-type lease revenue 982 940 Operating lease revenue 17,404 19,311 Total lease revenue $ 18,386 $ 20,251 |
Schedule of Operating Lease Payments to be Received | The following table presents future operating lease payments to be received as of March 31, 2020 : Amounts Year ending December 31, 2020 (remainder) $ 27,691 2021 34,910 2022 32,052 2023 30,285 2024 28,219 2025 and beyond 123,520 Total lease payments $ 276,677 |
Schedule of Property and Equipment Subject To Operating Leases | The following table presents amounts for assets subject to operating leases, which are included in Property and equipment, net : As of March 31, 2020 December 31, 2019 Cost Accumulated Depreciation Net Cost Accumulated Depreciation Net Customer premises equipment $ 1,488,031 $ (1,123,861 ) $ 364,170 $ 1,458,298 $ (1,074,968 ) $ 383,330 Satellites 104,620 (33,104 ) 71,516 104,620 (31,360 ) 73,260 Total $ 1,592,651 $ (1,156,965 ) $ 435,686 $ 1,562,918 $ (1,106,328 ) $ 456,590 The following table presents depreciation expense for assets subject to operating leases, which is included in Depreciation and amortization : For the three months 2020 2019 Customer premises equipment $ 49,504 $ 49,712 Satellites 1,744 1,737 Real estate — 217 Total $ 51,248 $ 51,666 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The following table presents the financial results of our discontinued operations for the BSS Business for the three months ended March 31, 2019: Amounts Revenue: Services and other revenue - DISH Network $ 70,826 Services and other revenue - other 6,400 Total revenue 77,226 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) 10,217 Selling, general and administrative expenses 20 Depreciation and amortization 31,119 Total costs and expenses 41,356 Operating income (loss) 35,870 Other income (expense): Interest expense (6,498 ) Total other income (expense), net (6,498 ) Income (loss) from discontinued operations before income taxes 29,372 Income tax benefit (provision), net (6,648 ) Net income (loss) from discontinued operations $ 22,724 The following table presents the significant supplemental cash flow information and adjustments to reconcile net income to net cash flow from operating activities for discontinued operations of the BSS Business for the three months ended March 31, 2019: Amounts Operating activities: Net income (loss) from discontinued operations $ 22,724 Depreciation and amortization $ 31,119 Investing activities: Expenditures for property and equipment $ 108 Financing activities: Payment of finance lease obligations $ 9,597 Payment of in-orbit incentive obligations $ 1,035 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | All assets and liabilities acquired from Yahsat have been recorded at fair value. The following table presents our updated preliminary allocation of the purchase price: Amounts Assets: Cash and cash equivalents $ 7,858 Other current assets, net 7,106 Property and equipment 86,983 Regulatory authorization 4,498 Goodwill 6,328 Other non-current assets, net 1,502 Total assets $ 114,275 Liabilities: Trade accounts payable $ 3,879 Accrued expenses and other current liabilities 4,796 Total liabilities $ 8,675 Total purchase price (1) $ 105,600 (1) Based on the value determined for the equity ownership interest issued by our Brazilian subsidiary as consideration for the business acquired by us in the Yahsat Brazil JV Transaction. |
Schedule of Other Intangible Assets | The following preliminary valuation of the acquired assets was derived using primarily unobservable Level 3 inputs, which require significant management judgment and estimation: Amounts Satellite payload $ 49,363 Regulatory authorization 4,498 Total $ 53,861 |
Marketable Investment Securit_2
Marketable Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of activity in available-for-sale debt securities | The following table presents our Marketable investment securities : As of March 31, 2020 December 31, 2019 Marketable investment securities: Debt securities: Available-for-sale: Corporate bonds $ 319,295 $ 411,706 Other debt securities 205,569 240,888 Total available-for-sale debt securities 524,864 652,594 Equity securities 77 241 Total marketable investment securities $ 524,941 $ 652,835 The following table presents the activity on our available-for-sale debt securities: For the three months 2020 2019 Proceeds from sales $ 10,000 $ 311,823 Gains (losses) on sales, net $ — $ 385 |
Schedule of unrealized gains (losses) on marketable investment securities | The following table presents the components of our available-for-sale debt securities: Amortized Unrealized Estimated Cost Gains Losses Fair Value As of March 31, 2020 Corporate bonds $ 321,466 $ — $ (2,171 ) $ 319,295 Other debt securities 205,569 — — 205,569 Total available-for-sale debt securities $ 527,035 $ — $ (2,171 ) $ 524,864 As of December 31, 2019 Corporate bonds $ 411,312 $ 395 $ (1 ) $ 411,706 Other debt securities 240,887 1 — 240,888 Total available-for-sale debt securities $ 652,199 $ 396 $ (1 ) $ 652,594 |
Schedule of activity in equity securities | The following table presents the activity of our equity securities: For the three months 2020 2019 Gains (losses) on investments, net $ (164 ) $ (732 ) |
Schedule of fair value measurements | The following table presents our marketable investment securities categorized by the fair value hierarchy, certain of which have historically experienced volatility: As of March 31, 2020 December 31, 2019 Level 1 Level 2 Total Level 1 Level 2 Total Available-for-sale debt securities: Corporate bonds $ — $ 319,295 $ 319,295 $ — $ 411,706 $ 411,706 Other debt securities — 205,569 205,569 — 240,888 240,888 Total available-for-sale debt securities — 524,864 524,864 — 652,594 652,594 Equity securities 77 — 77 241 — 241 Total marketable investment securities $ 77 $ 524,864 $ 524,941 $ 241 $ 652,594 $ 652,835 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | The following tables presents the components of Property and equipment, net : As of March 31, 2020 December 31, 2019 Property and equipment, net: Satellites, net $ 1,059,542 $ 1,127,521 Other property and equipment, net 691,019 730,060 Total property and equipment, net $ 1,750,561 $ 1,857,581 The following table presents our owned and leased satellites: Satellite Segment Launch Date Nominal Degree Orbital Location (Longitude) Depreciable Life (In Years) Owned: SPACEWAY 3 (1) Hughes August 2007 95 W 10 EchoStar XVII Hughes July 2012 107 W 15 EchoStar XIX Hughes December 2016 97.1 W 15 Al Yah 3 (2) Hughes January 2018 20 W 7 EchoStar IX (3) ESS August 2003 121 W 12 Finance leases: Eutelsat 65 West A Hughes March 2016 65 W 15 Telesat T19V Hughes July 2018 63 W 15 EchoStar 105/SES-11 ESS October 2017 105 W 15 (1) Depreciable life represents the remaining useful life as of June 8, 2011, the date EchoStar completed its acquisition of Hughes Communications, Inc. and its subsidiaries (the “Hughes Acquisition”). (2) Upon consummation of our joint venture with Yahsat in Brazil in November 2019, we acquired the Brazilian Ka-band payload on this satellite. Depreciable life represents the remaining useful life as of November 2019. (3) We own the Ka-band and Ku-band payloads on this satellite. The following table presents the components of our satellites, net: Depreciable Life (In Years) As of March 31, 2020 December 31, 2019 Satellites, net: Satellites - owned 7 to 15 $ 1,503,580 $ 1,516,006 Satellites - acquired under finance leases 15 352,206 381,162 Total satellites 1,855,786 1,897,168 Accumulated depreciation: Satellites - owned (739,859 ) (713,259 ) Satellites - acquired under finance leases (56,385 ) (56,388 ) Total accumulated depreciation (796,244 ) (769,647 ) Total satellites, net $ 1,059,542 $ 1,127,521 The following table presents the depreciation expense and capitalized interest associated with our satellites: For the three months 2020 2019 Depreciation expense: Satellites - owned $ 27,068 $ 27,010 Satellites acquired under finance leases 6,013 6,490 Total depreciation expense $ 33,081 $ 33,500 Capitalized interest $ 637 $ 147 |
Regulatory Authorizations (Tabl
Regulatory Authorizations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of finite lived and indefinite lived intangible assets by major class | The following table presents the components of our Regulatory authorizations, net : Finite lived Cost Accumulated Amortization Total Indefinite lived Total Balance, December 31, 2018 $ — $ — $ — $ 400,043 $ 400,043 Balance, March 31, 2019 $ — $ — $ — $ 400,043 $ 400,043 Balance, December 31, 2019 $ 12,524 $ (161 ) $ 12,363 $ 400,000 $ 412,363 Amortization expense — (100 ) (100 ) — (100 ) Foreign currency translation (1,020 ) — (1,020 ) — (1,020 ) Balance, March 31, 2020 $ 11,504 $ (261 ) $ 11,243 $ 400,000 $ 411,243 Weighted average useful life 14 years |
Other Investments (Tables)
Other Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of investment in unconsolidated Entities | The following table presents the components of Other investments, net : As of March 31, 2020 December 31, 2019 Other investments, net: Equity method investments $ 101,601 $ 102,689 Other equity investments 7,351 7,351 Total other investments, net $ 108,952 $ 110,040 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Amounts and Fair Values of the Entity's Debt | The following table presents the carrying amounts and fair values of our Long-term debt : Effective interest rates As of March 31, 2020 December 31, 2019 Carrying Fair Carrying Fair Senior Secured Notes: 5 1/4% Senior Secured Notes due 2026 5.320% $ 750,000 $ 748,133 $ 750,000 $ 825,308 Senior Unsecured Notes: 7 5/8% Senior Unsecured Notes due 2021 8.062% 900,000 922,527 900,000 963,783 6 5/8% Senior Unsecured Notes due 2026 6.688% 750,000 770,715 750,000 833,903 Less: Unamortized debt issuance costs (9,782 ) (10,832 ) Total long-term debt $ 2,390,218 $ 2,441,375 $ 2,389,168 $ 2,622,994 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 business segments. Capital expenditures are net of refunds and other receipts related to our property and equipment. Hughes ESS Corporate and Other Consolidated For the three months ended March 31, 2020 External revenue $ 458,482 $ 4,367 $ 4,698 $ 467,547 Intersegment revenue — 285 (285 ) — Total revenue $ 458,482 $ 4,652 $ 4,413 $ 467,547 EBITDA $ 154,641 $ 2,030 $ (6,646 ) $ 150,025 Capital expenditures $ 91,517 $ — $ — $ 91,517 For the three months ended March 31, 2019 External revenue $ 445,337 $ 3,852 $ 6,010 $ 455,199 Intersegment revenue — 181 (181 ) — Total revenue $ 445,337 $ 4,033 $ 5,829 $ 455,199 EBITDA $ 161,132 $ 1,729 $ (6,158 ) $ 156,703 Capital expenditures $ 73,821 $ — $ — $ 73,821 |
Schedule of reconciliation of EBITDA to reported income before income taxes | The following table reconciles Income (loss) from continuing operations before income taxes in the Condensed Consolidated Statements of Operations to EBITDA: For the three months 2020 2019 Income (loss) from continuing operations before income taxes $ (12,682 ) $ 5,180 Interest income, net (8,892 ) (17,997 ) Interest expense, net of amounts capitalized 42,192 57,915 Depreciation and amortization 125,965 112,411 Net loss (income) attributable to non-controlling interests 3,442 (806 ) EBITDA $ 150,025 $ 156,703 |
Related Party Transactions - _2
Related Party Transactions - EchoStar (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | The following table presents our Services and other revenue from EchoStar: For the three months 2020 2019 Services and other revenue - EchoStar $ 4,699 $ 4,474 The following table presents the corresponding related party receivables: As of March 31, 2020 December 31, 2019 Related party receivables - EchoStar - current $ 131,948 $ 131,892 Related party receivables - EchoStar - non-current 19,412 19,759 Total related party receivables - EchoStar $ 151,360 $ 151,651 The following table presents our operating expenses related to EchoStar: For the three months 2020 2019 Operating expenses - EchoStar $ 12,642 $ 13,306 The following table presents the corresponding related party payables: As of March 31, 2020 December 31, 2019 Related party payables - EchoStar - current $ 13,793 $ 11,132 Related party payables - EchoStar - non-current 23,748 23,980 Total related party payables - EchoStar $ 37,541 $ 35,112 The following table presents our Services and other revenue from DISH Network: For the three months ended March 31, 2020 2019 Services and other revenue - DISH Network $ 7,587 $ 11,545 The following table presents the related trade accounts receivable: As of March 31, 2020 December 31, 2019 Trade accounts receivable - DISH Network $ 9,955 $ 8,876 The following table presents our operating expenses related to DISH Network: For the three months ended March 31, 2020 2019 Operating expenses - DISH Network $ 1,137 $ 714 The following table presents the related trade accounts payable: As of March 31, 2020 December 31, 2019 Trade accounts payable - DISH Network $ 610 $ 502 |
Related Party Transactions - _3
Related Party Transactions - DISH Network (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | The following table presents our Services and other revenue from EchoStar: For the three months 2020 2019 Services and other revenue - EchoStar $ 4,699 $ 4,474 The following table presents the corresponding related party receivables: As of March 31, 2020 December 31, 2019 Related party receivables - EchoStar - current $ 131,948 $ 131,892 Related party receivables - EchoStar - non-current 19,412 19,759 Total related party receivables - EchoStar $ 151,360 $ 151,651 The following table presents our operating expenses related to EchoStar: For the three months 2020 2019 Operating expenses - EchoStar $ 12,642 $ 13,306 The following table presents the corresponding related party payables: As of March 31, 2020 December 31, 2019 Related party payables - EchoStar - current $ 13,793 $ 11,132 Related party payables - EchoStar - non-current 23,748 23,980 Total related party payables - EchoStar $ 37,541 $ 35,112 The following table presents our Services and other revenue from DISH Network: For the three months ended March 31, 2020 2019 Services and other revenue - DISH Network $ 7,587 $ 11,545 The following table presents the related trade accounts receivable: As of March 31, 2020 December 31, 2019 Trade accounts receivable - DISH Network $ 9,955 $ 8,876 The following table presents our operating expenses related to DISH Network: For the three months ended March 31, 2020 2019 Operating expenses - DISH Network $ 1,137 $ 714 The following table presents the related trade accounts payable: As of March 31, 2020 December 31, 2019 Trade accounts payable - DISH Network $ 610 $ 502 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of cost of sales and research and development costs | The following table presents the research and development costs incurred in connection with customers’ orders: For the three months ended March 31, 2020 2019 Cost of sales - equipment (exclusive of depreciation and amortization) $ 6,692 $ 5,395 Research and development expenses $ 6,254 $ 6,888 |
Schedule of cash and cash equivalents and restricted cash | The following table reconciles Cash and cash equivalents and restricted cash, as presented in the Condensed Consolidated Balance Sheets, to the total of the same as presented in the Condensed Consolidated Statements of Cash Flows: For the three months ended March 31, 2020 2019 Cash and cash equivalents, including restricted amounts, beginning of period: Cash and cash equivalents $ 1,139,435 $ 847,823 Restricted cash 887 796 Total cash and cash equivalents, included restricted amounts, beginning of period $ 1,140,322 $ 848,619 Cash and cash equivalents, including restricted amounts, end of period: Cash and cash equivalents $ 1,228,361 $ 1,138,711 Restricted cash 1,116 971 Total cash and cash equivalents, included restricted amounts, end of period $ 1,229,477 $ 1,139,682 |
Schedule of cash and cash equivalents and restricted cash | The following table reconciles Cash and cash equivalents and restricted cash, as presented in the Condensed Consolidated Balance Sheets, to the total of the same as presented in the Condensed Consolidated Statements of Cash Flows: For the three months ended March 31, 2020 2019 Cash and cash equivalents, including restricted amounts, beginning of period: Cash and cash equivalents $ 1,139,435 $ 847,823 Restricted cash 887 796 Total cash and cash equivalents, included restricted amounts, beginning of period $ 1,140,322 $ 848,619 Cash and cash equivalents, including restricted amounts, end of period: Cash and cash equivalents $ 1,228,361 $ 1,138,711 Restricted cash 1,116 971 Total cash and cash equivalents, included restricted amounts, end of period $ 1,229,477 $ 1,139,682 |
Schedule of other assets and liabilities | The following table presents the components of Other current assets, net , and Other non-current assets, net : As of March 31, 2020 December 31, 2019 Other current assets, net: Trade accounts receivable - DISH Network $ 9,955 $ 8,876 Inventory 88,302 79,474 Prepaids and deposits 47,055 42,324 Contract acquisition costs, net 14,290 16,869 Related party receivables - EchoStar 131,948 131,892 Other, net 23,821 22,217 Total other current assets, net $ 315,371 $ 301,652 Other non-current assets, net: Restricted cash $ 1,116 $ 887 Deferred tax assets, net 7,098 7,215 Capitalized software, net 104,401 101,786 Contract acquisition costs, net 96,107 96,723 Contract fulfillment costs, net 2,782 3,010 Related party receivables - EchoStar 19,412 19,759 Other, net 25,859 22,556 Total other non-current assets, net $ 256,775 $ 251,936 The following table presents the components of Accrued expenses and other current liabilities and Other non-current liabilities : As of March 31, 2020 December 31, 2019 Accrued expenses and other current liabilities: Trade accounts payable - DISH Network $ 610 $ 502 Accrued interest 35,905 32,184 Accrued compensation 31,707 42,846 Accrued taxes 7,534 18,493 Operating lease obligation 13,393 14,112 Related party payables - EchoStar 13,793 11,132 Other 128,948 139,148 Total accrued expenses and other current liabilities $ 231,890 $ 258,417 Other non-current liabilities: Related party payables - EchoStar $ 23,748 $ 23,980 Other 64,848 66,500 Total other non-current liabilities $ 88,596 $ 90,480 |
Activity in allowance for credit loss | The following table presents the activity in our allowance for doubtful accounts: Balance at Credit Losses (1) Deductions Foreign Currency Translation Balance at For the three months ended: March 31, 2020 $ 23,777 $ (5,754 ) $ (6,325 ) $ (1,090 ) $ 10,608 March 31, 2019 $ 16,604 $ 4,177 $ (6,738 ) $ (15 ) $ 14,028 (1) The impact of adopting ASC 326 on January 1, 2020 was a net decrease to our allowance for doubtful accounts largely driven by a $13.4 million reclassification to Other current assets, net and Other non-current assets, net , offset by a $2.9 million adjustment to Accumulated earnings (losses) . The following table presents the activity in our allowance for doubtful accounts, which is included within Other, net in each of Other current assets, net and Other non-current assets, net in the table above : Balance at Credit Losses (1) Deductions Foreign Currency Translation Balance at For the three months ended March 31, 2020 Other current assets, net $ — $ 1,595 $ — $ — $ 1,595 Other non-current assets, net $ — $ 13,379 $ — $ (358 ) $ 13,021 (1) The impact of adopting ASC 326 on January 1, 2020 was a net increase to our allowance for doubtful accounts largely driven by a $13.4 million reclassification from Trade accounts receivables and contracts assets, net . |
Schedule of inventory | The following table presents the components of inventory: As of March 31, 2020 December 31, 2019 Raw materials $ 8,399 $ 4,240 Work-in-process 9,421 6,979 Finished goods 70,482 68,255 Total inventory $ 88,302 $ 79,474 |
Schedule of other significant noncash transactions | The following table presents the supplemental and non-cash investing and financing activities: For the three months ended March 31, 2020 2019 Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized $ 49,563 $ 54,277 Cash paid for income taxes $ 716 $ 652 Non-cash investing and financing activities: Increase (decrease) in capital expenditures included in accounts payable, net $ (5,359 ) $ (2,163 ) |
Supplemental Guarantor and No_2
Supplemental Guarantor and Non-Guarantor Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed consolidating balance sheet | Condensed Consolidating Balance Sheet as of March 31, 2020 HSSC Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 1,174,650 $ 19,878 $ 33,833 $ — $ 1,228,361 Marketable investment securities 524,864 77 — — 524,941 Trade accounts receivable and contract assets, net — 131,579 56,233 — 187,812 Other current assets 93,526 655,191 109,288 (542,634 ) 315,371 Total current assets 1,793,040 806,725 199,354 (542,634 ) 2,256,485 Non-current assets: Property and equipment, net — 1,425,670 324,891 — 1,750,561 Operating lease right-of-use assets — 96,944 22,767 — 119,711 Goodwill — 504,173 5,142 — 509,315 Regulatory authorizations, net — 400,000 11,243 — 411,243 Other intangible assets, net — 25,663 — — 25,663 Other investments, net — 108,952 — — 108,952 Investment in subsidiaries 2,823,219 207,664 — (3,030,883 ) — Other non-current assets, net 18,179 288,132 43,055 (92,591 ) 256,775 Total non-current assets 2,841,398 3,057,198 407,098 (3,123,474 ) 3,182,220 Total assets $ 4,634,438 $ 3,863,923 $ 606,452 $ (3,666,108 ) $ 5,438,705 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ — $ 87,132 $ 19,207 $ — $ 106,339 Contract liabilities — 93,741 5,525 — 99,266 Accrued expenses and other current liabilities 266,731 311,723 196,070 (542,634 ) 231,890 Total current liabilities 266,731 492,596 220,802 (542,634 ) 437,495 Non-current liabilities: Long-term debt 2,390,218 — — — 2,390,218 Deferred tax liabilities, net — 398,786 — (17,565 ) 381,221 Operating lease liabilities — 86,603 18,854 — 105,457 Other non-current liabilities — 63,401 100,221 (75,026 ) 88,596 Total non-current liabilities 2,390,218 548,790 119,075 (92,591 ) 2,965,492 Total liabilities 2,656,949 1,041,386 339,877 (635,225 ) 3,402,987 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 1,977,489 2,822,537 208,346 (3,030,883 ) 1,977,489 Non-controlling interests — — 58,229 — 58,229 Total shareholder's equity 1,977,489 2,822,537 266,575 (3,030,883 ) 2,035,718 Total liabilities and shareholder's equity $ 4,634,438 $ 3,863,923 $ 606,452 $ (3,666,108 ) $ 5,438,705 Condensed Consolidating Balance Sheet as of December 31, 2019 HSSC Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 1,057,903 $ 32,338 $ 49,194 $ — $ 1,139,435 Marketable investment securities 652,594 241 — — 652,835 Trade accounts receivable and contract assets, net — 129,722 66,798 — 196,520 Other current assets 93,536 602,337 107,959 (502,180 ) 301,652 Total current assets 1,804,033 764,638 223,951 (502,180 ) 2,290,442 Non-current assets: Property and equipment, net — 1,459,151 398,430 — 1,857,581 Operating lease right-of-use assets — 89,106 24,293 — 113,399 Goodwill — 504,173 2,780 — 506,953 Regulatory authorizations, net — 400,000 12,363 — 412,363 Other intangible assets, net — 29,321 — — 29,321 Other investments, net — 110,040 — — 110,040 Investment in subsidiaries 2,876,572 282,163 — (3,158,735 ) — Other non-current assets, net 10,672 772,193 42,557 (573,486 ) 251,936 Total non-current assets 2,887,244 3,646,147 480,423 (3,732,221 ) 3,281,593 Total assets $ 4,691,277 $ 4,410,785 $ 704,374 $ (4,234,401 ) $ 5,572,035 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ — $ 102,744 $ 18,808 $ — $ 121,552 Contract liabilities — 96,485 4,575 — 101,060 Accrued expenses and other current liabilities 243,694 314,583 202,320 (502,180 ) 258,417 Total current liabilities 243,694 513,812 225,703 (502,180 ) 481,029 Non-current liabilities: Long-term debt 2,389,168 — — — 2,389,168 Deferred tax liabilities, net — 390,288 — (9,972 ) 380,316 Operating lease liabilities — 77,366 19,513 — 96,879 Other non-current liabilities — 553,518 100,476 (563,514 ) 90,480 Total non-current liabilities 2,389,168 1,021,172 119,989 (573,486 ) 2,956,843 Total liabilities 2,632,862 1,534,984 345,692 (1,075,666 ) 3,437,872 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 2,058,415 2,875,801 282,934 (3,158,735 ) 2,058,415 Non-controlling interests — — 75,748 — 75,748 Total shareholder's equity 2,058,415 2,875,801 358,682 (3,158,735 ) 2,134,163 Total liabilities and shareholder's equity $ 4,691,277 $ 4,410,785 $ 704,374 $ (4,234,401 ) $ 5,572,035 |
Schedule of condensed consolidating statement of operations and comprehensive income (loss) | Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) For the Three Months Ended March 31, 2020 HSSC Guarantor Non-Guarantor Eliminations Total Revenue: Services and other revenue $ — $ 354,399 $ 64,928 $ (9,089 ) $ 410,238 Equipment revenue — 65,586 5,410 (13,687 ) 57,309 Total revenue — 419,985 70,338 (22,776 ) 467,547 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 110,471 42,063 (8,649 ) 143,885 Cost of sales - equipment (exclusive of depreciation and amortization) — 55,374 4,221 (13,687 ) 45,908 Selling, general and administrative expenses — 95,818 20,482 (440 ) 115,860 Research and development expenses — 6,109 145 — 6,254 Depreciation and amortization — 99,359 26,606 — 125,965 Total costs and expenses — 367,131 93,517 (22,776 ) 437,872 Operating income (loss) — 52,854 (23,179 ) — 29,675 Other income (expense): Interest income 7,953 971 891 (923 ) 8,892 Interest expense, net of amounts capitalized (40,472 ) (613 ) (2,030 ) 923 (42,192 ) Gains (losses) on investments, net — (164 ) — — (164 ) Equity in earnings (losses) of unconsolidated affiliates, net — (1,087 ) — — (1,087 ) Equity in earnings (losses) of subsidiaries, net 10,630 (29,167 ) — 18,537 — Foreign currency transaction gains (losses), net — (2 ) (7,526 ) — (7,528 ) Other, net — (275 ) (3 ) — (278 ) Total other income (expense), net (21,889 ) (30,337 ) (8,668 ) 18,537 (42,357 ) Income (loss) from continuing operations before income taxes (21,889 ) 22,517 (31,847 ) 18,537 (12,682 ) Income tax benefit (provision), net 7,418 (11,804 ) (845 ) — (5,231 ) Net income (loss) (14,471 ) 10,713 (32,692 ) 18,537 (17,913 ) Less: Net loss (income) attributable to non-controlling interests — — 3,442 — 3,442 Net income (loss) attributable to Hughes Satellite Systems Corporation $ (14,471 ) $ 10,713 $ (29,250 ) $ 18,537 $ (14,471 ) Comprehensive income (loss): Net income (loss) $ (14,471 ) $ 10,713 $ (32,692 ) $ 18,537 $ (17,913 ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — (82,836 ) — (82,836 ) Unrealized gains (losses) on available-for-sale securities (2,479 ) — — — (2,479 ) Other — — (405 ) — (405 ) Equity in other comprehensive income (loss) (66,918 ) (66,918 ) — 133,836 — Total other comprehensive income (loss), net of tax (69,397 ) (66,918 ) (83,241 ) 133,836 (85,720 ) Comprehensive income (loss) (83,868 ) (56,205 ) (115,933 ) 152,373 (103,633 ) Less: Comprehensive loss (income) attributable to non-controlling interests — — 19,765 — 19,765 Comprehensive income (loss) attributable to Hughes Satellite Systems Corporation $ (83,868 ) $ (56,205 ) $ (96,168 ) $ 152,373 $ (83,868 ) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) For the Three Months Ended March 31, 2019 HSSC Guarantor Non-Guarantor Eliminations Total Revenue: Services and other revenue $ — $ 352,591 $ 59,696 $ (8,802 ) $ 403,485 Equipment revenue — 52,649 9,415 (10,350 ) 51,714 Total revenue — 405,240 69,111 (19,152 ) 455,199 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 110,862 39,333 (8,109 ) 142,086 Cost of sales - equipment (exclusive of depreciation and amortization) — 48,499 6,858 (10,350 ) 45,007 Selling, general and administrative expenses — 86,465 16,565 (693 ) 102,337 Research and development expenses — 6,743 145 — 6,888 Depreciation and amortization — 96,704 15,707 — 112,411 Total costs and expenses — 349,273 78,608 (19,152 ) 408,729 Operating income (loss) — 55,967 (9,497 ) — 46,470 Other income (expense): Interest income 17,409 926 559 (897 ) 17,997 Interest expense, net of amounts capitalized (56,361 ) (1,134 ) (1,317 ) 897 (57,915 ) 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 ) — Foreign currency transaction gains (losses), net — (19 ) 230 — 211 Other, net 309 (398 ) (76 ) — (165 ) Total other income (expense), net 13,556 (10,831 ) (604 ) (43,411 ) (41,290 ) Income (loss) from continuing operations before income taxes 13,556 45,136 (10,101 ) (43,411 ) 5,180 Income tax benefit (provision), net 8,670 (15,568 ) 2,026 — (4,872 ) Net income (loss) from continuing operations 22,226 29,568 (8,075 ) (43,411 ) 308 Net income (loss) from discontinued operations — 22,724 — — 22,724 Net income (loss) 22,226 52,292 (8,075 ) (43,411 ) 23,032 Less: Net loss (income) attributable to non-controlling interests — — (806 ) — (806 ) Net income (loss) attributable to Hughes Satellite Systems Corporation $ 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 2,353 — — — 2,353 Other — — 33 — 33 Equity in other comprehensive income (loss) (805 ) (805 ) — 1,610 — Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale securities (385 ) — — — (385 ) Total other comprehensive income (loss), net of tax 1,163 (805 ) (805 ) 1,610 1,163 Comprehensive income (loss) 23,389 51,487 (8,880 ) (41,801 ) 24,195 Less: Comprehensive loss (income) attributable to non-controlling interests — — (806 ) — (806 ) Comprehensive income (loss) attributable to Hughes Satellite Systems Corporation $ 23,389 $ 51,487 $ (9,686 ) $ (41,801 ) $ 23,389 |
Schedule of condensed consolidating statement of cash flows | Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2020 HSSC Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities: Net income (loss) $ (14,471 ) $ 10,713 $ (32,692 ) $ 18,537 $ (17,913 ) Adjustments to reconcile net income (loss) to net cash flows from operating activities (22,215 ) 95,031 28,858 (18,537 ) 83,137 Net cash flows from operating activities (36,686 ) 105,744 (3,834 ) — 65,224 Cash flows from investing activities: Purchases of marketable investment securities (365,877 ) — — — (365,877 ) Sales and maturities of marketable investment securities 490,020 — — — 490,020 Expenditures for property and equipment — (61,134 ) (30,383 ) — (91,517 ) Expenditures for externally marketed software — (8,638 ) — — (8,638 ) Distributions (contributions) and advances 29,290 (18,939 ) — (10,351 ) — Net cash flows from investing activities 153,433 (88,711 ) (30,383 ) (10,351 ) 23,988 Cash flows from financing activities: Payment of finance lease obligations — — (215 ) — (215 ) Payment of in-orbit incentive obligations — (203 ) — — (203 ) Contribution by non-controlling interest holder — — 4,000 — 4,000 Other, net — — 979 — 979 Contributions (distributions) and advances — (29,290 ) 18,939 10,351 — Net cash flows from financing activities — (29,493 ) 23,703 10,351 4,561 Effect of exchange rates on cash and cash equivalents — — (4,618 ) — (4,618 ) Net increase (decrease) in cash and cash equivalents 116,747 (12,460 ) (15,132 ) — 89,155 Cash and cash equivalents, including restricted amounts, beginning of period 1,057,903 32,338 50,081 — 1,140,322 Cash and cash equivalents, including restricted amounts, end of period $ 1,174,650 $ 19,878 $ 34,949 $ — $ 1,229,477 Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2019 HSSC Guarantor Non-Guarantor 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 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: Repurchase of the 2019 Senior Secured Notes (8,046 ) — — — (8,046 ) Payment of finance lease obligations — (9,597 ) (285 ) — (9,882 ) Payment of in-orbit incentive obligations — (1,573 ) — — (1,573 ) Purchase of non-controlling interest (7,312 ) — — — (7,312 ) Contributions (distributions) and advances — (111,020 ) 32,949 78,071 — 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 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 |
Organization and Business Act_2
Organization and Business Activities (Details) | 1 Months Ended | 3 Months Ended | ||
Sep. 30, 2019$ / sharesshares | May 31, 2019shares | Mar. 31, 2020segment$ / shares | Dec. 31, 2019$ / shares | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of business segments | segment | 2 | |||
Related Party Transaction [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
BSS Corp. | Common Stock | ||||
Related Party Transaction [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | |||
DISH Network | Common Class A | ||||
Related Party Transaction [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Stock conversion, numerator (in shares) | shares | 0.23523769 | 0.23523769 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of accounting changes | $ (2,409) | ||||
Trade accounts receivable and contract assets, net | $ 187,812 | $ 196,520 | |||
Other current assets, net | 315,371 | 301,652 | |||
Other non-current assets, net | 256,775 | 251,936 | |||
Total assets | 5,438,705 | 5,572,035 | |||
Deferred tax liabilities, net | 381,221 | 380,316 | |||
Accumulated earnings (losses) | 647,775 | 664,415 | |||
Non-controlling interests | 58,229 | 75,748 | |||
Total shareholder's equity | 2,035,718 | 2,134,163 | $ 2,410,487 | $ 2,392,495 | |
Total liabilities and shareholder's equity | 5,438,705 | 5,572,035 | |||
Accounting Standards Update 2016-13 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accumulated earnings (losses) | 2,900 | ||||
Adoption of ASC 326 Increase (Decrease) | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Trade accounts receivable and contract assets, net | (13,672) | ||||
Other current assets, net | 6,723 | ||||
Other non-current assets, net | 4,050 | ||||
Total assets | (2,899) | ||||
Deferred tax liabilities, net | (490) | ||||
Accumulated earnings (losses) | (2,169) | ||||
Non-controlling interests | (240) | ||||
Total shareholder's equity | (2,409) | ||||
Total liabilities and shareholder's equity | (2,899) | ||||
Balance at January 1, 2020 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Trade accounts receivable and contract assets, net | 182,848 | ||||
Other current assets, net | 308,375 | ||||
Other non-current assets, net | 255,986 | ||||
Total assets | 5,569,136 | ||||
Deferred tax liabilities, net | 379,826 | ||||
Accumulated earnings (losses) | 662,246 | ||||
Non-controlling interests | 75,508 | ||||
Total shareholder's equity | 2,131,754 | ||||
Total liabilities and shareholder's equity | 5,569,136 | ||||
Accumulated Earnings (Losses) | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of accounting changes | (2,169) | ||||
Total shareholder's equity | $ 647,775 | $ 664,415 | $ 716,183 | $ 693,957 | |
Accumulated Earnings (Losses) | Accounting Standards Update 2016-13 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of accounting changes | $ (2,200) |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Trade accounts receivable and contract assets, net: | |||
Total trade accounts receivable | $ 151,482 | $ 156,648 | |
Contract assets | 46,938 | 63,649 | |
Allowance for doubtful accounts | (10,608) | (23,777) | |
Total trade accounts receivable and contract assets, net | 187,812 | 196,520 | |
Contract liabilities: | |||
Current | 99,266 | 101,060 | |
Noncurrent | 9,426 | 10,572 | |
Total contract liabilities | 108,692 | 111,632 | |
Revenue recognized | 52,200 | $ 39,500 | |
Sales and services | |||
Trade accounts receivable and contract assets, net: | |||
Total trade accounts receivable | 147,288 | 152,632 | |
Leasing | |||
Trade accounts receivable and contract assets, net: | |||
Total trade accounts receivable | $ 4,194 | $ 4,016 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Allowance for Doubtful Accounts Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | Dec. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at Beginning of Period | $ 23,777 | $ 16,604 | ||
Credit Losses | (5,754) | 4,177 | ||
Deductions | (6,325) | (6,738) | ||
Foreign Currency Translation | (1,090) | (15) | ||
Balance at End of Period | 10,608 | $ 14,028 | ||
Accumulated earnings (losses) | $ 647,775 | $ 664,415 | ||
Accounting Standards Update 2016-13 | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Other assets | $ 13,400 | |||
Accumulated earnings (losses) | $ 2,900 |
Revenue Recognition - Contrac_2
Revenue Recognition - Contract Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Capitalized Contract Cost [Line Items] | |||
Unamortized contract acquisition costs | $ 110,397 | $ 113,592 | |
Contract Acquisition Costs | |||
Capitalized Contract Cost [Line Items] | |||
Amortization expense | $ 25,431 | $ 21,115 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) $ in Millions | Mar. 31, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 736.6 |
Expected percent recognized in next twelve months | 39.60% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 467,547 | $ 455,199 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 387,082 | 372,867 |
South and Central America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 33,956 | 26,863 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 46,509 | 55,469 |
Hughes | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 458,482 | 445,337 |
ESS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,367 | 3,852 |
Operating segments | Hughes | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 458,482 | 445,337 |
Operating segments | Hughes | North America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 382,715 | 367,829 |
Operating segments | Hughes | South and Central America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 33,956 | 26,863 |
Operating segments | Hughes | Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 41,811 | 50,645 |
Operating segments | ESS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,652 | 4,033 |
Operating segments | ESS | North America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,652 | 4,033 |
Operating segments | ESS | South and Central America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Operating segments | ESS | Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Corporate and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,413 | 5,829 |
Corporate and Other | North America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | (285) | 1,005 |
Corporate and Other | South and Central America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Corporate and Other | Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,698 | 4,824 |
Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 392,765 | 383,922 |
Services | Operating segments | Hughes | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 390,000 | 380,783 |
Services | Operating segments | ESS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,765 | 2,817 |
Services | Corporate and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 322 |
Lease revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 17,473 | 19,563 |
Lease revenue | Operating segments | Hughes | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 11,173 | 12,840 |
Lease revenue | Operating segments | ESS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,887 | 1,216 |
Lease revenue | Corporate and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,413 | 5,507 |
Services and other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 410,238 | 403,485 |
Services and other revenue | Operating segments | Hughes | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 401,173 | 393,623 |
Services and other revenue | Operating segments | ESS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,652 | 4,033 |
Services and other revenue | Corporate and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,413 | 5,829 |
Equipment | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 24,839 | 25,960 |
Equipment | Operating segments | Hughes | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 24,839 | 25,960 |
Equipment | Operating segments | ESS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Equipment | Corporate and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Design, development and construction services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 31,557 | 25,066 |
Design, development and construction services | Operating segments | Hughes | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 31,557 | 25,066 |
Design, development and construction services | Operating segments | ESS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Design, development and construction services | Corporate and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Lease revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 913 | 688 |
Lease revenue | Operating segments | Hughes | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 913 | 688 |
Lease revenue | Operating segments | ESS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Lease revenue | Corporate and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Total equipment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 57,309 | 51,714 |
Total equipment revenue | Operating segments | Hughes | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 57,309 | 51,714 |
Total equipment revenue | Operating segments | ESS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Total equipment revenue | Corporate and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 0 | $ 0 |
Revenue Recognition - Lease Inc
Revenue Recognition - Lease Income by Lease Type (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Revenue at lease commencement | $ 913 | $ 688 | |
Interest income | 69 | 252 | |
Total sales-type lease revenue | 982 | 940 | |
Operating lease revenue | 17,404 | 19,311 | |
Total lease revenue | 18,386 | $ 20,251 | |
Lease receivables | $ 6,600 | $ 6,500 |
Revenue Recognition - Lease I_2
Revenue Recognition - Lease Income Maturity (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
2020 (remainder) | $ 27,691 |
2021 | 34,910 |
2022 | 32,052 |
2023 | 30,285 |
2024 | 28,219 |
2025 and beyond | 123,520 |
Total lease payments | $ 276,677 |
Revenue Recognition - Property
Revenue Recognition - Property and Equipment Subject to Operating Leases (Details) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Net | $ 1,750,561 | $ 1,857,581 |
Customer premises equipment | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,488,031 | 1,458,298 |
Accumulated Depreciation | (1,123,861) | (1,074,968) |
Net | 364,170 | 383,330 |
Satellites | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 104,620 | 104,620 |
Accumulated Depreciation | (33,104) | (31,360) |
Net | 71,516 | 73,260 |
Assets Leased to Others [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,592,651 | 1,562,918 |
Accumulated Depreciation | (1,156,965) | (1,106,328) |
Net | $ 435,686 | $ 456,590 |
Revenue Recognition - Depreciat
Revenue Recognition - Depreciation Expense for Assets Subject to Operating Leases (Details) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 51,248 | $ 51,666 |
Customer premises equipment | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation | 49,504 | 49,712 |
Satellites | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation | 1,744 | 1,737 |
Real estate | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 0 | $ 217 |
Discontinued Operations - Opera
Discontinued Operations - Operating Results and Carrying Amounts of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue: | ||
Total revenue | $ 467,547 | $ 455,199 |
Other Income (Expense): | ||
Net income (loss) from discontinued operations | 0 | 22,724 |
Operating activities: | ||
Net income (loss) from discontinued operations | 0 | 22,724 |
Financing activities: | ||
Financing cash flows from finance leases | 215 | 9,882 |
Payment of in-orbit incentive obligations | 203 | 1,573 |
Services and other revenue | ||
Revenue: | ||
Total revenue | 410,238 | $ 403,485 |
BSS Business | Discontinued Operations | ||
Revenue: | ||
Total revenue | 77,226 | |
Costs and Expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 10,217 | |
Selling, general and administrative expenses | 20 | |
Depreciation and amortization | 31,119 | |
Total costs and expenses | 41,356 | |
Operating income (loss) | 35,870 | |
Other Income (Expense): | ||
Interest expense | (6,498) | |
Total other income (expense), net | (6,498) | |
Income (loss) from discontinued operations before income taxes | 29,372 | |
Income tax benefit (provision), net | (6,648) | |
Net income (loss) from discontinued operations | 22,724 | |
Operating activities: | ||
Net income (loss) from discontinued operations | 22,724 | |
Depreciation and amortization | 31,119 | |
Investing activities: | ||
Expenditures for property and equipment | 108 | |
Financing activities: | ||
Financing cash flows from finance leases | 9,597 | |
Payment of in-orbit incentive obligations | 1,035 | |
BSS Business | Discontinued Operations | Services and other revenue | ||
Revenue: | ||
Total revenue | 6,400 | |
BSS Business | Discontinued Operations | DISH Network | Services and other revenue | ||
Revenue: | ||
Total revenue | $ 70,826 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) $ in Millions | 1 Months Ended | |||||
Mar. 31, 2017USD ($) | Dec. 31, 2017 | Feb. 28, 2017 | Feb. 28, 2013transponder | Sep. 30, 2009transponder | Nov. 30, 2008transponder | |
EOC | EchoStar XXIII | Other noncurrent assets | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Transfer of launch service contracts | $ | $ 62 | |||||
Telesat Canada | TeleSat Transponder Agreement | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of DBS transponders available | 32 | |||||
S E S Latin America | Satellite Services Agreement | QuetzSat-1 | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of DBS transponders receiving services / transponder | 32 | |||||
DISH Network | DISH Nimiq 5 Agreement | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of DBS transponders available | 32 | |||||
DISH Network | Satellite Capacity Lease Agreement | QuetzSat-1 | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of DBS transponders currently receiving services | 24 | |||||
Number of DBS transponders receiving services sublease/transponder | 5 | |||||
EchoStar Technologies Business | DISH Network | Share Exchange Agreement | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Ownership interest acquired by related party | 100.00% | 100.00% |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Nov. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||
Useful life | 11 years | ||
Goodwill | $ 509,315 | $ 506,953 | |
Yahsat | |||
Business Acquisition [Line Items] | |||
Equity ownership | 20.00% | ||
Transaction costs | $ 1,600 | ||
Useful life | 11 years | ||
Goodwill | $ 6,328 | ||
Goodwill, foreign currency translation gain (loss) | $ 1,200 | ||
Satellite Payload | |||
Business Acquisition [Line Items] | |||
Useful life | 7 years |
Business Combinations - Schedul
Business Combinations - Schedule of Recognized Identified Assets and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Nov. 30, 2019 |
Assets: | |||
Goodwill | $ 509,315 | $ 506,953 | |
Yahsat | |||
Assets: | |||
Cash and cash equivalents | $ 7,858 | ||
Other current assets, net | 7,106 | ||
Property and equipment | 86,983 | ||
Regulatory authorization | 53,861 | ||
Goodwill | 6,328 | ||
Other non-current assets, net | 1,502 | ||
Total assets | 114,275 | ||
Liabilities: | |||
Trade accounts payable | 3,879 | ||
Accrued expenses and other current liabilities | 4,796 | ||
Total liabilities | 8,675 | ||
Total purchase price | 105,600 | ||
Regulatory authorization | Yahsat | |||
Assets: | |||
Regulatory authorization | $ 4,498 |
Business Combinations - Prelimi
Business Combinations - Preliminary Valuation (Details) - Yahsat $ in Thousands | Nov. 30, 2019USD ($) |
Business Acquisition [Line Items] | |
Acquired assets | $ 53,861 |
Satellite payload | |
Business Acquisition [Line Items] | |
Acquired assets | 49,363 |
Regulatory authorization | |
Business Acquisition [Line Items] | |
Acquired assets | $ 4,498 |
Marketable Investment Securit_3
Marketable Investment Securities - Schedule of Marketable Investment Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Available-for-sale: | ||
Total debt securities | $ 524,864 | $ 652,594 |
Equity securities | 77 | 241 |
Total marketable investment securities | 524,941 | 652,835 |
Corporate bonds | ||
Available-for-sale: | ||
Total debt securities | 319,295 | 411,706 |
Other debt securities | ||
Available-for-sale: | ||
Total debt securities | $ 205,569 | $ 240,888 |
Marketable Investment Securit_4
Marketable Investment Securities - Schedule of Unrealized Gains (Losses) on Available-for-Sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | $ 524,864 | $ 652,594 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 321,466 | 411,312 |
Unrealized Gains | 0 | 395 |
Unrealized Losses | (2,171) | (1) |
Estimated Fair Value | 319,295 | 411,706 |
Other debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 205,569 | 240,887 |
Unrealized Gains | 0 | 1 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 205,569 | 240,888 |
Total available-for-sale debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 527,035 | 652,199 |
Unrealized Gains | 0 | 396 |
Unrealized Losses | (2,171) | (1) |
Estimated Fair Value | $ 524,864 | $ 652,594 |
Marketable Investment Securit_5
Marketable Investment Securities - Narrative (Details) $ in Millions | Mar. 31, 2020USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale securities with contractual maturities of one year of less | $ 491.9 |
Available-for-sale securities with contractual maturity of greater than one year | $ 33 |
Marketable Investment Securit_6
Marketable Investment Securities - Activity on Available-for-sale Debt Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||
Proceeds from sales | $ 10,000 | $ 311,823 |
Gains (losses) on sales, net | $ 0 | $ 385 |
Marketable Investment Securit_7
Marketable Investment Securities - Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||
Gains (losses) on investments, net | $ (164) | $ (732) |
Marketable Investment Securit_8
Marketable Investment Securities - Fair Value of Investment Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair value of marketable securities | ||
Total debt securities | $ 524,864 | $ 652,594 |
Equity securities | 77 | 241 |
Corporate bonds | ||
Fair value of marketable securities | ||
Total debt securities | 319,295 | 411,706 |
Other debt securities | ||
Fair value of marketable securities | ||
Total debt securities | 205,569 | 240,888 |
Fair value measurements on recurring basis | ||
Fair value of marketable securities | ||
Total debt securities | 524,864 | 652,594 |
Equity securities | 77 | 241 |
Total marketable investment securities | 524,941 | 652,835 |
Fair value measurements on recurring basis | Corporate bonds | ||
Fair value of marketable securities | ||
Total debt securities | 319,295 | 411,706 |
Fair value measurements on recurring basis | Other debt securities | ||
Fair value of marketable securities | ||
Total debt securities | 205,569 | 240,888 |
Fair value measurements on recurring basis | Level 1 | ||
Fair value of marketable securities | ||
Total debt securities | 0 | 0 |
Equity securities | 77 | 241 |
Total marketable investment securities | 77 | 241 |
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 | 524,864 | 652,594 |
Equity securities | 0 | 0 |
Total marketable investment securities | 524,864 | 652,594 |
Fair value measurements on recurring basis | Level 2 | Corporate bonds | ||
Fair value of marketable securities | ||
Total debt securities | 319,295 | 411,706 |
Fair value measurements on recurring basis | Level 2 | Other debt securities | ||
Fair value of marketable securities | ||
Total debt securities | $ 205,569 | $ 240,888 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Major Asset Class (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Satellites, net | $ 1,750,561 | $ 1,857,581 |
Net | 1,750,561 | 1,857,581 |
Satellites | ||
Property, Plant and Equipment [Line Items] | ||
Satellites, net | 1,059,542 | 1,127,521 |
Other property and equipment, net | ||
Property, Plant and Equipment [Line Items] | ||
Net | $ 691,019 | $ 730,060 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)satellitemi | Dec. 31, 2019USD ($) | |
Satellites | ||
Property, Plant and Equipment [Line Items] | ||
Number of satellites in geostationary orbit, utilized by reporting entity | 8 | |
Number of satellites utilized under capital lease | 3 | |
Miles above the equator | mi | 22,300 | |
Owned | ||
Property, Plant and Equipment [Line Items] | ||
Number of satellites in geostationary orbit, utilized by reporting entity | 5 | |
Satellite Related Obligation | ||
Property, Plant and Equipment [Line Items] | ||
Satellite-related obligations | $ | $ 245.5 | $ 256.9 |
Level 2 | ||
Property, Plant and Equipment [Line Items] | ||
Fair value of in-orbit incentive obligations | $ | $ 56.2 | $ 57 |
Property and Equipment - Operat
Property and Equipment - Operating Satellite Fleet (Details) | 3 Months Ended |
Mar. 31, 2020 | |
SPACEWAY | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life In Years | 10 years |
EchoStar XVII | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life In Years | 15 years |
EchoStar XIX | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life In Years | 15 years |
Al Yah 3 | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life In Years | 7 years |
EchoStar IX | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life In Years | 12 years |
Eutelsat 65 West A | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life In Years | 15 years |
Telesat T19V | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life In Years | 15 years |
EchoStar 105/SES-11 | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life In Years | 15 years |
Property and Equipment - Sche_2
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 1,750,561 | $ 1,857,581 |
Satellites - owned | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,503,580 | 1,516,006 |
Accumulated depreciation | $ (739,859) | (713,259) |
Satellites - owned | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life In Years | 7 years | |
Satellites - owned | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life In Years | 15 years | |
Satellites - acquired under finance leases | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life In Years | 15 years | |
Finance leases | $ 352,206 | 381,162 |
Accumulated depreciation | (56,385) | (56,388) |
Satellites | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment and finance leases, before accumulated depreciation | 1,855,786 | 1,897,168 |
Accumulated depreciation | (796,244) | (769,647) |
Property and equipment, net | $ 1,059,542 | $ 1,127,521 |
Property and Equipment - Sche_3
Property and Equipment - Schedule of Depreciation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 51,248 | $ 51,666 |
Depreciation and amortization | 125,965 | 112,411 |
Capitalized interest | 637 | 147 |
Satellites | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation | 27,068 | 27,010 |
Amortization of right-of-use assets | 6,013 | 6,490 |
Depreciation and amortization | $ 33,081 | $ 33,500 |
Regulatory Authorizations - Sch
Regulatory Authorizations - Schedule of Finite Lived and Indefinite Lived Intangible Assets by Major Class (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Accumulated Amortization | |
Amortization expense | $ (100) |
Weighted average useful life | 14 years |
Total | |
Balance at the beginning of the period | $ 29,321 |
Balance at the end of the period | 25,663 |
Indefinite-lived Intangible Assets [Roll Forward] | |
Balance at the beginning of the period | 400,000 |
Balance at the end of the period | 400,000 |
Other Intangible Assets Net [RollForward] | |
Balance at the beginning of the period | 412,363 |
Foreign currency translation | (1,020) |
Balance at the end of the period | 411,243 |
Use Rights | |
Cost [Roll Forward] | |
Balance at the beginning of the period | 12,524 |
Foreign currency translation | (1,020) |
Balance at the end of the period | 11,504 |
Accumulated Amortization | |
Balance at the beginning of the period | (161) |
Amortization expense | (100) |
Balance at the end of the period | (261) |
Total | |
Balance at the beginning of the period | 12,363 |
Foreign currency translation | (1,020) |
Balance at the end of the period | $ 11,243 |
Regulatory Authorizations (Deta
Regulatory Authorizations (Details) $ in Millions | 1 Months Ended |
Nov. 30, 2019USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets gross, additions | $ 7.9 |
Useful life | 11 years |
Finite-lived intangible assets acquired | $ 4.5 |
Licensing agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 15 years |
Other Investments - Other Inves
Other Investments - Other Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Equity method investments | $ 101,601 | $ 102,689 |
Other equity investments | 7,351 | 7,351 |
Total other investments, net | $ 108,952 | $ 110,040 |
Other Investments (Details)
Other Investments (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Deluxe | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 50.00% | |||
Revenue from related parties | $ 1.3 | $ 0.9 | ||
Trade accounts receivable - DISH Network | 1 | $ 0.6 | ||
Broadband Connectivity Solutions | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 20.00% | |||
Revenue from related parties | 1.7 | $ 2.3 | ||
Trade accounts receivable - DISH Network | $ 4.5 | $ 5.2 | ||
Payments to acquire equity method investments | $ 100 |
Long-Term Debt - Schedule of De
Long-Term Debt - Schedule of Debt and Finance Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt and Capital Lease Obligations | ||
Less: Unamortized debt issuance costs | $ (9,782) | $ (10,832) |
Total long-term debt | 2,390,218 | 2,389,168 |
Fair Value | $ 2,441,375 | 2,622,994 |
5 1/4% Senior Secured Notes due 2026 | ||
Debt and Capital Lease Obligations | ||
Effective Interest Rate | 5.32% | |
Carrying Amount | $ 750,000 | 750,000 |
Fair Value | $ 748,133 | 825,308 |
Interest rate | 5.25% | |
7 5/8% Senior Unsecured Notes due 2021 | ||
Debt and Capital Lease Obligations | ||
Effective Interest Rate | 8.062% | |
Carrying Amount | $ 900,000 | 900,000 |
Fair Value | $ 922,527 | 963,783 |
Interest rate | 7.625% | |
6 5/8% Senior Unsecured Notes due 2026 | ||
Debt and Capital Lease Obligations | ||
Effective Interest Rate | 6.688% | |
Carrying Amount | $ 750,000 | 750,000 |
Fair Value | $ 770,715 | $ 833,903 |
Interest rate | 6.625% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision | $ (5,231) | $ (4,872) |
Effective income tax rate | (41.20%) | 94.10% |
Contingencies (Details)
Contingencies (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Dec. 31, 2019 | Mar. 31, 2020 | |
License Fee Dispute | ||
Other Commitments [Line Items] | ||
Written assessments | $ 28.4 | |
Loss contingency payments | 2.9 | |
License Fee Dispute | Additional license fee | ||
Other Commitments [Line Items] | ||
Written assessments | 4 | |
License Fee Dispute | Penalties | ||
Other Commitments [Line Items] | ||
Written assessments | 4.1 | |
License Fee Dispute | Interest and interest on penalties | ||
Other Commitments [Line Items] | ||
Written assessments | 20.3 | |
Hughes Network Systems | Elbit | ||
Other Commitments [Line Items] | ||
Awarded to other party | $ 33 | |
Hughes Network Systems | License Fee Dispute | ||
Other Commitments [Line Items] | ||
Loss contingency accrual | $ 80.2 | 77.1 |
Hughes Network Systems | License Fee Dispute | Additional license fee | ||
Other Commitments [Line Items] | ||
Loss contingency accrual | 3.8 | |
Hughes Network Systems | License Fee Dispute | Penalties | ||
Other Commitments [Line Items] | ||
Loss contingency accrual | 3.9 | |
Hughes Network Systems | License Fee Dispute | Interest and interest on penalties | ||
Other Commitments [Line Items] | ||
Loss contingency accrual | $ 69.4 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting [Abstract] | ||
Number of business segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 467,547 | $ 455,199 |
Capital expenditures | 91,517 | 73,821 |
Income (loss) from continuing operations before income taxes | (12,682) | 5,180 |
Interest income, net | (8,892) | (17,997) |
Interest expense, net of amounts capitalized | 42,192 | 57,915 |
Depreciation and amortization | (125,965) | (112,411) |
Net loss (income) attributable to non-controlling interests | 3,442 | (806) |
EBITDA | 150,025 | 156,703 |
Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 4,698 | 6,010 |
Intersegment revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | (285) | (181) |
Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 4,413 | 5,829 |
Capital expenditures | 0 | 0 |
EBITDA | (6,646) | (6,158) |
Hughes | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 458,482 | 445,337 |
Hughes | Intersegment revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Hughes | Operating segments | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 458,482 | 445,337 |
Capital expenditures | 91,517 | 73,821 |
EBITDA | 154,641 | 161,132 |
ESS | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 4,367 | 3,852 |
ESS | Intersegment revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 285 | 181 |
ESS | Operating segments | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 4,652 | 4,033 |
Capital expenditures | 0 | 0 |
EBITDA | $ 2,030 | $ 1,729 |
Related Party Transactions - _4
Related Party Transactions - EchoStar - Revenue (Details) - EchoStar - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 4,699 | $ 4,474 | |
Related party receivables - current | 131,948 | $ 131,892 | |
Related party receivables - EchoStar | 19,412 | 19,759 | |
Total related party receivables | $ 151,360 | $ 151,651 |
Related Party Transactions - _5
Related Party Transactions - EchoStar - Operating Expenses (Details) - EchoStar - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Operating expenses | $ 12,642 | $ 13,306 | |
Related party payables - current | 13,793 | $ 11,132 | |
Related party payables - EchoStar | 23,748 | 23,980 | |
Related party payables | $ 37,541 | $ 35,112 |
Related Party Transactions - _6
Related Party Transactions - EchoStar - Details (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
EchoStar Mobile Limited | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 4,700 | $ 5,000 |
Interest rate (as a percent) | 5.00% | |
EchoStar | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 4,699 | 4,474 |
Expense recorded for services provided | 4,400 | 2,800 |
EOC | Construction Management Services | ||
Related Party Transaction [Line Items] | ||
Related party costs | $ 300 | $ 400 |
Cheyenne Lease Agreement | EchoStar | Related Party Transactions, Lessor, Operating Lease, Real Estate [Member] | ||
Related Party Transaction [Line Items] | ||
Required minimum notice period for termination of agreement after lease extension | 30 days | |
One-Year London Interbank Offered Rate | Minimum | Related-Party Advances | ||
Related Party Transaction [Line Items] | ||
Range of annual rates for cash advances | 1.00% | |
One-Year London Interbank Offered Rate | Maximum | Related-Party Advances | ||
Related Party Transaction [Line Items] | ||
Range of annual rates for cash advances | 3.00% |
Related Party Transactions - _7
Related Party Transactions - DISH Network (Details) - USD ($) $ in Millions | Feb. 27, 2017 | Feb. 28, 2022 | Sep. 30, 2019 | Feb. 28, 2019 | Dec. 31, 2017 | Aug. 31, 2017 | Mar. 31, 2017 | Aug. 31, 2015 | Oct. 31, 2012 | Mar. 31, 2020 | Mar. 31, 2019 | May 31, 2012 |
Satellite and Tracking Stock Transaction | Hughes Retail Group | Hughes Retail Preferred Tracking Stock | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Percentage of economic interest in the Hughes Retail Group | 80.00% | |||||||||||
TerreStar Agreement | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
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 | |||||||||||
Hughes Broadband Distribution Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Automatic renewal period | 1 year | |||||||||||
Hughes Broadband Distribution Agreement | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Agreement term | 5 years | |||||||||||
Related party transactions, required minimum notice period for termination of agreement | 180 days | |||||||||||
DBSD North America Agreement | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Minimum required notice period for termination of agreement by related party | 21 days | |||||||||||
Related party transactions, required minimum notice period for termination of agreement | 120 days | |||||||||||
Hughes Equipment And Service Agreement | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Minimum required notice period for termination of agreement by related party | 365 days | |||||||||||
Automatic renewal period | 1 year | |||||||||||
Related party transactions, required minimum notice period for termination of agreement | 180 days | |||||||||||
Amended and Restated Professional Services Agreement [Member] | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Automatic renewal period | 1 year | |||||||||||
EchoStar Amended and Restated Professional Services Agreement | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Related party transactions, required minimum notice period for termination of agreement | 60 days | |||||||||||
Required minimum notice for termination of individual service | 30 days | |||||||||||
Collocation and Antenna Space Agreements | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Term of renewal option | 3 years | 4 years | ||||||||||
Required minimum notice period for termination of agreement by the reporting entity | 180 days | |||||||||||
Antenna Space And Power Agreements | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Term of renewal option | 3 years | |||||||||||
Hughes Broadband Master Services Agreement | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Agreement term | 5 years | |||||||||||
Automatic renewal period | 1 year | |||||||||||
Related party transactions, required minimum notice period for termination of agreement | 90 days | |||||||||||
Sales incentives and other costs | $ 4.6 | $ 4.8 | ||||||||||
TT&C Agreement | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Term of renewal option | 1 year | |||||||||||
Required minimum notice period for termination of agreement by the reporting entity | 12 months | |||||||||||
Renewal notice required by reporting entity | 90 days | |||||||||||
Subsequent event | DBSD North America Agreement | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Minimum required notice period for termination of agreement by related party | 180 days | |||||||||||
Maximum | Collocation and Antenna Space Agreements | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Renewal notice required by reporting entity | 120 days | |||||||||||
Maximum | Antenna Space And Power Agreements | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Renewal notice required by reporting entity | 120 days | |||||||||||
Minimum | Collocation and Antenna Space Agreements | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Renewal notice required by reporting entity | 90 days | |||||||||||
Minimum | Antenna Space And Power Agreements | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Renewal notice required by reporting entity | 90 days | |||||||||||
Ciel Satellite Holdings Inc | Satellite Capacity Lease Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Term of contract | 10 years | |||||||||||
Forecast | DBSD North America Agreement | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Automatic renewal period | 5 years | |||||||||||
Related Party Transactions, Lessee, Operating Lease, Real Estate | American Fork Occupancy License Agreement | DISH Network | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Term of contract | 5 years |
Related Party Transactions - _8
Related Party Transactions - DISH Network - Revenue (Details) - DISH Network - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 7,587 | $ 11,545 | |
Trade accounts receivable - DISH Network | $ 9,955 | $ 8,876 |
Related Party Transactions - _9
Related Party Transactions - DISH Network - Operating Expenses (Details) - DISH Network - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Operating expenses | $ 1,137 | $ 714 | |
Trade accounts payable - DISH Network | $ 610 | $ 502 |
Related Party Transactions -_10
Related Party Transactions - DISH Network - Other Agreements (Details) - shares | 1 Months Ended | |||
Sep. 30, 2019 | May 31, 2019 | Dec. 31, 2017 | Feb. 28, 2017 | |
DISH Network | Common Class A | ||||
Related Party Transaction [Line Items] | ||||
Stock conversion, numerator (in shares) | 0.23523769 | 0.23523769 | ||
DISH Network | EchoStar Technologies Business | Share Exchange Agreement | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest acquired by related party | 100.00% | 100.00% |
Related Party - Other (Details)
Related Party - Other (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Hughes Systique | |||
Related Party Transaction [Line Items] | |||
Ownership interest in related party (as a percent) | 43.00% | ||
Ownership interest percentage by related party | 25.00% | ||
TerreStar Solutions, Inc. | |||
Related Party Transaction [Line Items] | |||
Investment nonvoting interest ownership percentage(at least) | 15.00% | ||
Revenue from related parties | $ 2,200,000 | $ 5,100,000 | |
Trade accounts receivable - DISH Network | 2,300,000 | $ 2,700,000 | |
Global IP Revenue | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | 0 | 0 | |
Trade accounts receivable - DISH Network | 7,500,000 | 7,500,000 | |
Maxar Technologies Inc. | |||
Related Party Transaction [Line Items] | |||
Aggregate costs payable to related parties | 3,500,000 | $ 4,900,000 | |
Trade accounts payable - DISH Network | $ 0 | $ 0 |
Supplemental Financial Inform_3
Supplemental Financial Information - Schedule of Research and Development Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Research and development expenses | $ 6,254 | $ 6,888 |
Cost of sales - equipment (exclusive of depreciation and amortization) | ||
Research and development expenses | 6,692 | 5,395 |
Research and development expenses | ||
Research and development expenses | $ 6,254 | $ 6,888 |
Supplemental Financial Inform_4
Supplemental Financial Information - Reconciliation of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 1,228,361 | $ 1,139,435 | $ 1,138,711 | $ 847,823 |
Restricted cash | 1,116 | 887 | 971 | 796 |
Total cash and cash equivalents, included restricted amounts | $ 1,229,477 | $ 1,140,322 | $ 1,139,682 | $ 848,619 |
Supplemental Financial Inform_5
Supplemental Financial Information - Schedule of Other Current Assets and Other Non-Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other current assets, net: | ||
Inventory | $ 88,302 | $ 79,474 |
Prepaids and deposits | 47,055 | 42,324 |
Contract acquisition costs, net | 14,290 | 16,869 |
Other, net | 23,821 | 22,217 |
Total other current assets, net | 315,371 | 301,652 |
Non-current assets: | ||
Restricted cash | 1,116 | 887 |
Deferred Income Tax Assets, Net | 7,098 | 7,215 |
Deferred tax assets, net | 104,401 | 101,786 |
Other Assets, Miscellaneous, Noncurrent | 25,859 | 22,556 |
Other Assets, Noncurrent | 256,775 | 251,936 |
DISH Network | ||
Other current assets, net: | ||
Trade accounts receivable - DISH Network | 9,955 | 8,876 |
EchoStar | ||
Other current assets, net: | ||
Trade accounts receivable - DISH Network | 151,360 | 151,651 |
Related party receivables - EchoStar | 131,948 | 131,892 |
Non-current assets: | ||
Related party receivables - EchoStar | 19,412 | 19,759 |
Contract Acquisition Costs | ||
Non-current assets: | ||
Contract costs, net | 96,107 | 96,723 |
Contract Fulfillment Costs | ||
Non-current assets: | ||
Contract costs, net | $ 2,782 | $ 3,010 |
Supplemental Financial Inform_6
Supplemental Financial Information - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at Beginning of Period | $ 23,777 | $ 16,604 | |
Credit Losses | (5,754) | 4,177 | |
Deductions | (6,325) | (6,738) | |
Foreign Currency Translation | (1,090) | (15) | |
Balance at End of Period | 10,608 | $ 14,028 | |
Accounting Standards Update 2016-13 | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Other assets | $ 13,400 | ||
Other Current Assets | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at Beginning of Period | 0 | ||
Credit Losses | 1,595 | ||
Deductions | 0 | ||
Foreign Currency Translation | 0 | ||
Balance at End of Period | 1,595 | ||
Other noncurrent assets | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at Beginning of Period | 0 | ||
Credit Losses | 13,379 | ||
Deductions | 0 | ||
Foreign Currency Translation | (358) | ||
Balance at End of Period | $ 13,021 |
Supplemental Financial Inform_7
Supplemental Financial Information - Accrued Expenses and Other Current Liabilities and Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Liabilities [Abstract] | ||
Accrued interest | $ 35,905 | $ 32,184 |
Accrued compensation | 31,707 | 42,846 |
Accrued taxes | 7,534 | 18,493 |
Operating | 13,393 | 14,112 |
Other | 128,948 | 139,148 |
Total accrued expenses and other current liabilities | 231,890 | 258,417 |
Accounts Payable and Accrued Liabilities, Noncurrent [Abstract] | ||
Other | 64,848 | 66,500 |
Total other non-current liabilities | 88,596 | 90,480 |
DISH Network | ||
Accrued Liabilities [Abstract] | ||
Trade accounts payable - DISH Network | 610 | 502 |
EchoStar | ||
Accrued Liabilities [Abstract] | ||
Trade accounts payable - DISH Network | 37,541 | 35,112 |
Related party payables - EchoStar | 13,793 | 11,132 |
Accounts Payable and Accrued Liabilities, Noncurrent [Abstract] | ||
Related party payables - EchoStar | $ 23,748 | $ 23,980 |
Supplemental Financial Inform_8
Supplemental Financial Information - Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 8,399 | $ 4,240 |
Work-in-process | 9,421 | 6,979 |
Finished goods | 70,482 | 68,255 |
Total inventory | $ 88,302 | $ 79,474 |
Supplemental Financial Inform_9
Supplemental Financial Information - Supplemental and Non-cash Investing and Financing Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest, net of amounts capitalized | $ 49,563 | $ 54,277 |
Cash paid for income taxes | 716 | 652 |
Non-cash investing and financing activities: | ||
Increase (decrease) in capital expenditures included in accounts payable, net | $ (5,359) | $ (2,163) |
Supplemental Guarantor and No_3
Supplemental Guarantor and Non-Guarantor Financial Information - Narrative (Details) | Mar. 31, 2020 |
5 1/4% Senior Secured Notes due 2026 | |
Guarantor Obligations [Line Items] | |
Interest rate | 5.25% |
7 5/8% Senior Unsecured Notes due 2021 | |
Guarantor Obligations [Line Items] | |
Interest rate | 7.625% |
6 5/8% Senior Unsecured Notes due 2026 | |
Guarantor Obligations [Line Items] | |
Interest rate | 6.625% |
Supplemental Guarantor and No_4
Supplemental Guarantor and Non-Guarantor Financial Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||||
Cash and cash equivalents | $ 1,228,361 | $ 1,139,435 | $ 1,138,711 | $ 847,823 |
Marketable investment securities | 524,941 | 652,835 | ||
Trade accounts receivable and contract assets, net | 187,812 | 196,520 | ||
Other current assets, net | 315,371 | 301,652 | ||
Total current assets | 2,256,485 | 2,290,442 | ||
Non-current assets: | ||||
Property and equipment, net | 1,750,561 | 1,857,581 | ||
Operating lease right-of-use assets | 119,711 | 113,399 | ||
Goodwill | 509,315 | 506,953 | ||
Regulatory authorizations, net | 411,243 | 412,363 | 400,043 | 400,043 |
Other intangible assets, net | 25,663 | 29,321 | ||
Other investments, net | 108,952 | 110,040 | ||
Investment in subsidiaries | 0 | 0 | ||
Other non-current assets, net | 256,775 | 251,936 | ||
Total non-current assets | 3,182,220 | 3,281,593 | ||
Total assets | 5,438,705 | 5,572,035 | ||
Liabilities and Shareholder's Equity | ||||
Trade accounts payable | 106,339 | 121,552 | ||
Contract liabilities | 99,266 | 101,060 | ||
Accrued expenses and other current liabilities | 231,890 | 258,417 | ||
Total current liabilities | 437,495 | 481,029 | ||
Long-term debt | 2,390,218 | 2,389,168 | ||
Deferred tax liabilities, net | 381,221 | 380,316 | ||
Operating lease liabilities | 105,457 | 96,879 | ||
Other non-current liabilities | 88,596 | 90,480 | ||
Total non-current liabilities | 2,965,492 | 2,956,843 | ||
Total liabilities | 3,402,987 | 3,437,872 | ||
Total Hughes Satellite Systems Corporation shareholder's equity | 1,977,489 | 2,058,415 | ||
Non-controlling interests | 58,229 | 75,748 | ||
Total shareholder's equity | 2,035,718 | 2,134,163 | $ 2,410,487 | $ 2,392,495 |
Total liabilities and shareholder's equity | 5,438,705 | 5,572,035 | ||
Reportable Legal Entities | HSSC | ||||
Current assets: | ||||
Cash and cash equivalents | 1,174,650 | 1,057,903 | ||
Marketable investment securities | 524,864 | 652,594 | ||
Trade accounts receivable and contract assets, net | 0 | 0 | ||
Other current assets, net | 93,526 | 93,536 | ||
Total current assets | 1,793,040 | 1,804,033 | ||
Non-current assets: | ||||
Property and equipment, net | 0 | 0 | ||
Operating lease right-of-use assets | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Regulatory authorizations, net | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other investments, net | 0 | 0 | ||
Investment in subsidiaries | 2,823,219 | 2,876,572 | ||
Other non-current assets, net | 18,179 | 10,672 | ||
Total non-current assets | 2,841,398 | 2,887,244 | ||
Total assets | 4,634,438 | 4,691,277 | ||
Liabilities and Shareholder's Equity | ||||
Trade accounts payable | 0 | 0 | ||
Contract liabilities | 0 | 0 | ||
Accrued expenses and other current liabilities | 266,731 | 243,694 | ||
Total current liabilities | 266,731 | 243,694 | ||
Long-term debt | 2,390,218 | 2,389,168 | ||
Deferred tax liabilities, net | 0 | 0 | ||
Operating lease liabilities | 0 | 0 | ||
Other non-current liabilities | 0 | 0 | ||
Total non-current liabilities | 2,390,218 | 2,389,168 | ||
Total liabilities | 2,656,949 | 2,632,862 | ||
Total Hughes Satellite Systems Corporation shareholder's equity | 1,977,489 | 2,058,415 | ||
Non-controlling interests | 0 | 0 | ||
Total shareholder's equity | 1,977,489 | 2,058,415 | ||
Total liabilities and shareholder's equity | 4,634,438 | 4,691,277 | ||
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 19,878 | 32,338 | ||
Marketable investment securities | 77 | 241 | ||
Trade accounts receivable and contract assets, net | 131,579 | 129,722 | ||
Other current assets, net | 655,191 | 602,337 | ||
Total current assets | 806,725 | 764,638 | ||
Non-current assets: | ||||
Property and equipment, net | 1,425,670 | 1,459,151 | ||
Operating lease right-of-use assets | 96,944 | 89,106 | ||
Goodwill | 504,173 | 504,173 | ||
Regulatory authorizations, net | 400,000 | 400,000 | ||
Other intangible assets, net | 25,663 | 29,321 | ||
Other investments, net | 108,952 | 110,040 | ||
Investment in subsidiaries | 207,664 | 282,163 | ||
Other non-current assets, net | 288,132 | 772,193 | ||
Total non-current assets | 3,057,198 | 3,646,147 | ||
Total assets | 3,863,923 | 4,410,785 | ||
Liabilities and Shareholder's Equity | ||||
Trade accounts payable | 87,132 | 102,744 | ||
Contract liabilities | 93,741 | 96,485 | ||
Accrued expenses and other current liabilities | 311,723 | 314,583 | ||
Total current liabilities | 492,596 | 513,812 | ||
Long-term debt | 0 | 0 | ||
Deferred tax liabilities, net | 398,786 | 390,288 | ||
Operating lease liabilities | 86,603 | 77,366 | ||
Other non-current liabilities | 63,401 | 553,518 | ||
Total non-current liabilities | 548,790 | 1,021,172 | ||
Total liabilities | 1,041,386 | 1,534,984 | ||
Total Hughes Satellite Systems Corporation shareholder's equity | 2,822,537 | 2,875,801 | ||
Non-controlling interests | 0 | 0 | ||
Total shareholder's equity | 2,822,537 | 2,875,801 | ||
Total liabilities and shareholder's equity | 3,863,923 | 4,410,785 | ||
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 33,833 | 49,194 | ||
Marketable investment securities | 0 | 0 | ||
Trade accounts receivable and contract assets, net | 56,233 | 66,798 | ||
Other current assets, net | 109,288 | 107,959 | ||
Total current assets | 199,354 | 223,951 | ||
Non-current assets: | ||||
Property and equipment, net | 324,891 | 398,430 | ||
Operating lease right-of-use assets | 22,767 | 24,293 | ||
Goodwill | 5,142 | 2,780 | ||
Regulatory authorizations, net | 11,243 | 12,363 | ||
Other intangible assets, net | 0 | 0 | ||
Other investments, net | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Other non-current assets, net | 43,055 | 42,557 | ||
Total non-current assets | 407,098 | 480,423 | ||
Total assets | 606,452 | 704,374 | ||
Liabilities and Shareholder's Equity | ||||
Trade accounts payable | 19,207 | 18,808 | ||
Contract liabilities | 5,525 | 4,575 | ||
Accrued expenses and other current liabilities | 196,070 | 202,320 | ||
Total current liabilities | 220,802 | 225,703 | ||
Long-term debt | 0 | 0 | ||
Deferred tax liabilities, net | 0 | 0 | ||
Operating lease liabilities | 18,854 | 19,513 | ||
Other non-current liabilities | 100,221 | 100,476 | ||
Total non-current liabilities | 119,075 | 119,989 | ||
Total liabilities | 339,877 | 345,692 | ||
Total Hughes Satellite Systems Corporation shareholder's equity | 208,346 | 282,934 | ||
Non-controlling interests | 58,229 | 75,748 | ||
Total shareholder's equity | 266,575 | 358,682 | ||
Total liabilities and shareholder's equity | 606,452 | 704,374 | ||
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Marketable investment securities | 0 | 0 | ||
Trade accounts receivable and contract assets, net | 0 | 0 | ||
Other current assets, net | (542,634) | (502,180) | ||
Total current assets | (542,634) | (502,180) | ||
Non-current assets: | ||||
Property and equipment, net | 0 | 0 | ||
Operating lease right-of-use assets | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Regulatory authorizations, net | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other investments, net | 0 | 0 | ||
Investment in subsidiaries | (3,030,883) | (3,158,735) | ||
Other non-current assets, net | (92,591) | (573,486) | ||
Total non-current assets | (3,123,474) | (3,732,221) | ||
Total assets | (3,666,108) | (4,234,401) | ||
Liabilities and Shareholder's Equity | ||||
Trade accounts payable | 0 | 0 | ||
Contract liabilities | 0 | 0 | ||
Accrued expenses and other current liabilities | (542,634) | (502,180) | ||
Total current liabilities | (542,634) | (502,180) | ||
Long-term debt | 0 | 0 | ||
Deferred tax liabilities, net | (17,565) | (9,972) | ||
Operating lease liabilities | 0 | 0 | ||
Other non-current liabilities | (75,026) | (563,514) | ||
Total non-current liabilities | (92,591) | (573,486) | ||
Total liabilities | (635,225) | (1,075,666) | ||
Total Hughes Satellite Systems Corporation shareholder's equity | (3,030,883) | (3,158,735) | ||
Non-controlling interests | 0 | 0 | ||
Total shareholder's equity | (3,030,883) | (3,158,735) | ||
Total liabilities and shareholder's equity | $ (3,666,108) | $ (4,234,401) |
Supplemental Guarantor and No_5
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, 2020 | Mar. 31, 2019 | |
Revenue: | ||
Total revenue | $ 467,547 | $ 455,199 |
Costs and expenses: | ||
Selling, general and administrative expenses | 115,860 | 102,337 |
Research and development expenses | 6,254 | 6,888 |
Depreciation and amortization | 125,965 | 112,411 |
Total costs and expenses | 437,872 | 408,729 |
Operating income (loss) | 29,675 | 46,470 |
Other income (expense): | ||
Interest income, net | 8,892 | 17,997 |
Interest expense, net of amounts capitalized | (42,192) | (57,915) |
Gains (losses) on investments, net | (164) | (346) |
Equity in earnings (losses) of unconsolidated affiliates, net | (1,087) | (1,072) |
Equity in earnings (losses) of subsidiaries, net | 0 | 0 |
Foreign currency transaction gains (losses), net | (7,528) | 211 |
Other, net | (278) | (165) |
Total other income (expense), net | (42,357) | (41,290) |
Income (loss) from continuing operations before income taxes | (12,682) | 5,180 |
Income tax benefit (provision), net | (5,231) | (4,872) |
Net income (loss) from continuing operations | (17,913) | 308 |
Net income (loss) from discontinued operations | 0 | 22,724 |
Net income (loss) | (17,913) | 23,032 |
Less: Net loss (income) attributable to non-controlling interests | 3,442 | (806) |
Net income (loss) attributable to Hughes Satellite Systems Corporation | (14,471) | 22,226 |
Comprehensive income (loss): | ||
Net income (loss) | (17,913) | 23,032 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation | (82,836) | (838) |
Unrealized gains (losses) on available-for-sale debt securities | (2,479) | 2,353 |
Other | (405) | 33 |
Equity in other comprehensive income (loss) of subsidiaries, net | 0 | 0 |
Amounts reclassified to net income (loss): | ||
Realized losses (gains) on available-for-sale debt securities | 0 | (385) |
Total other comprehensive income (loss) | (85,720) | 1,163 |
Comprehensive income (loss) | (103,633) | 24,195 |
Less: Comprehensive loss (income) attributable to non-controlling interests | 19,765 | (806) |
Comprehensive income (loss) attributable to Hughes Satellite Systems Corporation | (83,868) | 23,389 |
Services and other revenue | ||
Revenue: | ||
Total revenue | 410,238 | 403,485 |
Costs and expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 143,885 | 142,086 |
Equipment revenue | ||
Revenue: | ||
Total revenue | 57,309 | 51,714 |
Costs and expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 45,908 | 45,007 |
Reportable Legal Entities | HSSC | ||
Revenue: | ||
Total 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 (loss) | 0 | 0 |
Other income (expense): | ||
Interest income, net | 7,953 | 17,409 |
Interest expense, net of amounts capitalized | (40,472) | (56,361) |
Gains (losses) on investments, net | 0 | 0 |
Equity in earnings (losses) of unconsolidated affiliates, net | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | 10,630 | 52,199 |
Foreign currency transaction gains (losses), net | 0 | 0 |
Other, net | 0 | 309 |
Total other income (expense), net | (21,889) | 13,556 |
Income (loss) from continuing operations before income taxes | (21,889) | 13,556 |
Income tax benefit (provision), net | 7,418 | 8,670 |
Net income (loss) from continuing operations | (14,471) | 22,226 |
Net income (loss) from discontinued operations | 0 | |
Net income (loss) | (14,471) | 22,226 |
Less: Net loss (income) attributable to non-controlling interests | 0 | 0 |
Net income (loss) attributable to Hughes Satellite Systems Corporation | (14,471) | 22,226 |
Comprehensive income (loss): | ||
Net income (loss) | (14,471) | 22,226 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation | 0 | 0 |
Unrealized gains (losses) on available-for-sale debt securities | (2,479) | 2,353 |
Other | 0 | 0 |
Equity in other comprehensive income (loss) of subsidiaries, net | (66,918) | (805) |
Amounts reclassified to net income (loss): | ||
Realized losses (gains) on available-for-sale debt securities | (385) | |
Total other comprehensive income (loss) | (69,397) | 1,163 |
Comprehensive income (loss) | (83,868) | 23,389 |
Less: Comprehensive loss (income) attributable to non-controlling interests | 0 | 0 |
Comprehensive income (loss) attributable to Hughes Satellite Systems Corporation | (83,868) | 23,389 |
Reportable Legal Entities | HSSC | Services and other revenue | ||
Revenue: | ||
Total revenue | 0 | 0 |
Costs and expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 0 | 0 |
Reportable Legal Entities | HSSC | Equipment revenue | ||
Revenue: | ||
Total revenue | 0 | 0 |
Costs and expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 0 | 0 |
Reportable Legal Entities | Guarantor Subsidiaries | ||
Revenue: | ||
Total revenue | 419,985 | 405,240 |
Costs and expenses: | ||
Selling, general and administrative expenses | 95,818 | 86,465 |
Research and development expenses | 6,109 | 6,743 |
Depreciation and amortization | 99,359 | 96,704 |
Total costs and expenses | 367,131 | 349,273 |
Operating income (loss) | 52,854 | 55,967 |
Other income (expense): | ||
Interest income, net | 971 | 926 |
Interest expense, net of amounts capitalized | (613) | (1,134) |
Gains (losses) on investments, net | (164) | (346) |
Equity in earnings (losses) of unconsolidated affiliates, net | (1,087) | (1,072) |
Equity in earnings (losses) of subsidiaries, net | (29,167) | (8,788) |
Foreign currency transaction gains (losses), net | (2) | (19) |
Other, net | (275) | (398) |
Total other income (expense), net | (30,337) | (10,831) |
Income (loss) from continuing operations before income taxes | 22,517 | 45,136 |
Income tax benefit (provision), net | (11,804) | (15,568) |
Net income (loss) from continuing operations | 10,713 | 29,568 |
Net income (loss) from discontinued operations | 22,724 | |
Net income (loss) | 10,713 | 52,292 |
Less: Net loss (income) attributable to non-controlling interests | 0 | 0 |
Net income (loss) attributable to Hughes Satellite Systems Corporation | 10,713 | 52,292 |
Comprehensive income (loss): | ||
Net income (loss) | 10,713 | 52,292 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation | 0 | 0 |
Unrealized gains (losses) on available-for-sale debt securities | 0 | 0 |
Other | 0 | 0 |
Equity in other comprehensive income (loss) of subsidiaries, net | (66,918) | (805) |
Amounts reclassified to net income (loss): | ||
Realized losses (gains) on available-for-sale debt securities | 0 | |
Total other comprehensive income (loss) | (66,918) | (805) |
Comprehensive income (loss) | (56,205) | 51,487 |
Less: Comprehensive loss (income) attributable to non-controlling interests | 0 | 0 |
Comprehensive income (loss) attributable to Hughes Satellite Systems Corporation | (56,205) | 51,487 |
Reportable Legal Entities | Guarantor Subsidiaries | Services and other revenue | ||
Revenue: | ||
Total revenue | 354,399 | 352,591 |
Costs and expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 110,471 | 110,862 |
Reportable Legal Entities | Guarantor Subsidiaries | Equipment revenue | ||
Revenue: | ||
Total revenue | 65,586 | 52,649 |
Costs and expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 55,374 | 48,499 |
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||
Revenue: | ||
Total revenue | 70,338 | 69,111 |
Costs and expenses: | ||
Selling, general and administrative expenses | 20,482 | 16,565 |
Research and development expenses | 145 | 145 |
Depreciation and amortization | 26,606 | 15,707 |
Total costs and expenses | 93,517 | 78,608 |
Operating income (loss) | (23,179) | (9,497) |
Other income (expense): | ||
Interest income, net | 891 | 559 |
Interest expense, net of amounts capitalized | (2,030) | (1,317) |
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 |
Foreign currency transaction gains (losses), net | (7,526) | 230 |
Other, net | (3) | (76) |
Total other income (expense), net | (8,668) | (604) |
Income (loss) from continuing operations before income taxes | (31,847) | (10,101) |
Income tax benefit (provision), net | (845) | 2,026 |
Net income (loss) from continuing operations | (32,692) | (8,075) |
Net income (loss) from discontinued operations | 0 | |
Net income (loss) | (32,692) | (8,075) |
Less: Net loss (income) attributable to non-controlling interests | 3,442 | (806) |
Net income (loss) attributable to Hughes Satellite Systems Corporation | (29,250) | (8,881) |
Comprehensive income (loss): | ||
Net income (loss) | (32,692) | (8,075) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation | (82,836) | (838) |
Unrealized gains (losses) on available-for-sale debt securities | 0 | 0 |
Other | (405) | 33 |
Equity in other comprehensive income (loss) of subsidiaries, net | 0 | 0 |
Amounts reclassified to net income (loss): | ||
Realized losses (gains) on available-for-sale debt securities | 0 | |
Total other comprehensive income (loss) | (83,241) | (805) |
Comprehensive income (loss) | (115,933) | (8,880) |
Less: Comprehensive loss (income) attributable to non-controlling interests | 19,765 | (806) |
Comprehensive income (loss) attributable to Hughes Satellite Systems Corporation | (96,168) | (9,686) |
Reportable Legal Entities | Non-Guarantor Subsidiaries | Services and other revenue | ||
Revenue: | ||
Total revenue | 64,928 | 59,696 |
Costs and expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 42,063 | 39,333 |
Reportable Legal Entities | Non-Guarantor Subsidiaries | Equipment revenue | ||
Revenue: | ||
Total revenue | 5,410 | 9,415 |
Costs and expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 4,221 | 6,858 |
Eliminations | ||
Revenue: | ||
Total revenue | (22,776) | (19,152) |
Costs and expenses: | ||
Selling, general and administrative expenses | (440) | (693) |
Research and development expenses | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Total costs and expenses | (22,776) | (19,152) |
Operating income (loss) | 0 | 0 |
Other income (expense): | ||
Interest income, net | (923) | (897) |
Interest expense, net of amounts capitalized | 923 | 897 |
Gains (losses) on investments, net | 0 | 0 |
Equity in earnings (losses) of unconsolidated affiliates, net | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | 18,537 | (43,411) |
Foreign currency transaction gains (losses), net | 0 | 0 |
Other, net | 0 | 0 |
Total other income (expense), net | 18,537 | (43,411) |
Income (loss) from continuing operations before income taxes | 18,537 | (43,411) |
Income tax benefit (provision), net | 0 | 0 |
Net income (loss) from continuing operations | 18,537 | (43,411) |
Net income (loss) from discontinued operations | 0 | |
Net income (loss) | 18,537 | (43,411) |
Less: Net loss (income) attributable to non-controlling interests | 0 | 0 |
Net income (loss) attributable to Hughes Satellite Systems Corporation | 18,537 | (43,411) |
Comprehensive income (loss): | ||
Net income (loss) | 18,537 | (43,411) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation | 0 | 0 |
Unrealized gains (losses) on available-for-sale debt securities | 0 | 0 |
Other | 0 | 0 |
Equity in other comprehensive income (loss) of subsidiaries, net | 133,836 | 1,610 |
Amounts reclassified to net income (loss): | ||
Realized losses (gains) on available-for-sale debt securities | 0 | |
Total other comprehensive income (loss) | 133,836 | 1,610 |
Comprehensive income (loss) | 152,373 | (41,801) |
Less: Comprehensive loss (income) attributable to non-controlling interests | 0 | 0 |
Comprehensive income (loss) attributable to Hughes Satellite Systems Corporation | 152,373 | (41,801) |
Eliminations | Services and other revenue | ||
Revenue: | ||
Total revenue | (9,089) | (8,802) |
Costs and expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | (8,649) | (8,109) |
Eliminations | Equipment revenue | ||
Revenue: | ||
Total revenue | (13,687) | (10,350) |
Costs and expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | $ (13,687) | $ (10,350) |
Supplemental Guarantor and No_6
Supplemental Guarantor and Non-Guarantor Financial Information - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (17,913) | $ 23,032 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 83,137 | 147,933 |
Net cash flows from operating activities | 65,224 | 170,965 |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | (365,877) | (240,188) |
Sales and maturities of marketable investment securities | 490,020 | 468,745 |
Expenditures for property and equipment | (91,517) | (73,929) |
Expenditures for externally marketed software | (8,638) | (7,600) |
Distributions (contributions) and advances from (to) subsidiaries, net | 0 | 0 |
Net cash flows from investing activities | 23,988 | 147,028 |
Cash flows from financing activities: | ||
Repurchase of the 2019 Senior Secured Notes | 0 | (8,046) |
Payment of finance lease obligations | (215) | (9,882) |
Payment of in-orbit incentive obligations | (203) | (1,573) |
Contribution by non-controlling interest holder | 4,000 | 0 |
Purchase of non-controlling interest | 0 | (7,312) |
Other, net | 979 | 0 |
Contributions (distributions) and advances (to) from parent, net | 0 | |
Net cash flows from financing activities | 4,561 | (26,813) |
Effect of exchange rates on cash and cash equivalents | (4,618) | (117) |
Net increase (decrease) in cash and cash equivalents | 89,155 | 291,063 |
Cash and cash equivalents, including restricted amounts, beginning of period | 1,140,322 | 848,619 |
Cash and cash equivalents, including restricted amounts, end of period | 1,229,477 | 1,139,682 |
Reportable Legal Entities | HSSC | ||
Cash flows from operating activities: | ||
Net income (loss) | (14,471) | 22,226 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | (22,215) | (48,467) |
Net cash flows from operating activities | (36,686) | (26,241) |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | (365,877) | (240,188) |
Sales and maturities of marketable investment securities | 490,020 | 468,748 |
Expenditures for property and equipment | 0 | 0 |
Expenditures for externally marketed software | 0 | 0 |
Distributions (contributions) and advances from (to) subsidiaries, net | 29,290 | 111,020 |
Net cash flows from investing activities | 153,433 | 339,580 |
Cash flows from financing activities: | ||
Repurchase of the 2019 Senior Secured Notes | (8,046) | |
Payment of finance lease obligations | 0 | 0 |
Payment of in-orbit incentive obligations | 0 | 0 |
Contribution by non-controlling interest holder | 0 | |
Purchase of non-controlling interest | (7,312) | |
Other, net | 0 | |
Contributions (distributions) and advances (to) from parent, net | 0 | |
Net cash flows from financing activities | 0 | (15,358) |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 116,747 | 297,981 |
Cash and cash equivalents, including restricted amounts, beginning of period | 1,057,903 | 771,718 |
Cash and cash equivalents, including restricted amounts, end of period | 1,174,650 | 1,069,699 |
Reportable Legal Entities | Guarantor Subsidiaries | ||
Cash flows from operating activities: | ||
Net income (loss) | 10,713 | 52,292 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 95,031 | 163,032 |
Net cash flows from operating activities | 105,744 | 215,324 |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | 0 | 0 |
Sales and maturities of marketable investment securities | 0 | (3) |
Expenditures for property and equipment | (61,134) | (54,207) |
Expenditures for externally marketed software | (8,638) | (7,600) |
Distributions (contributions) and advances from (to) subsidiaries, net | (18,939) | (32,949) |
Net cash flows from investing activities | (88,711) | (94,759) |
Cash flows from financing activities: | ||
Repurchase of the 2019 Senior Secured Notes | 0 | |
Payment of finance lease obligations | 0 | (9,597) |
Payment of in-orbit incentive obligations | (203) | (1,573) |
Contribution by non-controlling interest holder | 0 | |
Purchase of non-controlling interest | 0 | |
Other, net | (111,020) | |
Contributions (distributions) and advances (to) from parent, net | (29,290) | |
Net cash flows from financing activities | (29,493) | (122,190) |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | (12,460) | (1,625) |
Cash and cash equivalents, including restricted amounts, beginning of period | 32,338 | 46,353 |
Cash and cash equivalents, including restricted amounts, end of period | 19,878 | 44,728 |
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||
Cash flows from operating activities: | ||
Net income (loss) | (32,692) | (8,075) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 28,858 | (10,043) |
Net cash flows from operating activities | (3,834) | (18,118) |
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 | (30,383) | (19,722) |
Expenditures for externally marketed software | 0 | 0 |
Distributions (contributions) and advances from (to) subsidiaries, net | 0 | 0 |
Net cash flows from investing activities | (30,383) | (19,722) |
Cash flows from financing activities: | ||
Repurchase of the 2019 Senior Secured Notes | 0 | |
Payment of finance lease obligations | (215) | (285) |
Payment of in-orbit incentive obligations | 0 | 0 |
Contribution by non-controlling interest holder | 4,000 | |
Purchase of non-controlling interest | 0 | |
Other, net | 979 | 32,949 |
Contributions (distributions) and advances (to) from parent, net | 18,939 | |
Net cash flows from financing activities | 23,703 | 32,664 |
Effect of exchange rates on cash and cash equivalents | (4,618) | (117) |
Net increase (decrease) in cash and cash equivalents | (15,132) | (5,293) |
Cash and cash equivalents, including restricted amounts, beginning of period | 50,081 | 30,548 |
Cash and cash equivalents, including restricted amounts, end of period | 34,949 | 25,255 |
Eliminations | ||
Cash flows from operating activities: | ||
Net income (loss) | 18,537 | (43,411) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | (18,537) | 43,411 |
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 |
Expenditures for externally marketed software | 0 | 0 |
Distributions (contributions) and advances from (to) subsidiaries, net | (10,351) | (78,071) |
Net cash flows from investing activities | (10,351) | (78,071) |
Cash flows from financing activities: | ||
Repurchase of the 2019 Senior Secured Notes | 0 | |
Payment of finance lease obligations | 0 | 0 |
Payment of in-orbit incentive obligations | 0 | 0 |
Contribution by non-controlling interest holder | 0 | |
Purchase of non-controlling interest | 0 | |
Other, net | 78,071 | |
Contributions (distributions) and advances (to) from parent, net | 10,351 | |
Net cash flows from financing activities | 10,351 | 78,071 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 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 |
Uncategorized Items - hssc03312
Label | Element | Value |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 2,131,754,000 |
Indefinite-lived Intangible Assets (Excluding Goodwill) | us-gaap_IndefiniteLivedIntangibleAssetsExcludingGoodwill | 400,043,000 |
Indefinite-lived Intangible Assets (Excluding Goodwill) | us-gaap_IndefiniteLivedIntangibleAssetsExcludingGoodwill | 400,043,000 |
Use Rights [Member] | ||
Finite-Lived Intangible Assets, Gross | us-gaap_FiniteLivedIntangibleAssetsGross | 0 |
Finite-Lived Intangible Assets, Gross | us-gaap_FiniteLivedIntangibleAssetsGross | 0 |
Finite-Lived Intangible Assets, Net | us-gaap_FiniteLivedIntangibleAssetsNet | 0 |
Finite-Lived Intangible Assets, Net | us-gaap_FiniteLivedIntangibleAssetsNet | 0 |
Finite-Lived Intangible Assets, Accumulated Amortization | us-gaap_FiniteLivedIntangibleAssetsAccumulatedAmortization | 0 |
Finite-Lived Intangible Assets, Accumulated Amortization | us-gaap_FiniteLivedIntangibleAssetsAccumulatedAmortization | 0 |
AOCI Attributable to Parent [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (84,636,000) |
Noncontrolling Interest [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 75,508,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (240,000) |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 1,478,636,000 |
Retained Earnings [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 662,246,000 |