Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 06, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | Yes | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | Yes | ||
Entity Emerging Growth Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 1,078 | ||
Documents Incorporated by Reference | None | ||
Entity Central Index Key | 0001533758 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Denver, CO |
Auditor Firm ID | 185 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 653,132 | $ 429,168 |
Marketable investment securities | 799,769 | 854,502 |
Trade accounts receivable and contract assets, net | 236,336 | 182,063 |
Other current assets, net | 275,202 | 276,844 |
Total current assets | 1,964,439 | 1,742,577 |
Non-current assets: | ||
Property and equipment, net | 1,376,004 | 1,523,447 |
Operating lease right-of-use assets | 150,632 | 148,221 |
Goodwill | 532,491 | 511,086 |
Regulatory authorizations, net | 408,619 | 408,959 |
Other intangible assets, net | 15,698 | 13,984 |
Other investments, net | 83,523 | 91,226 |
Other non-current assets, net | 285,877 | 302,840 |
Total non-current assets | 2,852,844 | 2,999,763 |
Total assets | 4,817,283 | 4,742,340 |
Current liabilities: | ||
Trade accounts payable | 98,229 | 105,477 |
Contract liabilities | 121,739 | 141,343 |
Accrued expenses and other current liabilities | 393,899 | 308,879 |
Total current liabilities | 613,867 | 555,699 |
Non-current liabilities: | ||
Long-term debt, net | 1,496,777 | 1,495,994 |
Deferred tax liabilities, net | 289,757 | 334,406 |
Operating lease liabilities | 135,122 | 134,001 |
Other non-current liabilities | 133,897 | 153,251 |
Total non-current liabilities | 2,055,553 | 2,117,652 |
Total liabilities | 2,669,420 | 2,673,351 |
Commitments and contingencies | ||
Shareholder's equity: | ||
Preferred stock, $0.001 par value,1,000,000 shares authorized, none issued and outstanding at both December 31, 2022 and 2021 | 0 | 0 |
Common stock, $0.01 par value, 1,000,000 shares authorized, 1,078 shares issued and outstanding at both December 31, 2022 and 2021 | 0 | 0 |
Additional paid-in capital | 1,479,857 | 1,489,776 |
Accumulated other comprehensive income (loss) | (170,184) | (173,381) |
Accumulated earnings (losses) | 741,754 | 692,341 |
Total Hughes Satellite Systems Corporation shareholder's equity | 2,051,427 | 2,008,736 |
Non-controlling interests | 96,436 | 60,253 |
Total shareholder's equity | 2,147,863 | 2,068,989 |
Total liabilities and shareholder's equity | $ 4,817,283 | $ 4,742,340 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Shareholder's equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares issued (in shares) | 1,078 | 1,078 |
Common stock, shares outstanding (in shares) | 1,078 | 1,078 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | |||
Total revenue | $ 2,003,343 | $ 1,994,726 | $ 1,897,358 |
Costs and expenses: | |||
Selling, general and administrative expenses | 429,877 | 422,235 | 433,408 |
Research and development expenses | 32,810 | 31,777 | 29,448 |
Depreciation and amortization | 431,065 | 464,146 | 498,876 |
Impairment of long-lived assets | 0 | 210 | 0 |
Total costs and expenses | 1,748,891 | 1,695,243 | 1,700,798 |
Operating income (loss) | 254,452 | 299,483 | 196,560 |
Other income (expense): | |||
Interest income, net | 30,812 | 8,146 | 18,802 |
Interest expense, net of amounts capitalized | (92,386) | (126,499) | (172,466) |
Gains (losses) on investments, net | 245 | 2,103 | (232) |
Equity in earnings (losses) of unconsolidated affiliates, net | (5,703) | (5,347) | (6,116) |
Foreign currency transaction gains (losses), net | 6,016 | (11,494) | 3,427 |
Other, net | (85) | 1,336 | (286) |
Total other income (expense), net | (61,101) | (131,755) | (156,871) |
Income (loss) before income taxes | 193,351 | 167,728 | 39,689 |
Income tax benefit (provision), net | (54,441) | (57,111) | (42,118) |
Net income (loss) | 138,910 | 110,617 | (2,429) |
Less: Net loss (income) attributable to non-controlling interests | 10,503 | 10,154 | 11,754 |
Net income (loss) attributable to HSSC | 149,413 | 120,771 | 9,325 |
Services and other revenue | |||
Revenue: | |||
Total revenue | 1,629,194 | 1,724,299 | 1,691,757 |
Costs and expenses: | |||
Cost of sales | 562,849 | 544,915 | 572,637 |
Equipment revenue | |||
Revenue: | |||
Total revenue | 374,149 | 270,427 | 205,601 |
Costs and expenses: | |||
Cost of sales | $ 292,290 | $ 231,960 | $ 166,429 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 138,910 | $ 110,617 | $ (2,429) |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 5,475 | (31,317) | (77,646) |
Unrealized gains (losses) on available-for-sale securities | (553) | 490 | (192) |
Other | 0 | (98) | (4) |
Amounts reclassified to net income (loss): | |||
Realized losses (gains) on available-for-sale debt securities | (17) | (5) | (1) |
Total other comprehensive income (loss), net of tax | 4,905 | (30,930) | (77,843) |
Comprehensive income (loss) | 143,815 | 79,687 | (80,272) |
Less: Comprehensive loss (income) attributable to non-controlling interests | 8,795 | 14,543 | 27,392 |
Comprehensive income (loss) attributable to HSSC | $ 152,610 | $ 94,230 | $ (52,880) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Additional Paid-In Capital | Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Cumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Earnings (Losses) | Accumulated Earnings (Losses) Cumulative Effect, Period of Adoption, Adjustment | Accumulated Earnings (Losses) Cumulative Effect, Period of Adoption, Adjusted Balance | Non-controlling Interests | Non-controlling Interests Cumulative Effect, Period of Adoption, Adjustment | Non-controlling Interests Cumulative Effect, Period of Adoption, Adjusted Balance |
Beginning balance at Dec. 31, 2019 | $ 2,134,163 | $ (2,409) | $ 2,131,754 | $ 1,478,636 | $ 1,478,636 | $ (84,636) | $ (84,636) | $ 664,415 | $ (2,169) | $ 662,246 | $ 75,748 | $ (240) | $ 75,508 |
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Stock-based compensation | 3,883 | 3,883 | |||||||||||
Issuance of equity and contribution of assets pursuant to the India JV formation | 2,758 | 4,338 | (1,580) | ||||||||||
Contribution by non-controlling interest holder | 18,241 | 18,241 | |||||||||||
Other comprehensive income (loss) | (77,834) | (62,204) | (15,630) | ||||||||||
Net income (loss) | (2,429) | 9,325 | (11,754) | ||||||||||
Other, net | 3 | (127) | (1) | 131 | |||||||||
Ending balance at Dec. 31, 2020 | 2,076,376 | 1,486,730 | (146,840) | 671,570 | 64,916 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Stock-based compensation | 3,046 | 3,046 | |||||||||||
Contribution by non-controlling interest holder | 9,880 | 9,880 | |||||||||||
Other comprehensive income (loss) | (30,930) | (26,541) | (4,389) | ||||||||||
Dividend paid to EchoStar | (100,000) | (100,000) | |||||||||||
Net income (loss) | 110,617 | 120,771 | (10,154) | ||||||||||
Ending balance at Dec. 31, 2021 | 2,068,989 | 1,489,776 | (173,381) | 692,341 | 60,253 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Stock-based compensation | 4,318 | 4,318 | |||||||||||
Issuance of equity and contribution of assets pursuant to the India JV formation | 30,303 | (14,237) | 44,540 | ||||||||||
Other comprehensive income (loss) | 4,905 | 3,197 | 1,708 | ||||||||||
Dividend paid to EchoStar | (100,000) | (100,000) | |||||||||||
Net income (loss) | 138,910 | 149,413 | (10,503) | ||||||||||
Other, net | 438 | 438 | |||||||||||
Ending balance at Dec. 31, 2022 | $ 2,147,863 | $ 1,479,857 | $ (170,184) | $ 741,754 | $ 96,436 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 138,910,000 | $ 110,617,000 | $ (2,429,000) |
Adjustments to reconcile net income (loss) to cash flows provided by (used for) operating activities: | |||
Depreciation and amortization | 431,065,000 | 464,146,000 | 498,876,000 |
Impairment of long-lived assets | 0 | 210,000 | 0 |
Losses (gains) on investments, net | (245,000) | (2,103,000) | 232,000 |
Equity in losses (earnings) of unconsolidated affiliates, net | 5,703,000 | 5,347,000 | 6,116,000 |
Foreign currency transaction losses (gains), net | (6,016,000) | 11,494,000 | (3,427,000) |
Deferred tax provision (benefit), net | (48,875,000) | (38,276,000) | (4,261,000) |
Stock-based compensation | 4,318,000 | 3,046,000 | 5,167,000 |
Amortization of debt issuance costs | 783,000 | 2,381,000 | 4,324,000 |
Other, net | 8,015,000 | 21,082,000 | 2,007,000 |
Changes in assets and liabilities, net: | |||
Trade accounts receivable and contract assets, net | (50,670,000) | (2,342,000) | (2,755,000) |
Other current assets, net | 3,513,000 | 9,446,000 | 6,040,000 |
Trade accounts payable | 511,000 | (13,659,000) | (7,071,000) |
Contract liabilities | (19,604,000) | 36,774,000 | 3,509,000 |
Accrued expenses and other current liabilities | 89,961,000 | (17,383,000) | 73,746,000 |
Non-current assets and non-current liabilities, net | (18,517,000) | 71,531,000 | (51,734,000) |
Net cash provided by (used for) operating activities | 538,852,000 | 662,311,000 | 528,340,000 |
Cash flows from investing activities: | |||
Purchases of marketable investment securities | (986,736,000) | (1,517,849,000) | (2,035,712,000) |
Sales and maturities of marketable investment securities | 1,045,950,000 | 1,864,186,000 | 1,482,704,000 |
Expenditures for property and equipment | (239,403,000) | (296,303,000) | (355,238,000) |
Expenditures for externally marketed software | (23,105,000) | (33,543,000) | (38,655,000) |
Sales of other investments | 0 | 9,451,000 | 0 |
India JV formation | (7,892,000) | 0 | 0 |
Dividend received from unconsolidated affiliate | 2,000,000 | 0 | 0 |
Net cash provided by (used for) investing activities | (209,186,000) | 25,942,000 | (946,901,000) |
Cash flows from financing activities: | |||
Repurchase and maturity of the 2021 Senior Unsecured Notes | 0 | (901,818,000) | 0 |
Payment of finance lease obligations | (120,000) | (670,000) | (811,000) |
Payment of in-orbit incentive obligations | (2,988,000) | (2,214,000) | (1,554,000) |
Contribution by non-controlling interest holder | 0 | 9,880,000 | 18,241,000 |
Dividend paid to EchoStar | (100,000,000) | (100,000,000) | 0 |
Other, net | 0 | (966,000) | 998,000 |
Net cash provided by (used for) financing activities | (103,108,000) | (995,788,000) | 16,874,000 |
Effect of exchange rates on cash and cash equivalents | (2,233,000) | (3,614,000) | 2,662,000 |
Net increase (decrease) in cash and cash equivalents | 224,325,000 | (311,149,000) | (399,025,000) |
Cash and cash equivalents, including restricted amounts, beginning of period | 430,148,000 | 741,297,000 | 1,140,322,000 |
Cash and cash equivalents, including restricted amounts, end of period | $ 654,473,000 | $ 430,148,000 | $ 741,297,000 |
ORGANIZATION AND BUSINESS ACTIV
ORGANIZATION AND BUSINESS ACTIVITIES | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS ACTIVITIES | ORGANIZATION AND BUSINESS ACTIVITIES Principal Business Hughes Satellite Systems Corporation (which, together with its subsidiaries, is referred to as “HSSC,” the “Company,” “we,” “us” and “our”) is a holding company and a subsidiary of EchoStar Corporation (“EchoStar” and “parent”). We are an industry leader in both networking technologies and services, innovating to deliver the global solutions that power a connected future for people, enterprises and things everywhere. We provide internet services to consumer customers, which include home and small to medium-sized businesses, and satellite and multi-transport technologies and managed network services to enterprise customers, telecommunications providers, aeronautical service providers and government entities, including the U.S. Department of Defense. We operate in the following two business segments: • Hughes segment — which provides broadband satellite technologies and broadband internet products and services to consumer customers. We provide broadband network technologies, managed services, equipment, hardware, satellite services and communications solutions to government and enterprise customers. We also design, provide and install gateway and terminal equipment to customers for other satellite systems. In addition, we design, develop, construct and provide telecommunication networks comprising satellite ground segment systems and terminals to mobile system operators and our enterprise customers. • Echostar Satellite Services segment (“ESS segment”) — which provides satellite services on a full-time and/or occasional-use basis to U.S. government service providers, internet service providers, broadcast news organizations, content providers and private enterprise customers. We operate our ESS business using primarily the EchoStar IX satellite and the EchoStar 105/SES-11 satellite and related infrastructure. Revenue in our ESS segment depends largely on our ability to continuously make use of our available satellite capacity with existing customers and our ability to enter into commercial relationships with new customers. Our operations also include various corporate functions (primarily Executive, Treasury, Strategic Development, Human Resources, Information Technology, Finance, Accounting, Real Estate and Legal) and other activities, such as costs incurred in certain satellite development programs and other business development activities, and gains or losses from certain of our investments, that have not been assigned to our business segments. These activities, costs and income, as well as eliminations of intersegment transactions, are accounted for in Corporate and Other segment in our segment reporting. We also divide our operations by primary geographic market as follows: (i) North America (the U.S. and its territories, Mexico, and Canada); (ii) South and Central America and (iii) Other (Asia, Africa, Australia, Europe, India, and the Middle East). Refer to Note 20. Segment Reporting for further detail . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation These Consolidated Financial Statements and the accompanying notes (collectively, the “Consolidated Financial Statements”) are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). 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. All amounts presented in these Consolidated Financial Statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted. Use of Estimates We are required to make certain estimates and assumptions that affect the amounts reported in these Consolidated Financial Statements. The most significant estimates and assumptions are used in determining: (i) inputs used to recognize revenue over time, including amortization periods for deferred contract acquisition costs; (ii) allowances for doubtful accounts; (iii) deferred taxes and related valuation allowances, including uncertain tax positions; (iv) loss contingencies; (v) fair value of financial instruments; (vi) fair value of assets and liabilities acquired in business combinations; and (vii) assets and goodwill impairment testing. We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts and such differences may be material to our financial statements. Additionally, changing economic conditions may increase the inherent uncertainty in the estimates and assumptions indicated above. We review our estimates and assumptions periodically and the effects of revisions thereto are reflected in the period they occur or prospectively if the revised estimate affects future periods. Fair Value Measurements We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We utilize the highest level of inputs available according to the following hierarchy in determining fair value: • Level 1 - Defined as observable inputs being quoted prices in active markets for identical assets; • Level 2 - Defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3 - Defined as unobservable inputs for which little or no market data exists, consistent with characteristics of the asset or liability that would be considered by market participants in a transaction to purchase or sell the asset or liability. Fair values of our marketable investment securities are measured on a recurring basis based on a variety of observable market inputs. For our investments in publicly traded equity securities and U.S. government securities, fair value ordinarily is determined based on Level 1 measurements that reflect quoted prices for identical securities in active markets. Fair values of our investments in other marketable debt securities are generally based on Level 2 measurements as the markets for such debt securities are less active. We consider trades of identical debt securities on or near the measurement date as a strong indication of fair value and matrix pricing techniques that consider par value, coupon rate, credit quality, maturity and other relevant features may also be used to determine fair value of our investments in marketable debt securities. Fair values for our outstanding debt are based on quoted market prices in less active markets and are categorized as Level 2 measurements. Additionally, we use fair value measurements from time to time in connection with other investments, asset impairment testing and the assignment of purchase consideration to assets and liabilities of acquired companies. Those fair value measurements typically include significant unobservable inputs and are categorized within Level 3 of the fair value hierarchy. Transfers between levels in the fair value hierarchy are considered to occur at the beginning of the quarterly accounting period. There were no transfers between levels during the years ended December 31, 2022 and 2021. As of December 31, 2022 and 2021, the carrying amounts of our cash and cash equivalents, trade accounts receivable and contract assets, net, trade accounts payable, and accrued expenses and other current liabilities were equal to or approximated their fair value due to their short-term nature or proximity to current market rates. Overview Revenue is recognized upon transfer of control of the promised goods or our performance of the services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We enter into contracts that may include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations. We also recognize lease revenue which is derived from leases of property and equipment which, for operating leases, is reported in Services and other revenue in the Consolidated Statements of Operations and, for sales-type leases, is reported in Equipment revenue in the Consolidated Statements of Operations. Certain of our customer contracts contain embedded equipment leases, which we separate from non-lease components of the contract based on the relative standalone selling prices of the lease and non-lease components. Hughes Segment Our Hughes segment service contracts typically obligate us to provide substantially the same services on a recurring basis in exchange for fixed recurring fees over the term of the contract. We satisfy such performance obligations over time and recognize revenue ratably as services are rendered over the service period. Certain of our contracts with service obligations provide for fees based on usage, capacity or volume. We satisfy these performance obligations and recognize the related revenue at the point in time, or over the period, when the services are rendered. Our Hughes segment also sells and leases communications equipment to its customers. Revenue from equipment sales generally is recognized based upon shipment terms. Our equipment sales contracts typically include standard product warranties, but generally do not provide for returns or refunds. Revenue for extended warranties is recognized ratably over the extended warranty period. For contracts with multiple performance obligations, we typically allocate the contract’s transaction price to each performance obligation based on their relative standalone selling prices. When the standalone selling price is not observable, our primary method used to estimate standalone selling price is the expected cost plus a margin. Our contracts generally require customer payments to be made at or shortly after the time we transfer control of goods or perform the services. In addition to equipment and service offerings, our Hughes segment also enters into long-term contracts to design, develop, construct and install complex telecommunication networks for mobile system operators and enterprise customers. Revenue from such contracts is generally recognized over time as a measure of progress that depicts the transfer of control of the goods or services to the customer. Depending on the nature of the arrangement, we measure progress toward contract completion using an appropriate input method or output method. Under the input method, we recognize the transaction price as revenue based on the ratio of costs incurred to estimated total costs at completion. Under the output method, revenue and cost of sales are recognized as products are delivered based on the expected profit for the entire agreement. Profit margins on long-term contracts generally are based on estimates of revenue and costs at completion. We review and revise our estimates periodically and recognize related adjustments in the period in which the revisions are made. Estimated losses on contracts are recorded in the period in which they are identified. We generally receive interim payments as work progresses, although for some contracts, we may be entitled to receive an advance payment. ESS Segment Generally, our ESS segment service contracts with customers contain a single performance obligation and, therefore, there is no need to allocate the transaction price. We transfer control and recognize revenue for satellite services at the point in time or over the period when the services are rendered. Lease Revenue We lease satellite capacity, communications equipment and real estate to certain of our customers. We identify and determine the classification of such leases as operating leases or sales-type leases. A lease is classified as a sales-type lease if it meets the criteria for a finance lease; otherwise it is classified as an operating lease. Some of our leases are embedded in contracts with customers that include non-lease performance obligations. For such contracts, except where we have elected otherwise, we allocate consideration in the contract between lease and non-lease components based on their relative standalone selling prices. We elected an accounting policy to not separate the lease of equipment from related services in our HughesNet satellite internet service (the “HughesNet service”) contracts with customers and account for all revenue from such contracts as non-lease service revenue. Assets subject to operating leases remain in Property and equipment, net and continue to be depreciated. Assets subject to sales-type leases are derecognized from Property and equipment, net at lease commencement and a net investment in the lease asset is recognized in Trade accounts receivable and contract assets, net and Other non-current assets, net . Operating lease revenue is generally recognized on a straight-line basis over the lease term. Sales-type lease revenue and a corresponding receivable generally are recognized at lease commencement based on the present value of the future lease payments and related interest income on the receivable is recognized over the lease term. Payments under sales-type leases are discounted using the interest rate implicit in the lease or our incremental borrowing rate if the interest rate implicit in the lease cannot be reasonably determined. We report revenue from sales-type leases at the commencement date in Equipment revenue and periodic interest income in Services and other revenue. We report operating lease revenue in Services and other revenue . Other Sales and Value Added Taxes, Universal Service Fees and other taxes that we collect concurrent with revenue producing activities are excluded from revenue and included in Accrued expenses and other current liabilities in the Consolidated Balance Sheets. Shipping and handling costs associated with outbound freight are accounted for as a fulfillment cost after control over a product has transferred to the customer and are included in Cost of sales - equipment in the Consolidated Statements of Operations at the time of shipment. Cost of Sales - Services and Other Cost of Sales - Equipment Cost of sales - equipment in the Consolidated Statements of Operations primarily consists of inventory costs, including freight and royalties, and is generally recognized at the point in time control of the equipment is passed to the customer and related revenue is recognized. Additionally, customer-related research and development costs are incurred in connection with the specific requirements of a customer’s order; in such instances, the amounts for these customer funded development efforts are also included in Cost of sales - equipment Stock-based Compensation Expense Stock-based compensation expense is recognized based on the fair value of stock awards ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense for awards with service conditions only is recognized on a straight-line basis over the requisite service period for the entire award. Compensation expense for awards subject to performance conditions is recognized only when satisfaction of the performance condition is probable. Advertising Costs Advertising costs are expensed as incurred and are included in Selling, general and administrative expenses Debt Issuance Costs Costs of issuing debt generally are deferred and amortized utilizing the effective interest method, with amortization included in Interest expense, net of amounts capitalized in the Consolidated Statements of Operations. We report unamortized debt issuance costs as a reduction of the related long-term debt in the Consolidated Balance Sheets. Foreign Currency The functional currency for certain of our foreign operations is determined to be the local currency. Accordingly, we translate assets and liabilities of these foreign entities from their local currencies to U.S. dollars using period-end exchange rates and translate income and expense accounts at monthly average rates. The resulting translation adjustments are reported as Foreign currency translation adjustments in the Consolidated Statements of Comprehensive Income (Loss). Except in certain uncommon circumstances, we have not recorded deferred income taxes related to our foreign currency translation adjustments. Gains and losses resulting from the re-measurement of transactions denominated in foreign currencies are recognized in Foreign currency transaction gains (losses), net in the Consolidated Statements of Operations. Income Taxes We are included in the consolidated federal income tax return of EchoStar. We recognize a provision or benefit for income taxes currently payable or receivable and for income tax amounts deferred to future periods based upon a separate return allocation method which results in income tax expense that approximates the expense that would result if we were a stand-alone entity. Deferred tax assets and liabilities reflect the effects of tax losses, credits, and the future income tax effects of temporary differences between GAAP carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are offset by valuation allowances when we determine it is more likely than not that such deferred tax assets will not be realized in the foreseeable future. We determine deferred tax assets and liabilities separately for each taxing jurisdiction and report the net amount for each jurisdiction as a non-current asset or liability in the Consolidated Balance Sheets. From time to time, we engage in transactions where the income tax consequences are uncertain. We recognize tax benefits when, in management’s judgment, a tax filing position is more likely than not to be sustained if challenged by the tax authorities. For tax positions that meet the more-likely-than-not threshold, we may not recognize a portion of a tax benefit depending on management’s assessment of how the tax position will ultimately be settled. Unrecognized tax benefits generally are netted against the deferred tax assets associated with our net operating loss and tax credit carryforwards. We adjust our estimates periodically based on ongoing examinations by, and settlements with, various taxing authorities, as well as changes in tax laws, regulations and precedent. Estimates of our uncertain tax positions are made based upon prior experience and are updated in light of changes in facts and circumstances. However, due to the uncertain and complex application of tax regulations, it is possible that the ultimate resolution of audits may result in liabilities which could be materially different from these estimates. In such an event, we will record additional income tax provision or benefit in the period in which such resolution occurs. We classify interest and penalties, if any, associated with our unrecognized tax benefits as a component of income tax provision or benefit. Lessee Accounting At the inception of a contract, we assess whether the contract is, or contains, a lease. The assessment is based on (i) whether the contract involves the use of a distinct identified asset, (ii) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (iii) whether we have the right to direct the use of the asset. Our operating leases consist primarily of leases for office space, data centers and satellite-related ground infrastructure. A lease is classified as a finance lease when one or more of the following criteria are met: (i) the lease transfers ownership of the asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (iii) the lease term is for a major part of the remaining useful life of the asset, (iv) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset or (v) the asset is of a specialized nature and there is not expected to be an alternative use to the lessor at the end of the lease term. A lease is classified as an operating lease if it does not meet any of these criteria. Our finance leases consist primarily of leases for satellite capacity. All significant lease arrangements are generally recognized at lease commencement. Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at commencement. An ROU asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less (short-term leases), and we recognize lease expense for these leases as incurred over the lease term. ROU assets represent our right to use an underlying asset during the reasonably certain lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. The ROU asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any prepayments to the lessor and initial direct costs such as brokerage commissions, less any lease incentives received. The lease liability is initially measured at the present value of the minimum lease payments, discounted using an estimate of our incremental borrowing rate for a collateralized loan with the same term as the underlying lease. The incremental borrowing rates used for the initial measurement of lease liabilities are based on the original lease terms. In determining our incremental borrowing rate, we consider the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. We report operating lease ROU assets in Operating lease right-of-use assets and operating lease liabilities in Accrued expenses and other current liabilities and Operating lease liabilities . We report finance lease ROU assets in Property and equipment, net and finance lease liabilities in Current portion of long-term debt, net and Long-term debt, net . Cash and Cash Equivalents We consider all liquid investments purchased with an original maturity of less than 90 days to be cash equivalents. Cash equivalents as of December 31, 2022 and 2021 primarily consisted of commercial paper, government bonds, corporate notes and money market funds. The amortized cost of these investments approximates their fair value. Debt Securities Our corporate bond portfolio includes debt instruments issued by individual corporations, primarily in the industrial and financial services industries. Our commercial paper portfolio includes instruments issued by individual corporations, primarily in the industrial, financial services and utilities industries. Our other debt securities portfolio includes investments in various debt instruments, including U.S. government bonds and mutual funds. We consider all liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. We account for our debt securities as available-for-sale or using the fair value option based on our investment strategy for the securities. For available-for-sale debt securities, we recognize periodic changes in the difference between fair value and amortized cost in Unrealized gains (losses) on available-for-sale securities in the Consolidated Statements of Comprehensive Income (Loss). Gains and losses realized upon sales of available-for-sale debt securities are reclassified from other comprehensive income (loss) and recognized on the trade date in Gains (losses) on investments, net in the Consolidated Statements of Operations. We use the first-in, first-out (“FIFO”) method to determine the cost basis on sales of available-for-sale debt securities. Interest income from available-for-sale debt securities is reported in Interest income, net in the Consolidated Statements of Operations. We periodically evaluate our available-for-sale debt securities portfolio to determine whether any declines in the fair value of these securities are other-than-temporary. Our evaluation considers, among other things, (i) the length of time and extent to which the fair value of such security has been lower than amortized cost, (ii) market and company-specific factors related to the security and (iii) our intent and ability to hold the investment to maturity or when it recovers its value. We generally consider a decline to be other-than-temporary when (i) we intend to sell the security, (ii) it is more likely than not that we will be required to sell the security before maturity or when it recovers its value or (iii) we do not expect to recover the amortized cost of the security at maturity. Declines in the fair value of available-for-sale debt securities that are determined to be other-than-temporary are reclassified from other comprehensive income (loss) and recognized in Net income (loss) in the Consolidated Statements of Operations, thus establishing a new cost basis for the investment. From time to time we make strategic investments in marketable corporate debt securities. Generally, we elect to account for these debt securities using the fair value option because it results in consistency in accounting for unrealized gains and losses for all securities in our portfolio of strategic investments. When we elect the fair value option for investments in debt securities, we recognize periodic changes in fair value of these securities in Gains (losses) on investments, net in the Consolidated Statements of Operations. Interest income from these securities is reported in Interest income, net Equity Securities We account for our equity securities with readily determinable fair values at fair value and recognize periodic changes in the fair value in Gains (losses) on investments, net in the Consolidated Statements of Operations. We recognize dividend income on equity securities on the ex-dividend date and report such income in Other, net in the Consolidated Statements of Operations. Restricted marketable investment securities that are pledged as collateral for our letters of credit and surety bonds are included in Other non-current assets, net Trade Accounts Receivable Trade accounts receivable includes amounts billed and currently due from customers and represents our unconditional rights to consideration arising from our performance under our customer contracts. Trade accounts receivable also includes amounts due from customers under our leasing arrangements. We make ongoing estimates relating to the collectability of our trade accounts receivable and maintain an allowance for estimated losses resulting from the inability of our customers to make the required payments. In determining the amount of the allowance, we consider historical levels of credit losses and make judgments about the creditworthiness of our customers based on ongoing credit evaluations. Past due trade accounts receivable balances are written off when our internal collection efforts have been unsuccessful. Bad debt expense related to our trade accounts receivable and other contract assets is included in Selling, general and administrative expenses in the Consolidated Statements of Operations. Contract assets represent revenue that we have recognized in advance of billing the customer and are included in Trade accounts receivable and contract assets, net or Other non-current assets, net Contract Acquisition Costs Our contract acquisition costs represent incremental direct costs of obtaining a contract and consist primarily of sales incentives paid to employees and third-party representatives. When we determine that our contract acquisition costs are recoverable, we defer and amortize the costs over the contract term, or over the estimated life of the customer relationship if anticipated renewals are expected and the incentives payable upon renewal are not commensurate with the initial incentive. We amortize contract acquisition costs in proportion to the revenue to which the costs relate. We expense sales incentives as incurred if the expected amortization period is one year or less. Unamortized contract acquisition costs are included in Other non-current assets, net in the Consolidated Balance Sheets and related amortization expense is included in Selling, general and administrative expenses in the Consolidated Statements of Operations. Inventory Inventory is stated at the lower of cost or net realizable value. Cost of inventory is determined using the FIFO method and consists primarily of materials, direct labor and indirect overhead incurred in the procurement and manufacturing of our products. We use standard costing methodologies in determining the cost of certain of our finished goods and work-in-process inventories. We determine net realizable value using our best estimates of future use or recovery, considering the aging and composition of inventory balances, the effects of technological and/or design changes, forecasted future product demand based on firm or near-firm customer orders and alternative means of disposition of excess or obsolete items. We recognize losses within Cost of sales - equipment in the Consolidated Statements of Operations when we determine that the cost of inventory and commitments to purchase inventory exceed net realizable value. Satellites Satellites are stated at cost, less accumulated depreciation. Depreciation is recorded on a straight-line basis over their estimated useful lives. The cost of our satellites includes construction costs, including the present value of in-orbit incentives payable to the satellite manufacturer, launch costs, capitalized interest and related insurance premiums. We depreciate our owned satellites on a straight-line basis over the estimated useful life of each satellite. We have satellites acquired under finance leases. The recorded costs of those satellites are the present values of all lease payments. We amortize our finance lease ROU satellites over their respective lease terms. Our satellites may experience anomalies from time to time, some of which may have a significant adverse effect on their remaining useful lives, the commercial operation of the satellites or our operating results or financial position. We evaluate our satellites for impairment and test for recoverability whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Certain anomalies may be considered a significant adverse change in the physical condition of a particular satellite. However, based on redundancies designed within each satellite, certain of these anomalies may not be considered to be significant events requiring a test of recoverability. Other Property and Equipment Other property and equipment are stated at cost, less accumulated depreciation. Depreciation is recorded on a straight-line basis over their estimated useful lives. Other property and equipment includes: land; buildings and improvements; furniture, fixtures, equipment and internal-use software; customer premises equipment; and construction in process. Costs related to the procurement and development of software for internal-use are capitalized and amortized using the straight-line method over the estimated useful life of the software, not in excess of five years. Repair and maintenance costs are charged to expense when incurred. Goodwill We account for acquired businesses using the acquisition method of accounting which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. All of our goodwill is assigned to our Hughes segment. We evaluate goodwill for impairment on an annual basis in our second fiscal quarter or whenever events and changes in circumstances indicate the carrying amounts may not be recoverable. Impairments may result from, among other things, deterioration in financial and operational performance, declines in stock price, increased attrition, adverse market conditions, adverse changes in applicable laws and/or regulations, deterioration of general macroeconomic conditions, fluctuations in foreign exchange rates, increased competitive markets in which we operate in, declining financial performance over a sustained period, changes in key personnel and/or strategy, and a variety of other factors. Our impairment assessment typically begins with a qualitative assessment to determine whether it is more likely than not the fair value of the reporting unit is less than its carrying amount. The qualitative assessment includes comparing the overall financial performance against the planned results. In the performance of the qualitative assessment, we analyze a variety of events or factors that may influence the fair value of the reporting unit, that could include, but are not limited to: macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity-specific events which requires significant judgment. If we determine in the qualitative assessment that it is more likely than not that the fair value is less than its carrying value, then we perform a quantitative assessment to determine the estimated fair value of the indefinite lived asset or reporting unit. We could also choose the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test. In the quantitative assessment, fair value is usually estimated using two valuation approaches: the discounted cash flows method and the market comparable method. In the performance of the quantitative assessment, we use a variety of inputs, some of which may require significant judgment, that influence the fair value of the reporting unit, that could include, but are not limited to: discount rate, revenue growth rate, amount and timing of future cash flows, guideline public company metrics, and comparable market transactions. In addition, we also perform a market capitalizatio |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Contract Balances The following table presents the components of our contract balances: As of December 31, 2022 2021 Trade accounts receivable and contract assets, net: Sales and services $ 170,466 $ 154,676 Leasing 7,935 5,668 Total trade accounts receivable 178,401 160,344 Contract assets 73,293 36,307 Allowance for doubtful accounts (15,358) (14,588) Total trade accounts receivable and contract assets, net $ 236,336 $ 182,063 Contract liabilities: Current $ 121,739 $ 141,343 Non-current 8,326 10,669 Total contract liabilities $ 130,065 $ 152,012 The following table presents the revenue recognized in the Consolidated Statements of Operations that was previously included within contract liabilities: For the years ended December 31, 2022 2021 2020 Revenue $ 120,867 $ 82,633 $ 72,877 The following table presents the activity in our allowance for doubtful accounts: For the years ended December 31, 2022 2021 2020 Balance at beginning of period $ 14,588 $ 15,386 $ 23,777 Credit losses (1) 32,910 22,591 18,582 Deductions (36,011) (23,543) (26,031) Foreign currency translation 3,871 154 (942) Balance at end of period $ 15,358 $ 14,588 $ 15,386 (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 the activity in our contract acquisition costs, net: For the years ended December 31, 2022 2021 2020 Balance at beginning of period $ 82,986 $ 99,837 $ 113,592 Additions 57,627 72,503 91,143 Amortization expense (76,760) (88,178) (101,278) Foreign currency translation 594 (1,176) (3,620) Balance at end of period $ 64,447 $ 82,986 $ 99,837 Performance Obligations As of December 31, 2022, the remaining performance obligations for our customer contracts with original expected durations of more than one year was $1.1 billion. Performance obligations expected to be satisfied within one year and greater than one year are 34.0% and 66.0%, respectively. This amount and percentages exclude agreements with consumer customers in our Hughes segment, our leasing arrangements and agreements with certain customers under which collectability of all amounts due through the term of contracts is uncertain. Disaggregation of Revenue Geographic Information The following tables present our revenue from customer contracts disaggregated by primary geographic market and by segment: Hughes ESS Corporate and Other Consolidated For the year ended December 31, 2022 North America $ 1,576,773 $ 20,533 $ (1,400) $ 1,595,906 South and Central America 171,318 — — 171,318 Other 218,496 — 17,623 236,119 Total revenue $ 1,966,587 $ 20,533 $ 16,223 $ 2,003,343 For the year ended December 31, 2021 North America $ 1,617,229 $ 17,679 $ (385) $ 1,634,523 South and Central America 176,515 — — 176,515 Other 162,482 — 21,206 183,688 Total revenue $ 1,956,226 $ 17,679 $ 20,821 $ 1,994,726 For the year ended December 31, 2020 North America $ 1,556,961 $ 17,398 $ (1,161) $ 1,573,198 South and Central America 151,194 — — 151,194 Other 152,679 — 20,287 172,966 Total revenue $ 1,860,834 $ 17,398 $ 19,126 $ 1,897,358 Nature of Products and Services The following tables present our revenue disaggregated by the nature of products and services and by segment: Hughes ESS Corporate and Other Consolidated For the year ended December 31, 2022 Services and other revenue: Services $ 1,551,613 $ 13,206 $ — $ 1,564,819 Lease revenue 40,825 7,327 16,223 64,375 Total services and other revenue 1,592,438 20,533 16,223 1,629,194 Equipment revenue: Equipment 119,107 — — 119,107 Design, development and construction services 246,265 — — 246,265 Lease revenue 8,777 — — 8,777 Total equipment revenue 374,149 — — 374,149 Total revenue $ 1,966,587 $ 20,533 $ 16,223 $ 2,003,343 For the year ended December 31, 2021 Services and other revenue: Services $ 1,646,778 $ 11,961 $ — $ 1,658,739 Lease revenue 39,021 5,718 20,821 65,560 Total services and other revenue 1,685,799 17,679 20,821 1,724,299 Equipment revenue: Equipment 108,767 — — 108,767 Design, development and construction services 152,934 — — 152,934 Lease revenue 8,726 — — 8,726 Total equipment revenue 270,427 — — 270,427 Total revenue $ 1,956,226 $ 17,679 $ 20,821 $ 1,994,726 For the year ended December 31, 2020 Services and other revenue: Services $ 1,614,730 $ 10,785 $ — $ 1,625,515 Lease revenue 40,503 6,613 19,126 66,242 Total services and other revenue 1,655,233 17,398 19,126 1,691,757 Equipment revenue: Equipment 110,108 — — 110,108 Design, development and construction services 88,511 — — 88,511 Lease revenue 6,982 — — 6,982 Total equipment revenue 205,601 — — 205,601 Total revenue $ 1,860,834 $ 17,398 $ 19,126 $ 1,897,358 Lease Revenue The following table presents our lease revenue by type of lease: For the years ended December 31, 2022 2021 2020 Sales-type lease revenue: Revenue at lease commencement $ 7,557 $ 7,998 $ 6,982 Interest income 1,220 728 393 Total sales-type lease revenue 8,777 8,726 7,375 Operating lease revenue 64,375 65,560 65,849 Total lease revenue $ 73,152 $ 74,286 $ 73,224 Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $21.9 million and $17.1 million as of December 31, 2022 and 2021, respectively. The following table presents future operating lease payments to be received as of December 31, 2022: Amounts December 31, 2023 $ 37,478 2024 32,856 2025 30,802 2026 28,828 2027 23,860 2028 and beyond 46,070 Total lease payments to be received $ 199,894 The following table presents amounts for assets subject to operating leases, which are included in Property and equipment, net: As of December 31, 2022 2021 Cost Accumulated Depreciation Net Cost Accumulated Depreciation Net Customer premises equipment $ 933,669 $ (703,110) $ 230,559 $ 1,860,766 $ (1,549,508) $ 311,258 Satellites 104,620 (52,284) 52,336 104,620 (45,309) 59,311 Total $ 1,038,289 $ (755,394) $ 282,895 $ 1,965,386 $ (1,594,817) $ 370,569 The following table presents depreciation expense for assets subject to operating leases, which is included in Depreciation and amortization : For the years ended December 31, 2022 2021 2020 Customer premises equipment $ 221,645 $ 247,072 $ 246,542 Satellites 6,975 6,975 6,975 Total $ 228,620 $ 254,047 $ 253,517 |
LESSEE ACCOUNTING
LESSEE ACCOUNTING | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LESSEE ACCOUNTING | LESSEE ACCOUNTING The following table presents the amounts for ROU assets and lease liabilities: As of December 31, 2022 2021 Right-of-use assets: Operating $ 150,632 $ 148,221 Finance 238,748 258,498 Total right-of-use assets $ 389,380 $ 406,719 Lease liabilities: Current: Operating $ 17,766 $ 16,697 Finance — 123 Total current 17,766 16,820 Non-current: Operating 135,122 134,001 Finance — — Total non-current 135,122 134,001 Total lease liabilities $ 152,888 $ 150,821 As of December 31, 2022, we have prepaid our obligations regarding most of our finance ROU assets. Finance lease assets are reported net of accumulated amortization of $121.9 million and $95.7 million as of December 31, 2022 and 2021, respectively. The following table presents the components of lease cost and weighted-average lease terms and discount rates for operating and finance leases: For the years ended December 31, 2022 2021 2020 Lease cost: Operating lease cost $ 25,219 $ 23,323 $ 23,321 Finance lease cost: Amortization of right-of-use assets 29,906 29,270 27,611 Interest on lease liabilities 7 49 106 Total finance lease cost 29,913 29,319 27,717 Short-term lease cost 258 — 132 Variable lease cost 2,246 1,895 3,799 Total lease cost $ 57,636 $ 54,537 $ 54,969 As of December 31, 2022 2021 Lease term and discount rate: Weighted-average remaining lease term: Finance leases 0.0 years 0.3 years Operating leases 8.0 years 10.8 years Weighted-average discount rate: Finance leases — % 12.8 % Operating leases 5.9 % 5.6 % The following table presents the detailed cash flows from operating and finance leases: For the years ended December 31, 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 24,653 $ 21,808 $ 21,313 Operating cash flows from finance leases 7 49 106 Financing cash flows from finance leases 124 430 499 We obtained ROU assets in exchange for lease liabilities of $4.3 million, $26.1 million and $22.6 million upon commencement of operating leases during the year ended December 31, 2022, 2021 and 2020, respectively. The following table presents future minimum lease payments of our lease liabilities as of December 31, 2022: Operating Leases Year ending December 31, 2023 $ 24,983 2024 23,063 2025 19,470 2026 18,684 2027 17,168 2028 and beyond 97,162 Total future minimum lease payments 200,530 Less: Interest (47,642) Total lease liabilities $ 152,888 |
LESSEE ACCOUNTING | LESSEE ACCOUNTING The following table presents the amounts for ROU assets and lease liabilities: As of December 31, 2022 2021 Right-of-use assets: Operating $ 150,632 $ 148,221 Finance 238,748 258,498 Total right-of-use assets $ 389,380 $ 406,719 Lease liabilities: Current: Operating $ 17,766 $ 16,697 Finance — 123 Total current 17,766 16,820 Non-current: Operating 135,122 134,001 Finance — — Total non-current 135,122 134,001 Total lease liabilities $ 152,888 $ 150,821 As of December 31, 2022, we have prepaid our obligations regarding most of our finance ROU assets. Finance lease assets are reported net of accumulated amortization of $121.9 million and $95.7 million as of December 31, 2022 and 2021, respectively. The following table presents the components of lease cost and weighted-average lease terms and discount rates for operating and finance leases: For the years ended December 31, 2022 2021 2020 Lease cost: Operating lease cost $ 25,219 $ 23,323 $ 23,321 Finance lease cost: Amortization of right-of-use assets 29,906 29,270 27,611 Interest on lease liabilities 7 49 106 Total finance lease cost 29,913 29,319 27,717 Short-term lease cost 258 — 132 Variable lease cost 2,246 1,895 3,799 Total lease cost $ 57,636 $ 54,537 $ 54,969 As of December 31, 2022 2021 Lease term and discount rate: Weighted-average remaining lease term: Finance leases 0.0 years 0.3 years Operating leases 8.0 years 10.8 years Weighted-average discount rate: Finance leases — % 12.8 % Operating leases 5.9 % 5.6 % The following table presents the detailed cash flows from operating and finance leases: For the years ended December 31, 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 24,653 $ 21,808 $ 21,313 Operating cash flows from finance leases 7 49 106 Financing cash flows from finance leases 124 430 499 We obtained ROU assets in exchange for lease liabilities of $4.3 million, $26.1 million and $22.6 million upon commencement of operating leases during the year ended December 31, 2022, 2021 and 2020, respectively. The following table presents future minimum lease payments of our lease liabilities as of December 31, 2022: Operating Leases Year ending December 31, 2023 $ 24,983 2024 23,063 2025 19,470 2026 18,684 2027 17,168 2028 and beyond 97,162 Total future minimum lease payments 200,530 Less: Interest (47,642) Total lease liabilities $ 152,888 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS In May 2019, we entered into an agreement with Bharti Airtel Limited (“BAL”) and its subsidiary, Bharti Airtel Services Limited (together with BAL, “Bharti”), pursuant to which Bharti agreed to contribute its very small aperture terminal (“VSAT”) telecommunications services and hardware business in India to Hughes Communications India Private Limited (“HCIPL”) and its subsidiaries, our less than wholly owned Indian subsidiaries, that conduct our VSAT services and hardware business in India. On January 4, 2022, this joint venture was formed (the “India JV”) and subsequent to the formation of the India JV, we hold a 67% ownership interest and Bharti holds a 33% ownership interest in HCIPL. The India JV combines the VSAT businesses of both companies to offer flexible and scalable enterprise networking solutions using satellite connectivity for primary transport, back-up and hybrid implementation in India. The results of operations related to the India JV have been included in these Consolidated Financial Statements from the date of formation. The costs associated with the closing of the India JV were not material and were expensed as incurred. The fair value of the consideration transferred was $38.2 million. Net cash paid was $7.9 million, inclusive of amounts paid for the acquisition of, or of HCIPL shares from, entities that were shareholders of HCIPL prior to closing the India JV. All assets and liabilities acquired in the India JV formation have been recorded at fair value. The following table presents our allocation of the purchase price: Amounts Assets: Trade accounts receivable and contract assets, net $ 6,160 Other current assets 2,085 Property and equipment 4,669 Goodwill 23,086 Other intangible assets 4,428 Total assets $ 40,428 Liabilities: Trade accounts payable $ 133 Accrued expenses and other current liabilities 986 Deferred tax liabilities 1,114 Total liabilities $ 2,233 Total purchase price $ 38,195 The valuation of assets acquired and liabilities assumed in the India JV were derived using primarily unobservable Level 3 inputs, which require significant management judgment and estimation, and resulted in a customer relationship intangible of $4.4 million with an estimated life of 5 years and is reported in Other intangible assets, net . Goodwill associated with the India JV is attributable to expected synergies, the projected long-term business growth in current and new markets and an assembled workforce. Goodwill has been allocated entirely to our Hughes segment. |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
OTHER COMPREHENSIVE INCOME (LOSS) | OTHER COMPREHENSIVE INCOME (LOSS) The following table presents the changes in the balances of Accumulated other comprehensive income (loss) by component: Cumulative Foreign Currency Translation Adjustments Unrealized Gain (Loss) On Available-For-Sale Securities Other Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2020 $ (146,953) $ 113 $ — $ (146,840) Other comprehensive income (loss) before reclassifications (26,928) 490 (98) (26,536) Amounts reclassified to net income (loss) — (5) — (5) Other comprehensive income (loss) (26,928) 485 (98) (26,541) Balance, December 31, 2021 (173,881) 598 (98) (173,381) Other comprehensive income (loss) before reclassifications 3,767 (553) — 3,214 Amounts reclassified to net income (loss) — (17) — (17) Other comprehensive income (loss) 3,767 (570) — 3,197 Balance, December 31, 2022 $ (170,114) $ 28 $ (98) $ (170,184) |
MARKETABLE INVESTMENT SECURITIE
MARKETABLE INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE INVESTMENT SECURITIES | MARKETABLE INVESTMENT SECURITIES The following table presents our Marketable investment securities : As of December 31, 2022 2021 Marketable investment securities: Available-for-sale debt securities: Corporate bonds $ 154,580 $ 284,787 Commercial paper 643,526 491,360 Other debt securities 1,663 78,355 Total available-for-sale debt securities 799,769 854,502 Equity securities — — Total marketable investment securities $ 799,769 $ 854,502 Debt Securities Available-for-Sale The following table presents the components of our available-for-sale debt securities: Amortized Unrealized Estimated Cost Gains Losses Fair Value As of December 31, 2022 Corporate bonds $ 154,517 $ 119 $ (56) $ 154,580 Commercial paper 643,553 — (27) 643,526 Other debt securities 1,663 — — 1,663 Total available-for-sale debt securities $ 799,733 $ 119 $ (83) $ 799,769 As of December 31, 2021 Corporate bonds $ 285,169 $ — $ (382) $ 284,787 Commercial paper 491,360 — — 491,360 Other debt securities 78,395 — (40) 78,355 Total available-for-sale debt securities $ 854,924 $ — $ (422) $ 854,502 The following table presents the activity on our available-for-sale debt securities: For the years ended December 31, 2022 2021 2020 Proceeds from sales $ 37,904 $ 292,188 $ 112,497 As of December 31, 2022, we have $784.4 million of available-for-sale debt securities with contractual maturities of one year or less and $15.4 million with contractual maturities greater than one year. Equity Securities The following table presents the activity of our equity securities: For the years ended December 31, 2022 2021 2020 Gains (losses) on investments, net $ — $ (6) $ (235) Fair Value Measurements The following table presents our marketable investment securities categorized by the fair value hierarchy, certain of which have historically experienced volatility: Level 1 Level 2 Total As of December 31, 2022 Cash equivalents (including restricted) $ 496 $ 548,058 $ 548,554 Available-for-sale debt securities: Corporate bonds $ — $ 154,580 $ 154,580 Commercial paper — 643,526 643,526 Other debt securities — 1,663 1,663 Total available-for-sale debt securities — 799,769 799,769 Equity securities — — — Total marketable investment securities $ — $ 799,769 $ 799,769 As of December 31, 2021 Cash equivalents (including restricted) $ 4,032 $ 320,732 $ 324,764 Available-for-sale debt securities: Corporate bonds $ — $ 284,787 $ 284,787 Commercial paper — 491,360 491,360 Other debt securities — 78,355 78,355 Total available-for-sale debt securities — 854,502 854,502 Equity securities — — — Total marketable investment securities $ — $ 854,502 $ 854,502 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The following table presents the components of Property and equipment, net : As of December 31, 2022 2021 Property and equipment, net: Satellites, net $ 754,019 $ 847,613 Other property and equipment, net 621,985 675,834 Total property and equipment, net $ 1,376,004 $ 1,523,447 Satellites As of December 31, 2022, our satellite fleet consisted of eight geosynchronous (“GEO”) satellites, five of which are owned and three of which are leased. They are all in geosynchronous orbit, approximately 22,300 miles above the equator. The following table presents our GEO satellite fleet as of December 31, 2022: GEO Satellite Segment Launch Date Nominal Degree Orbital Location (Longitude) Depreciable Life (In Years) Owned: SPACEWAY 3 (1) Hughes August 2007 95 W 10 EchoStar XVII Hughes July 2012 107 W 15 EchoStar XIX Hughes December 2016 97.1 W 15 Al Yah 3 (2) Hughes January 2018 20 W 7 EchoStar IX (3) (4) ESS August 2003 121 W 12 Finance leases: Eutelsat 65 West A Hughes March 2016 65 W 15 Telesat T19V Hughes July 2018 63 W 15 EchoStar 105/SES-11 ESS October 2017 105 W 15 (1) Depreciable life represents the remaining useful life as of June 8, 2011, the date EchoStar completed the acquisition of Hughes Communications, Inc. (“Hughes Communications”) and its subsidiaries in 2011 (the “Hughes Acquisition”). (2) Upon consummation of our joint venture with Al Yah Satellite Communications Company PrJSC (“Yahsat”) in Brazil in November 2019, we acquired the Brazilian Ka-band payload on this satellite. Depreciable life represents the remaining useful life as of November 2019. (3) We own the Ka-band and Ku-band payloads on this satellite. (4) EchoStar IX is approaching its end of station-kept life. The Company placed the satellite in an inclined-orbit in the first quarter of 2023. Inclined-orbit will extend its life to enable further revenue generating opportunities. The following table presents the components of our satellites, net: Depreciable Life (In Years) As of December 31, 2022 2021 Satellites, net: Satellites - owned 7 to 15 $ 1,503,435 $ 1,500,836 Satellites - acquired under finance leases 15 360,642 354,170 Total satellites 1,864,077 1,855,006 Accumulated depreciation: Satellites - owned (988,164) (911,722) Satellites - acquired under finance leases (121,894) (95,671) Total accumulated depreciation (1,110,058) (1,007,393) Total satellites, net $ 754,019 $ 847,613 The following table presents the depreciation expense associated with our satellites, net: For the years ended December 31, 2022 2021 2020 Depreciation expense: Satellites - owned $ 75,738 $ 85,068 $ 108,273 Satellites - acquired under finance leases 24,127 23,740 27,611 Total depreciation expense $ 99,865 $ 108,808 $ 135,884 The following table presents capitalized interest associated with our satellites and satellite-related ground infrastructure: For the years ended December 31, 2022 2021 2020 Capitalized interest $ 8,712 $ 6,002 $ 2,488 Satellite-Related Commitments As of December 31, 2022 and December 31, 2021 our satellite-related commitments were $143.5 million and $179.7 million, respectively. These include payments pursuant to regulatory authorizations, non-lease costs associated with our finance lease satellites, in-orbit incentives relating to certain satellites and commitments for satellite service arrangements. In certain circumstances, the dates on which we are obligated to pay our contractual obligations could change. Satellite Anomalies and Impairments 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 year ended December 31, 2022. Satellite Insurance We generally do not carry in-orbit insurance on our satellites or payloads because we have assessed that the cost of insurance is not economical relative to the risk of failures. Therefore, we generally bear the risk of any in-orbit failures. Pursuant to the terms of our joint venture agreement with Yahsat, we are required to maintain insurance for the Al Yah 3 Brazilian payload during the commercial in-orbit service of such payload, subject to certain limitations on coverage. We have obtained certain insurance for our EchoStar XXIV satellite covering launch plus the first year of operations. We will continue to assess circumstances going forward and make insurance-related decisions on a case-by-case basis. The following table presents Other property and equipment, net : Depreciable Life (In Years) As of December 31, 2022 2021 Other property and equipment, net: Land — $ 13,510 $ 13,322 Buildings and improvements 1 to 40 75,163 73,824 Furniture, fixtures, equipment and other 1 to 12 747,179 723,902 Customer premises equipment 2 to 4 933,669 1,860,766 Construction in progress 195,655 157,038 Total other property and equipment 1,965,176 2,828,852 Accumulated depreciation (1,343,191) (2,153,018) Other property and equipment, net $ 621,985 $ 675,834 During 2022, the Company identified fully depreciated assets that were no longer in use, mostly related to our customer premises equipment assets. Cost and accumulated depreciation were reduced by $1.1 billion. There was no impact to Other property and equipment, net . The following table presents the depreciation expense associated with our other property and equipment: For the years ended December 31, 2022 2021 2020 Other property and equipment depreciation expense: Buildings and improvements $ 3,661 $ 4,908 $ 4,285 Furniture, fixtures, equipment and other 71,804 72,855 76,649 Customer premises equipment 221,645 247,072 246,542 Total depreciation expense $ 297,110 $ 324,835 $ 327,476 |
REGULATORY AUTHORIZATIONS
REGULATORY AUTHORIZATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
REGULATORY AUTHORIZATIONS | REGULATORY AUTHORIZATIONS The following table presents our Regulatory authorizations, net : Finite lived Cost Accumulated Amortization Total Indefinite lived Total Balance, December 31, 2019 $ 12,524 $ (161) $ 12,363 $ 400,000 $ 412,363 Amortization expense — (902) (902) — (902) Currency translation adjustments (1,019) 9 (1,010) — (1,010) Balance, December 31, 2020 11,505 (1,054) 10,451 400,000 410,451 Amortization expense — (806) (806) — (806) Currency translation adjustments (772) 86 (686) — (686) Balance, December 31, 2021 10,733 (1,774) 8,959 400,000 408,959 Amortization expense — (825) (825) — (825) Currency translation adjustments 598 (113) 485 — 485 Balance, December 31, 2022 $ 11,331 $ (2,712) $ 8,619 $ 400,000 $ 408,619 Weighted-average useful life (in years) 14 Future Amortization The following table presents our estimated future amortization of our regulatory authorizations with finite lives as of December 31, 2022: Amount For the years ending December 31, 2023 $ 836 2024 836 2025 836 2026 836 2027 836 2028 and beyond 4,439 Total $ 8,619 The following table presents our other intangible assets: Customer Relationships Patents Trademarks and Licenses Total Cost: As of December 31, 2019 $ 270,300 $ 51,400 $ 29,700 $ 351,400 As of December 31, 2020 270,300 51,400 29,700 351,400 As of December 31, 2021 270,300 51,400 29,700 351,400 Additions 4,312 — — 4,312 Currency Translation Adjustments (328) — — (328) As of December 31, 2022 $ 274,284 $ 51,400 $ 29,700 $ 355,384 Accumulated amortization: As of December 31, 2019 $ (257,933) $ (51,400) $ (12,746) $ (322,079) Amortization expense (9,496) — (1,485) (10,981) As of December 31, 2020 (267,429) (51,400) (14,231) (333,060) Amortization expense (2,871) — (1,485) (4,356) As of December 31, 2021 (270,300) (51,400) (15,716) (337,416) Amortization expense (785) — (1,485) (2,270) As of December 31, 2022 $ (271,085) $ (51,400) $ (17,201) $ (339,686) Carrying amount: As of December 31, 2021 $ — $ — $ 13,984 $ 13,984 As of December 31, 2022 $ 3,199 $ — $ 12,499 $ 15,698 Weighted-average useful life (in years) 8 6 20 Future Amortization The following table presents our estimated future amortization of other intangible assets as of December 31, 2022: Amount For the years ending December 31, 2023 $ 2,282 2024 2,282 2025 2,282 2026 2,282 2027 1,496 2028 and beyond 5,074 Total $ 15,698 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL All of our goodwill is assigned to our Hughes segment, as it was generated through: i) the Hughes Acquisition; ii) the agreement with 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”); and iii) the India JV formation. During the quarter ended December 31, 2022, we conducted a quantitative interim test of goodwill for all of our reporting units due to the sustained decline in our stock price during that period. We estimated the reporting unit's fair value using the discounted cash flow method and the market comparable method. The discounted cash flow method used the reporting unit's projections of estimated operating results and cash flows that were discounted using a weighted-average cost of capital based on a reasonable market participant’s point of view. The main assumptions supporting the cash flow projections include, but are not limited to, revenue growth, margins, discount rate, and terminal growth rate. The financial projections reflect management's best estimate of economic and market conditions over the projected period, including forecasted revenue growth, margins, capital expenditures, depreciation, and amortization. Under the market comparable method, we used the guideline company method to develop valuation multiples and compare the single reporting unit to similar publicly traded companies. Additionally, we performed a reconciliation of our estimated fair value, determined using the discounted cash flows method and the market comparable method, to the Company’s market capitalization. As a result of this interim test, no goodwill impairment was identified. The fair value of the Hughes reporting unit exceeded the carrying value by more than 20%. We concluded that there were no other indicators of impairment for the quarter ended December 31, 2022. The following table presents our goodwill: For the years ended December 31, 2022 2021 2020 Balance at beginning of period $ 511,086 $ 511,597 $ 506,953 India JV formation 23,086 — — Foreign currency translation (1,681) (511) 4,644 Balance at end of period $ 532,491 $ 511,086 $ 511,597 |
OTHER INTANGIBLE ASSETS
OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
OTHER INTANGIBLE ASSETS | REGULATORY AUTHORIZATIONS The following table presents our Regulatory authorizations, net : Finite lived Cost Accumulated Amortization Total Indefinite lived Total Balance, December 31, 2019 $ 12,524 $ (161) $ 12,363 $ 400,000 $ 412,363 Amortization expense — (902) (902) — (902) Currency translation adjustments (1,019) 9 (1,010) — (1,010) Balance, December 31, 2020 11,505 (1,054) 10,451 400,000 410,451 Amortization expense — (806) (806) — (806) Currency translation adjustments (772) 86 (686) — (686) Balance, December 31, 2021 10,733 (1,774) 8,959 400,000 408,959 Amortization expense — (825) (825) — (825) Currency translation adjustments 598 (113) 485 — 485 Balance, December 31, 2022 $ 11,331 $ (2,712) $ 8,619 $ 400,000 $ 408,619 Weighted-average useful life (in years) 14 Future Amortization The following table presents our estimated future amortization of our regulatory authorizations with finite lives as of December 31, 2022: Amount For the years ending December 31, 2023 $ 836 2024 836 2025 836 2026 836 2027 836 2028 and beyond 4,439 Total $ 8,619 The following table presents our other intangible assets: Customer Relationships Patents Trademarks and Licenses Total Cost: As of December 31, 2019 $ 270,300 $ 51,400 $ 29,700 $ 351,400 As of December 31, 2020 270,300 51,400 29,700 351,400 As of December 31, 2021 270,300 51,400 29,700 351,400 Additions 4,312 — — 4,312 Currency Translation Adjustments (328) — — (328) As of December 31, 2022 $ 274,284 $ 51,400 $ 29,700 $ 355,384 Accumulated amortization: As of December 31, 2019 $ (257,933) $ (51,400) $ (12,746) $ (322,079) Amortization expense (9,496) — (1,485) (10,981) As of December 31, 2020 (267,429) (51,400) (14,231) (333,060) Amortization expense (2,871) — (1,485) (4,356) As of December 31, 2021 (270,300) (51,400) (15,716) (337,416) Amortization expense (785) — (1,485) (2,270) As of December 31, 2022 $ (271,085) $ (51,400) $ (17,201) $ (339,686) Carrying amount: As of December 31, 2021 $ — $ — $ 13,984 $ 13,984 As of December 31, 2022 $ 3,199 $ — $ 12,499 $ 15,698 Weighted-average useful life (in years) 8 6 20 Future Amortization The following table presents our estimated future amortization of other intangible assets as of December 31, 2022: Amount For the years ending December 31, 2023 $ 2,282 2024 2,282 2025 2,282 2026 2,282 2027 1,496 2028 and beyond 5,074 Total $ 15,698 |
OTHER INVESTMENTS
OTHER INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
OTHER INVESTMENTS | OTHER INVESTMENTS The following table presents our Other investments, net : As of December 31, 2022 2021 Other investments, net: Equity method investments $ 83,523 $ 91,226 Total other investments, net $ 83,523 $ 91,226 Equity Method Investments Deluxe/EchoStar LLC We own 50% of Deluxe/EchoStar LLC (“Deluxe”), a joint venture that we entered into in 2010 to build an advanced digital cinema satellite distribution network targeting delivery to digitally equipped theaters in the U.S. and Canada. Broadband Connectivity Solutions (Restricted) Limited We own 20% of Broadband Connectivity Solutions (Restricted) Limited (together with its subsidiaries, “BCS”), a joint venture that we entered into in 2018 to provide commercial Ka-band satellite broadband services across Africa, the Middle East and southwest Asia operating over Yahsat's Al Yah 2 and Al Yah 3 Ka-band satellites. Financial Information for Our Equity Method Investments The following table presents revenue recognized: For the years ended December 31, 2022 2021 2020 Deluxe $ 5,334 $ 5,480 $ 4,393 BCS $ 7,933 $ 8,278 $ 9,080 The following table presents trade accounts receivable: As of December 31, 2022 2021 Deluxe $ 3,026 $ 934 BCS $ 5,062 $ 5,544 We recorded cash distributions from our investments of $2.0 million for the year ended December 31, 2022 that was considered a return of investment and reported in Net cash provided by (used for) investing activities |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The following table presents the carrying amount and fair values of our Long-term debt, net: Effective Interest Rate As of December 31, 2022 2021 Carrying Amount Fair Value Carrying Amount Fair Value Senior Secured Notes: 5 1/4% Senior Secured Notes due 2026 5.320% $ 750,000 $ 727,763 $ 750,000 $ 825,555 Senior Unsecured Notes: 6 5/8% Senior Unsecured Notes due 2026 6.688% 750,000 707,490 750,000 838,740 Less: Unamortized debt issuance costs (3,223) — (4,006) — Total long-term debt, net $ 1,496,777 $ 1,435,253 $ 1,495,994 $ 1,664,295 Additional Information Relating to the Notes Each series of the Notes is redeemable, in whole or in part, at any time at a redemption price equal to 100.0% of the principal amount thereof plus a “make-whole” premium, as defined in the applicable Indenture, together with accrued and unpaid interest, if any, to the date of redemption. The 2026 Senior Secured Notes are: • our secured obligations; • secured by security interests in substantially all of our and certain of our subsidiaries’ existing and future tangible and intangible assets on a first priority basis, subject to certain exceptions; • effectively junior to our obligations that are secured by assets that are not part of the collateral that secures the 2026 Senior Secured Notes to the extent of the value of the collateral securing such obligations; • effectively senior to our existing and future unsecured obligations to the extent of the value of the collateral securing the 2026 Senior Secured Notes, after giving effect to permitted liens as provided in the 2016 Secured Indenture; • senior in right of payment to all of our existing and future obligations that are expressly subordinated to the 2026 Senior Secured Notes; • structurally junior to any existing and future obligations of any of our subsidiaries that do not guarantee the 2026 Senior Secured Notes; and • unconditionally guaranteed, jointly and severally, on a general senior secured basis by certain of our subsidiaries, which guarantees rank equally with all of the guarantors’ existing and future unsubordinated indebtedness and effectively senior to such guarantors’ existing and future obligations to the extent of the value of the assets securing the 2026 Senior Secured Notes. The 2026 Senior Unsecured Notes are: • our unsecured senior obligations; • ranked equally with all existing and future unsubordinated indebtedness and effectively junior to any secured indebtedness up to the value of the assets securing such indebtedness; • effectively junior to our obligations that are secured to the extent of the value of the collateral securing such obligations; • senior in right of payment to all our existing and future obligations that are expressly subordinated to the 2026 Senior Unsecured Notes; • structurally junior to any existing and future obligations of any of our subsidiaries that do not guarantee the 2026 Senior Unsecured Notes; and • unconditionally guaranteed, jointly and severally, on a general senior secured basis by certain of our subsidiaries, which guarantees rank equally with all of the guarantors’ existing and future unsubordinated indebtedness, and effectively junior to any secured indebtedness of the guarantors up to the value of the assets securing such indebtedness. Subject to certain exceptions, the Indentures contain restrictive covenants that, among other things, impose limitations on our ability and, in certain instances, the ability of certain of our subsidiaries to: • incur additional debt; • pay dividends or make distributions on our or their capital stock or repurchase our or their capital stock; • make certain investments; • create liens or enter into sale and leaseback transactions; • enter into transactions with affiliates; • merge or consolidate with another company; • transfer and sell assets; and • allow to exist certain restrictions on our or their ability to pay dividends, make distributions, make other payments, or transfer assets. In the event of a Change of Control, as defined in the respective Indentures, we would be required to make an offer to repurchase all or any part of a holder’s Notes at a purchase price equal to 101.0% of the aggregate principal amount thereof, together with accrued and unpaid interest to the date of repurchase. Debt Issuance Costs For the years ended December 31, 2022, 2021 and 2020, we amortized $0.8 million, $2.4 million and $4.3 million respectively, of debt issuance costs incurred for all debt issuances, which are included in Interest expense, net of amounts capitalized in the Consolidated Statements of Operations. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following table presents the components of Income (loss) before income taxes in the Consolidated Statements of Operations: For the years ended December 31, 2022 2021 2020 Domestic $ 253,654 $ 246,207 $ 116,268 Foreign (60,303) (78,479) (76,579) Income (loss) before income taxes $ 193,351 $ 167,728 $ 39,689 The following table presents the components of Income tax benefit (provision), net , in the Consolidated Statements of Operations: For the years ended December 31, 2022 2021 2020 Current benefit (provision), net: Federal $ (83,594) $ (73,571) $ (40,109) State (15,430) (18,562) (4,152) Foreign (4,292) (3,254) (1,740) Total current benefit (provision), net $ (103,316) $ (95,387) $ (46,001) Deferred benefit (provision), net: Federal $ 37,714 $ 28,319 $ 15,151 State 8,186 3,705 (2,926) Foreign 2,975 6,252 (8,342) Total deferred benefit (provision), net 48,875 38,276 3,883 Total income tax benefit (provision), net $ (54,441) $ (57,111) $ (42,118) The following table presents our actual tax provisions reconciled to the amounts computed by applying the statutory federal tax rate to Income (loss) before income taxes in the Consolidated Statements of Operations: For the years ended December 31, 2022 2021 2020 Statutory rate $ (40,604) $ (35,223) $ (8,336) State income taxes, net of federal benefit (provision) (4,005) (10,960) (6,205) Permanent differences (2,233) (806) (1,447) Tax credits, including withholding tax 3,699 4,573 1,137 Valuation allowance (21,359) (23,346) (36,491) Rates different than statutory 9,753 10,164 9,725 Other 308 (1,513) (501) Total income tax benefit (provision), net $ (54,441) $ (57,111) $ (42,118) The following table presents the components of our deferred tax assets and liabilities: As of December 31, 2022 2021 Deferred tax assets: Net operating losses, credit and other carryforwards $ 119,594 $ 121,021 Other investments 11,648 8,890 Accrued expenses 53,324 30,973 Stock-based compensation 5,645 6,833 Other assets 32,824 8,985 Total deferred tax assets 223,035 176,702 Valuation allowance (153,233) (139,727) Deferred tax assets after valuation allowance $ 69,802 $ 36,975 Deferred tax liabilities: Property and equipment, regulatory authorizations, and other intangibles $ (332,884) $ (338,130) Other liabilities (18,853) (27,840) Total deferred tax liabilities (351,737) (365,970) Total net deferred tax liabilities $ (281,935) $ (328,995) Net deferred tax assets (liabilities) foreign jurisdiction $ 6,277 $ 5,267 Net deferred tax assets (liabilities) domestic (288,212) (334,262) Total net deferred tax assets (liabilities) $ (281,935) $ (328,995) Overall, our net deferred tax assets were offset by a valuation allowance of $153.2 million and $139.7 million as of December 31, 2022 and 2021, respectively. The change in the valuation allowance relates to an increase in the net operating loss carryforwards of certain foreign subsidiaries, offset by a decrease due to changes in foreign exchange rates. Tax benefits of net operating loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. As of December 31, 2022, we had foreign net operating loss carryforwards of $406.8 million. The net operating loss carryforwards associated with India will begin to expire in 2027. As of December 31, 2022, we had undistributed earnings attributable to foreign subsidiaries for which no provision for U.S. income taxes or foreign withholding taxes has been made because it is expected that such earnings will be reinvested outside the U.S. indefinitely. It is not practicable to determine the amount of the unrecognized deferred tax liability at this time. As of December 31, 2022 and 2021, we had net deferred tax assets related to our foreign subsidiaries of $7.8 million and $5.4 million, respectively, which were recorded in Other non-current assets, net Accounting for Uncertainty in Income Taxes In addition to filing U.S. federal income tax returns with EchoStar, we file income tax returns in all states that impose an income tax. As of December 31, 2022, we are not currently under a U.S. federal income tax examination. However, the IRS could perform tax examinations on years as early as tax year 2008. We are also subject to frequent state income tax audits and have open state examinations on years as early as tax year 2008. We also file income tax returns in the United Kingdom, Germany, Brazil, India and a number of other foreign jurisdictions. We generally are open to income tax examination in these foreign jurisdictions for taxable years beginning in 2004. As of December 31, 2022, we are currently being audited by the Indian tax authorities for fiscal years 2004 through 2021 and the German tax authority for calendar years 2016 through 2019. We have no other on-going significant income tax examinations in process in our foreign jurisdictions. The following table presents the reconciliation of the beginning and ending amount of unrecognized income tax benefits: For the years ended December 31, 2022 2021 2020 Unrecognized tax benefit balance as of beginning of period: $ 7,294 $ 7,294 $ 7,866 Reductions based on tax positions related to prior years (122) — (572) Balance as of end of period $ 7,172 $ 7,294 $ 7,294 As of December 31, 2022 and 2021, we had $7.2 million of unrecognized income tax benefits, all of which, if recognized, would affect our effective tax rate. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANSEmployee Stock Purchase PlanEchoStar has an employee stock purchase plan (the “ESPP”), under which it is authorized to issue 5.0 million shares of EchoStar’s Class A common stock. As of December 31, 2022, EchoStar had approximately 0.7 million shares of Class A common stock which remain available for issuance under the ESPP. Generally, all full-time employees who have been employed by EchoStar or its subsidiaries for at least one calendar quarter are eligible to participate in the ESPP. Employee stock purchases are made through payroll deductions. Under the terms of the ESPP, each employee’s deductions are limited so that the maximum they may purchase under the ESPP is $25,000 in fair value of Class A common stock per year. Stock purchases are made on the last business day of each calendar quarter at 85.0% of the closing price of EchoStar’s Class A common stock on that date. For the years ended December 31, 2022, 2021 and 2020, employee purchases of EchoStar’s Class A common stock through the ESPP totaled approximately 580,000 shares, 446,000 shares and 452,000 shares, respectively. 401(k) Employee Savings Plans Under the EchoStar 401(k) Plan (“the Plan”), eligible employees are entitled to contribute up to 75.0% of their eligible compensation, on a pre-tax and/or after-tax basis, subject to the maximum contribution limit provided by the Internal Revenue Code of 1986, as amended (the “Code”). All employee contributions to the Plan are immediately vested. EchoStar matches 50 cents on the dollar for the first 6.0% of each employee’s salary contributions to the Plan for a total of 3.0% match on a pre-tax basis up to a maximum of $7,500 annually. EchoStar’s match is calculated each pay period there is an employee contribution. In addition, EchoStar may make an annual discretionary contribution to the Plan to be made in cash or EchoStar’s stock. EchoStar’s contributions under the Plan vest at 20.0% per year and are 100.0% vested after an eligible employee has completed five years of employment. Forfeitures of unvested participant balances may be used to fund matching and discretionary contributions. The following table presents our matching contributions and discretionary contributions: For the years ended December 31, 2022 2021 2020 Matching contributions $ 5,475 $ 5,434 $ 5,239 Fair value of EchoStar discretionary contributions of its Class A common stock, net of forfeitures, under 401(k) plan $ 7,042 $ 7,125 $ 6,921 |
RELATED PARTY TRANSACTIONS - EC
RELATED PARTY TRANSACTIONS - ECHOSTAR | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS - ECHOSTAR | RELATED PARTY TRANSACTIONS - ECHOSTARThe following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Shared Corporate Services. We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. 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 $14.2 million, $2.8 million and $7.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. Services and Other Revenue — EchoStar The following table presents our Services and other revenue from EchoStar: For the years ended December 31, 2022 2021 2020 Services and other revenue - EchoStar $ 17,623 $ 21,206 $ 20,287 The following table presents the corresponding related party receivables: As of December 31, 2022 2021 Related party receivables - EchoStar - current $ 112,985 $ 122,619 Related party receivables - EchoStar - non-current 55,834 56,055 Total related party receivables - EchoStar $ 168,819 $ 178,674 Receivables. EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current. No repayment schedule for these receivables has been determined. Operating Expenses — EchoStar The following table presents our operating expenses from EchoStar: For the years ended December 31, 2022 2021 2020 Operating expenses - EchoStar $ 75,462 $ 56,430 $ 56,859 The following table presents the corresponding related party payables: As of December 31, 2022 2021 Related party payables - EchoStar - current $ 216,504 $ 124,578 Related party payables - EchoStar - non-current 23,423 24,118 Total related party payables - EchoStar $ 239,927 $ 148,696 Payables. We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current. No repayment schedule for these payables has been determined. Real Estate. We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy. Cash Advances. EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2023. Advances under these agreements bear interest at annual rates of three percent. We report amounts payable under these agreements within Related party payables - EchoStar - non-current. BSS Transaction . Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement (as defined below), and as part of the BSS Transaction (as defined below), we and our subsidiaries transferred certain of the BSS Business (as defined below) to BSS Corp. (as defined below), and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. EchoStar Mobile Limited Service Agreements. We provide services and lease equipment to support the business of EchoStar Mobile Limited, a subsidiary of EchoStar that is licensed by the EU to provide mobile satellite services and complementary ground component services covering the entire EU using S-band spectrum. Generally, the amounts EchoStar’s other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded revenue in Services and other revenue of $17.6 million, $21.2 million and $20.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, related to these services. Additionally, we have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5%, that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current. Construction Management Services for EchoStar XXIV satellite. In August 2017, a subsidiary of EchoStar entered into a contract with Maxar Space, LLC (formerly Space Systems/Loral, LLC), for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite, with an expected launch in the second quarter of 2023. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $1.6 million, $1.6 million and $1.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. Dividends. On March 17, 2022, our Board of Directors declared and approved payment of a cash dividend on our outstanding common stock to our shareholder and parent, EchoStar, in the amount of $100.0 million. Payment of this dividend was made in the first quarter of 2022. Overview EchoStar and DISH have operated as separate publicly-traded companies since 2008 (the “Spin-off”). A substantial majority of the voting power of the shares of each of EchoStar and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family. In January 2017, EchoStar and certain of its subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries pursuant to which, in February 2017, we received all of the shares of preferred tracking stock previously issued by us and one of our subsidiaries (the “Tracking Stock”), representing an 80% economic interest in the residential retail satellite broadband business of our Hughes segment, in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of our EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). The Tracking Stock was retired in March 2017. In September 2019, pursuant to a master transaction agreement (the “Master Transaction Agreement”) with DISH and a wholly-owned subsidiary of DISH (“Merger Sub”), (i) we transferred certain real property and the various businesses, products, licenses, technology, revenues, billings, operating activities, assets and liabilities primarily related to the former portion of our ESS segment that managed, marketed and provided (1) broadcast satellite services primarily to Network and our former joint venture Dish Mexico, S. de R.L. de C.V. and its subsidiaries (“Dish Mexico”), and (2) telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network and a portion of our other businesses (collectively, the “BSS Business”) to one of our former subsidiaries, EchoStar BSS Corporation (“BSS Corp.”), (ii) we distributed to each holder of shares of our Class A or Class B common stock entitled to receive consideration in the transaction an amount of shares of common stock of BSS Corp., par value $0.001 per share (“BSS Common Stock”), equal to one share of BSS Common Stock for each share of our Class A or Class B common stock owned by such stockholder (the “Distribution”); and (iii) immediately after the Distribution, (1) Merger Sub merged with and into BSS Corp. (the “Merger”), such that BSS Corp. became a wholly-owned subsidiary of DISH and with DISH then owning and operating the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”). In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we, EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network, on the one hand, obtains certain products, services and rights from us, EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future. Services and Other Revenue — DISH Network The following table presents our Services and other revenue - DISH Network : For the years ended December 31, 2022 2021 2020 Services and other revenue - DISH Network $ 17,832 $ 21,718 $ 25,930 The following table presents the related trade accounts receivable: As of December 31, 2022 2021 Trade accounts receivable - DISH Network $ 1,992 $ 3,457 Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. We terminated the provision of this satellite capacity in December 2022. Telesat Obligation Agreement. In September 2009, we entered into an agreement with Telesat Canada to lease satellite capacity from Telesat Canada on all 32 direct broadcast satellite (“DBS”) transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we entered into an agreement with DISH Network, pursuant to which DISH Network leased satellite capacity from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement (the “DISH Nimiq 5 Agreement”). Under the terms of the DISH Nimiq 5 Agreement, DISH Network made certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service. We transferred the Telesat Transponder Agreement to DISH Network in September 2019 as part of the BSS Transaction; however, we retained certain obligations related to DISH Network’s performance under that agreement and we entered into an agreement with DISH Network whereby DISH Network compensates us for retaining such obligations. DBSD North America Agreement. In March 2012, DISH Network completed its acquisition of all of the equity of DBSD North America, Inc. (“DBSD North America”). Prior to DISH Network’s acquisition of DBSD North America and EchoStar’s completion of the Hughes Acquisition, DBSD North America and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services of DBSD North America’s gateway and ground-based communications equipment. In December 2017, we and DBSD North America amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DBSD North America has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis, unless terminated by DBSD North America upon at least 120 days’ written notice to us. In February 2019, we further amended these agreements to provide DBSD North America with the right to continue to receive warranty services from us on a month-to-month basis until December 2023, unless terminated by DBSD North America upon at least 21 days’ written notice to us. The provision of hosting services will continue until February 2027 unless terminated by DBSD North America upon at least 180 days’ written notice to us. In addition, DBSD North America generally may terminate any and all such services for convenience, subject to providing us with prior notice and/or payment of termination charges. Hughes Equipment and Services Agreement . In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days’ written notice to us or by us with at least 365 days’ written notice to DISH Network. Operating Expenses — DISH Network The following table presents our operating expenses related to DISH Network: For the years ended December 31, 2022 2021 2020 Operating expenses - DISH Network $ 4,545 $ 4,813 $ 4,734 The following table presents the related trade accounts payable: As of December 31, 2022 2021 Trade accounts payable - DISH Network $ 567 $ 587 Amended and Restated Professional Services Agreement . In connection with the Spin-off, EchoStar entered into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”). In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement (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 Professional Services Agreement (the “Amended and Restated Professional Services Agreement”) to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 16. Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 1, 2023 and renews automatically for successive one-year periods thereafter, unless the agreement is terminated earlier by either party upon at least 60 days’ notice. We or DISH network may generally terminate the Amended and Restated Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice, unless the statement of work for particular services states otherwise. Certain services provided under the Amended and Restated Professional Services Agreement may survive the termination of the agreement. Collocation and Antenna Space Agreements . We and DISH Network entered into an agreement pursuant to which DISH Network provided us with collocation space in El Paso, Texas. This agreement was for an initial period ending in July 2015, and provided us with renewal options for four consecutive three-year terms. We exercised our first renewal option for a period commencing in August 2015 and ending in July 2018, in April 2018 we exercised our second renewal option for a period ending in July 2021, and in May 2021 we exercised our third renewal option for a period ending in July 2024. In connection with the Share Exchange, effective March 2017, we also entered into certain agreements pursuant to which DISH Network provides collocation and antenna space to EchoStar through February 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; Spokane, Washington; and Englewood, Colorado. In October 2019, we provided a termination notice for our New Braunfels, Texas agreement effective May 2020. In November 2020, we provided a termination notice for one of our Englewood, Colorado agreements effective May 2021. In November 2021, we exercised our right to renew the collocation agreements at Gilbert, Arizona, Cheyenne, Wyoming, Spokane, Washington, Englewood, Colorado and Monee, Illinois for a period ending in February 2025. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. In May 2022, we exercised our right to renew such other agreements at Monee, Illinois and Spokane, Washington through August 2025. Generally, we may renew our collocation and antenna space agreements for three-year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 180 days’ prior written notice. In September 2019, in connection with the BSS Transaction, we entered into an agreement pursuant to which DISH Network provided us with certain additional collocation space in Cheyenne, Wyoming for a period that ended in September 2020. The fees for the services provided under these agreements depend on the number of racks located at the location. Also in connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing in August 2020, with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. In March 2021, we entered into additional agreements pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming, and the right to use an antenna and certain space in Gilbert, Arizona. Both agreements are for a period of five years with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. Hughes Broadband Master Services Agreement . In conjunction with the launch of our EchoStar XIX satellite, in March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our Gen 5 HughesNet service and related equipment and other telecommunication services and (ii) installs Gen 5 HughesNet service equipment with respect to activations generated by DISH Network. Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The current term of the Hughes Broadband MSA is through March 2023 with automatic renewal for successive one-year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our Gen 5 HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $6.8 million, $8.4 million and $16.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. 2019 TT&C Agreement . In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). In June 2021, we amended the 2019 TT&C Agreement to extend the term until September 2022 and added the option for us to renew the 2019 TT&C Agreement up to an additional three years. In September 2022, we exercised the option to renew the 2019 TT&C Agreement until September 2023. The fees for services provided under the 2019 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months’ notice. Referral Marketing Agreement . In June 2021, we and DISH Network entered into an agreement pursuant to which we will pre-qualify prospects contacting Hughes call centers and transfer those prospects to DISH Network for introduction to DISH Network’s video services, for prospects that convert Hughes will receive a commission. This agreement has an indefinite term and may be terminated by either party upon 90 days’ prior written notice. Whidbey Island 5G Network Test Bed Subcontract . In June 2022, we and DISH Wireless entered into a subcontract (“DISH Subcontract”) pursuant to which DISH will provide access and use of a DISH lab, technical support and integration and testing support for the 5G network test bed to be delivered by Hughes to its customer. Other Receivables - DISH Network Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”), because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar and its subsidiaries will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed. In light of the Tax Sharing Agreement, among other things, and in connection with EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount that includes the federal tax benefit DISH received as a result of our operations. In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network. Master Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) EchoStar completed the Distribution; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by the parties, including EchoStar’s representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities. EchoStar and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively. BSS Transaction Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries’ with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction. Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect. BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except that EchoStar is responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred to DISH Network in connection with the BSS Transaction. Share Exchange Agreement . In February 2017 EchoStar consummated the Share Exchange, following which EchoStar and certain of its and our subsidiaries no longer operate the transferred EchoStar Technologies businesses and the Tracking Stock was retired and is no longer outstanding and all agreements, arrangements and policy statements with respect to such Tracking Stock terminated and are of no further effect. Pursuant to the Share Exchange Agreement, EchoStar and certain of its and our subsidiaries transferred certain assets, investments in joint ventures, spectrum licenses and real estate properties and DISH Network assumed certain liabilities relating to the transferred assets and businesses. The Share Exchange Agreement contained customary representations and warranties by the parties, including representations by EchoStar related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. EchoStar and DISH Network also agreed to customary indemnification provisions whereby each party indemnifies the other against certain losses with respect to breaches of representations, warranties or covenants and certain liabilities and if certain actions undertaken by EchoStar or DISH causes the transaction to be taxable to the other party after closing. Hughes Systique Corporation We contract with Hughes Systique Corporation (“Hughes Systique”) for software development services. In addition to our approximately 42% ownership in Hughes Systique, Mr. Pradman Kaul, the former President of our subsidiary Hughes Communications and Vice-Chair of our board of directors (effective January 1, 2023), and his brother, who is the Chief Executive Officer and President of Hughes Systique, own in the aggregate approximately 25%, on an undiluted basis, of Hughes Systique’s outstanding shares as of December 31, 2022. Furthermore, Mr. Pradman Kaul serves on the board of directors of Hughes Systique. Hughes Systique is a variable interest entity and we are considered the primary beneficiary of Hughes Systique due to, among other factors, our ability to direct the activities that most significantly impact the economic performance of Hughes Systique. As a result, we consolidate Hughes Systique’s financial statements in these Consolidated Financial Statements. |
RELATED PARTY TRANSACTIONS - DI
RELATED PARTY TRANSACTIONS - DISH NETWORK | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS - DISH NETWORK | RELATED PARTY TRANSACTIONS - ECHOSTARThe following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Shared Corporate Services. We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. 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 $14.2 million, $2.8 million and $7.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. Services and Other Revenue — EchoStar The following table presents our Services and other revenue from EchoStar: For the years ended December 31, 2022 2021 2020 Services and other revenue - EchoStar $ 17,623 $ 21,206 $ 20,287 The following table presents the corresponding related party receivables: As of December 31, 2022 2021 Related party receivables - EchoStar - current $ 112,985 $ 122,619 Related party receivables - EchoStar - non-current 55,834 56,055 Total related party receivables - EchoStar $ 168,819 $ 178,674 Receivables. EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current. No repayment schedule for these receivables has been determined. Operating Expenses — EchoStar The following table presents our operating expenses from EchoStar: For the years ended December 31, 2022 2021 2020 Operating expenses - EchoStar $ 75,462 $ 56,430 $ 56,859 The following table presents the corresponding related party payables: As of December 31, 2022 2021 Related party payables - EchoStar - current $ 216,504 $ 124,578 Related party payables - EchoStar - non-current 23,423 24,118 Total related party payables - EchoStar $ 239,927 $ 148,696 Payables. We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current. No repayment schedule for these payables has been determined. Real Estate. We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy. Cash Advances. EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2023. Advances under these agreements bear interest at annual rates of three percent. We report amounts payable under these agreements within Related party payables - EchoStar - non-current. BSS Transaction . Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement (as defined below), and as part of the BSS Transaction (as defined below), we and our subsidiaries transferred certain of the BSS Business (as defined below) to BSS Corp. (as defined below), and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. EchoStar Mobile Limited Service Agreements. We provide services and lease equipment to support the business of EchoStar Mobile Limited, a subsidiary of EchoStar that is licensed by the EU to provide mobile satellite services and complementary ground component services covering the entire EU using S-band spectrum. Generally, the amounts EchoStar’s other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded revenue in Services and other revenue of $17.6 million, $21.2 million and $20.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, related to these services. Additionally, we have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5%, that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current. Construction Management Services for EchoStar XXIV satellite. In August 2017, a subsidiary of EchoStar entered into a contract with Maxar Space, LLC (formerly Space Systems/Loral, LLC), for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite, with an expected launch in the second quarter of 2023. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $1.6 million, $1.6 million and $1.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. Dividends. On March 17, 2022, our Board of Directors declared and approved payment of a cash dividend on our outstanding common stock to our shareholder and parent, EchoStar, in the amount of $100.0 million. Payment of this dividend was made in the first quarter of 2022. Overview EchoStar and DISH have operated as separate publicly-traded companies since 2008 (the “Spin-off”). A substantial majority of the voting power of the shares of each of EchoStar and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family. In January 2017, EchoStar and certain of its subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries pursuant to which, in February 2017, we received all of the shares of preferred tracking stock previously issued by us and one of our subsidiaries (the “Tracking Stock”), representing an 80% economic interest in the residential retail satellite broadband business of our Hughes segment, in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of our EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). The Tracking Stock was retired in March 2017. In September 2019, pursuant to a master transaction agreement (the “Master Transaction Agreement”) with DISH and a wholly-owned subsidiary of DISH (“Merger Sub”), (i) we transferred certain real property and the various businesses, products, licenses, technology, revenues, billings, operating activities, assets and liabilities primarily related to the former portion of our ESS segment that managed, marketed and provided (1) broadcast satellite services primarily to Network and our former joint venture Dish Mexico, S. de R.L. de C.V. and its subsidiaries (“Dish Mexico”), and (2) telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network and a portion of our other businesses (collectively, the “BSS Business”) to one of our former subsidiaries, EchoStar BSS Corporation (“BSS Corp.”), (ii) we distributed to each holder of shares of our Class A or Class B common stock entitled to receive consideration in the transaction an amount of shares of common stock of BSS Corp., par value $0.001 per share (“BSS Common Stock”), equal to one share of BSS Common Stock for each share of our Class A or Class B common stock owned by such stockholder (the “Distribution”); and (iii) immediately after the Distribution, (1) Merger Sub merged with and into BSS Corp. (the “Merger”), such that BSS Corp. became a wholly-owned subsidiary of DISH and with DISH then owning and operating the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”). In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we, EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network, on the one hand, obtains certain products, services and rights from us, EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future. Services and Other Revenue — DISH Network The following table presents our Services and other revenue - DISH Network : For the years ended December 31, 2022 2021 2020 Services and other revenue - DISH Network $ 17,832 $ 21,718 $ 25,930 The following table presents the related trade accounts receivable: As of December 31, 2022 2021 Trade accounts receivable - DISH Network $ 1,992 $ 3,457 Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. We terminated the provision of this satellite capacity in December 2022. Telesat Obligation Agreement. In September 2009, we entered into an agreement with Telesat Canada to lease satellite capacity from Telesat Canada on all 32 direct broadcast satellite (“DBS”) transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we entered into an agreement with DISH Network, pursuant to which DISH Network leased satellite capacity from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement (the “DISH Nimiq 5 Agreement”). Under the terms of the DISH Nimiq 5 Agreement, DISH Network made certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service. We transferred the Telesat Transponder Agreement to DISH Network in September 2019 as part of the BSS Transaction; however, we retained certain obligations related to DISH Network’s performance under that agreement and we entered into an agreement with DISH Network whereby DISH Network compensates us for retaining such obligations. DBSD North America Agreement. In March 2012, DISH Network completed its acquisition of all of the equity of DBSD North America, Inc. (“DBSD North America”). Prior to DISH Network’s acquisition of DBSD North America and EchoStar’s completion of the Hughes Acquisition, DBSD North America and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services of DBSD North America’s gateway and ground-based communications equipment. In December 2017, we and DBSD North America amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DBSD North America has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis, unless terminated by DBSD North America upon at least 120 days’ written notice to us. In February 2019, we further amended these agreements to provide DBSD North America with the right to continue to receive warranty services from us on a month-to-month basis until December 2023, unless terminated by DBSD North America upon at least 21 days’ written notice to us. The provision of hosting services will continue until February 2027 unless terminated by DBSD North America upon at least 180 days’ written notice to us. In addition, DBSD North America generally may terminate any and all such services for convenience, subject to providing us with prior notice and/or payment of termination charges. Hughes Equipment and Services Agreement . In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days’ written notice to us or by us with at least 365 days’ written notice to DISH Network. Operating Expenses — DISH Network The following table presents our operating expenses related to DISH Network: For the years ended December 31, 2022 2021 2020 Operating expenses - DISH Network $ 4,545 $ 4,813 $ 4,734 The following table presents the related trade accounts payable: As of December 31, 2022 2021 Trade accounts payable - DISH Network $ 567 $ 587 Amended and Restated Professional Services Agreement . In connection with the Spin-off, EchoStar entered into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”). In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement (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 Professional Services Agreement (the “Amended and Restated Professional Services Agreement”) to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 16. Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 1, 2023 and renews automatically for successive one-year periods thereafter, unless the agreement is terminated earlier by either party upon at least 60 days’ notice. We or DISH network may generally terminate the Amended and Restated Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice, unless the statement of work for particular services states otherwise. Certain services provided under the Amended and Restated Professional Services Agreement may survive the termination of the agreement. Collocation and Antenna Space Agreements . We and DISH Network entered into an agreement pursuant to which DISH Network provided us with collocation space in El Paso, Texas. This agreement was for an initial period ending in July 2015, and provided us with renewal options for four consecutive three-year terms. We exercised our first renewal option for a period commencing in August 2015 and ending in July 2018, in April 2018 we exercised our second renewal option for a period ending in July 2021, and in May 2021 we exercised our third renewal option for a period ending in July 2024. In connection with the Share Exchange, effective March 2017, we also entered into certain agreements pursuant to which DISH Network provides collocation and antenna space to EchoStar through February 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; Spokane, Washington; and Englewood, Colorado. In October 2019, we provided a termination notice for our New Braunfels, Texas agreement effective May 2020. In November 2020, we provided a termination notice for one of our Englewood, Colorado agreements effective May 2021. In November 2021, we exercised our right to renew the collocation agreements at Gilbert, Arizona, Cheyenne, Wyoming, Spokane, Washington, Englewood, Colorado and Monee, Illinois for a period ending in February 2025. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. In May 2022, we exercised our right to renew such other agreements at Monee, Illinois and Spokane, Washington through August 2025. Generally, we may renew our collocation and antenna space agreements for three-year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 180 days’ prior written notice. In September 2019, in connection with the BSS Transaction, we entered into an agreement pursuant to which DISH Network provided us with certain additional collocation space in Cheyenne, Wyoming for a period that ended in September 2020. The fees for the services provided under these agreements depend on the number of racks located at the location. Also in connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing in August 2020, with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. In March 2021, we entered into additional agreements pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming, and the right to use an antenna and certain space in Gilbert, Arizona. Both agreements are for a period of five years with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. Hughes Broadband Master Services Agreement . In conjunction with the launch of our EchoStar XIX satellite, in March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our Gen 5 HughesNet service and related equipment and other telecommunication services and (ii) installs Gen 5 HughesNet service equipment with respect to activations generated by DISH Network. Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The current term of the Hughes Broadband MSA is through March 2023 with automatic renewal for successive one-year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our Gen 5 HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $6.8 million, $8.4 million and $16.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. 2019 TT&C Agreement . In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). In June 2021, we amended the 2019 TT&C Agreement to extend the term until September 2022 and added the option for us to renew the 2019 TT&C Agreement up to an additional three years. In September 2022, we exercised the option to renew the 2019 TT&C Agreement until September 2023. The fees for services provided under the 2019 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months’ notice. Referral Marketing Agreement . In June 2021, we and DISH Network entered into an agreement pursuant to which we will pre-qualify prospects contacting Hughes call centers and transfer those prospects to DISH Network for introduction to DISH Network’s video services, for prospects that convert Hughes will receive a commission. This agreement has an indefinite term and may be terminated by either party upon 90 days’ prior written notice. Whidbey Island 5G Network Test Bed Subcontract . In June 2022, we and DISH Wireless entered into a subcontract (“DISH Subcontract”) pursuant to which DISH will provide access and use of a DISH lab, technical support and integration and testing support for the 5G network test bed to be delivered by Hughes to its customer. Other Receivables - DISH Network Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”), because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar and its subsidiaries will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed. In light of the Tax Sharing Agreement, among other things, and in connection with EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount that includes the federal tax benefit DISH received as a result of our operations. In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network. Master Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) EchoStar completed the Distribution; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by the parties, including EchoStar’s representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities. EchoStar and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively. BSS Transaction Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries’ with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction. Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect. BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except that EchoStar is responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred to DISH Network in connection with the BSS Transaction. Share Exchange Agreement . In February 2017 EchoStar consummated the Share Exchange, following which EchoStar and certain of its and our subsidiaries no longer operate the transferred EchoStar Technologies businesses and the Tracking Stock was retired and is no longer outstanding and all agreements, arrangements and policy statements with respect to such Tracking Stock terminated and are of no further effect. Pursuant to the Share Exchange Agreement, EchoStar and certain of its and our subsidiaries transferred certain assets, investments in joint ventures, spectrum licenses and real estate properties and DISH Network assumed certain liabilities relating to the transferred assets and businesses. The Share Exchange Agreement contained customary representations and warranties by the parties, including representations by EchoStar related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. EchoStar and DISH Network also agreed to customary indemnification provisions whereby each party indemnifies the other against certain losses with respect to breaches of representations, warranties or covenants and certain liabilities and if certain actions undertaken by EchoStar or DISH causes the transaction to be taxable to the other party after closing. Hughes Systique Corporation We contract with Hughes Systique Corporation (“Hughes Systique”) for software development services. In addition to our approximately 42% ownership in Hughes Systique, Mr. Pradman Kaul, the former President of our subsidiary Hughes Communications and Vice-Chair of our board of directors (effective January 1, 2023), and his brother, who is the Chief Executive Officer and President of Hughes Systique, own in the aggregate approximately 25%, on an undiluted basis, of Hughes Systique’s outstanding shares as of December 31, 2022. Furthermore, Mr. Pradman Kaul serves on the board of directors of Hughes Systique. Hughes Systique is a variable interest entity and we are considered the primary beneficiary of Hughes Systique due to, among other factors, our ability to direct the activities that most significantly impact the economic performance of Hughes Systique. As a result, we consolidate Hughes Systique’s financial statements in these Consolidated Financial Statements. |
RELATED PARTY TRANSACTIONS - OT
RELATED PARTY TRANSACTIONS - OTHER | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS - OTHER | RELATED PARTY TRANSACTIONS - ECHOSTARThe following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Shared Corporate Services. We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. 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 $14.2 million, $2.8 million and $7.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. Services and Other Revenue — EchoStar The following table presents our Services and other revenue from EchoStar: For the years ended December 31, 2022 2021 2020 Services and other revenue - EchoStar $ 17,623 $ 21,206 $ 20,287 The following table presents the corresponding related party receivables: As of December 31, 2022 2021 Related party receivables - EchoStar - current $ 112,985 $ 122,619 Related party receivables - EchoStar - non-current 55,834 56,055 Total related party receivables - EchoStar $ 168,819 $ 178,674 Receivables. EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current. No repayment schedule for these receivables has been determined. Operating Expenses — EchoStar The following table presents our operating expenses from EchoStar: For the years ended December 31, 2022 2021 2020 Operating expenses - EchoStar $ 75,462 $ 56,430 $ 56,859 The following table presents the corresponding related party payables: As of December 31, 2022 2021 Related party payables - EchoStar - current $ 216,504 $ 124,578 Related party payables - EchoStar - non-current 23,423 24,118 Total related party payables - EchoStar $ 239,927 $ 148,696 Payables. We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current. No repayment schedule for these payables has been determined. Real Estate. We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy. Cash Advances. EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2023. Advances under these agreements bear interest at annual rates of three percent. We report amounts payable under these agreements within Related party payables - EchoStar - non-current. BSS Transaction . Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement (as defined below), and as part of the BSS Transaction (as defined below), we and our subsidiaries transferred certain of the BSS Business (as defined below) to BSS Corp. (as defined below), and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. EchoStar Mobile Limited Service Agreements. We provide services and lease equipment to support the business of EchoStar Mobile Limited, a subsidiary of EchoStar that is licensed by the EU to provide mobile satellite services and complementary ground component services covering the entire EU using S-band spectrum. Generally, the amounts EchoStar’s other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded revenue in Services and other revenue of $17.6 million, $21.2 million and $20.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, related to these services. Additionally, we have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5%, that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current. Construction Management Services for EchoStar XXIV satellite. In August 2017, a subsidiary of EchoStar entered into a contract with Maxar Space, LLC (formerly Space Systems/Loral, LLC), for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite, with an expected launch in the second quarter of 2023. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $1.6 million, $1.6 million and $1.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. Dividends. On March 17, 2022, our Board of Directors declared and approved payment of a cash dividend on our outstanding common stock to our shareholder and parent, EchoStar, in the amount of $100.0 million. Payment of this dividend was made in the first quarter of 2022. Overview EchoStar and DISH have operated as separate publicly-traded companies since 2008 (the “Spin-off”). A substantial majority of the voting power of the shares of each of EchoStar and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family. In January 2017, EchoStar and certain of its subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries pursuant to which, in February 2017, we received all of the shares of preferred tracking stock previously issued by us and one of our subsidiaries (the “Tracking Stock”), representing an 80% economic interest in the residential retail satellite broadband business of our Hughes segment, in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of our EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). The Tracking Stock was retired in March 2017. In September 2019, pursuant to a master transaction agreement (the “Master Transaction Agreement”) with DISH and a wholly-owned subsidiary of DISH (“Merger Sub”), (i) we transferred certain real property and the various businesses, products, licenses, technology, revenues, billings, operating activities, assets and liabilities primarily related to the former portion of our ESS segment that managed, marketed and provided (1) broadcast satellite services primarily to Network and our former joint venture Dish Mexico, S. de R.L. de C.V. and its subsidiaries (“Dish Mexico”), and (2) telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network and a portion of our other businesses (collectively, the “BSS Business”) to one of our former subsidiaries, EchoStar BSS Corporation (“BSS Corp.”), (ii) we distributed to each holder of shares of our Class A or Class B common stock entitled to receive consideration in the transaction an amount of shares of common stock of BSS Corp., par value $0.001 per share (“BSS Common Stock”), equal to one share of BSS Common Stock for each share of our Class A or Class B common stock owned by such stockholder (the “Distribution”); and (iii) immediately after the Distribution, (1) Merger Sub merged with and into BSS Corp. (the “Merger”), such that BSS Corp. became a wholly-owned subsidiary of DISH and with DISH then owning and operating the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”). In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we, EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network, on the one hand, obtains certain products, services and rights from us, EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future. Services and Other Revenue — DISH Network The following table presents our Services and other revenue - DISH Network : For the years ended December 31, 2022 2021 2020 Services and other revenue - DISH Network $ 17,832 $ 21,718 $ 25,930 The following table presents the related trade accounts receivable: As of December 31, 2022 2021 Trade accounts receivable - DISH Network $ 1,992 $ 3,457 Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. We terminated the provision of this satellite capacity in December 2022. Telesat Obligation Agreement. In September 2009, we entered into an agreement with Telesat Canada to lease satellite capacity from Telesat Canada on all 32 direct broadcast satellite (“DBS”) transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we entered into an agreement with DISH Network, pursuant to which DISH Network leased satellite capacity from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement (the “DISH Nimiq 5 Agreement”). Under the terms of the DISH Nimiq 5 Agreement, DISH Network made certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service. We transferred the Telesat Transponder Agreement to DISH Network in September 2019 as part of the BSS Transaction; however, we retained certain obligations related to DISH Network’s performance under that agreement and we entered into an agreement with DISH Network whereby DISH Network compensates us for retaining such obligations. DBSD North America Agreement. In March 2012, DISH Network completed its acquisition of all of the equity of DBSD North America, Inc. (“DBSD North America”). Prior to DISH Network’s acquisition of DBSD North America and EchoStar’s completion of the Hughes Acquisition, DBSD North America and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services of DBSD North America’s gateway and ground-based communications equipment. In December 2017, we and DBSD North America amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DBSD North America has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis, unless terminated by DBSD North America upon at least 120 days’ written notice to us. In February 2019, we further amended these agreements to provide DBSD North America with the right to continue to receive warranty services from us on a month-to-month basis until December 2023, unless terminated by DBSD North America upon at least 21 days’ written notice to us. The provision of hosting services will continue until February 2027 unless terminated by DBSD North America upon at least 180 days’ written notice to us. In addition, DBSD North America generally may terminate any and all such services for convenience, subject to providing us with prior notice and/or payment of termination charges. Hughes Equipment and Services Agreement . In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days’ written notice to us or by us with at least 365 days’ written notice to DISH Network. Operating Expenses — DISH Network The following table presents our operating expenses related to DISH Network: For the years ended December 31, 2022 2021 2020 Operating expenses - DISH Network $ 4,545 $ 4,813 $ 4,734 The following table presents the related trade accounts payable: As of December 31, 2022 2021 Trade accounts payable - DISH Network $ 567 $ 587 Amended and Restated Professional Services Agreement . In connection with the Spin-off, EchoStar entered into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”). In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement (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 Professional Services Agreement (the “Amended and Restated Professional Services Agreement”) to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 16. Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 1, 2023 and renews automatically for successive one-year periods thereafter, unless the agreement is terminated earlier by either party upon at least 60 days’ notice. We or DISH network may generally terminate the Amended and Restated Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice, unless the statement of work for particular services states otherwise. Certain services provided under the Amended and Restated Professional Services Agreement may survive the termination of the agreement. Collocation and Antenna Space Agreements . We and DISH Network entered into an agreement pursuant to which DISH Network provided us with collocation space in El Paso, Texas. This agreement was for an initial period ending in July 2015, and provided us with renewal options for four consecutive three-year terms. We exercised our first renewal option for a period commencing in August 2015 and ending in July 2018, in April 2018 we exercised our second renewal option for a period ending in July 2021, and in May 2021 we exercised our third renewal option for a period ending in July 2024. In connection with the Share Exchange, effective March 2017, we also entered into certain agreements pursuant to which DISH Network provides collocation and antenna space to EchoStar through February 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; Spokane, Washington; and Englewood, Colorado. In October 2019, we provided a termination notice for our New Braunfels, Texas agreement effective May 2020. In November 2020, we provided a termination notice for one of our Englewood, Colorado agreements effective May 2021. In November 2021, we exercised our right to renew the collocation agreements at Gilbert, Arizona, Cheyenne, Wyoming, Spokane, Washington, Englewood, Colorado and Monee, Illinois for a period ending in February 2025. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. In May 2022, we exercised our right to renew such other agreements at Monee, Illinois and Spokane, Washington through August 2025. Generally, we may renew our collocation and antenna space agreements for three-year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 180 days’ prior written notice. In September 2019, in connection with the BSS Transaction, we entered into an agreement pursuant to which DISH Network provided us with certain additional collocation space in Cheyenne, Wyoming for a period that ended in September 2020. The fees for the services provided under these agreements depend on the number of racks located at the location. Also in connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing in August 2020, with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. In March 2021, we entered into additional agreements pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming, and the right to use an antenna and certain space in Gilbert, Arizona. Both agreements are for a period of five years with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. Hughes Broadband Master Services Agreement . In conjunction with the launch of our EchoStar XIX satellite, in March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our Gen 5 HughesNet service and related equipment and other telecommunication services and (ii) installs Gen 5 HughesNet service equipment with respect to activations generated by DISH Network. Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The current term of the Hughes Broadband MSA is through March 2023 with automatic renewal for successive one-year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our Gen 5 HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $6.8 million, $8.4 million and $16.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. 2019 TT&C Agreement . In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). In June 2021, we amended the 2019 TT&C Agreement to extend the term until September 2022 and added the option for us to renew the 2019 TT&C Agreement up to an additional three years. In September 2022, we exercised the option to renew the 2019 TT&C Agreement until September 2023. The fees for services provided under the 2019 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months’ notice. Referral Marketing Agreement . In June 2021, we and DISH Network entered into an agreement pursuant to which we will pre-qualify prospects contacting Hughes call centers and transfer those prospects to DISH Network for introduction to DISH Network’s video services, for prospects that convert Hughes will receive a commission. This agreement has an indefinite term and may be terminated by either party upon 90 days’ prior written notice. Whidbey Island 5G Network Test Bed Subcontract . In June 2022, we and DISH Wireless entered into a subcontract (“DISH Subcontract”) pursuant to which DISH will provide access and use of a DISH lab, technical support and integration and testing support for the 5G network test bed to be delivered by Hughes to its customer. Other Receivables - DISH Network Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”), because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar and its subsidiaries will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed. In light of the Tax Sharing Agreement, among other things, and in connection with EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount that includes the federal tax benefit DISH received as a result of our operations. In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network. Master Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) EchoStar completed the Distribution; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by the parties, including EchoStar’s representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities. EchoStar and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively. BSS Transaction Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries’ with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction. Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect. BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except that EchoStar is responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred to DISH Network in connection with the BSS Transaction. Share Exchange Agreement . In February 2017 EchoStar consummated the Share Exchange, following which EchoStar and certain of its and our subsidiaries no longer operate the transferred EchoStar Technologies businesses and the Tracking Stock was retired and is no longer outstanding and all agreements, arrangements and policy statements with respect to such Tracking Stock terminated and are of no further effect. Pursuant to the Share Exchange Agreement, EchoStar and certain of its and our subsidiaries transferred certain assets, investments in joint ventures, spectrum licenses and real estate properties and DISH Network assumed certain liabilities relating to the transferred assets and businesses. The Share Exchange Agreement contained customary representations and warranties by the parties, including representations by EchoStar related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. EchoStar and DISH Network also agreed to customary indemnification provisions whereby each party indemnifies the other against certain losses with respect to breaches of representations, warranties or covenants and certain liabilities and if certain actions undertaken by EchoStar or DISH causes the transaction to be taxable to the other party after closing. Hughes Systique Corporation We contract with Hughes Systique Corporation (“Hughes Systique”) for software development services. In addition to our approximately 42% ownership in Hughes Systique, Mr. Pradman Kaul, the former President of our subsidiary Hughes Communications and Vice-Chair of our board of directors (effective January 1, 2023), and his brother, who is the Chief Executive Officer and President of Hughes Systique, own in the aggregate approximately 25%, on an undiluted basis, of Hughes Systique’s outstanding shares as of December 31, 2022. Furthermore, Mr. Pradman Kaul serves on the board of directors of Hughes Systique. Hughes Systique is a variable interest entity and we are considered the primary beneficiary of Hughes Systique due to, among other factors, our ability to direct the activities that most significantly impact the economic performance of Hughes Systique. As a result, we consolidate Hughes Systique’s financial statements in these Consolidated Financial Statements. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments The following table summarizes our contractual obligations as of December 31, 2022: Payments Due in the Years Ending December 31, Total (4)(5) 2023 2024 2025 2026 2027 Thereafter Long-term debt (1) $ 1,500,000 $ — $ — $ — $ 1,500,000 $ — $ — Interest on long-term debt 356,252 89,063 89,063 89,063 89,063 — — Satellite-related commitments (2) 143,516 43,729 17,737 17,351 16,089 14,393 34,217 Operating lease obligations (3) 200,528 24,983 23,063 19,470 18,684 17,168 97,160 Total $ 2,200,296 $ 157,775 $ 129,863 $ 125,884 $ 1,623,836 $ 31,561 $ 131,377 (1) Assumes all long-term debt is outstanding until scheduled maturity. (2) Includes payments pursuant to: i) the EchoStar XXIV launch contract, ii) regulatory authorizations, iii) non-lease costs associated with our finance lease satellites, iv) in-orbit incentives relating to certain satellites and v) commitments for satellite service arrangements. (3) Operating leases consist primarily of leases for office space, data centers and satellite-related ground infrastructure. (4) The table excludes amounts related to deferred tax liabilities, unrecognized tax positions and certain other amounts recorded in our non-current liabilities as the timing of any payments is uncertain. (5) The table excludes long-term deferred revenue and other long-term liabilities that do not require future cash payments. In certain circumstances, the dates on which we are obligated to pay our contractual obligations could change. 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, 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 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 Litigation We are involved in a number of legal proceedings concerning matters arising in connection with the conduct of our business activities. Many of these proceedings are at preliminary stages and/or seek an indeterminate amount of damages. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable and to determine if accruals are appropriate. We record an accrual for litigation and other loss contingencies when we determine that a loss is probable, and the amount of the loss can be reasonably estimated. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made. There can be no assurance that legal proceedings against us will be resolved in amounts that will not differ from the amounts of our recorded accruals. Legal fees and other costs of defending legal proceedings are charged to expense as incurred. For certain proceedings, management is unable to predict with any degree of certainty the outcome or provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons: (i) the proceedings are in various stages; (ii) damages have not been sought or specified; (iii) damages are unsupported, indeterminate and/or exaggerated in management’s opinion; (iv) there is uncertainty as to the outcome of pending trials, appeals, motions or other proceedings; (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties are involved (as with many patent-related cases). Except as described below, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material effect on our financial condition, operating results or cash flows, though there is no assurance that the resolution and outcomes of these proceedings, individually or in the aggregate, will not be material to our financial condition, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period. We intend to vigorously defend the proceedings against us. In the event that a court, tribunal, other body or jury ultimately rules against us, we may be subject to adverse consequences, including, without limitation, substantial damages, which may include treble damages, fines, penalties, compensatory damages and/or other equitable or injunctive relief that could require us to materially modify our business operations or certain products or services that we offer to our consumers. Shareholder Litigation On July 2, 2019, the City of Hallandale Beach Police Officers’ and Firefighters’ Personnel Retirement Trust, purporting to sue on behalf of a class of EchoStar Corporation’s stockholders, filed a complaint in the District Court of Clark County, Nevada against EchoStar’s directors, Charles W. Ergen, R. Stanton Dodge, Anthony M. Federico, Pradman P. Kaul, C. Michael Schroeder, Jeffrey R. Tarr, William D. Wade, and Michael T. Dugan; our chief financial officer, David J. Rayner; EchoStar; HSSC; our former subsidiary BSS Corp.; and DISH and its subsidiary Merger Sub. On September 5, 2019, the defendants filed motions to dismiss. On October 11, 2019, the plaintiffs filed an amended complaint removing Messrs. Dodge, Federico, Kaul, Schroeder, Tarr and Wade as defendants. The amended complaint alleges that Mr. Ergen, as our controlling stockholder, breached fiduciary duties to EchoStar’s minority stockholders by structuring the BSS Transaction with inadequate consideration and improperly influencing our and EchoStar’s boards of directors to approve the BSS Transaction. The amended complaint also alleges that the other defendants aided and abetted such alleged breaches. The plaintiffs seek equitable and monetary relief, including the issuance of additional DISH Common Stock, and other costs and disbursements, including attorneys’ fees on behalf of the purported class. On November 11, 2019, we and the other defendants filed separate motions to dismiss plaintiff’s amended complaint and during a hearing on January 13, 2020 the court denied these motions. On February 10, 2020, we and the other defendants filed answers to the amended complaint. The Court certified plaintiff’s class on January 11, 2021. On June 18, 2021, the parties executed a settlement agreement to resolve all claims in this case. On the same day, the parties filed a joint motion for preliminary approval of the settlement agreement. The motion was granted by an order dated July 30, 2021. On December 9, 2021, the Court held a final settlement hearing. On December 10, 2021, the Court issued an Order granting final approval of the settlement agreement. In an order dated October 24, 2022, the Court granted plaintiff’s unopposed motion to approve the class distribution plan. 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 HCIPL, formerly known as Hughes Escorts Communications Limited, obtained a license to operate a data network over satellite using VSAT systems. In 2002, HCIPL’s license was amended pursuant to a new government policy that was first established in 1999. The new policy eliminated the fixed license fees and instead required each telecommunications service provider to pay license fees based on its adjusted gross revenue (“AGR”). In March 2005, the Indian Department of Telecommunications (“DOT”) notified HCIPL that, based on its review of HCIPL’s audited accounts and AGR statements, HCIPL must pay additional license fees and penalties and interest on such fees and penalties. HCIPL responded that the DOT had improperly calculated its AGR by including revenue from licensed and unlicensed activities. The DOT rejected this explanation and in 2006, HCIPL filed a petition with an administrative tribunal (the “Tribunal”), challenging the DOT’s calculation of its AGR. The DOT also issued license fee assessments to other telecommunications service providers and a number of similar petitions were filed by several other such providers with the Tribunal. These petitions were amended, consolidated, remanded and re-appealed several times. On April 23, 2015, the Tribunal issued a judgment affirming the DOT’s calculation of AGR for the telecommunications service providers but reversing the DOT’s imposition of interest, penalties and interest on such penalties as excessive. Over subsequent years, the DOT and HCIPL and other telecommunications service providers, respectively, filed several appeals of the Tribunal’s ruling. On October 24, 2019, the Supreme Court of India (“Supreme Court”) issued an order (the “October 2019 Order”) affirming the license fee assessments imposed by the DOT, including its imposition of interest, penalties and interest on the penalties, but without indicating the amount HCIPL is required to pay the DOT, and ordering payment by January 23, 2020. On November 23, 2019, HCIPL and other telecommunication service providers filed a petition asking the Supreme Court to reconsider the October 2019 Order. The petition was denied on January 20, 2020. On January 22, 2020, HCIPL and other telecommunication service providers filed an application requesting that the Supreme Court modify the October 2019 Order to permit the DOT to calculate the final amount due and extend HCIPL’s and the other telecommunication service providers’ payment deadline. On February 14, 2020, the Supreme Court directed HCIPL and the other telecommunication service providers to explain why the Supreme Court should not initiate contempt proceedings for failure to pay the amounts due. During a hearing on March 18, 2020, the Supreme Court ordered that all amounts that were due before the October 2019 Order must be paid, including interest, penalties and interest on the penalties. The Supreme Court also ordered that the parties appear for a further hearing addressing, potentially among other things, a proposal by the DOT to allow for extended or deferred payments of amounts due. On June 11, 2020, the Supreme Court ordered HCIPL and the other telecommunication service providers to submit affidavits addressing the proposal made by the DOT to extend the time frame for payment of the amounts owed and for HCIPL and the other telecommunication providers to provide security for such payments. On September 1, 2020, the Supreme Court issued a judgment permitting a 10-year payment schedule. Under this payment schedule, HCIPL is required to make an annual payment every March 31, through 2031. Following the Supreme Court of India’s October 2019 judgment, HCIPL made payments during the first quarter of 2020, and additional payments on March 31, 2021 and March 31, 2022. The following table presents the components of the accrual: As of December 31, 2022 2021 Additional license fees $ 3,425 $ 3,812 Penalties 3,516 3,912 Interest and interest on penalties 78,327 81,389 Less: Payments (17,785) (8,451) Total accrual 67,483 80,662 Less: Current portion 10,191 11,178 Total long-term accrual $ 57,292 $ 69,484 Any eventual payments made with respect to the ultimate outcome of this matter may be different from our accrual and such differences could be significant. Other In addition to the above actions, we are subject to various other legal proceedings and claims, which arise in the ordinary course of business. As part of our ongoing operations, we are subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as by governmental/regulatory authorities responsible for enforcing the laws and regulations to which we may be subject. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the federal government. Some states have adopted similar state whistleblower and false claims provisions. In addition, we from time to time receive inquiries from federal, state and foreign agencies regarding compliance with various laws and regulations. In our opinion, the amount of ultimate liability with respect to any of these other actions is unlikely to materially affect our financial position, results of operations or cash flows, though the resolutions and outcomes, individually or in the aggregate, could be material to our financial position, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Business segments are components of an enterprise for which separate financial information is available and regularly evaluated by our chief operating decision maker (“CODM”), who is our Chief Executive Officer. We operate in two business segments, Hughes segment and ESS segment. The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, and net income (loss) attributable to non-controlling interests (“EBITDA”). Total assets by segment have not been reported herein because the information is not provided to our CODM on a regular basis. The following table presents total revenue, capital expenditures and EBITDA for each of our business segments: Hughes ESS Corporate Consolidated For the year ended December 31, 2022 External revenue $ 1,966,587 $ 19,132 $ 17,624 $ 2,003,343 Intersegment revenue — 1,401 (1,401) — Total revenue $ 1,966,587 $ 20,533 $ 16,223 $ 2,003,343 Capital expenditures $ 239,403 $ — $ — $ 239,403 EBITDA $ 732,929 $ 14,416 $ (50,852) $ 696,493 For the year ended December 31, 2021 External revenue $ 1,956,226 $ 17,295 $ 21,205 $ 1,994,726 Intersegment revenue — 384 (384) — Total revenue $ 1,956,226 $ 17,679 $ 20,821 $ 1,994,726 Capital expenditures $ 296,303 $ — $ — $ 296,303 EBITDA $ 781,824 $ 9,185 $ (30,628) $ 760,381 For the year ended December 31, 2020 External revenue $ 1,860,834 $ 16,237 $ 20,287 $ 1,897,358 Intersegment revenue — 1,161 (1,161) — Total revenue $ 1,860,834 $ 17,398 $ 19,126 $ 1,897,358 Capital expenditures $ 355,197 $ 41 $ — $ 355,238 EBITDA $ 727,608 $ 7,873 $ (31,498) $ 703,983 The following table reconciles Income (loss) before income taxes in the Consolidated Statements of Operations to EBITDA: For the years ended December 31, 2022 2021 2020 Income (loss) before income taxes $ 193,351 $ 167,728 $ 39,689 Interest income, net (30,812) (8,146) (18,802) Interest expense, net of amounts capitalized 92,386 126,499 172,466 Depreciation and amortization 431,065 464,146 498,876 Net loss (income) attributable to non-controlling interests 10,503 10,154 11,754 EBITDA $ 696,493 $ 760,381 $ 703,983 Geographic Information The following table summarizes total long-lived assets attributed to the North America, South and Central America and other foreign locations: As of December 31, 2022 2021 Long-lived assets: North America $ 2,075,373 $ 2,148,052 South and Central America 206,556 267,429 Other 50,883 41,995 Total long-lived assets $ 2,332,812 $ 2,457,476 |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
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 years ended December 31, 2022 2021 2020 Cost of sales - equipment $ 31,781 $ 29,636 $ 19,788 Research and development expenses $ 32,810 $ 31,777 $ 29,448 Advertising Costs We incurred advertising expense of $69.0 million, $82.4 million and $65.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. Cash and Cash Equivalents and Restricted Cash The following table reconciles cash and cash equivalents and restricted cash, as presented in the Consolidated Balance Sheets to the total of the same as presented in the Consolidated Statements of Cash Flows: For the years ended December 31, 2022 2021 2020 Cash and cash equivalents, including restricted amounts, beginning of period: Cash and cash equivalents $ 429,168 $ 740,490 $ 1,139,435 Restricted cash 980 807 887 Total cash and cash equivalents, included restricted amounts, beginning of period $ 430,148 $ 741,297 $ 1,140,322 Cash and cash equivalents, including restricted amounts, end of period: Cash and cash equivalents $ 653,132 $ 429,168 $ 740,490 Restricted cash 1,341 980 807 Total cash and cash equivalents, included restricted amounts, end of period $ 654,473 $ 430,148 $ 741,297 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 December 31, 2022 2021 Other current assets, net: Related party receivables - EchoStar $ 112,985 $ 122,619 Inventory 123,006 102,907 Prepaids and deposits 23,948 27,737 Trade accounts receivable - DISH Network 1,992 3,457 Other, net 13,271 20,124 Total other current assets $ 275,202 $ 276,844 Other non-current assets, net: Capitalized software, net $ 116,844 $ 124,701 Contract acquisition costs, net 64,447 82,986 Related party receivables - EchoStar 55,834 56,055 Deferred tax assets, net 7,822 5,411 Restricted cash 1,341 980 Contract fulfillment costs, net 1,931 1,721 Other, net 37,658 30,986 Total other non-current assets, net $ 285,877 $ 302,840 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: For the years ended December 31, 2022 2021 2020 Other current assets, net Other non-current assets, net Other current assets, net Other non-current assets, net Other current assets, net Other non-current assets, net Balance at beginning of period $ — $ 16,709 $ 1,747 $ 12,869 $ — $ — Credit losses (1) — — — 3,328 1,595 13,378 Foreign currency translation — — (1,747) 1,159 152 (509) Deductions — — — (647) — — Balance at end of period $ — $ 16,709 $ — $ 16,709 $ 1,747 $ 12,869 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 December 31, 2022 2021 Accrued expenses and other current liabilities: Related party payables - EchoStar $ 216,504 $ 124,578 Accrued compensation 40,684 45,630 Operating lease obligation 17,766 16,697 Accrued interest 39,194 39,289 Accrued taxes 10,631 9,790 Accrual for license fee dispute 10,191 11,178 Trade accounts payable - DISH Network 567 587 Other 58,362 61,130 Total accrued expenses and other current liabilities $ 393,899 $ 308,879 Other non-current liabilities: Accrual for license fee dispute $ 57,292 $ 69,484 Related party payables - EchoStar 23,423 24,118 Contract liabilities 8,326 10,669 Other 44,856 48,980 Total other non-current liabilities $ 133,897 $ 153,251 Inventory The following table presents the components of inventory: As of December 31, 2022 2021 Raw materials $ 32,920 $ 13,778 Work-in-process 16,408 11,705 Finished goods 73,678 77,424 Total inventory $ 123,006 $ 102,907 Capitalized Software Costs The following tables present the activity related to our capitalized software cost: As of December 31, 2022 2021 Net carrying amount of externally marketed software $ 116,841 $ 124,701 Externally marketed software under development and not yet placed into service $ 26,924 $ 57,357 For the years ended December 31, 2022 2021 2020 Capitalized costs related to development of externally marketed software $ 23,105 $ 33,543 $ 38,655 Amortization expense relating to externally marketed software $ 30,965 $ 25,288 $ 23,780 Weighted-average useful life (in years) 4 Supplemental and Non-cash Investing and Financing Activities The following table presents the supplemental and non-cash investing and financing activities: For the years ended December 31, 2022 2021 2020 Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized $ 91,583 $ 118,638 $ 162,692 Cash paid for income taxes $ 12,538 $ 10,641 $ 9,094 Non-cash investing and financing activities: Increase (decrease) in capital expenditures included in accounts payable, net $ 8,001 $ (347) $ (6,198) Non-cash net assets received as part of the India JV formation $ 36,701 $ — $ — |
SUPPLEMENTAL GUARANTOR AND NON-
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Guarantor and Non-Guarantor Financial Information | |
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION Consolidating Balance Sheet as of December 31, 2022 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 547,605 $ 25,318 $ 80,209 $ — $ 653,132 Marketable investment securities 799,769 — — — 799,769 Trade accounts receivable and contract assets, net — 168,484 67,852 — 236,336 Other current assets, net 71 1,330,813 284,621 (1,340,303) 275,202 Total current assets 1,347,445 1,524,615 432,682 (1,340,303) 1,964,439 Non-current assets: Property and equipment, net — 1,140,294 235,710 — 1,376,004 Operating lease right-of-use assets — 121,609 29,023 — 150,632 Goodwill — 504,173 28,318 — 532,491 Regulatory authorizations, net — 400,000 8,619 — 408,619 Other intangible assets, net — 12,499 3,199 — 15,698 Other investments, net 8,920 — 74,603 — 83,523 Investment in subsidiaries 3,312,961 358,141 — (3,671,102) — Other non-current assets, net 1,095 261,906 163,165 (140,289) 285,877 Total non-current assets 3,322,976 2,798,622 542,637 (3,811,391) 2,852,844 Total assets $ 4,670,421 $ 4,323,237 $ 975,319 $ (5,151,694) $ 4,817,283 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ 477 $ 85,327 $ 12,425 $ — $ 98,229 Contract liabilities — 115,893 5,846 — 121,739 Accrued expenses and other current liabilities 1,121,740 296,666 315,796 (1,340,303) 393,899 Total current liabilities 1,122,217 497,886 334,067 (1,340,303) 613,867 Non-current liabilities: Long-term debt, net 1,496,777 — — — 1,496,777 Deferred tax liabilities, net — 288,716 1,451 (410) 289,757 Operating lease liabilities — 111,052 24,070 — 135,122 Other non-current liabilities — 113,183 160,593 (139,879) 133,897 Total non-current liabilities 1,496,777 512,951 186,114 (140,289) 2,055,553 Total liabilities 2,618,994 1,010,837 520,181 (1,480,592) 2,669,420 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 2,051,427 3,312,400 358,702 (3,671,102) 2,051,427 Non-controlling interests — — 96,436 — 96,436 Total shareholder's equity 2,051,427 3,312,400 455,138 (3,671,102) 2,147,863 Total liabilities and shareholder's equity $ 4,670,421 $ 4,323,237 $ 975,319 $ (5,151,694) $ 4,817,283 Consolidating Balance Sheet as of December 31, 2021 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 324,764 $ 42,550 $ 61,854 $ — $ 429,168 Marketable investment securities 854,502 — — — 854,502 Trade accounts receivable and contract assets, net — 127,350 54,713 — 182,063 Other current assets, net 170,283 1,056,871 94,185 (1,044,495) 276,844 Total current assets 1,349,549 1,226,771 210,752 (1,044,495) 1,742,577 Non-current assets: Property and equipment, net — 1,209,859 313,588 — 1,523,447 Operating lease right-of-use assets — 117,912 30,309 — 148,221 Goodwill — 504,173 6,913 — 511,086 Regulatory authorizations, net — 400,000 8,959 — 408,959 Other intangible assets, net — 13,984 — — 13,984 Other investments, net — 9,600 81,626 — 91,226 Investment in subsidiaries 3,126,926 292,211 — (3,419,137) — Other non-current assets, net 1,191 299,149 97,305 (94,805) 302,840 Total non-current assets 3,128,117 2,846,888 538,700 (3,513,942) 2,999,763 Total assets $ 4,477,666 $ 4,073,659 $ 749,452 $ (4,558,437) $ 4,742,340 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ — $ 92,156 $ 13,321 $ — $ 105,477 Contract liabilities — 134,474 6,869 — 141,343 Accrued expenses and other current liabilities 972,936 218,463 161,975 (1,044,495) 308,879 Total current liabilities 972,936 445,093 182,165 (1,044,495) 555,699 Non-current liabilities: Long-term debt, net 1,495,994 — — — 1,495,994 Deferred tax liabilities, net — 334,148 258 — 334,406 Operating lease liabilities — 108,431 25,570 — 134,001 Other non-current liabilities — 59,623 188,432 (94,804) 153,251 Total non-current liabilities 1,495,994 502,202 214,260 (94,804) 2,117,652 Total liabilities 2,468,930 947,295 396,425 (1,139,299) 2,673,351 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 2,008,736 3,126,364 292,774 (3,419,138) 2,008,736 Non-controlling interests — — 60,253 — 60,253 Total shareholder's equity 2,008,736 3,126,364 353,027 (3,419,138) 2,068,989 Total liabilities and shareholder's equity $ 4,477,666 $ 4,073,659 $ 749,452 $ (4,558,437) $ 4,742,340 Consolidating Statement of Operations and Comprehensive Income (Loss) For the Year Ended December 31, 2022 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue $ — $ 1,336,782 $ 317,935 $ (25,523) $ 1,629,194 Equipment revenue — 360,656 34,071 (20,578) 374,149 Total revenue — 1,697,438 352,006 (46,101) 2,003,343 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 419,074 173,385 (29,610) 562,849 Cost of sales - equipment (exclusive of depreciation and amortization) — 285,665 21,208 (14,583) 292,290 Selling, general and administrative expenses — 346,392 85,393 (1,908) 429,877 Research and development expenses — 32,447 363 — 32,810 Depreciation and amortization — 293,330 137,735 — 431,065 Total costs and expenses — 1,376,908 418,084 (46,101) 1,748,891 Operating income (loss) — 320,530 (66,078) — 254,452 Other income (expense): Interest income 25,801 5,345 4,655 (4,989) 30,812 Interest expense, net of amounts capitalized (89,846) 4,170 (11,699) 4,989 (92,386) Gains (losses) on investments, net 28 217 — — 245 Equity in earnings (losses) of unconsolidated affiliates, net 880 440 (7,023) — (5,703) Equity in earnings (losses) of subsidiaries, net 193,023 (53,571) — (139,452) — Foreign currency transaction gains (losses), net — 6,704 (688) — 6,016 Other, net — (28,397) 28,312 — (85) Total other income (expense), net 129,886 (65,092) 13,557 (139,452) (61,101) Income (loss) before income taxes 129,886 255,438 (52,521) (139,452) 193,351 Income tax benefit (provision), net 19,527 (62,415) (11,553) — (54,441) Net income (loss) 149,413 193,023 (64,074) (139,452) 138,910 Less: Net loss (income) attributable to non-controlling interests — — 10,503 — 10,503 Net income (loss) attributable to HSSC $ 149,413 $ 193,023 $ (53,571) $ (139,452) $ 149,413 Comprehensive income (loss): Net income (loss) $ 149,413 $ 193,023 $ (64,074) $ (139,452) $ 138,910 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 5,475 — 5,475 Unrealized gains (losses) on available-for-sale securities (553) — — — (553) Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale debt securities (17) — — — (17) Equity in other comprehensive income (loss) of subsidiaries, net 3,770 3,770 — (7,540) — Total other comprehensive income (loss), net of tax 3,200 3,770 5,475 (7,540) 4,905 Comprehensive income (loss) 152,613 196,793 (58,599) (146,992) 143,815 Less: Comprehensive loss (income) attributable to non-controlling interests — — 8,795 — 8,795 Comprehensive income (loss) attributable to HSSC $ 152,613 $ 196,793 $ (49,804) $ (146,992) $ 152,610 Consolidating Statement of Operations and Comprehensive Income (Loss) For the Year Ended December 31, 2021 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Revenue: Services and other revenue $ — $ 1,428,960 $ 317,948 $ (22,609) $ 1,724,299 Equipment revenue — 284,139 26,041 (39,753) 270,427 Total revenue — 1,713,099 343,989 (62,362) 1,994,726 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 420,767 147,660 (23,512) 544,915 Cost of sales - equipment (exclusive of depreciation and amortization) — 251,195 17,938 (37,173) 231,960 Selling, general and administrative expenses — 331,973 91,939 (1,677) 422,235 Research and development expenses — 31,159 618 — 31,777 Depreciation and amortization — 333,618 130,528 — 464,146 Impairment of long-lived assets — 210 — — 210 Total costs and expenses — 1,368,922 388,683 (62,362) 1,695,243 Operating income (loss) — 344,177 (44,694) — 299,483 Other income (expense): Interest income, net 3,367 5,270 4,460 (4,951) 8,146 Interest expense, net of amounts capitalized (120,635) 1,189 (12,004) 4,951 (126,499) Gains (losses) on investments, net 2 2,101 — — 2,103 Equity in earnings (losses) of unconsolidated affiliates, net — 1,714 (7,061) — (5,347) Equity in earnings (losses) of subsidiaries, net 207,895 (65,083) — (142,812) — Foreign currency transaction gains (losses), net — (72) (11,422) — (11,494) Other, net (1,938) 3,380 (106) — 1,336 Total other income (expense), net 88,691 (51,501) (26,133) (142,812) (131,755) Income (loss) before income taxes 88,691 292,676 (70,827) (142,812) 167,728 Income tax benefit (provision), net 32,080 (84,781) (4,410) — (57,111) Net income (loss) 120,771 207,895 (75,237) (142,812) 110,617 Less: Net loss (income) attributable to non-controlling interests — — 10,154 — 10,154 Net income (loss) attributable to HSSC $ 120,771 $ 207,895 $ (65,083) $ (142,812) $ 120,771 Comprehensive income (loss): Net income (loss) $ 120,771 $ 207,895 $ (75,237) $ (142,812) $ 110,617 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — (31,317) — (31,317) Unrealized gains (losses) on available-for-sale securities 490 — — — 490 Other — — (98) — (98) Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale debt securities (5) — — — (5) Equity in other comprehensive income (loss) of subsidiaries, net (27,026) (27,026) — 54,052 — Total other comprehensive income (loss), net of tax (26,541) (27,026) (31,415) 54,052 (30,930) Comprehensive income (loss) 94,230 180,869 (106,652) (88,760) 79,687 Less: Comprehensive loss (income) attributable to non-controlling interests — — 14,543 — 14,543 Comprehensive income (loss) attributable to HSSC $ 94,230 $ 180,869 $ (92,109) $ (88,760) $ 94,230 Consolidating Statement of Operations and Comprehensive Income (Loss) For the Year Ended December 31, 2020 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Revenue: Services and other revenue $ — $ 1,452,180 $ 274,926 $ (35,349) $ 1,691,757 Equipment revenue — 256,090 26,520 (77,009) 205,601 Total revenue — 1,708,270 301,446 (112,358) 1,897,358 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 443,806 162,561 (33,730) 572,637 Cost of sales - equipment (exclusive of depreciation and amortization) — 223,086 20,352 (77,009) 166,429 Selling, general and administrative expenses — 359,151 75,876 (1,619) 433,408 Research and development expenses — 28,846 602 — 29,448 Depreciation and amortization — 391,319 107,557 — 498,876 Impairment of long-lived assets — — — — — Total costs and expenses — 1,446,208 366,948 (112,358) 1,700,798 Operating income (loss) — 262,062 (65,502) — 196,560 Other income (expense): Interest income, net 14,843 4,049 3,711 (3,801) 18,802 Interest expense, net of amounts capitalized (162,012) (2,691) (11,564) 3,801 (172,466) Gains (losses) on investments, net (82) (150) — — (232) Equity in earnings (losses) of unconsolidated affiliates, net — (6,116) — — (6,116) Equity in earnings (losses) of subsidiaries, net 121,688 (68,916) — (52,772) — Foreign currency transaction gains (losses), net — (269) 3,696 — 3,427 Other, net — (645) 359 — (286) Total other income (expense), net (25,563) (74,738) (3,798) (52,772) (156,871) Income (loss) before income taxes (25,563) 187,324 (69,300) (52,772) 39,689 Income tax benefit (provision), net 34,888 (65,435) (11,571) — (42,118) Net income (loss) 9,325 121,889 (80,871) (52,772) (2,429) Less: Net loss (income) attributable to non-controlling interests — — 11,754 — 11,754 Net income (loss) attributable to HSSC $ 9,325 $ 121,889 $ (69,117) $ (52,772) $ 9,325 Comprehensive income (loss): Net income (loss) $ 9,325 $ 121,889 $ (80,871) $ (52,772) $ (2,429) Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — (77,646) — (77,646) Unrealized gains (losses) on available-for-sale securities (192) — — — (192) Other — — (4) — (4) Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale debt securities (1) — — — (1) Equity in other comprehensive income (loss) of subsidiaries, net (62,012) (62,012) — 124,024 — Total other comprehensive income (loss), net of tax (62,205) (62,012) (77,650) 124,024 (77,843) Comprehensive income (loss) (52,880) 59,877 (158,521) 71,252 (80,272) Less: Comprehensive loss (income) attributable to non-controlling interests — — 27,392 — 27,392 Comprehensive income (loss) attributable to HSSC $ (52,880) $ 59,877 $ (131,129) $ 71,252 $ (52,880) Consolidating Statement of Cash Flows For the Year Ended December 31, 2022 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities: Net income (loss) $ 149,413 $ 193,023 $ (64,074) $ (139,452) $ 138,910 Adjustments to reconcile net income (loss) to net cash flows from operating activities (205,763) 335,155 131,098 139,452 399,942 Net cash provided by (used for) operating activities (56,350) 528,178 67,024 — 538,852 Cash flows from investing activities: Purchases of marketable investment securities (986,736) — — — (986,736) Sales and maturities of marketable investment securities 1,045,950 — — — 1,045,950 Expenditures for property and equipment — (193,449) (45,954) — (239,403) Expenditures for externally marketed software — (23,105) — — (23,105) Distributions (contributions) and advances from (to) subsidiaries, net 317,977 — — (317,977) — India JV formation — (7,892) — — (7,892) Dividend received from unconsolidated affiliate 2,000 — — — 2,000 Net cash provided by (used for) investing activities 379,191 (224,446) (45,954) (317,977) (209,186) Cash flows from financing activities: Payment of finance lease obligations — — (120) — (120) Payment of in-orbit incentive obligations — (2,988) — — (2,988) Dividend paid to EchoStar (100,000) — — — (100,000) Contribution (distributions) and advances (to) from parent, net — (317,977) — 317,977 — Net cash provided by (used for) financing activities (100,000) (320,965) (120) 317,977 (103,108) Effect of exchange rates on cash and cash equivalents — — (2,233) — (2,233) Net increase (decrease) in cash and cash equivalents 222,841 (17,233) 18,717 — 224,325 Cash and cash equivalents, including restricted amounts, beginning of period 324,764 42,549 62,835 — 430,148 Cash and cash equivalents, including restricted amounts, end of period $ 547,605 $ 25,316 $ 81,552 $ — $ 654,473 Consolidating Statement of Cash Flows For the Year Ended December 31, 2021 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash flows from operating activities: Net income (loss) $ 120,771 $ 207,895 $ (75,237) $ (142,812) $ 110,617 Adjustments to reconcile net income (loss) to net cash flows from operating activities (213,342) 479,663 142,561 142,812 551,694 Net cash provided by (used for) operating activities (92,571) 687,558 67,324 — 662,311 Cash flows from investing activities: Purchases of marketable investment securities (1,517,849) — — — (1,517,849) Sales and maturities of marketable investment securities 1,864,186 — — — 1,864,186 Expenditures for property and equipment — (196,902) (99,401) — (296,303) Expenditures for externally marketed software — (33,543) — — (33,543) Distributions (contributions) and advances from (to) subsidiaries, net 422,965 (44,891) — (378,074) — Sales of other investments — 9,451 — — 9,451 Net cash provided by (used for) investing activities 769,302 (265,885) (99,401) (378,074) 25,942 Cash flows from financing activities: Repurchase and maturity of the 2021 Senior Unsecured Notes (901,818) — — — (901,818) Payment of finance lease obligations — — (670) — (670) Payment of in-orbit incentive obligations — (2,214) — — (2,214) Contribution by non-controlling interest holder — — 9,880 — 9,880 Dividend paid to EchoStar (100,000) — — — (100,000) Other, net — — (966) — (966) Contribution (distributions) and advances (to) from parent, net — (422,965) 44,891 378,074 — Net cash provided by (used for) financing activities (1,001,818) (425,179) 53,135 378,074 (995,788) Effect of exchange rates on cash and cash equivalents — — (3,614) — (3,614) Net increase (decrease) in cash and cash equivalents (325,087) (3,506) 17,444 — (311,149) Cash and cash equivalents, including restricted amounts, beginning of period 649,851 46,055 45,391 — 741,297 Cash and cash equivalents, including restricted amounts, end of period $ 324,764 $ 42,549 $ 62,835 $ — $ 430,148 Consolidating Statement of Cash Flows For the Year Ended December 31, 2020 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash flows from operating activities: Net income (loss) $ 9,325 $ 121,889 $ (80,871) $ (52,772) $ (2,429) Adjustments to reconcile net income (loss) to net cash flows from operating activities (108,780) 480,249 106,528 52,772 530,769 Net cash provided by (used for) operating activities (99,455) 602,138 25,657 — 528,340 Cash flows from investing activities: Purchases of marketable investment securities (2,035,712) — — — (2,035,712) Sales and maturities of marketable investment securities 1,482,704 — — — 1,482,704 Expenditures for property and equipment — (202,083) (153,155) — (355,238) Expenditures for externally marketed software — (38,655) — — (38,655) Distributions (contributions) and advances from (to) subsidiaries, net 244,411 (101,718) — (142,693) — Sales of other investments — — — — — Net cash provided by (used for) investing activities (308,597) (342,456) (153,155) (142,693) (946,901) Cash flows from financing activities: Payment of finance lease obligations — — (811) — (811) Payment of in-orbit incentive obligations — (1,554) — — (1,554) Contribution by non-controlling interest holder — — 18,241 — 18,241 Other, net — — 998 — 998 Contribution (distributions) and advances (to) from parent, net — (244,411) 101,718 142,693 — Net cash provided by (used for) financing activities — (245,965) 120,146 142,693 16,874 Effect of exchange rates on cash and cash equivalents — — 2,662 — 2,662 Net increase (decrease) in cash and cash equivalents (408,052) 13,717 (4,690) — (399,025) 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 $ 649,851 $ 46,055 $ 45,391 $ — $ 741,297 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Principles of Consolidation and Basis of Presentation These Consolidated Financial Statements and the accompanying notes (collectively, the “Consolidated Financial Statements”) are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). 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. All amounts presented in these Consolidated Financial Statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted. |
Principles of Consolidation | Principles of Consolidation and Basis of Presentation These Consolidated Financial Statements and the accompanying notes (collectively, the “Consolidated Financial Statements”) are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). 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. All amounts presented in these Consolidated Financial Statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted. |
Use of Estimates | Use of Estimates We are required to make certain estimates and assumptions that affect the amounts reported in these Consolidated Financial Statements. The most significant estimates and assumptions are used in determining: (i) inputs used to recognize revenue over time, including amortization periods for deferred contract acquisition costs; (ii) allowances for doubtful accounts; (iii) deferred taxes and related valuation allowances, including uncertain tax positions; (iv) loss contingencies; (v) fair value of financial instruments; (vi) fair value of assets and liabilities acquired in business combinations; and (vii) assets and goodwill impairment testing. |
Fair Value Measurements | Fair Value Measurements We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We utilize the highest level of inputs available according to the following hierarchy in determining fair value: • Level 1 - Defined as observable inputs being quoted prices in active markets for identical assets; • Level 2 - Defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3 - Defined as unobservable inputs for which little or no market data exists, consistent with characteristics of the asset or liability that would be considered by market participants in a transaction to purchase or sell the asset or liability. Fair values of our marketable investment securities are measured on a recurring basis based on a variety of observable market inputs. For our investments in publicly traded equity securities and U.S. government securities, fair value ordinarily is determined based on Level 1 measurements that reflect quoted prices for identical securities in active markets. Fair values of our investments in other marketable debt securities are generally based on Level 2 measurements as the markets for such debt securities are less active. We consider trades of identical debt securities on or near the measurement date as a strong indication of fair value and matrix pricing techniques that consider par value, coupon rate, credit quality, maturity and other relevant features may also be used to determine fair value of our investments in marketable debt securities. Fair values for our outstanding debt are based on quoted market prices in less active markets and are categorized as Level 2 measurements. Additionally, we use fair value measurements from time to time in connection with other investments, asset impairment testing and the assignment of purchase consideration to assets and liabilities of acquired companies. Those fair value measurements typically include significant unobservable inputs and are categorized within Level 3 of the fair value hierarchy. Transfers between levels in the fair value hierarchy are considered to occur at the beginning of the quarterly accounting period. There were no transfers between levels during the years ended December 31, 2022 and 2021. As of December 31, 2022 and 2021, the carrying amounts of our cash and cash equivalents, trade accounts receivable and contract assets, net, trade accounts payable, and accrued expenses and other current liabilities were equal to or approximated their fair value due to their short-term nature or proximity to current market rates. |
Revenue Recognition | Revenue Recognition Overview Revenue is recognized upon transfer of control of the promised goods or our performance of the services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We enter into contracts that may include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations. We also recognize lease revenue which is derived from leases of property and equipment which, for operating leases, is reported in Services and other revenue in the Consolidated Statements of Operations and, for sales-type leases, is reported in Equipment revenue in the Consolidated Statements of Operations. Certain of our customer contracts contain embedded equipment leases, which we separate from non-lease components of the contract based on the relative standalone selling prices of the lease and non-lease components. Hughes Segment Our Hughes segment service contracts typically obligate us to provide substantially the same services on a recurring basis in exchange for fixed recurring fees over the term of the contract. We satisfy such performance obligations over time and recognize revenue ratably as services are rendered over the service period. Certain of our contracts with service obligations provide for fees based on usage, capacity or volume. We satisfy these performance obligations and recognize the related revenue at the point in time, or over the period, when the services are rendered. Our Hughes segment also sells and leases communications equipment to its customers. Revenue from equipment sales generally is recognized based upon shipment terms. Our equipment sales contracts typically include standard product warranties, but generally do not provide for returns or refunds. Revenue for extended warranties is recognized ratably over the extended warranty period. For contracts with multiple performance obligations, we typically allocate the contract’s transaction price to each performance obligation based on their relative standalone selling prices. When the standalone selling price is not observable, our primary method used to estimate standalone selling price is the expected cost plus a margin. Our contracts generally require customer payments to be made at or shortly after the time we transfer control of goods or perform the services. ESS Segment Generally, our ESS segment service contracts with customers contain a single performance obligation and, therefore, there is no need to allocate the transaction price. We transfer control and recognize revenue for satellite services at the point in time or over the period when the services are rendered. Lease Revenue We lease satellite capacity, communications equipment and real estate to certain of our customers. We identify and determine the classification of such leases as operating leases or sales-type leases. A lease is classified as a sales-type lease if it meets the criteria for a finance lease; otherwise it is classified as an operating lease. Some of our leases are embedded in contracts with customers that include non-lease performance obligations. For such contracts, except where we have elected otherwise, we allocate consideration in the contract between lease and non-lease components based on their relative standalone selling prices. We elected an accounting policy to not separate the lease of equipment from related services in our HughesNet satellite internet service (the “HughesNet service”) contracts with customers and account for all revenue from such contracts as non-lease service revenue. Assets subject to operating leases remain in Property and equipment, net and continue to be depreciated. Assets subject to sales-type leases are derecognized from Property and equipment, net at lease commencement and a net investment in the lease asset is recognized in Trade accounts receivable and contract assets, net and Other non-current assets, net . Operating lease revenue is generally recognized on a straight-line basis over the lease term. Sales-type lease revenue and a corresponding receivable generally are recognized at lease commencement based on the present value of the future lease payments and related interest income on the receivable is recognized over the lease term. Payments under sales-type leases are discounted using the interest rate implicit in the lease or our incremental borrowing rate if the interest rate implicit in the lease cannot be reasonably determined. We report revenue from sales-type leases at the commencement date in Equipment revenue and periodic interest income in Services and other revenue. We report operating lease revenue in Services and other revenue . Other Sales and Value Added Taxes, Universal Service Fees and other taxes that we collect concurrent with revenue producing activities are excluded from revenue and included in Accrued expenses and other current liabilities in the Consolidated Balance Sheets. Shipping and handling costs associated with outbound freight are accounted for as a fulfillment cost after control over a product has transferred to the customer and are included in Cost of sales - equipment in the Consolidated Statements of Operations at the time of shipment. Trade Accounts Receivable Trade accounts receivable includes amounts billed and currently due from customers and represents our unconditional rights to consideration arising from our performance under our customer contracts. Trade accounts receivable also includes amounts due from customers under our leasing arrangements. We make ongoing estimates relating to the collectability of our trade accounts receivable and maintain an allowance for estimated losses resulting from the inability of our customers to make the required payments. In determining the amount of the allowance, we consider historical levels of credit losses and make judgments about the creditworthiness of our customers based on ongoing credit evaluations. Past due trade accounts receivable balances are written off when our internal collection efforts have been unsuccessful. Bad debt expense related to our trade accounts receivable and other contract assets is included in Selling, general and administrative expenses in the Consolidated Statements of Operations. Contract assets represent revenue that we have recognized in advance of billing the customer and are included in Trade accounts receivable and contract assets, net or Other non-current assets, net Contract Acquisition Costs Our contract acquisition costs represent incremental direct costs of obtaining a contract and consist primarily of sales incentives paid to employees and third-party representatives. When we determine that our contract acquisition costs are recoverable, we defer and amortize the costs over the contract term, or over the estimated life of the customer relationship if anticipated renewals are expected and the incentives payable upon renewal are not commensurate with the initial incentive. We amortize contract acquisition costs in proportion to the revenue to which the costs relate. We expense sales incentives as incurred if the expected amortization period is one year or less. Unamortized contract acquisition costs are included in Other non-current assets, net in the Consolidated Balance Sheets and related amortization expense is included in Selling, general and administrative expenses in the Consolidated Statements of Operations. Contract liabilities consist of advance payments and billings in excess of revenue recognized under customer contracts and are included in Contract liabilities or Other non-current liabilities |
Cost of Sales - Services and Other and Equipment | Cost of Sales - Services and Other Cost of Sales - Equipment Cost of sales - equipment in the Consolidated Statements of Operations primarily consists of inventory costs, including freight and royalties, and is generally recognized at the point in time control of the equipment is passed to the customer and related revenue is recognized. Additionally, customer-related research and development costs are incurred in connection with the specific requirements of a customer’s order; in such instances, the amounts for these customer funded development efforts are also included in Cost of sales - equipment |
Stock-based Compensation Expense | Stock-based Compensation Expense Stock-based compensation expense is recognized based on the fair value of stock awards ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense for awards with service conditions only is recognized on a straight-line basis over the requisite service period for the entire award. Compensation expense for awards subject to performance conditions is recognized only when satisfaction of the performance condition is probable. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and are included in Selling, general and administrative expenses |
Research and Development | Research and DevelopmentResearch and development costs, not incurred in connection with customer requirements, are generally expensed when incurred. |
Debt Issuance Costs | Debt Issuance Costs Costs of issuing debt generally are deferred and amortized utilizing the effective interest method, with amortization included in Interest expense, net of amounts capitalized in the Consolidated Statements of Operations. We report unamortized debt issuance costs as a reduction of the related long-term debt in the Consolidated Balance Sheets. |
Foreign Currency | Foreign Currency The functional currency for certain of our foreign operations is determined to be the local currency. Accordingly, we translate assets and liabilities of these foreign entities from their local currencies to U.S. dollars using period-end exchange rates and translate income and expense accounts at monthly average rates. The resulting translation adjustments are reported as Foreign currency translation adjustments in the Consolidated Statements of Comprehensive Income (Loss). Except in certain uncommon circumstances, we have not recorded deferred income taxes related to our foreign currency translation adjustments. Gains and losses resulting from the re-measurement of transactions denominated in foreign currencies are recognized in Foreign currency transaction gains (losses), net in the Consolidated Statements of Operations. |
Income Taxes | Income Taxes We are included in the consolidated federal income tax return of EchoStar. We recognize a provision or benefit for income taxes currently payable or receivable and for income tax amounts deferred to future periods based upon a separate return allocation method which results in income tax expense that approximates the expense that would result if we were a stand-alone entity. Deferred tax assets and liabilities reflect the effects of tax losses, credits, and the future income tax effects of temporary differences between GAAP carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are offset by valuation allowances when we determine it is more likely than not that such deferred tax assets will not be realized in the foreseeable future. We determine deferred tax assets and liabilities separately for each taxing jurisdiction and report the net amount for each jurisdiction as a non-current asset or liability in the Consolidated Balance Sheets. From time to time, we engage in transactions where the income tax consequences are uncertain. We recognize tax benefits when, in management’s judgment, a tax filing position is more likely than not to be sustained if challenged by the tax authorities. For tax positions that meet the more-likely-than-not threshold, we may not recognize a portion of a tax benefit depending on management’s assessment of how the tax position will ultimately be settled. Unrecognized tax benefits generally are netted against the deferred tax assets associated with our net operating loss and tax credit carryforwards. We adjust our estimates periodically based on ongoing examinations by, and settlements with, various taxing authorities, as well as changes in tax laws, regulations and precedent. Estimates of our uncertain tax positions are made based upon prior experience and are updated in light of changes in facts and circumstances. However, due to the uncertain and complex application of tax regulations, it is possible that the ultimate resolution of audits may result in liabilities which could be materially different from these estimates. In such an event, we will record additional income tax provision or benefit in the period in which such resolution occurs. We classify interest and penalties, if any, associated with our unrecognized tax benefits as a component of income tax provision or benefit. |
Lessee Accounting | Lessee Accounting At the inception of a contract, we assess whether the contract is, or contains, a lease. The assessment is based on (i) whether the contract involves the use of a distinct identified asset, (ii) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (iii) whether we have the right to direct the use of the asset. Our operating leases consist primarily of leases for office space, data centers and satellite-related ground infrastructure. A lease is classified as a finance lease when one or more of the following criteria are met: (i) the lease transfers ownership of the asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (iii) the lease term is for a major part of the remaining useful life of the asset, (iv) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset or (v) the asset is of a specialized nature and there is not expected to be an alternative use to the lessor at the end of the lease term. A lease is classified as an operating lease if it does not meet any of these criteria. Our finance leases consist primarily of leases for satellite capacity. All significant lease arrangements are generally recognized at lease commencement. Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at commencement. An ROU asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less (short-term leases), and we recognize lease expense for these leases as incurred over the lease term. ROU assets represent our right to use an underlying asset during the reasonably certain lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. The ROU asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any prepayments to the lessor and initial direct costs such as brokerage commissions, less any lease incentives received. The lease liability is initially measured at the present value of the minimum lease payments, discounted using an estimate of our incremental borrowing rate for a collateralized loan with the same term as the underlying lease. The incremental borrowing rates used for the initial measurement of lease liabilities are based on the original lease terms. In determining our incremental borrowing rate, we consider the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. We report operating lease ROU assets in Operating lease right-of-use assets and operating lease liabilities in Accrued expenses and other current liabilities and Operating lease liabilities . We report finance lease ROU assets in Property and equipment, net and finance lease liabilities in Current portion of long-term debt, net and Long-term debt, net |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss)The amounts reclassified to net income (loss) related to unrealized gain (loss) on available-for-sale securities are included in Gains (losses) on investments, net in the Consolidated Statements of Operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Marketable Investment Securities | Marketable Investment Securities Debt Securities Our corporate bond portfolio includes debt instruments issued by individual corporations, primarily in the industrial and financial services industries. Our commercial paper portfolio includes instruments issued by individual corporations, primarily in the industrial, financial services and utilities industries. Our other debt securities portfolio includes investments in various debt instruments, including U.S. government bonds and mutual funds. We consider all liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. We account for our debt securities as available-for-sale or using the fair value option based on our investment strategy for the securities. For available-for-sale debt securities, we recognize periodic changes in the difference between fair value and amortized cost in Unrealized gains (losses) on available-for-sale securities in the Consolidated Statements of Comprehensive Income (Loss). Gains and losses realized upon sales of available-for-sale debt securities are reclassified from other comprehensive income (loss) and recognized on the trade date in Gains (losses) on investments, net in the Consolidated Statements of Operations. We use the first-in, first-out (“FIFO”) method to determine the cost basis on sales of available-for-sale debt securities. Interest income from available-for-sale debt securities is reported in Interest income, net in the Consolidated Statements of Operations. We periodically evaluate our available-for-sale debt securities portfolio to determine whether any declines in the fair value of these securities are other-than-temporary. Our evaluation considers, among other things, (i) the length of time and extent to which the fair value of such security has been lower than amortized cost, (ii) market and company-specific factors related to the security and (iii) our intent and ability to hold the investment to maturity or when it recovers its value. We generally consider a decline to be other-than-temporary when (i) we intend to sell the security, (ii) it is more likely than not that we will be required to sell the security before maturity or when it recovers its value or (iii) we do not expect to recover the amortized cost of the security at maturity. Declines in the fair value of available-for-sale debt securities that are determined to be other-than-temporary are reclassified from other comprehensive income (loss) and recognized in Net income (loss) in the Consolidated Statements of Operations, thus establishing a new cost basis for the investment. From time to time we make strategic investments in marketable corporate debt securities. Generally, we elect to account for these debt securities using the fair value option because it results in consistency in accounting for unrealized gains and losses for all securities in our portfolio of strategic investments. When we elect the fair value option for investments in debt securities, we recognize periodic changes in fair value of these securities in Gains (losses) on investments, net in the Consolidated Statements of Operations. Interest income from these securities is reported in Interest income, net Equity Securities We account for our equity securities with readily determinable fair values at fair value and recognize periodic changes in the fair value in Gains (losses) on investments, net in the Consolidated Statements of Operations. We recognize dividend income on equity securities on the ex-dividend date and report such income in Other, net in the Consolidated Statements of Operations. Restricted marketable investment securities that are pledged as collateral for our letters of credit and surety bonds are included in Other non-current assets, net |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value. Cost of inventory is determined using the FIFO method and consists primarily of materials, direct labor and indirect overhead incurred in the procurement and manufacturing of our products. We use standard costing methodologies in determining the cost of certain of our finished goods and work-in-process inventories. We determine net realizable value using our best estimates of future use or recovery, considering the aging and composition of inventory balances, the effects of technological and/or design changes, forecasted future product demand based on firm or near-firm customer orders and alternative means of disposition of excess or obsolete items. We recognize losses within Cost of sales - equipment |
Property and Equipment | Property and Equipment Satellites Satellites are stated at cost, less accumulated depreciation. Depreciation is recorded on a straight-line basis over their estimated useful lives. The cost of our satellites includes construction costs, including the present value of in-orbit incentives payable to the satellite manufacturer, launch costs, capitalized interest and related insurance premiums. We depreciate our owned satellites on a straight-line basis over the estimated useful life of each satellite. We have satellites acquired under finance leases. The recorded costs of those satellites are the present values of all lease payments. We amortize our finance lease ROU satellites over their respective lease terms. Our satellites may experience anomalies from time to time, some of which may have a significant adverse effect on their remaining useful lives, the commercial operation of the satellites or our operating results or financial position. We evaluate our satellites for impairment and test for recoverability whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Certain anomalies may be considered a significant adverse change in the physical condition of a particular satellite. However, based on redundancies designed within each satellite, certain of these anomalies may not be considered to be significant events requiring a test of recoverability. Other Property and Equipment |
Goodwill | Goodwill We account for acquired businesses using the acquisition method of accounting which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. All of our goodwill is assigned to our Hughes segment. We evaluate goodwill for impairment on an annual basis in our second fiscal quarter or whenever events and changes in circumstances indicate the carrying amounts may not be recoverable. Impairments may result from, among other things, deterioration in financial and operational performance, declines in stock price, increased attrition, adverse market conditions, adverse changes in applicable laws and/or regulations, deterioration of general macroeconomic conditions, fluctuations in foreign exchange rates, increased competitive markets in which we operate in, declining financial performance over a sustained period, changes in key personnel and/or strategy, and a variety of other factors. Our impairment assessment typically begins with a qualitative assessment to determine whether it is more likely than not the fair value of the reporting unit is less than its carrying amount. The qualitative assessment includes comparing the overall financial performance against the planned results. In the performance of the qualitative assessment, we analyze a variety of events or factors that may influence the fair value of the reporting unit, that could include, but are not limited to: macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity-specific events which requires significant judgment. If we determine in the qualitative assessment that it is more likely than not that the fair value is less than its carrying value, then we perform a quantitative assessment to determine the estimated fair value of the indefinite lived asset or reporting unit. We could also choose the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test. In the quantitative assessment, fair value is usually estimated using two valuation approaches: the discounted cash flows method and the market comparable method. In the performance of the quantitative assessment, we use a variety of inputs, some of which may require significant judgment, that influence the fair value of the reporting unit, that could include, but are not limited to: discount rate, revenue growth rate, amount and timing of future cash flows, guideline public company metrics, and comparable market transactions. In addition, we also perform a market capitalization reconciliation to compare the estimated fair value, determined using the discounted cash flows method and the market comparable method, to the Company’s market capitalization as of the date of the test. If the carrying value exceeds the estimated fair value, then an impairment is recognized for the difference. There has been no impairment to date. |
Regulatory Authorizations and Other Intangible Assets | Regulatory Authorizations Finite Lived We have regulatory authorizations that are not related to the Federal Communications Commission (“FCC”) and have determined that they have finite lives due to uncertainties about the ability to extend or renew their terms. Finite lived regulatory authorizations are amortized over their estimated useful lives on a straight-line basis. Renewal costs are usually capitalized when they are incurred. Indefinite Lived We also have indefinite lived regulatory authorizations that primarily consist of FCC authorizations and certain other contractual or regulatory rights to use spectrum at specified orbital locations. We have determined that our FCC authorizations generally have indefinite useful lives based on the following: • FCC authorizations are non-depleting assets; • Renewal satellite applications generally are authorized by the FCC subject to certain conditions, without substantial cost under a stable regulatory, legislative and legal environment; • Expenditures required to maintain the authorization are not significant; and • We intend to use these authorizations indefinitely. Other Intangible Assets |
Impairment of Long-lived Assets | Impairment of Long-lived Assets We review our long-lived assets for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For assets held and used in operations, the asset is not recoverable if the carrying amount of the asset exceeds its undiscounted estimated future net cash flows. When an asset is not recoverable, we adjust the carrying amount of such asset to its estimated fair value and recognize the impairment loss in Impairment of long-lived assets |
Other Investments | Other Investments Equity Method Investments We use the equity method to account for investments when we have the ability to exercise significant influence on the operating decisions of the affiliate. Such investments are initially recorded at cost and subsequently adjusted for our proportionate share of the net earnings or loss of the investee, which is reported in Equity in earnings (losses) of unconsolidated affiliates, net in the Consolidated Statements of Operations. Additionally, the carrying amount of such investments includes a component of goodwill when the cost of our investment exceeds the fair value of the underlying identifiable assets and liabilities of the affiliate. Lastly, dividends received from these affiliates reduces the carrying amount of our investment. Other Equity Investments We generally measure investments in non-publicly traded equity instruments without a readily determinable fair value at cost adjusted for observable price changes in orderly transactions for the identical or similar securities of the same issuer and changes resulting from impairments, if any. Other equity instruments are measured to determine their value based on observable market information. When we adjust the carrying amount of an investment to its estimated fair value, the gain or loss is recorded in Gains (losses) on investments, net in the Consolidated Statements of Operations. Impairment Considerations We periodically evaluate all of our other investments to determine whether events or changes in circumstances have occurred that may have a significant adverse effect on the fair value of the investment. We consider information if provided to us by our investees such as current financial statements, business plans, investment documentation, capitalization tables, liquidation waterfalls, and board materials; and we may make additional inquiries of investee management. Indicators of impairment may include, but are not limited to, unprofitable operations, material loss contingencies, changes in business strategy, changes in market trends or market conditions, changes in the investees’ enterprise value and changes in the investees’ investment pricing. When we determine that one of our other investments is impaired we reduce its carrying value to its estimated fair value and recognize the impairment loss in Other-than-temporary impairment losses on equity method investments or Gains (losses) on investments, net in the Consolidated Statements of Operations. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements Government Assistance On January 1, 2022 we adopted Accounting Standards Update (“ASU”) No. 2021-10 - Government Assistance (Topic 832) : Disclosures by Business Entities about Government Assistance, which requires business entities (except for not-for-profit entities and employee benefit plans) to disclose information about certain government assistance they receive. The Topic 832 disclosure requirements include: (i) the nature of the transactions and the related accounting policy used; (ii) the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item; and (iii) significant terms and conditions of the transactions. Our adoption of this ASU did not have a material impact on our Consolidated Financial Statements. Income Taxes On January 1, 2021, we adopted ASU No. 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) . ASU 2019-12 is part of the Financial Accounting Standards Board (“FASB”) overall simplification initiative and seeks to simplify the accounting for income taxes by updating certain guidance and removing certain exceptions. Our adoption of this ASU did not have a material impact on our Consolidated Financial Statements. Credit Losses On January 1, 2020, we adopted 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 Consolidated Financial Statements and they continue to be reported under the accounting standards in effect for the periods before January 1, 2020. Financial Impact of Adoption. The following table presents our adoption of this new standard resulting in adjustments to our Consolidated Balance Sheet effective January 1, 2020: Balance Adoption of ASC 326 Increase (Decrease) Balance January 1, 2020 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 Consolidated Statements of Operations for the year ended December 31, 2020. Recently Issued Accounting Pronouncements Not Yet Adopted Business Combinations In October 2021, the FASB issued ASU No. 2021-08 - Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue contracts acquired in a business combination. The ASU requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU is effective for the Company for annual and interim periods in fiscal years beginning after December 15, 2022. The ASU is applied to business combinations occurring on or after the effective date. Reference Rate Reform In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848) , and all subsequent amendments to the initial guidance, codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. The guidance may be applied upon issuance of ASC 848 through December 31, 2024. We expect to utilize the optional expedients provided by the guidance for contracts amended solely to use an alternative reference rate. We have evaluated the new guidance and we are in the process of implementing this ASU, and all subsequent amendments, and do not expect them to have a material impact on our Consolidated Financial Statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table presents our adoption of this new standard resulting in adjustments to our Consolidated Balance Sheet effective January 1, 2020: Balance Adoption of ASC 326 Increase (Decrease) Balance January 1, 2020 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) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Components of Contract Balances | The following table presents the components of our contract balances: As of December 31, 2022 2021 Trade accounts receivable and contract assets, net: Sales and services $ 170,466 $ 154,676 Leasing 7,935 5,668 Total trade accounts receivable 178,401 160,344 Contract assets 73,293 36,307 Allowance for doubtful accounts (15,358) (14,588) Total trade accounts receivable and contract assets, net $ 236,336 $ 182,063 Contract liabilities: Current $ 121,739 $ 141,343 Non-current 8,326 10,669 Total contract liabilities $ 130,065 $ 152,012 The following table presents the revenue recognized in the Consolidated Statements of Operations that was previously included within contract liabilities: For the years ended December 31, 2022 2021 2020 Revenue $ 120,867 $ 82,633 $ 72,877 |
Schedule of Allowance for Credit Loss | The following table presents the activity in our allowance for doubtful accounts: For the years ended December 31, 2022 2021 2020 Balance at beginning of period $ 14,588 $ 15,386 $ 23,777 Credit losses (1) 32,910 22,591 18,582 Deductions (36,011) (23,543) (26,031) Foreign currency translation 3,871 154 (942) Balance at end of period $ 15,358 $ 14,588 $ 15,386 (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: For the years ended December 31, 2022 2021 2020 Other current assets, net Other non-current assets, net Other current assets, net Other non-current assets, net Other current assets, net Other non-current assets, net Balance at beginning of period $ — $ 16,709 $ 1,747 $ 12,869 $ — $ — Credit losses (1) — — — 3,328 1,595 13,378 Foreign currency translation — — (1,747) 1,159 152 (509) Deductions — — — (647) — — Balance at end of period $ — $ 16,709 $ — $ 16,709 $ 1,747 $ 12,869 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 Activity in Contract Acquisition Costs | The following table presents the activity in our contract acquisition costs, net: For the years ended December 31, 2022 2021 2020 Balance at beginning of period $ 82,986 $ 99,837 $ 113,592 Additions 57,627 72,503 91,143 Amortization expense (76,760) (88,178) (101,278) Foreign currency translation 594 (1,176) (3,620) Balance at end of period $ 64,447 $ 82,986 $ 99,837 |
Schedule of Disaggregation of Revenue | The following tables present our revenue from customer contracts disaggregated by primary geographic market and by segment: Hughes ESS Corporate and Other Consolidated For the year ended December 31, 2022 North America $ 1,576,773 $ 20,533 $ (1,400) $ 1,595,906 South and Central America 171,318 — — 171,318 Other 218,496 — 17,623 236,119 Total revenue $ 1,966,587 $ 20,533 $ 16,223 $ 2,003,343 For the year ended December 31, 2021 North America $ 1,617,229 $ 17,679 $ (385) $ 1,634,523 South and Central America 176,515 — — 176,515 Other 162,482 — 21,206 183,688 Total revenue $ 1,956,226 $ 17,679 $ 20,821 $ 1,994,726 For the year ended December 31, 2020 North America $ 1,556,961 $ 17,398 $ (1,161) $ 1,573,198 South and Central America 151,194 — — 151,194 Other 152,679 — 20,287 172,966 Total revenue $ 1,860,834 $ 17,398 $ 19,126 $ 1,897,358 The following tables present our revenue disaggregated by the nature of products and services and by segment: Hughes ESS Corporate and Other Consolidated For the year ended December 31, 2022 Services and other revenue: Services $ 1,551,613 $ 13,206 $ — $ 1,564,819 Lease revenue 40,825 7,327 16,223 64,375 Total services and other revenue 1,592,438 20,533 16,223 1,629,194 Equipment revenue: Equipment 119,107 — — 119,107 Design, development and construction services 246,265 — — 246,265 Lease revenue 8,777 — — 8,777 Total equipment revenue 374,149 — — 374,149 Total revenue $ 1,966,587 $ 20,533 $ 16,223 $ 2,003,343 For the year ended December 31, 2021 Services and other revenue: Services $ 1,646,778 $ 11,961 $ — $ 1,658,739 Lease revenue 39,021 5,718 20,821 65,560 Total services and other revenue 1,685,799 17,679 20,821 1,724,299 Equipment revenue: Equipment 108,767 — — 108,767 Design, development and construction services 152,934 — — 152,934 Lease revenue 8,726 — — 8,726 Total equipment revenue 270,427 — — 270,427 Total revenue $ 1,956,226 $ 17,679 $ 20,821 $ 1,994,726 For the year ended December 31, 2020 Services and other revenue: Services $ 1,614,730 $ 10,785 $ — $ 1,625,515 Lease revenue 40,503 6,613 19,126 66,242 Total services and other revenue 1,655,233 17,398 19,126 1,691,757 Equipment revenue: Equipment 110,108 — — 110,108 Design, development and construction services 88,511 — — 88,511 Lease revenue 6,982 — — 6,982 Total equipment revenue 205,601 — — 205,601 Total revenue $ 1,860,834 $ 17,398 $ 19,126 $ 1,897,358 |
Schedule of Sales-type Lease Revenue | The following table presents our lease revenue by type of lease: For the years ended December 31, 2022 2021 2020 Sales-type lease revenue: Revenue at lease commencement $ 7,557 $ 7,998 $ 6,982 Interest income 1,220 728 393 Total sales-type lease revenue 8,777 8,726 7,375 Operating lease revenue 64,375 65,560 65,849 Total lease revenue $ 73,152 $ 74,286 $ 73,224 |
Schedule of Operating Lease Revenue | The following table presents our lease revenue by type of lease: For the years ended December 31, 2022 2021 2020 Sales-type lease revenue: Revenue at lease commencement $ 7,557 $ 7,998 $ 6,982 Interest income 1,220 728 393 Total sales-type lease revenue 8,777 8,726 7,375 Operating lease revenue 64,375 65,560 65,849 Total lease revenue $ 73,152 $ 74,286 $ 73,224 |
Schedule of Operating Lease Payments to be Received | The following table presents future operating lease payments to be received as of December 31, 2022: Amounts December 31, 2023 $ 37,478 2024 32,856 2025 30,802 2026 28,828 2027 23,860 2028 and beyond 46,070 Total lease payments to be received $ 199,894 |
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 December 31, 2022 2021 Cost Accumulated Depreciation Net Cost Accumulated Depreciation Net Customer premises equipment $ 933,669 $ (703,110) $ 230,559 $ 1,860,766 $ (1,549,508) $ 311,258 Satellites 104,620 (52,284) 52,336 104,620 (45,309) 59,311 Total $ 1,038,289 $ (755,394) $ 282,895 $ 1,965,386 $ (1,594,817) $ 370,569 During 2022, the Company identified fully depreciated assets that were no longer in use, mostly related to our customer premises equipment assets. Cost and accumulated depreciation were reduced by $1.1 billion. There was no impact to Other property and equipment, net . The following table presents depreciation expense for assets subject to operating leases, which is included in Depreciation and amortization : For the years ended December 31, 2022 2021 2020 Customer premises equipment $ 221,645 $ 247,072 $ 246,542 Satellites 6,975 6,975 6,975 Total $ 228,620 $ 254,047 $ 253,517 |
LESSEE ACCOUNTING (Tables)
LESSEE ACCOUNTING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Lease Assets and Liabilities | The following table presents the amounts for ROU assets and lease liabilities: As of December 31, 2022 2021 Right-of-use assets: Operating $ 150,632 $ 148,221 Finance 238,748 258,498 Total right-of-use assets $ 389,380 $ 406,719 Lease liabilities: Current: Operating $ 17,766 $ 16,697 Finance — 123 Total current 17,766 16,820 Non-current: Operating 135,122 134,001 Finance — — Total non-current 135,122 134,001 Total lease liabilities $ 152,888 $ 150,821 |
Schedule of Lease Cost, Weighted Average Term, Discount Rates and Cash Flows | The following table presents the components of lease cost and weighted-average lease terms and discount rates for operating and finance leases: For the years ended December 31, 2022 2021 2020 Lease cost: Operating lease cost $ 25,219 $ 23,323 $ 23,321 Finance lease cost: Amortization of right-of-use assets 29,906 29,270 27,611 Interest on lease liabilities 7 49 106 Total finance lease cost 29,913 29,319 27,717 Short-term lease cost 258 — 132 Variable lease cost 2,246 1,895 3,799 Total lease cost $ 57,636 $ 54,537 $ 54,969 As of December 31, 2022 2021 Lease term and discount rate: Weighted-average remaining lease term: Finance leases 0.0 years 0.3 years Operating leases 8.0 years 10.8 years Weighted-average discount rate: Finance leases — % 12.8 % Operating leases 5.9 % 5.6 % The following table presents the detailed cash flows from operating and finance leases: For the years ended December 31, 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 24,653 $ 21,808 $ 21,313 Operating cash flows from finance leases 7 49 106 Financing cash flows from finance leases 124 430 499 |
Schedule of Operating Lease Liability Maturity | The following table presents future minimum lease payments of our lease liabilities as of December 31, 2022: Operating Leases Year ending December 31, 2023 $ 24,983 2024 23,063 2025 19,470 2026 18,684 2027 17,168 2028 and beyond 97,162 Total future minimum lease payments 200,530 Less: Interest (47,642) Total lease liabilities $ 152,888 |
Schedule of Financing Lease Liability Maturity | The following table presents future minimum lease payments of our lease liabilities as of December 31, 2022: Operating Leases Year ending December 31, 2023 $ 24,983 2024 23,063 2025 19,470 2026 18,684 2027 17,168 2028 and beyond 97,162 Total future minimum lease payments 200,530 Less: Interest (47,642) Total lease liabilities $ 152,888 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents our allocation of the purchase price: Amounts Assets: Trade accounts receivable and contract assets, net $ 6,160 Other current assets 2,085 Property and equipment 4,669 Goodwill 23,086 Other intangible assets 4,428 Total assets $ 40,428 Liabilities: Trade accounts payable $ 133 Accrued expenses and other current liabilities 986 Deferred tax liabilities 1,114 Total liabilities $ 2,233 Total purchase price $ 38,195 |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in the balances of Accumulated other comprehensive income (loss) by component: Cumulative Foreign Currency Translation Adjustments Unrealized Gain (Loss) On Available-For-Sale Securities Other Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2020 $ (146,953) $ 113 $ — $ (146,840) Other comprehensive income (loss) before reclassifications (26,928) 490 (98) (26,536) Amounts reclassified to net income (loss) — (5) — (5) Other comprehensive income (loss) (26,928) 485 (98) (26,541) Balance, December 31, 2021 (173,881) 598 (98) (173,381) Other comprehensive income (loss) before reclassifications 3,767 (553) — 3,214 Amounts reclassified to net income (loss) — (17) — (17) Other comprehensive income (loss) 3,767 (570) — 3,197 Balance, December 31, 2022 $ (170,114) $ 28 $ (98) $ (170,184) |
MARKETABLE INVESTMENT SECURIT_2
MARKETABLE INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Marketable Investment Securities | The following table presents our Marketable investment securities : As of December 31, 2022 2021 Marketable investment securities: Available-for-sale debt securities: Corporate bonds $ 154,580 $ 284,787 Commercial paper 643,526 491,360 Other debt securities 1,663 78,355 Total available-for-sale debt securities 799,769 854,502 Equity securities — — Total marketable investment securities $ 799,769 $ 854,502 |
Schedule of Available-for-sale Securities Reconciliation | The following table presents the components of our available-for-sale debt securities: Amortized Unrealized Estimated Cost Gains Losses Fair Value As of December 31, 2022 Corporate bonds $ 154,517 $ 119 $ (56) $ 154,580 Commercial paper 643,553 — (27) 643,526 Other debt securities 1,663 — — 1,663 Total available-for-sale debt securities $ 799,733 $ 119 $ (83) $ 799,769 As of December 31, 2021 Corporate bonds $ 285,169 $ — $ (382) $ 284,787 Commercial paper 491,360 — — 491,360 Other debt securities 78,395 — (40) 78,355 Total available-for-sale debt securities $ 854,924 $ — $ (422) $ 854,502 |
Schedule of Activity on Available-for-sale Debt Securities | The following table presents the activity on our available-for-sale debt securities: For the years ended December 31, 2022 2021 2020 Proceeds from sales $ 37,904 $ 292,188 $ 112,497 |
Schedule of Activity of Equity Securities | The following table presents the activity of our equity securities: For the years ended December 31, 2022 2021 2020 Gains (losses) on investments, net $ — $ (6) $ (235) |
Schedule of Fair Value Measurements | The following table presents our marketable investment securities categorized by the fair value hierarchy, certain of which have historically experienced volatility: Level 1 Level 2 Total As of December 31, 2022 Cash equivalents (including restricted) $ 496 $ 548,058 $ 548,554 Available-for-sale debt securities: Corporate bonds $ — $ 154,580 $ 154,580 Commercial paper — 643,526 643,526 Other debt securities — 1,663 1,663 Total available-for-sale debt securities — 799,769 799,769 Equity securities — — — Total marketable investment securities $ — $ 799,769 $ 799,769 As of December 31, 2021 Cash equivalents (including restricted) $ 4,032 $ 320,732 $ 324,764 Available-for-sale debt securities: Corporate bonds $ — $ 284,787 $ 284,787 Commercial paper — 491,360 491,360 Other debt securities — 78,355 78,355 Total available-for-sale debt securities — 854,502 854,502 Equity securities — — — Total marketable investment securities $ — $ 854,502 $ 854,502 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | The following table presents the components of Property and equipment, net : As of December 31, 2022 2021 Property and equipment, net: Satellites, net $ 754,019 $ 847,613 Other property and equipment, net 621,985 675,834 Total property and equipment, net $ 1,376,004 $ 1,523,447 The following table presents the components of our satellites, net: Depreciable Life (In Years) As of December 31, 2022 2021 Satellites, net: Satellites - owned 7 to 15 $ 1,503,435 $ 1,500,836 Satellites - acquired under finance leases 15 360,642 354,170 Total satellites 1,864,077 1,855,006 Accumulated depreciation: Satellites - owned (988,164) (911,722) Satellites - acquired under finance leases (121,894) (95,671) Total accumulated depreciation (1,110,058) (1,007,393) Total satellites, net $ 754,019 $ 847,613 The following table presents the depreciation expense associated with our satellites, net: For the years ended December 31, 2022 2021 2020 Depreciation expense: Satellites - owned $ 75,738 $ 85,068 $ 108,273 Satellites - acquired under finance leases 24,127 23,740 27,611 Total depreciation expense $ 99,865 $ 108,808 $ 135,884 The following table presents capitalized interest associated with our satellites and satellite-related ground infrastructure: For the years ended December 31, 2022 2021 2020 Capitalized interest $ 8,712 $ 6,002 $ 2,488 The following table presents Other property and equipment, net : Depreciable Life (In Years) As of December 31, 2022 2021 Other property and equipment, net: Land — $ 13,510 $ 13,322 Buildings and improvements 1 to 40 75,163 73,824 Furniture, fixtures, equipment and other 1 to 12 747,179 723,902 Customer premises equipment 2 to 4 933,669 1,860,766 Construction in progress 195,655 157,038 Total other property and equipment 1,965,176 2,828,852 Accumulated depreciation (1,343,191) (2,153,018) Other property and equipment, net $ 621,985 $ 675,834 The following table presents the depreciation expense associated with our other property and equipment: For the years ended December 31, 2022 2021 2020 Other property and equipment depreciation expense: Buildings and improvements $ 3,661 $ 4,908 $ 4,285 Furniture, fixtures, equipment and other 71,804 72,855 76,649 Customer premises equipment 221,645 247,072 246,542 Total depreciation expense $ 297,110 $ 324,835 $ 327,476 |
Schedule of Satellites | The following table presents our GEO satellite fleet as of December 31, 2022: GEO Satellite Segment Launch Date Nominal Degree Orbital Location (Longitude) Depreciable Life (In Years) Owned: SPACEWAY 3 (1) Hughes August 2007 95 W 10 EchoStar XVII Hughes July 2012 107 W 15 EchoStar XIX Hughes December 2016 97.1 W 15 Al Yah 3 (2) Hughes January 2018 20 W 7 EchoStar IX (3) (4) ESS August 2003 121 W 12 Finance leases: Eutelsat 65 West A Hughes March 2016 65 W 15 Telesat T19V Hughes July 2018 63 W 15 EchoStar 105/SES-11 ESS October 2017 105 W 15 (1) Depreciable life represents the remaining useful life as of June 8, 2011, the date EchoStar completed the acquisition of Hughes Communications, Inc. (“Hughes Communications”) and its subsidiaries in 2011 (the “Hughes Acquisition”). (2) Upon consummation of our joint venture with Al Yah Satellite Communications Company PrJSC (“Yahsat”) in Brazil in November 2019, we acquired the Brazilian Ka-band payload on this satellite. Depreciable life represents the remaining useful life as of November 2019. (3) We own the Ka-band and Ku-band payloads on this satellite. (4) EchoStar IX is approaching its end of station-kept life. The Company placed the satellite in an inclined-orbit in the first quarter of 2023. Inclined-orbit will extend its life to enable further revenue generating opportunities. |
REGULATORY AUTHORIZATIONS (Tabl
REGULATORY AUTHORIZATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Regulatory Authorizations | The following table presents our Regulatory authorizations, net : Finite lived Cost Accumulated Amortization Total Indefinite lived Total Balance, December 31, 2019 $ 12,524 $ (161) $ 12,363 $ 400,000 $ 412,363 Amortization expense — (902) (902) — (902) Currency translation adjustments (1,019) 9 (1,010) — (1,010) Balance, December 31, 2020 11,505 (1,054) 10,451 400,000 410,451 Amortization expense — (806) (806) — (806) Currency translation adjustments (772) 86 (686) — (686) Balance, December 31, 2021 10,733 (1,774) 8,959 400,000 408,959 Amortization expense — (825) (825) — (825) Currency translation adjustments 598 (113) 485 — 485 Balance, December 31, 2022 $ 11,331 $ (2,712) $ 8,619 $ 400,000 $ 408,619 Weighted-average useful life (in years) 14 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table presents our goodwill: For the years ended December 31, 2022 2021 2020 Balance at beginning of period $ 511,086 $ 511,597 $ 506,953 India JV formation 23,086 — — Foreign currency translation (1,681) (511) 4,644 Balance at end of period $ 532,491 $ 511,086 $ 511,597 |
OTHER INTANGIBLE ASSETS (Tables
OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | The following table presents our other intangible assets: Customer Relationships Patents Trademarks and Licenses Total Cost: As of December 31, 2019 $ 270,300 $ 51,400 $ 29,700 $ 351,400 As of December 31, 2020 270,300 51,400 29,700 351,400 As of December 31, 2021 270,300 51,400 29,700 351,400 Additions 4,312 — — 4,312 Currency Translation Adjustments (328) — — (328) As of December 31, 2022 $ 274,284 $ 51,400 $ 29,700 $ 355,384 Accumulated amortization: As of December 31, 2019 $ (257,933) $ (51,400) $ (12,746) $ (322,079) Amortization expense (9,496) — (1,485) (10,981) As of December 31, 2020 (267,429) (51,400) (14,231) (333,060) Amortization expense (2,871) — (1,485) (4,356) As of December 31, 2021 (270,300) (51,400) (15,716) (337,416) Amortization expense (785) — (1,485) (2,270) As of December 31, 2022 $ (271,085) $ (51,400) $ (17,201) $ (339,686) Carrying amount: As of December 31, 2021 $ — $ — $ 13,984 $ 13,984 As of December 31, 2022 $ 3,199 $ — $ 12,499 $ 15,698 Weighted-average useful life (in years) 8 6 20 |
Schedule of Estimated Future Amortization of Intangible Assets | The following table presents our estimated future amortization of our regulatory authorizations with finite lives as of December 31, 2022: Amount For the years ending December 31, 2023 $ 836 2024 836 2025 836 2026 836 2027 836 2028 and beyond 4,439 Total $ 8,619 The following table presents our estimated future amortization of other intangible assets as of December 31, 2022: Amount For the years ending December 31, 2023 $ 2,282 2024 2,282 2025 2,282 2026 2,282 2027 1,496 2028 and beyond 5,074 Total $ 15,698 |
OTHER INVESTMENTS (Tables)
OTHER INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Other Investments and Equity Method Investments | The following table presents our Other investments, net : As of December 31, 2022 2021 Other investments, net: Equity method investments $ 83,523 $ 91,226 Total other investments, net $ 83,523 $ 91,226 The following table presents revenue recognized: For the years ended December 31, 2022 2021 2020 Deluxe $ 5,334 $ 5,480 $ 4,393 BCS $ 7,933 $ 8,278 $ 9,080 The following table presents trade accounts receivable: As of December 31, 2022 2021 Deluxe $ 3,026 $ 934 BCS $ 5,062 $ 5,544 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Amount and Fair Values of Long-term Debt | The following table presents the carrying amount and fair values of our Long-term debt, net: Effective Interest Rate As of December 31, 2022 2021 Carrying Amount Fair Value Carrying Amount Fair Value Senior Secured Notes: 5 1/4% Senior Secured Notes due 2026 5.320% $ 750,000 $ 727,763 $ 750,000 $ 825,555 Senior Unsecured Notes: 6 5/8% Senior Unsecured Notes due 2026 6.688% 750,000 707,490 750,000 838,740 Less: Unamortized debt issuance costs (3,223) — (4,006) — Total long-term debt, net $ 1,496,777 $ 1,435,253 $ 1,495,994 $ 1,664,295 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income (Loss) Before Income Taxes | The following table presents the components of Income (loss) before income taxes in the Consolidated Statements of Operations: For the years ended December 31, 2022 2021 2020 Domestic $ 253,654 $ 246,207 $ 116,268 Foreign (60,303) (78,479) (76,579) Income (loss) before income taxes $ 193,351 $ 167,728 $ 39,689 |
Schedule of Components of the Benefit (Provision) for Income Taxes | The following table presents the components of Income tax benefit (provision), net , in the Consolidated Statements of Operations: For the years ended December 31, 2022 2021 2020 Current benefit (provision), net: Federal $ (83,594) $ (73,571) $ (40,109) State (15,430) (18,562) (4,152) Foreign (4,292) (3,254) (1,740) Total current benefit (provision), net $ (103,316) $ (95,387) $ (46,001) Deferred benefit (provision), net: Federal $ 37,714 $ 28,319 $ 15,151 State 8,186 3,705 (2,926) Foreign 2,975 6,252 (8,342) Total deferred benefit (provision), net 48,875 38,276 3,883 Total income tax benefit (provision), net $ (54,441) $ (57,111) $ (42,118) |
Schedule of Income Tax Rate Reconciliation | The following table presents our actual tax provisions reconciled to the amounts computed by applying the statutory federal tax rate to Income (loss) before income taxes in the Consolidated Statements of Operations: For the years ended December 31, 2022 2021 2020 Statutory rate $ (40,604) $ (35,223) $ (8,336) State income taxes, net of federal benefit (provision) (4,005) (10,960) (6,205) Permanent differences (2,233) (806) (1,447) Tax credits, including withholding tax 3,699 4,573 1,137 Valuation allowance (21,359) (23,346) (36,491) Rates different than statutory 9,753 10,164 9,725 Other 308 (1,513) (501) Total income tax benefit (provision), net $ (54,441) $ (57,111) $ (42,118) |
Schedule of Deferred Tax Assets and Liabilities | The following table presents the components of our deferred tax assets and liabilities: As of December 31, 2022 2021 Deferred tax assets: Net operating losses, credit and other carryforwards $ 119,594 $ 121,021 Other investments 11,648 8,890 Accrued expenses 53,324 30,973 Stock-based compensation 5,645 6,833 Other assets 32,824 8,985 Total deferred tax assets 223,035 176,702 Valuation allowance (153,233) (139,727) Deferred tax assets after valuation allowance $ 69,802 $ 36,975 Deferred tax liabilities: Property and equipment, regulatory authorizations, and other intangibles $ (332,884) $ (338,130) Other liabilities (18,853) (27,840) Total deferred tax liabilities (351,737) (365,970) Total net deferred tax liabilities $ (281,935) $ (328,995) Net deferred tax assets (liabilities) foreign jurisdiction $ 6,277 $ 5,267 Net deferred tax assets (liabilities) domestic (288,212) (334,262) Total net deferred tax assets (liabilities) $ (281,935) $ (328,995) |
Schedule of Reconciliation of Unrecognized Tax Benefits | The following table presents the reconciliation of the beginning and ending amount of unrecognized income tax benefits: For the years ended December 31, 2022 2021 2020 Unrecognized tax benefit balance as of beginning of period: $ 7,294 $ 7,294 $ 7,866 Reductions based on tax positions related to prior years (122) — (572) Balance as of end of period $ 7,172 $ 7,294 $ 7,294 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Schedule of Matching Contributions and Discretionary Contributions | The following table presents our matching contributions and discretionary contributions: For the years ended December 31, 2022 2021 2020 Matching contributions $ 5,475 $ 5,434 $ 5,239 Fair value of EchoStar discretionary contributions of its Class A common stock, net of forfeitures, under 401(k) plan $ 7,042 $ 7,125 $ 6,921 |
RELATED PARTY TRANSACTIONS - _2
RELATED PARTY TRANSACTIONS - ECHOSTAR (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table presents our Services and other revenue from EchoStar: For the years ended December 31, 2022 2021 2020 Services and other revenue - EchoStar $ 17,623 $ 21,206 $ 20,287 The following table presents the corresponding related party receivables: As of December 31, 2022 2021 Related party receivables - EchoStar - current $ 112,985 $ 122,619 Related party receivables - EchoStar - non-current 55,834 56,055 Total related party receivables - EchoStar $ 168,819 $ 178,674 The following table presents our operating expenses from EchoStar: For the years ended December 31, 2022 2021 2020 Operating expenses - EchoStar $ 75,462 $ 56,430 $ 56,859 The following table presents the corresponding related party payables: As of December 31, 2022 2021 Related party payables - EchoStar - current $ 216,504 $ 124,578 Related party payables - EchoStar - non-current 23,423 24,118 Total related party payables - EchoStar $ 239,927 $ 148,696 The following table presents our Services and other revenue - DISH Network : For the years ended December 31, 2022 2021 2020 Services and other revenue - DISH Network $ 17,832 $ 21,718 $ 25,930 The following table presents the related trade accounts receivable: As of December 31, 2022 2021 Trade accounts receivable - DISH Network $ 1,992 $ 3,457 The following table presents our operating expenses related to DISH Network: For the years ended December 31, 2022 2021 2020 Operating expenses - DISH Network $ 4,545 $ 4,813 $ 4,734 The following table presents the related trade accounts payable: As of December 31, 2022 2021 Trade accounts payable - DISH Network $ 567 $ 587 |
RELATED PARTY TRANSACTIONS - _3
RELATED PARTY TRANSACTIONS - DISH NETWORK (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table presents our Services and other revenue from EchoStar: For the years ended December 31, 2022 2021 2020 Services and other revenue - EchoStar $ 17,623 $ 21,206 $ 20,287 The following table presents the corresponding related party receivables: As of December 31, 2022 2021 Related party receivables - EchoStar - current $ 112,985 $ 122,619 Related party receivables - EchoStar - non-current 55,834 56,055 Total related party receivables - EchoStar $ 168,819 $ 178,674 The following table presents our operating expenses from EchoStar: For the years ended December 31, 2022 2021 2020 Operating expenses - EchoStar $ 75,462 $ 56,430 $ 56,859 The following table presents the corresponding related party payables: As of December 31, 2022 2021 Related party payables - EchoStar - current $ 216,504 $ 124,578 Related party payables - EchoStar - non-current 23,423 24,118 Total related party payables - EchoStar $ 239,927 $ 148,696 The following table presents our Services and other revenue - DISH Network : For the years ended December 31, 2022 2021 2020 Services and other revenue - DISH Network $ 17,832 $ 21,718 $ 25,930 The following table presents the related trade accounts receivable: As of December 31, 2022 2021 Trade accounts receivable - DISH Network $ 1,992 $ 3,457 The following table presents our operating expenses related to DISH Network: For the years ended December 31, 2022 2021 2020 Operating expenses - DISH Network $ 4,545 $ 4,813 $ 4,734 The following table presents the related trade accounts payable: As of December 31, 2022 2021 Trade accounts payable - DISH Network $ 567 $ 587 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Contractual Obligations | The following table summarizes our contractual obligations as of December 31, 2022: Payments Due in the Years Ending December 31, Total (4)(5) 2023 2024 2025 2026 2027 Thereafter Long-term debt (1) $ 1,500,000 $ — $ — $ — $ 1,500,000 $ — $ — Interest on long-term debt 356,252 89,063 89,063 89,063 89,063 — — Satellite-related commitments (2) 143,516 43,729 17,737 17,351 16,089 14,393 34,217 Operating lease obligations (3) 200,528 24,983 23,063 19,470 18,684 17,168 97,160 Total $ 2,200,296 $ 157,775 $ 129,863 $ 125,884 $ 1,623,836 $ 31,561 $ 131,377 (1) Assumes all long-term debt is outstanding until scheduled maturity. (2) Includes payments pursuant to: i) the EchoStar XXIV launch contract, ii) regulatory authorizations, iii) non-lease costs associated with our finance lease satellites, iv) in-orbit incentives relating to certain satellites and v) commitments for satellite service arrangements. (3) Operating leases consist primarily of leases for office space, data centers and satellite-related ground infrastructure. (4) The table excludes amounts related to deferred tax liabilities, unrecognized tax positions and certain other amounts recorded in our non-current liabilities as the timing of any payments is uncertain. (5) The table excludes long-term deferred revenue and other long-term liabilities that do not require future cash payments. |
Schedule of Accrual For License Fee Dispute | The following table presents the components of the accrual: As of December 31, 2022 2021 Additional license fees $ 3,425 $ 3,812 Penalties 3,516 3,912 Interest and interest on penalties 78,327 81,389 Less: Payments (17,785) (8,451) Total accrual 67,483 80,662 Less: Current portion 10,191 11,178 Total long-term accrual $ 57,292 $ 69,484 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue, EBITDA, and Capital Expenditures by Operating Segments | The following table presents total revenue, capital expenditures and EBITDA for each of our business segments: Hughes ESS Corporate Consolidated For the year ended December 31, 2022 External revenue $ 1,966,587 $ 19,132 $ 17,624 $ 2,003,343 Intersegment revenue — 1,401 (1,401) — Total revenue $ 1,966,587 $ 20,533 $ 16,223 $ 2,003,343 Capital expenditures $ 239,403 $ — $ — $ 239,403 EBITDA $ 732,929 $ 14,416 $ (50,852) $ 696,493 For the year ended December 31, 2021 External revenue $ 1,956,226 $ 17,295 $ 21,205 $ 1,994,726 Intersegment revenue — 384 (384) — Total revenue $ 1,956,226 $ 17,679 $ 20,821 $ 1,994,726 Capital expenditures $ 296,303 $ — $ — $ 296,303 EBITDA $ 781,824 $ 9,185 $ (30,628) $ 760,381 For the year ended December 31, 2020 External revenue $ 1,860,834 $ 16,237 $ 20,287 $ 1,897,358 Intersegment revenue — 1,161 (1,161) — Total revenue $ 1,860,834 $ 17,398 $ 19,126 $ 1,897,358 Capital expenditures $ 355,197 $ 41 $ — $ 355,238 EBITDA $ 727,608 $ 7,873 $ (31,498) $ 703,983 |
Schedule of Reconciliation of EBITDA to Reported Income (Loss) Before Income Taxes | The following table reconciles Income (loss) before income taxes in the Consolidated Statements of Operations to EBITDA: For the years ended December 31, 2022 2021 2020 Income (loss) before income taxes $ 193,351 $ 167,728 $ 39,689 Interest income, net (30,812) (8,146) (18,802) Interest expense, net of amounts capitalized 92,386 126,499 172,466 Depreciation and amortization 431,065 464,146 498,876 Net loss (income) attributable to non-controlling interests 10,503 10,154 11,754 EBITDA $ 696,493 $ 760,381 $ 703,983 |
Schedule of Total Long-lived Assets | The following table summarizes total long-lived assets attributed to the North America, South and Central America and other foreign locations: As of December 31, 2022 2021 Long-lived assets: North America $ 2,075,373 $ 2,148,052 South and Central America 206,556 267,429 Other 50,883 41,995 Total long-lived assets $ 2,332,812 $ 2,457,476 |
SUPPLEMENTAL FINANCIAL INFORM_2
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 years ended December 31, 2022 2021 2020 Cost of sales - equipment $ 31,781 $ 29,636 $ 19,788 Research and development expenses $ 32,810 $ 31,777 $ 29,448 |
Schedule of Cash and Cash Equivalents | The following table reconciles cash and cash equivalents and restricted cash, as presented in the Consolidated Balance Sheets to the total of the same as presented in the Consolidated Statements of Cash Flows: For the years ended December 31, 2022 2021 2020 Cash and cash equivalents, including restricted amounts, beginning of period: Cash and cash equivalents $ 429,168 $ 740,490 $ 1,139,435 Restricted cash 980 807 887 Total cash and cash equivalents, included restricted amounts, beginning of period $ 430,148 $ 741,297 $ 1,140,322 Cash and cash equivalents, including restricted amounts, end of period: Cash and cash equivalents $ 653,132 $ 429,168 $ 740,490 Restricted cash 1,341 980 807 Total cash and cash equivalents, included restricted amounts, end of period $ 654,473 $ 430,148 $ 741,297 |
Schedule of Restrictions on Cash and Cash Equivalents | The following table reconciles cash and cash equivalents and restricted cash, as presented in the Consolidated Balance Sheets to the total of the same as presented in the Consolidated Statements of Cash Flows: For the years ended December 31, 2022 2021 2020 Cash and cash equivalents, including restricted amounts, beginning of period: Cash and cash equivalents $ 429,168 $ 740,490 $ 1,139,435 Restricted cash 980 807 887 Total cash and cash equivalents, included restricted amounts, beginning of period $ 430,148 $ 741,297 $ 1,140,322 Cash and cash equivalents, including restricted amounts, end of period: Cash and cash equivalents $ 653,132 $ 429,168 $ 740,490 Restricted cash 1,341 980 807 Total cash and cash equivalents, included restricted amounts, end of period $ 654,473 $ 430,148 $ 741,297 |
Schedule of Allowance for Credit Loss | The following table presents the activity in our allowance for doubtful accounts: For the years ended December 31, 2022 2021 2020 Balance at beginning of period $ 14,588 $ 15,386 $ 23,777 Credit losses (1) 32,910 22,591 18,582 Deductions (36,011) (23,543) (26,031) Foreign currency translation 3,871 154 (942) Balance at end of period $ 15,358 $ 14,588 $ 15,386 (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: For the years ended December 31, 2022 2021 2020 Other current assets, net Other non-current assets, net Other current assets, net Other non-current assets, net Other current assets, net Other non-current assets, net Balance at beginning of period $ — $ 16,709 $ 1,747 $ 12,869 $ — $ — Credit losses (1) — — — 3,328 1,595 13,378 Foreign currency translation — — (1,747) 1,159 152 (509) Deductions — — — (647) — — Balance at end of period $ — $ 16,709 $ — $ 16,709 $ 1,747 $ 12,869 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 Other current assets, net and Other non-current assets, net : As of December 31, 2022 2021 Other current assets, net: Related party receivables - EchoStar $ 112,985 $ 122,619 Inventory 123,006 102,907 Prepaids and deposits 23,948 27,737 Trade accounts receivable - DISH Network 1,992 3,457 Other, net 13,271 20,124 Total other current assets $ 275,202 $ 276,844 Other non-current assets, net: Capitalized software, net $ 116,844 $ 124,701 Contract acquisition costs, net 64,447 82,986 Related party receivables - EchoStar 55,834 56,055 Deferred tax assets, net 7,822 5,411 Restricted cash 1,341 980 Contract fulfillment costs, net 1,931 1,721 Other, net 37,658 30,986 Total other non-current assets, net $ 285,877 $ 302,840 The following table presents the components of Accrued expenses and other current liabilities and Other non-current liabilities : As of December 31, 2022 2021 Accrued expenses and other current liabilities: Related party payables - EchoStar $ 216,504 $ 124,578 Accrued compensation 40,684 45,630 Operating lease obligation 17,766 16,697 Accrued interest 39,194 39,289 Accrued taxes 10,631 9,790 Accrual for license fee dispute 10,191 11,178 Trade accounts payable - DISH Network 567 587 Other 58,362 61,130 Total accrued expenses and other current liabilities $ 393,899 $ 308,879 Other non-current liabilities: Accrual for license fee dispute $ 57,292 $ 69,484 Related party payables - EchoStar 23,423 24,118 Contract liabilities 8,326 10,669 Other 44,856 48,980 Total other non-current liabilities $ 133,897 $ 153,251 |
Schedule of Inventory | The following table presents the components of inventory: As of December 31, 2022 2021 Raw materials $ 32,920 $ 13,778 Work-in-process 16,408 11,705 Finished goods 73,678 77,424 Total inventory $ 123,006 $ 102,907 |
Schedule of Capitalized Software Costs | The following tables present the activity related to our capitalized software cost: As of December 31, 2022 2021 Net carrying amount of externally marketed software $ 116,841 $ 124,701 Externally marketed software under development and not yet placed into service $ 26,924 $ 57,357 For the years ended December 31, 2022 2021 2020 Capitalized costs related to development of externally marketed software $ 23,105 $ 33,543 $ 38,655 Amortization expense relating to externally marketed software $ 30,965 $ 25,288 $ 23,780 Weighted-average useful life (in years) 4 |
Schedule of Noncash Investing and Financing Activities | The following table presents the supplemental and non-cash investing and financing activities: For the years ended December 31, 2022 2021 2020 Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized $ 91,583 $ 118,638 $ 162,692 Cash paid for income taxes $ 12,538 $ 10,641 $ 9,094 Non-cash investing and financing activities: Increase (decrease) in capital expenditures included in accounts payable, net $ 8,001 $ (347) $ (6,198) Non-cash net assets received as part of the India JV formation $ 36,701 $ — $ — |
SUPPLEMENTAL GUARANTOR AND NO_2
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Guarantor and Non-Guarantor Financial Information | |
Schedule of Consolidating Balance Sheet | Consolidating Balance Sheet as of December 31, 2022 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 547,605 $ 25,318 $ 80,209 $ — $ 653,132 Marketable investment securities 799,769 — — — 799,769 Trade accounts receivable and contract assets, net — 168,484 67,852 — 236,336 Other current assets, net 71 1,330,813 284,621 (1,340,303) 275,202 Total current assets 1,347,445 1,524,615 432,682 (1,340,303) 1,964,439 Non-current assets: Property and equipment, net — 1,140,294 235,710 — 1,376,004 Operating lease right-of-use assets — 121,609 29,023 — 150,632 Goodwill — 504,173 28,318 — 532,491 Regulatory authorizations, net — 400,000 8,619 — 408,619 Other intangible assets, net — 12,499 3,199 — 15,698 Other investments, net 8,920 — 74,603 — 83,523 Investment in subsidiaries 3,312,961 358,141 — (3,671,102) — Other non-current assets, net 1,095 261,906 163,165 (140,289) 285,877 Total non-current assets 3,322,976 2,798,622 542,637 (3,811,391) 2,852,844 Total assets $ 4,670,421 $ 4,323,237 $ 975,319 $ (5,151,694) $ 4,817,283 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ 477 $ 85,327 $ 12,425 $ — $ 98,229 Contract liabilities — 115,893 5,846 — 121,739 Accrued expenses and other current liabilities 1,121,740 296,666 315,796 (1,340,303) 393,899 Total current liabilities 1,122,217 497,886 334,067 (1,340,303) 613,867 Non-current liabilities: Long-term debt, net 1,496,777 — — — 1,496,777 Deferred tax liabilities, net — 288,716 1,451 (410) 289,757 Operating lease liabilities — 111,052 24,070 — 135,122 Other non-current liabilities — 113,183 160,593 (139,879) 133,897 Total non-current liabilities 1,496,777 512,951 186,114 (140,289) 2,055,553 Total liabilities 2,618,994 1,010,837 520,181 (1,480,592) 2,669,420 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 2,051,427 3,312,400 358,702 (3,671,102) 2,051,427 Non-controlling interests — — 96,436 — 96,436 Total shareholder's equity 2,051,427 3,312,400 455,138 (3,671,102) 2,147,863 Total liabilities and shareholder's equity $ 4,670,421 $ 4,323,237 $ 975,319 $ (5,151,694) $ 4,817,283 Consolidating Balance Sheet as of December 31, 2021 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 324,764 $ 42,550 $ 61,854 $ — $ 429,168 Marketable investment securities 854,502 — — — 854,502 Trade accounts receivable and contract assets, net — 127,350 54,713 — 182,063 Other current assets, net 170,283 1,056,871 94,185 (1,044,495) 276,844 Total current assets 1,349,549 1,226,771 210,752 (1,044,495) 1,742,577 Non-current assets: Property and equipment, net — 1,209,859 313,588 — 1,523,447 Operating lease right-of-use assets — 117,912 30,309 — 148,221 Goodwill — 504,173 6,913 — 511,086 Regulatory authorizations, net — 400,000 8,959 — 408,959 Other intangible assets, net — 13,984 — — 13,984 Other investments, net — 9,600 81,626 — 91,226 Investment in subsidiaries 3,126,926 292,211 — (3,419,137) — Other non-current assets, net 1,191 299,149 97,305 (94,805) 302,840 Total non-current assets 3,128,117 2,846,888 538,700 (3,513,942) 2,999,763 Total assets $ 4,477,666 $ 4,073,659 $ 749,452 $ (4,558,437) $ 4,742,340 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ — $ 92,156 $ 13,321 $ — $ 105,477 Contract liabilities — 134,474 6,869 — 141,343 Accrued expenses and other current liabilities 972,936 218,463 161,975 (1,044,495) 308,879 Total current liabilities 972,936 445,093 182,165 (1,044,495) 555,699 Non-current liabilities: Long-term debt, net 1,495,994 — — — 1,495,994 Deferred tax liabilities, net — 334,148 258 — 334,406 Operating lease liabilities — 108,431 25,570 — 134,001 Other non-current liabilities — 59,623 188,432 (94,804) 153,251 Total non-current liabilities 1,495,994 502,202 214,260 (94,804) 2,117,652 Total liabilities 2,468,930 947,295 396,425 (1,139,299) 2,673,351 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 2,008,736 3,126,364 292,774 (3,419,138) 2,008,736 Non-controlling interests — — 60,253 — 60,253 Total shareholder's equity 2,008,736 3,126,364 353,027 (3,419,138) 2,068,989 Total liabilities and shareholder's equity $ 4,477,666 $ 4,073,659 $ 749,452 $ (4,558,437) $ 4,742,340 |
Schedule of Consolidating Statement of Operations and Comprehensive Income (Loss) | Consolidating Statement of Operations and Comprehensive Income (Loss) For the Year Ended December 31, 2022 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue $ — $ 1,336,782 $ 317,935 $ (25,523) $ 1,629,194 Equipment revenue — 360,656 34,071 (20,578) 374,149 Total revenue — 1,697,438 352,006 (46,101) 2,003,343 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 419,074 173,385 (29,610) 562,849 Cost of sales - equipment (exclusive of depreciation and amortization) — 285,665 21,208 (14,583) 292,290 Selling, general and administrative expenses — 346,392 85,393 (1,908) 429,877 Research and development expenses — 32,447 363 — 32,810 Depreciation and amortization — 293,330 137,735 — 431,065 Total costs and expenses — 1,376,908 418,084 (46,101) 1,748,891 Operating income (loss) — 320,530 (66,078) — 254,452 Other income (expense): Interest income 25,801 5,345 4,655 (4,989) 30,812 Interest expense, net of amounts capitalized (89,846) 4,170 (11,699) 4,989 (92,386) Gains (losses) on investments, net 28 217 — — 245 Equity in earnings (losses) of unconsolidated affiliates, net 880 440 (7,023) — (5,703) Equity in earnings (losses) of subsidiaries, net 193,023 (53,571) — (139,452) — Foreign currency transaction gains (losses), net — 6,704 (688) — 6,016 Other, net — (28,397) 28,312 — (85) Total other income (expense), net 129,886 (65,092) 13,557 (139,452) (61,101) Income (loss) before income taxes 129,886 255,438 (52,521) (139,452) 193,351 Income tax benefit (provision), net 19,527 (62,415) (11,553) — (54,441) Net income (loss) 149,413 193,023 (64,074) (139,452) 138,910 Less: Net loss (income) attributable to non-controlling interests — — 10,503 — 10,503 Net income (loss) attributable to HSSC $ 149,413 $ 193,023 $ (53,571) $ (139,452) $ 149,413 Comprehensive income (loss): Net income (loss) $ 149,413 $ 193,023 $ (64,074) $ (139,452) $ 138,910 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 5,475 — 5,475 Unrealized gains (losses) on available-for-sale securities (553) — — — (553) Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale debt securities (17) — — — (17) Equity in other comprehensive income (loss) of subsidiaries, net 3,770 3,770 — (7,540) — Total other comprehensive income (loss), net of tax 3,200 3,770 5,475 (7,540) 4,905 Comprehensive income (loss) 152,613 196,793 (58,599) (146,992) 143,815 Less: Comprehensive loss (income) attributable to non-controlling interests — — 8,795 — 8,795 Comprehensive income (loss) attributable to HSSC $ 152,613 $ 196,793 $ (49,804) $ (146,992) $ 152,610 Consolidating Statement of Operations and Comprehensive Income (Loss) For the Year Ended December 31, 2021 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Revenue: Services and other revenue $ — $ 1,428,960 $ 317,948 $ (22,609) $ 1,724,299 Equipment revenue — 284,139 26,041 (39,753) 270,427 Total revenue — 1,713,099 343,989 (62,362) 1,994,726 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 420,767 147,660 (23,512) 544,915 Cost of sales - equipment (exclusive of depreciation and amortization) — 251,195 17,938 (37,173) 231,960 Selling, general and administrative expenses — 331,973 91,939 (1,677) 422,235 Research and development expenses — 31,159 618 — 31,777 Depreciation and amortization — 333,618 130,528 — 464,146 Impairment of long-lived assets — 210 — — 210 Total costs and expenses — 1,368,922 388,683 (62,362) 1,695,243 Operating income (loss) — 344,177 (44,694) — 299,483 Other income (expense): Interest income, net 3,367 5,270 4,460 (4,951) 8,146 Interest expense, net of amounts capitalized (120,635) 1,189 (12,004) 4,951 (126,499) Gains (losses) on investments, net 2 2,101 — — 2,103 Equity in earnings (losses) of unconsolidated affiliates, net — 1,714 (7,061) — (5,347) Equity in earnings (losses) of subsidiaries, net 207,895 (65,083) — (142,812) — Foreign currency transaction gains (losses), net — (72) (11,422) — (11,494) Other, net (1,938) 3,380 (106) — 1,336 Total other income (expense), net 88,691 (51,501) (26,133) (142,812) (131,755) Income (loss) before income taxes 88,691 292,676 (70,827) (142,812) 167,728 Income tax benefit (provision), net 32,080 (84,781) (4,410) — (57,111) Net income (loss) 120,771 207,895 (75,237) (142,812) 110,617 Less: Net loss (income) attributable to non-controlling interests — — 10,154 — 10,154 Net income (loss) attributable to HSSC $ 120,771 $ 207,895 $ (65,083) $ (142,812) $ 120,771 Comprehensive income (loss): Net income (loss) $ 120,771 $ 207,895 $ (75,237) $ (142,812) $ 110,617 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — (31,317) — (31,317) Unrealized gains (losses) on available-for-sale securities 490 — — — 490 Other — — (98) — (98) Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale debt securities (5) — — — (5) Equity in other comprehensive income (loss) of subsidiaries, net (27,026) (27,026) — 54,052 — Total other comprehensive income (loss), net of tax (26,541) (27,026) (31,415) 54,052 (30,930) Comprehensive income (loss) 94,230 180,869 (106,652) (88,760) 79,687 Less: Comprehensive loss (income) attributable to non-controlling interests — — 14,543 — 14,543 Comprehensive income (loss) attributable to HSSC $ 94,230 $ 180,869 $ (92,109) $ (88,760) $ 94,230 Consolidating Statement of Operations and Comprehensive Income (Loss) For the Year Ended December 31, 2020 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Revenue: Services and other revenue $ — $ 1,452,180 $ 274,926 $ (35,349) $ 1,691,757 Equipment revenue — 256,090 26,520 (77,009) 205,601 Total revenue — 1,708,270 301,446 (112,358) 1,897,358 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 443,806 162,561 (33,730) 572,637 Cost of sales - equipment (exclusive of depreciation and amortization) — 223,086 20,352 (77,009) 166,429 Selling, general and administrative expenses — 359,151 75,876 (1,619) 433,408 Research and development expenses — 28,846 602 — 29,448 Depreciation and amortization — 391,319 107,557 — 498,876 Impairment of long-lived assets — — — — — Total costs and expenses — 1,446,208 366,948 (112,358) 1,700,798 Operating income (loss) — 262,062 (65,502) — 196,560 Other income (expense): Interest income, net 14,843 4,049 3,711 (3,801) 18,802 Interest expense, net of amounts capitalized (162,012) (2,691) (11,564) 3,801 (172,466) Gains (losses) on investments, net (82) (150) — — (232) Equity in earnings (losses) of unconsolidated affiliates, net — (6,116) — — (6,116) Equity in earnings (losses) of subsidiaries, net 121,688 (68,916) — (52,772) — Foreign currency transaction gains (losses), net — (269) 3,696 — 3,427 Other, net — (645) 359 — (286) Total other income (expense), net (25,563) (74,738) (3,798) (52,772) (156,871) Income (loss) before income taxes (25,563) 187,324 (69,300) (52,772) 39,689 Income tax benefit (provision), net 34,888 (65,435) (11,571) — (42,118) Net income (loss) 9,325 121,889 (80,871) (52,772) (2,429) Less: Net loss (income) attributable to non-controlling interests — — 11,754 — 11,754 Net income (loss) attributable to HSSC $ 9,325 $ 121,889 $ (69,117) $ (52,772) $ 9,325 Comprehensive income (loss): Net income (loss) $ 9,325 $ 121,889 $ (80,871) $ (52,772) $ (2,429) Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — (77,646) — (77,646) Unrealized gains (losses) on available-for-sale securities (192) — — — (192) Other — — (4) — (4) Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale debt securities (1) — — — (1) Equity in other comprehensive income (loss) of subsidiaries, net (62,012) (62,012) — 124,024 — Total other comprehensive income (loss), net of tax (62,205) (62,012) (77,650) 124,024 (77,843) Comprehensive income (loss) (52,880) 59,877 (158,521) 71,252 (80,272) Less: Comprehensive loss (income) attributable to non-controlling interests — — 27,392 — 27,392 Comprehensive income (loss) attributable to HSSC $ (52,880) $ 59,877 $ (131,129) $ 71,252 $ (52,880) |
Schedule of Consolidating Statement of Cash Flows | Consolidating Statement of Cash Flows For the Year Ended December 31, 2022 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities: Net income (loss) $ 149,413 $ 193,023 $ (64,074) $ (139,452) $ 138,910 Adjustments to reconcile net income (loss) to net cash flows from operating activities (205,763) 335,155 131,098 139,452 399,942 Net cash provided by (used for) operating activities (56,350) 528,178 67,024 — 538,852 Cash flows from investing activities: Purchases of marketable investment securities (986,736) — — — (986,736) Sales and maturities of marketable investment securities 1,045,950 — — — 1,045,950 Expenditures for property and equipment — (193,449) (45,954) — (239,403) Expenditures for externally marketed software — (23,105) — — (23,105) Distributions (contributions) and advances from (to) subsidiaries, net 317,977 — — (317,977) — India JV formation — (7,892) — — (7,892) Dividend received from unconsolidated affiliate 2,000 — — — 2,000 Net cash provided by (used for) investing activities 379,191 (224,446) (45,954) (317,977) (209,186) Cash flows from financing activities: Payment of finance lease obligations — — (120) — (120) Payment of in-orbit incentive obligations — (2,988) — — (2,988) Dividend paid to EchoStar (100,000) — — — (100,000) Contribution (distributions) and advances (to) from parent, net — (317,977) — 317,977 — Net cash provided by (used for) financing activities (100,000) (320,965) (120) 317,977 (103,108) Effect of exchange rates on cash and cash equivalents — — (2,233) — (2,233) Net increase (decrease) in cash and cash equivalents 222,841 (17,233) 18,717 — 224,325 Cash and cash equivalents, including restricted amounts, beginning of period 324,764 42,549 62,835 — 430,148 Cash and cash equivalents, including restricted amounts, end of period $ 547,605 $ 25,316 $ 81,552 $ — $ 654,473 Consolidating Statement of Cash Flows For the Year Ended December 31, 2021 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash flows from operating activities: Net income (loss) $ 120,771 $ 207,895 $ (75,237) $ (142,812) $ 110,617 Adjustments to reconcile net income (loss) to net cash flows from operating activities (213,342) 479,663 142,561 142,812 551,694 Net cash provided by (used for) operating activities (92,571) 687,558 67,324 — 662,311 Cash flows from investing activities: Purchases of marketable investment securities (1,517,849) — — — (1,517,849) Sales and maturities of marketable investment securities 1,864,186 — — — 1,864,186 Expenditures for property and equipment — (196,902) (99,401) — (296,303) Expenditures for externally marketed software — (33,543) — — (33,543) Distributions (contributions) and advances from (to) subsidiaries, net 422,965 (44,891) — (378,074) — Sales of other investments — 9,451 — — 9,451 Net cash provided by (used for) investing activities 769,302 (265,885) (99,401) (378,074) 25,942 Cash flows from financing activities: Repurchase and maturity of the 2021 Senior Unsecured Notes (901,818) — — — (901,818) Payment of finance lease obligations — — (670) — (670) Payment of in-orbit incentive obligations — (2,214) — — (2,214) Contribution by non-controlling interest holder — — 9,880 — 9,880 Dividend paid to EchoStar (100,000) — — — (100,000) Other, net — — (966) — (966) Contribution (distributions) and advances (to) from parent, net — (422,965) 44,891 378,074 — Net cash provided by (used for) financing activities (1,001,818) (425,179) 53,135 378,074 (995,788) Effect of exchange rates on cash and cash equivalents — — (3,614) — (3,614) Net increase (decrease) in cash and cash equivalents (325,087) (3,506) 17,444 — (311,149) Cash and cash equivalents, including restricted amounts, beginning of period 649,851 46,055 45,391 — 741,297 Cash and cash equivalents, including restricted amounts, end of period $ 324,764 $ 42,549 $ 62,835 $ — $ 430,148 Consolidating Statement of Cash Flows For the Year Ended December 31, 2020 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash flows from operating activities: Net income (loss) $ 9,325 $ 121,889 $ (80,871) $ (52,772) $ (2,429) Adjustments to reconcile net income (loss) to net cash flows from operating activities (108,780) 480,249 106,528 52,772 530,769 Net cash provided by (used for) operating activities (99,455) 602,138 25,657 — 528,340 Cash flows from investing activities: Purchases of marketable investment securities (2,035,712) — — — (2,035,712) Sales and maturities of marketable investment securities 1,482,704 — — — 1,482,704 Expenditures for property and equipment — (202,083) (153,155) — (355,238) Expenditures for externally marketed software — (38,655) — — (38,655) Distributions (contributions) and advances from (to) subsidiaries, net 244,411 (101,718) — (142,693) — Sales of other investments — — — — — Net cash provided by (used for) investing activities (308,597) (342,456) (153,155) (142,693) (946,901) Cash flows from financing activities: Payment of finance lease obligations — — (811) — (811) Payment of in-orbit incentive obligations — (1,554) — — (1,554) Contribution by non-controlling interest holder — — 18,241 — 18,241 Other, net — — 998 — 998 Contribution (distributions) and advances (to) from parent, net — (244,411) 101,718 142,693 — Net cash provided by (used for) financing activities — (245,965) 120,146 142,693 16,874 Effect of exchange rates on cash and cash equivalents — — 2,662 — 2,662 Net increase (decrease) in cash and cash equivalents (408,052) 13,717 (4,690) — (399,025) 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 $ 649,851 $ 46,055 $ 45,391 $ — $ 741,297 |
ORGANIZATION AND BUSINESS ACT_2
ORGANIZATION AND BUSINESS ACTIVITIES (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | |
Accounting Policies [Line Items] | |||||
Weighted-average useful life (in years) | 14 years | ||||
Goodwill impairment loss | $ 0 | ||||
Stockholders' equity | (2,147,863,000) | $ (2,068,989,000) | $ (2,076,376,000) | $ (2,134,163,000) | |
Accumulated Earnings (Losses) | |||||
Accounting Policies [Line Items] | |||||
Stockholders' equity | $ (741,754,000) | $ (692,341,000) | $ (671,570,000) | (664,415,000) | |
Cumulative Effect, Period of Adoption, Adjustment | |||||
Accounting Policies [Line Items] | |||||
Stockholders' equity | 2,409,000 | ||||
Cumulative Effect, Period of Adoption, Adjustment | Accumulated Earnings (Losses) | |||||
Accounting Policies [Line Items] | |||||
Stockholders' equity | $ 2,200,000 | $ 2,169,000 | |||
Computer software | |||||
Accounting Policies [Line Items] | |||||
Weighted-average useful life (in years) | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impact of Adoption of New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Trade accounts receivable and contract assets, net | $ 236,336 | $ 182,063 | $ 196,520 | ||
Other current assets, net | 301,652 | ||||
Other non-current assets, net | 285,877 | 302,840 | 251,936 | ||
Total assets | 4,817,283 | 4,742,340 | 5,572,035 | ||
Deferred tax liabilities, net | 289,757 | 334,406 | 380,316 | ||
Accumulated earnings (losses) | 741,754 | 692,341 | 664,415 | ||
Non-controlling interests | 96,436 | 60,253 | 75,748 | ||
Total shareholder's equity | 2,147,863 | 2,068,989 | $ 2,076,376 | 2,134,163 | |
Total liabilities and shareholder's equity | $ 4,817,283 | $ 4,742,340 | 5,572,035 | ||
Adoption of ASC 326 Increase (Decrease) | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accumulated earnings (losses) | $ 2,900 | ||||
Cumulative Effect, Period of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total shareholder's equity | (2,409) | ||||
Cumulative Effect, Period of Adoption, Adjustment | 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 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 | $ 2,131,754 | |||
Total liabilities and shareholder's equity | $ 5,569,136 |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Components of Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Trade accounts receivable and contract assets, net: | ||||
Trade accounts receivable | $ 178,401 | $ 160,344 | ||
Contract assets | 73,293 | 36,307 | ||
Allowance for doubtful accounts | (15,358) | (14,588) | ||
Trade accounts receivable and contract assets, net | 236,336 | 182,063 | $ 196,520 | |
Contract liabilities: | ||||
Current | 121,739 | 141,343 | ||
Non-current | 8,326 | 10,669 | ||
Total contract liabilities | 130,065 | 152,012 | ||
Revenue recognized | 120,867 | 82,633 | $ 72,877 | |
Sales and services | ||||
Trade accounts receivable and contract assets, net: | ||||
Trade accounts receivable | 170,466 | 154,676 | ||
Leasing | ||||
Trade accounts receivable and contract assets, net: | ||||
Trade accounts receivable | $ 7,935 | $ 5,668 |
REVENUE RECOGNITION - Schedul_2
REVENUE RECOGNITION - Schedule of Allowance for Doubtful Accounts Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||||
Balance at beginning of period | $ 14,588 | $ 15,386 | $ 23,777 | ||
Credit losses | 32,910 | 22,591 | 18,582 | ||
Deductions | (36,011) | (23,543) | (26,031) | ||
Foreign currency translation | 3,871 | 154 | (942) | ||
Balance at end of period | 15,358 | 14,588 | $ 15,386 | ||
Accumulated earnings (losses) | $ 741,754 | $ 692,341 | $ 664,415 | ||
Adoption of ASC 326 Increase (Decrease) | |||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||||
Other current assets, net and other non-current assets, net | $ 13,400 | ||||
Accumulated earnings (losses) | $ 2,900 |
REVENUE RECOGNITION - Activity
REVENUE RECOGNITION - Activity in Contract Acquisition Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Increase (Decrease) In Capitalized Contract Cost [Roll Forward] | |||
Balance at beginning of period | $ 82,986 | $ 99,837 | $ 113,592 |
Additions | 57,627 | 72,503 | 91,143 |
Amortization expense | (76,760) | (88,178) | (101,278) |
Foreign currency translation | 594 | (1,176) | (3,620) |
Balance at end of period | $ 64,447 | $ 82,986 | $ 99,837 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) $ in Billions | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 1.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | 1 year |
Remaining performance obligation, percentage | 34% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | |
Remaining performance obligation, percentage | 66% |
REVENUE RECOGNITION - Schedul_3
REVENUE RECOGNITION - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 2,003,343 | $ 1,994,726 | $ 1,897,358 |
Services and other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,629,194 | 1,724,299 | 1,691,757 |
Services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,564,819 | 1,658,739 | 1,625,515 |
Lease revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 64,375 | 65,560 | 66,242 |
Total equipment revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 374,149 | 270,427 | 205,601 |
Equipment | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 119,107 | 108,767 | 110,108 |
Design, development and construction services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 246,265 | 152,934 | 88,511 |
Lease revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 8,777 | 8,726 | 6,982 |
North America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,595,906 | 1,634,523 | 1,573,198 |
South and Central America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 171,318 | 176,515 | 151,194 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 236,119 | 183,688 | 172,966 |
Corporate and Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 16,223 | 20,821 | 19,126 |
Corporate and Other | Services and other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 16,223 | 20,821 | 19,126 |
Corporate and Other | Services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Corporate and Other | Lease revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 16,223 | 20,821 | 19,126 |
Corporate and Other | Total equipment revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Corporate and Other | Equipment | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Corporate and Other | Design, development and construction services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Corporate and Other | Lease revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Corporate and Other | North America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | (1,400) | (385) | (1,161) |
Corporate and Other | South and Central America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Corporate and Other | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 17,623 | 21,206 | 20,287 |
Hughes | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,966,587 | 1,956,226 | 1,860,834 |
Hughes | Operating segments | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,966,587 | 1,956,226 | 1,860,834 |
Hughes | Operating segments | Services and other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,592,438 | 1,685,799 | 1,655,233 |
Hughes | Operating segments | Services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,551,613 | 1,646,778 | 1,614,730 |
Hughes | Operating segments | Lease revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 40,825 | 39,021 | 40,503 |
Hughes | Operating segments | Total equipment revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 374,149 | 270,427 | 205,601 |
Hughes | Operating segments | Equipment | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 119,107 | 108,767 | 110,108 |
Hughes | Operating segments | Design, development and construction services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 246,265 | 152,934 | 88,511 |
Hughes | Operating segments | Lease revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 8,777 | 8,726 | 6,982 |
Hughes | Operating segments | North America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,576,773 | 1,617,229 | 1,556,961 |
Hughes | Operating segments | South and Central America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 171,318 | 176,515 | 151,194 |
Hughes | Operating segments | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 218,496 | 162,482 | 152,679 |
ESS | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 19,132 | 17,295 | 16,237 |
ESS | Operating segments | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 20,533 | 17,679 | 17,398 |
ESS | Operating segments | Services and other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 20,533 | 17,679 | 17,398 |
ESS | Operating segments | Services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 13,206 | 11,961 | 10,785 |
ESS | Operating segments | Lease revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 7,327 | 5,718 | 6,613 |
ESS | Operating segments | Total equipment revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
ESS | Operating segments | Equipment | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
ESS | Operating segments | Design, development and construction services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
ESS | Operating segments | Lease revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
ESS | Operating segments | North America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 20,533 | 17,679 | 17,398 |
ESS | Operating segments | South and Central America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
ESS | Operating segments | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 0 | $ 0 | $ 0 |
REVENUE RECOGNITION - Lease Inc
REVENUE RECOGNITION - Lease Income By Lease Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Sales-type lease revenue: | |||
Revenue at lease commencement | $ 7,557 | $ 7,998 | $ 6,982 |
Interest income | 1,220 | 728 | 393 |
Total sales-type lease revenue | 8,777 | 8,726 | 7,375 |
Operating lease revenue | 64,375 | 65,560 | 65,849 |
Total lease revenue | 73,152 | 74,286 | $ 73,224 |
Sales-type lease receivable | $ 21,900 | $ 17,100 | |
Sales-Type Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Total revenue | Total revenue | Total revenue |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Total revenue | Total revenue | Total revenue |
REVENUE RECOGNITION - Lease I_2
REVENUE RECOGNITION - Lease Income Maturity (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
December 31, | |
2023 | $ 37,478 |
2024 | 32,856 |
2025 | 30,802 |
2026 | 28,828 |
2027 | 23,860 |
2028 and beyond | 46,070 |
Total lease payments to be received | $ 199,894 |
REVENUE RECOGNITION - Property
REVENUE RECOGNITION - Property and Equipment Subject to Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Customer premises equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 933,669 | $ 1,860,766 | |
Accumulated Depreciation | (703,110) | (1,549,508) | |
Net | 230,559 | 311,258 | |
Depreciation | 221,645 | 247,072 | $ 246,542 |
Satellites | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 104,620 | 104,620 | |
Accumulated Depreciation | (52,284) | (45,309) | |
Net | 52,336 | 59,311 | |
Depreciation | 6,975 | 6,975 | 6,975 |
Real estate | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 1,038,289 | 1,965,386 | |
Accumulated Depreciation | (755,394) | (1,594,817) | |
Net | 282,895 | 370,569 | |
Depreciation | $ 228,620 | $ 254,047 | $ 253,517 |
LESSEE ACCOUNTING - Schedule of
LESSEE ACCOUNTING - Schedule of Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Right-of-use assets: | ||
Operating | $ 150,632 | $ 148,221 |
Finance | 238,748 | 258,498 |
Total right-of-use assets | 389,380 | 406,719 |
Current: | ||
Operating | 17,766 | 16,697 |
Finance | 0 | 123 |
Total current | 17,766 | 16,820 |
Non-current: | ||
Operating | 135,122 | 134,001 |
Finance | 0 | 0 |
Total non-current | 135,122 | 134,001 |
Total lease liabilities | $ 152,888 | $ 150,821 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities | Other non-current liabilities |
Finance lease, accumulated amortization | $ 121,900 | $ 95,700 |
LESSEE ACCOUNTING - Schedule _2
LESSEE ACCOUNTING - Schedule of Lease Cost, Weighted Average Term, Discount Rates and Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease cost: | |||
Operating lease cost | $ 25,219 | $ 23,323 | $ 23,321 |
Finance lease cost: | |||
Amortization of right-of-use assets | 29,906 | 29,270 | 27,611 |
Interest on lease liabilities | 7 | 49 | 106 |
Total finance lease cost | 29,913 | 29,319 | 27,717 |
Short-term lease cost | 258 | 0 | 132 |
Variable lease cost | 2,246 | 1,895 | 3,799 |
Total lease cost | $ 57,636 | $ 54,537 | 54,969 |
Weighted-average remaining lease term: | |||
Finance leases | 0 years | 3 months 18 days | |
Operating leases | 8 years | 10 years 9 months 18 days | |
Weighted-average discount rate: | |||
Finance leases | 0% | 12.80% | |
Operating leases | 5.90% | 5.60% | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 24,653 | $ 21,808 | 21,313 |
Operating cash flows from finance leases | 7 | 49 | 106 |
Financing cash flows from finance leases | 124 | 430 | 499 |
Right-of-use asset obtained in exchange for lease liability | $ 4,300 | $ 26,100 | $ 22,600 |
LESSEE ACCOUNTING - Schedule _3
LESSEE ACCOUNTING - Schedule of Lease Liability Maturity (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Operating Leases | |
2023 | $ 24,983 |
2024 | 23,063 |
2025 | 19,470 |
2026 | 18,684 |
2027 | 17,168 |
2028 and beyond | 97,162 |
Total future minimum lease payments | 200,530 |
Less: Interest | (47,642) |
Total lease liabilities | $ 152,888 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 04, 2022 | Dec. 31, 2022 | |
India JV | ||
Business Acquisition [Line Items] | ||
Equity interest, percentage in joint venture | 67% | |
India JV | Bharti | ||
Business Acquisition [Line Items] | ||
Ownership interest | 33% | |
India Joint Venture | ||
Business Acquisition [Line Items] | ||
Total purchase price | $ 38,195 | |
Payments to acquire business, net | 7,900 | |
Other intangible assets | $ 4,428 | |
India Joint Venture | Customer Relationships | ||
Business Acquisition [Line Items] | ||
Other intangible assets | $ 4,400 | |
Amortization period | 5 years |
BUSINESS COMBINATIONS - Schedul
BUSINESS COMBINATIONS - Schedule of Recognized Identified Assets and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 04, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | |||||
Goodwill | $ 532,491 | $ 511,086 | $ 511,597 | $ 506,953 | |
India Joint Venture | |||||
Assets: | |||||
Trade accounts receivable and contract assets, net | $ 6,160 | ||||
Other current assets | 2,085 | ||||
Property and equipment | 4,669 | ||||
Goodwill | 23,086 | ||||
Other intangible assets | 4,428 | ||||
Total assets | 40,428 | ||||
Liabilities: | |||||
Trade accounts payable | 133 | ||||
Accrued expenses and other current liabilities | 986 | ||||
Deferred tax liabilities | 1,114 | ||||
Total liabilities | 2,233 | ||||
Total purchase price | $ 38,195 |
OTHER COMPREHENSIVE INCOME (L_3
OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ 2,068,989 | $ 2,076,376 | $ 2,134,163 |
Other comprehensive income (loss) before reclassifications | 3,214 | (26,536) | |
Amounts reclassified to net income (loss) | (17) | (5) | |
Total other comprehensive income (loss), net of tax | 4,905 | (30,930) | (77,843) |
Ending balance | 2,147,863 | 2,068,989 | 2,076,376 |
Cumulative Foreign Currency Translation Adjustments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (173,881) | (146,953) | |
Other comprehensive income (loss) before reclassifications | 3,767 | (26,928) | |
Amounts reclassified to net income (loss) | 0 | 0 | |
Total other comprehensive income (loss), net of tax | 3,767 | (26,928) | |
Ending balance | (170,114) | (173,881) | (146,953) |
Unrealized Gain (Loss) On Available-For-Sale Securities | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | 598 | 113 | |
Other comprehensive income (loss) before reclassifications | (553) | 490 | |
Amounts reclassified to net income (loss) | (17) | (5) | |
Total other comprehensive income (loss), net of tax | (570) | 485 | |
Ending balance | 28 | 598 | 113 |
Other | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (98) | 0 | |
Other comprehensive income (loss) before reclassifications | 0 | (98) | |
Amounts reclassified to net income (loss) | 0 | 0 | |
Total other comprehensive income (loss), net of tax | 0 | (98) | |
Ending balance | (98) | (98) | 0 |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (173,381) | (146,840) | |
Total other comprehensive income (loss), net of tax | 3,197 | (26,541) | |
Ending balance | $ (170,184) | $ (173,381) | $ (146,840) |
MARKETABLE INVESTMENT SECURIT_3
MARKETABLE INVESTMENT SECURITIES - Schedule of Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | $ 799,769 | $ 854,502 |
Equity securities | 0 | 0 |
Marketable investment securities | 799,769 | 854,502 |
Corporate bonds | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 154,580 | 284,787 |
Commercial paper | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 643,526 | 491,360 |
Other debt securities | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | $ 1,663 | $ 78,355 |
MARKETABLE INVESTMENT SECURIT_4
MARKETABLE INVESTMENT SECURITIES - Unrealized Gains (Losses) on Available-for-Sale (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | $ 799,733 | $ 854,924 |
Unrealized Gains | 119 | 0 |
Unrealized Losses | (83) | (422) |
Estimated Fair Value | 799,769 | 854,502 |
Corporate bonds | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 154,517 | 285,169 |
Unrealized Gains | 119 | 0 |
Unrealized Losses | (56) | (382) |
Estimated Fair Value | 154,580 | 284,787 |
Commercial paper | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 643,553 | 491,360 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (27) | 0 |
Estimated Fair Value | 643,526 | 491,360 |
Other debt securities | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 1,663 | 78,395 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | (40) |
Estimated Fair Value | $ 1,663 | $ 78,355 |
MARKETABLE INVESTMENT SECURIT_5
MARKETABLE INVESTMENT SECURITIES - Activity on Available-for-sale Debt Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds from sales | $ 37,904 | $ 292,188 | $ 112,497 |
MARKETABLE INVESTMENT SECURIT_6
MARKETABLE INVESTMENT SECURITIES - Narrative (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Debt securities with contractual maturities of one year or less | $ 784.4 |
Debt securities with contractual maturities exceeding one year | $ 15.4 |
MARKETABLE INVESTMENT SECURIT_7
MARKETABLE INVESTMENT SECURITIES - Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |||
Gains (losses) on investments, net | $ 0 | $ (6) | $ (235) |
MARKETABLE INVESTMENT SECURIT_8
MARKETABLE INVESTMENT SECURITIES - Schedule of Fair Value Measurements (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Fair value of marketable securities | ||
Cash equivalents (including restricted) | $ 548,554,000 | $ 324,764,000 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 799,769,000 | 854,502,000 |
Equity securities | 0 | 0 |
Total marketable investment securities | 799,769,000 | 854,502,000 |
Corporate bonds | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 154,580,000 | 284,787,000 |
Commercial paper | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 643,526,000 | 491,360,000 |
Other debt securities | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 1,663,000 | 78,355,000 |
Level 1 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 496,000 | 4,032,000 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 0 | 0 |
Equity securities | 0 | 0 |
Total marketable investment securities | 0 | 0 |
Level 1 | Corporate bonds | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 0 | 0 |
Level 1 | Commercial paper | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 0 | 0 |
Level 1 | Other debt securities | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 0 | 0 |
Level 2 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 548,058,000 | 320,732,000 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 799,769,000 | 854,502,000 |
Equity securities | 0 | 0 |
Total marketable investment securities | 799,769,000 | 854,502,000 |
Level 2 | Corporate bonds | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 154,580,000 | 284,787,000 |
Level 2 | Commercial paper | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 643,526,000 | 491,360,000 |
Level 2 | Other debt securities | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 1,663,000 | 78,355,000 |
Level 3 | ||
Available-for-sale debt securities: | ||
Total marketable investment securities | $ 0 | $ 0 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Major Asset Class (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property and equipment, net: | ||
Property and equipment, net | $ 1,376,004 | $ 1,523,447 |
Satellites, net | ||
Property and equipment, net: | ||
Property and equipment, net | 754,019 | 847,613 |
Other property and equipment, net | ||
Property and equipment, net: | ||
Property and equipment, net | $ 621,985 | $ 675,834 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) satellite mi | Dec. 31, 2021 USD ($) | |
Property, Plant and Equipment [Line Items] | ||
Other property and equipment, write-off | $ | $ 1,100 | |
Satellite-related obligations | ||
Property, Plant and Equipment [Line Items] | ||
Satellite-related obligations | $ | $ 143.5 | $ 179.7 |
Satellites | ||
Property, Plant and Equipment [Line Items] | ||
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | satellite | 8 | |
Satellites in geosynchronous orbit length above equator | mi | 22,300 | |
Satellites - owned | ||
Property, Plant and Equipment [Line Items] | ||
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | satellite | 5 | |
Satellites - acquired under finance leases | ||
Property, Plant and Equipment [Line Items] | ||
Number of satellites utilized under capital lease | satellite | 3 | |
Level 2 | ||
Property, Plant and Equipment [Line Items] | ||
Obligations, fair value disclosure | $ | $ 50.2 | $ 53.2 |
PROPERTY AND EQUIPMENT - Sche_2
PROPERTY AND EQUIPMENT - Schedule of Satellite Fleet (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (In Years) | 15 years |
SPACEWAY 3 | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (In Years) | 10 years |
EchoStar XVII | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (In Years) | 15 years |
EchoStar XIX | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (In Years) | 15 years |
Al Yah 3 | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (In Years) | 7 years |
EchoStar IX | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (In Years) | 12 years |
Eutelsat 65 West A | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (In Years) | 15 years |
Telesat T19V | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (In Years) | 15 years |
EchoStar 105/SES-11 | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (In Years) | 15 years |
PROPERTY AND EQUIPMENT- Schedul
PROPERTY AND EQUIPMENT- Schedule of Satellite Breakdown (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
Accumulated depreciation: | ||
Total satellites, net | $ 1,376,004 | $ 1,523,447 |
Satellites | ||
Satellites, net: | ||
Total satellites | 1,864,077 | 1,855,006 |
Accumulated depreciation: | ||
Accumulated depreciation | (1,110,058) | (1,007,393) |
Total satellites, net | 754,019 | 847,613 |
Satellites - owned | ||
Satellites, net: | ||
Satellites - owned | 1,503,435 | 1,500,836 |
Accumulated depreciation: | ||
Accumulated depreciation | (988,164) | (911,722) |
Satellites - acquired under finance leases | ||
Satellites, net: | ||
Satellites - acquired under finance leases | 360,642 | 354,170 |
Accumulated depreciation: | ||
Accumulated depreciation | $ (121,894) | $ (95,671) |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 7 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years |
PROPERTY AND EQUIPMENT - Sche_3
PROPERTY AND EQUIPMENT - Schedule of Depreciation Expense and Capitalized Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Depreciation expense: | |||
Satellites - acquired under finance leases | $ 29,906 | $ 29,270 | $ 27,611 |
Total depreciation expense | 431,065 | 464,146 | 498,876 |
Capitalized interest | 8,712 | 6,002 | 2,488 |
Satellites | |||
Depreciation expense: | |||
Total depreciation expense | 99,865 | 108,808 | 135,884 |
Satellites - owned | |||
Depreciation expense: | |||
Satellites - owned | 75,738 | 85,068 | 108,273 |
Satellites - acquired under finance leases | |||
Depreciation expense: | |||
Satellites - acquired under finance leases | $ 24,127 | $ 23,740 | $ 27,611 |
Property and Equipment - Sche_4
Property and Equipment - Schedule of Other Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
Other property and equipment, net | ||
Other property and equipment, net: | ||
Property and equipment, other, gross | $ 1,965,176 | $ 2,828,852 |
Accumulated depreciation | (1,343,191) | (2,153,018) |
Other property and equipment, net | 621,985 | 675,834 |
Land | ||
Other property and equipment, net: | ||
Property and equipment, other, gross | 13,510 | 13,322 |
Buildings and improvements | ||
Other property and equipment, net: | ||
Property and equipment, other, gross | 75,163 | 73,824 |
Furniture, fixtures, equipment and other | ||
Other property and equipment, net: | ||
Property and equipment, other, gross | 747,179 | 723,902 |
Customer premises equipment | ||
Other property and equipment, net: | ||
Property and equipment, other, gross | 933,669 | 1,860,766 |
Construction in progress | ||
Other property and equipment, net: | ||
Property and equipment, other, gross | $ 195,655 | $ 157,038 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 7 years | |
Minimum | Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 1 year | |
Minimum | Furniture, fixtures, equipment and other | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 1 year | |
Minimum | Customer premises equipment | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 2 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
Maximum | Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 40 years | |
Maximum | Furniture, fixtures, equipment and other | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 12 years | |
Maximum | Customer premises equipment | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 4 years |
Property and Equipment - Sche_5
Property and Equipment - Schedule of Other Depreciation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other property and equipment, net | |||
Other property and equipment depreciation expense: | |||
Depreciation | $ 297,110 | $ 324,835 | $ 327,476 |
Buildings and improvements | |||
Other property and equipment depreciation expense: | |||
Depreciation | 3,661 | 4,908 | 4,285 |
Furniture, fixtures, equipment and other | |||
Other property and equipment depreciation expense: | |||
Depreciation | 71,804 | 72,855 | 76,649 |
Customer premises equipment | |||
Other property and equipment depreciation expense: | |||
Depreciation | $ 221,645 | $ 247,072 | $ 246,542 |
REGULATORY AUTHORIZATIONS - Sch
REGULATORY AUTHORIZATIONS - Schedule of Finite Lived and Indefinite Lived Intangible Assets by Major Class (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Amortization | |||
Amortization expense | $ (825) | $ (806) | $ (902) |
Indefinite lived | |||
Balance at the beginning of the period | 400,000 | 400,000 | 400,000 |
Currency translation adjustments | 0 | 0 | 0 |
Balance at the end of the period | 400,000 | 400,000 | 400,000 |
Total | |||
Balance at beginning of period | 408,959 | 410,451 | 412,363 |
Currency translation adjustments | 485 | (686) | (1,010) |
Balance at the end of the period | $ 408,619 | 408,959 | 410,451 |
Weighted-average useful life (in years) | 14 years | ||
Regulatory authorization | |||
Cost | |||
Balance at the beginning of the period | $ 10,733 | 11,505 | 12,524 |
Currency translation adjustments | 598 | (772) | (1,019) |
Balance at the end of the period | 11,331 | 10,733 | 11,505 |
Accumulated Amortization | |||
Balance at beginning of period | (1,774) | (1,054) | (161) |
Amortization expense | (825) | (806) | (902) |
Currency translation adjustments | (113) | 86 | 9 |
Balance at end of the period | (2,712) | (1,774) | (1,054) |
Total | |||
Beginning balance | 8,959 | 10,451 | 12,363 |
Currency translation adjustments | 485 | (686) | (1,010) |
Balance at the end of the period | $ 8,619 | $ 8,959 | $ 10,451 |
REGULATORY AUTHORIZATIONS - S_2
REGULATORY AUTHORIZATIONS - Schedule of Estimated Future Amortization of Intangible Assets (Details) - Regulatory authorization - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
For the years ending December 31, | ||||
2023 | $ 836 | |||
2024 | 836 | |||
2025 | 836 | |||
2026 | 836 | |||
2027 | 836 | |||
2028 and beyond | 4,439 | |||
Total | $ 8,619 | $ 8,959 | $ 10,451 | $ 12,363 |
GOODWILL (Details)
GOODWILL (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill [Line Items] | |
Goodwill impairment loss | $ 0 |
India JV | Yahsat | |
Goodwill [Line Items] | |
Equity ownership percentage | 20% |
India JV | Hughes | Yahsat | |
Goodwill [Line Items] | |
Equity ownership percentage | 20% |
GOODWILL - Schedule of Goodwill
GOODWILL - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | |||
Balance at beginning of period | $ 511,086 | $ 511,597 | $ 506,953 |
India JV formation | 23,086 | 0 | 0 |
Foreign currency translation | (1,681) | (511) | 4,644 |
Balance at end of period | $ 532,491 | $ 511,086 | $ 511,597 |
OTHER INTANGIBLE ASSETS - Sched
OTHER INTANGIBLE ASSETS - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Amortization | |||
Weighted-average useful life (in years) | 14 years | ||
Total | |||
Cost: | |||
Balance at the beginning of the period | $ 351,400 | $ 351,400 | $ 351,400 |
Additions | 4,312 | ||
Currency Translation Adjustments | (328) | ||
Balance at the end of the period | 355,384 | 351,400 | 351,400 |
Accumulated Amortization | |||
Balance at beginning of period | (337,416) | (333,060) | (322,079) |
Amortization expense | (2,270) | (4,356) | (10,981) |
Balance at end of the period | (339,686) | (337,416) | (333,060) |
Total | 15,698 | 13,984 | |
Customer Relationships | |||
Cost: | |||
Balance at the beginning of the period | 270,300 | 270,300 | 270,300 |
Additions | 4,312 | ||
Currency Translation Adjustments | (328) | ||
Balance at the end of the period | 274,284 | 270,300 | 270,300 |
Accumulated Amortization | |||
Balance at beginning of period | (270,300) | (267,429) | (257,933) |
Amortization expense | (785) | (2,871) | (9,496) |
Balance at end of the period | (271,085) | (270,300) | (267,429) |
Total | $ 3,199 | 0 | |
Weighted-average useful life (in years) | 8 years | ||
Patents | |||
Cost: | |||
Balance at the beginning of the period | $ 51,400 | 51,400 | 51,400 |
Additions | 0 | ||
Currency Translation Adjustments | 0 | ||
Balance at the end of the period | 51,400 | 51,400 | 51,400 |
Accumulated Amortization | |||
Balance at beginning of period | (51,400) | (51,400) | (51,400) |
Amortization expense | 0 | 0 | 0 |
Balance at end of the period | (51,400) | (51,400) | (51,400) |
Total | $ 0 | 0 | |
Weighted-average useful life (in years) | 6 years | ||
Trademarks and Licenses | |||
Cost: | |||
Balance at the beginning of the period | $ 29,700 | 29,700 | 29,700 |
Additions | 0 | ||
Currency Translation Adjustments | 0 | ||
Balance at the end of the period | 29,700 | 29,700 | 29,700 |
Accumulated Amortization | |||
Balance at beginning of period | (15,716) | (14,231) | (12,746) |
Amortization expense | (1,485) | (1,485) | (1,485) |
Balance at end of the period | (17,201) | (15,716) | $ (14,231) |
Total | $ 12,499 | $ 13,984 | |
Weighted-average useful life (in years) | 20 years |
OTHER INTANGIBLE ASSETS - Futur
OTHER INTANGIBLE ASSETS - Future Amortization of Intangible Assets (Details) - Other intangible assets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
December 31, | ||
2023 | $ 2,282 | |
2024 | 2,282 | |
2025 | 2,282 | |
2026 | 2,282 | |
2027 | 1,496 | |
2028 and beyond | 5,074 | |
Total | $ 15,698 | $ 13,984 |
OTHER INVESTMENTS - Schedule of
OTHER INVESTMENTS - Schedule of Other Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other investments, net: | ||
Equity method investments | $ 83,523 | $ 91,226 |
Total other investments, net | $ 83,523 | $ 91,226 |
OTHER INVESTMENTS - Narrative (
OTHER INVESTMENTS - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||||
Dividend received from unconsolidated affiliate | $ 2,000,000 | $ 0 | $ 0 | |
Deluxe | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest, percentage in joint venture | 50% | |||
BCS | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest, percentage in joint venture | 20% |
OTHER INVESTMENTS - Schedule _2
OTHER INVESTMENTS - Schedule of Revenue Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deluxe | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenue from related parties | $ 5,334 | $ 5,480 | $ 4,393 |
BCS | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenue from related parties | $ 7,933 | $ 8,278 | $ 9,080 |
OTHER INVESTMENTS - Schedule _3
OTHER INVESTMENTS - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deluxe | ||
Schedule of Equity Method Investments [Line Items] | ||
Related party receivables | $ 3,026 | $ 934 |
BCS | ||
Schedule of Equity Method Investments [Line Items] | ||
Related party receivables | $ 5,062 | $ 5,544 |
LONG-TERM DEBT - Schedule of De
LONG-TERM DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt | ||
Less: Unamortized debt issuance costs | $ (3,223) | $ (4,006) |
Carrying amount, total long-term debt, net | 1,496,777 | 1,495,994 |
Fair value, total long-term debt, net | $ 1,435,253 | 1,664,295 |
Senior Secured Notes | 5 1/4% Senior Secured Notes due 2026 | ||
Debt | ||
Effective Interest Rate | 5.32% | |
Carrying amount, gross | $ 750,000 | 750,000 |
Fair value, total long-term debt, net | $ 727,763 | 825,555 |
Senior Unsecured Notes | 6 5/8% Senior Unsecured Notes due 2026 | ||
Debt | ||
Effective Interest Rate | 6.688% | |
Carrying amount, gross | $ 750,000 | 750,000 |
Fair value, total long-term debt, net | $ 707,490 | $ 838,740 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 27, 2016 | |
Debt | ||||
Amortization of debt issuance costs | $ 783,000 | $ 2,381,000 | $ 4,324,000 | |
Interest on long-term debt | ||||
Debt | ||||
Amortization of debt issuance costs | $ 800,000 | $ 2,400,000 | $ 4,300,000 | |
5 1/4% Senior Secured Notes due 2026 | Hughes Satellite Systems Corporation (HSSC) | ||||
Debt | ||||
Issue price as percent of principal | 100% | |||
6 5/8% Senior Unsecured Notes due 2026 | Hughes Satellite Systems Corporation (HSSC) | ||||
Debt | ||||
Principal amount of debt issuance | $ 750,000,000 | |||
Senior Unsecured Notes | ||||
Debt | ||||
Percent of debt holders required to call debt | 25% | |||
Senior Unsecured Notes | 6 5/8% Senior Unsecured Notes due 2026 | ||||
Debt | ||||
Interest rate | 6.625% | |||
Redemption price percentage | 100% | |||
Purchase price due to change of control, as percentage of aggregate principal amount | 101% | |||
Senior Unsecured Notes | 6 5/8% Senior Unsecured Notes due 2026 | Hughes Satellite Systems Corporation (HSSC) | ||||
Debt | ||||
Issue price as percent of principal | 100% | |||
Senior Secured Notes | 5 1/4% Senior Secured Notes due 2026 | ||||
Debt | ||||
Interest rate | 5.25% | |||
Redemption price percentage | 100% | |||
Purchase price due to change of control, as percentage of aggregate principal amount | 101% | |||
Senior Secured Notes | 5 1/4% Senior Secured Notes due 2026 | Hughes Satellite Systems Corporation (HSSC) | ||||
Debt | ||||
Principal amount of debt issuance | $ 750,000,000 |
Income Taxes - Components of In
Income Taxes - Components of Income (Loss) From Continuing Operations Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 253,654 | $ 246,207 | $ 116,268 |
Foreign | (60,303) | (78,479) | (76,579) |
Income (loss) before income taxes | $ 193,351 | $ 167,728 | $ 39,689 |
Income Taxes - Components of _2
Income Taxes - Components of Income Tax Benefit (Provision), Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current benefit (provision), net: | |||
Federal | $ (83,594) | $ (73,571) | $ (40,109) |
State | (15,430) | (18,562) | (4,152) |
Foreign | (4,292) | (3,254) | (1,740) |
Total current benefit (provision), net | (103,316) | (95,387) | (46,001) |
Deferred benefit (provision), net: | |||
Federal | 37,714 | 28,319 | 15,151 |
State | 8,186 | 3,705 | (2,926) |
Foreign | 2,975 | 6,252 | (8,342) |
Total deferred benefit (provision), net | 48,875 | 38,276 | 3,883 |
Total income tax benefit (provision), net | $ (54,441) | $ (57,111) | $ (42,118) |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Statutory rate | $ (40,604) | $ (35,223) | $ (8,336) |
State income taxes, net of federal benefit (provision) | (4,005) | (10,960) | (6,205) |
Permanent differences | (2,233) | (806) | (1,447) |
Tax credits, including withholding tax | 3,699 | 4,573 | 1,137 |
Valuation allowance | (21,359) | (23,346) | (36,491) |
Rates different than statutory | 9,753 | 10,164 | 9,725 |
Other | 308 | (1,513) | (501) |
Total income tax benefit (provision), net | $ (54,441) | $ (57,111) | $ (42,118) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating losses, credit and other carryforwards | $ 119,594 | $ 121,021 |
Other investments | 11,648 | 8,890 |
Accrued expenses | 53,324 | 30,973 |
Stock-based compensation | 5,645 | 6,833 |
Other assets | 32,824 | 8,985 |
Total deferred tax assets | 223,035 | 176,702 |
Valuation allowance | (153,233) | (139,727) |
Deferred tax assets after valuation allowance | 69,802 | 36,975 |
Deferred tax liabilities: | ||
Property and equipment, regulatory authorizations, and other intangibles | (332,884) | (338,130) |
Other liabilities | (18,853) | (27,840) |
Total deferred tax liabilities | (351,737) | (365,970) |
Deferred tax assets after valuation allowance | 69,802 | 36,975 |
Total net deferred tax liabilities | (281,935) | (328,995) |
Foreign | ||
Deferred tax assets: | ||
Deferred tax assets after valuation allowance | 6,277 | 5,267 |
Deferred tax liabilities: | ||
Deferred tax assets after valuation allowance | 6,277 | 5,267 |
Federal | ||
Deferred tax liabilities: | ||
Total net deferred tax liabilities | $ (288,212) | $ (334,262) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | $ (153,233,000) | $ (139,727,000) |
Provision for U.S. income taxes or foreign withholding taxes | 0 | |
Deferred tax in foreign subsidiaries | 7,800,000 | 5,400,000 |
Unrecognized tax benefits if recognized, could affect our effective tax rate | 7,200,000 | $ 7,200,000 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 406,800,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Unrecognized tax benefit balance as of beginning of period: | |||
Balance as of beginning of period | $ 7,294 | $ 7,294 | $ 7,866 |
Reductions based on tax positions related to prior years | (122) | 0 | (572) |
Balance as of end of period | $ 7,172 | $ 7,294 | $ 7,294 |
EMPLOYEE BENEFIT PLANS - Employ
EMPLOYEE BENEFIT PLANS - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee benefit plans | |||
Required service period | 3 months | ||
Class A common stock | |||
Employee benefit plans | |||
Maximum fair value of capital stock permitted to be purchased by employees in any one year under ESPP | $ 25,000 | ||
Purchase price as percentage of closing market price on the last business day of each calendar quarter under ESPP | 85% | ||
Employee purchases of common stock under ESPP (in shares) | 580,000 | 446,000 | 452,000 |
Class A common stock | EchoStar | |||
Employee benefit plans | |||
Number of shares authorized for issue (in shares) | 5,000,000 | ||
Number of shares that remain available for issuance (in shares) | 700,000 |
EMPLOYEE BENEFIT PLANS - 401(k)
EMPLOYEE BENEFIT PLANS - 401(k) Employee Savings Plans (Details) - EchoStar 401(k) Plan - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee benefit plans | |||
Contribution limit per employee, as a percentage of eligible compensation | 75% | ||
Employer matching contribution as a percentage of voluntary employee contributions under 401(k) plan | 50% | ||
Percentage of eligible compensation, matched 50% by employer | 6% | ||
Percentage of eligible compensation, matched 100% by employer | 3% | ||
Employer maximum annual contribution per employee under 401(k) plan | $ 7,500 | ||
Vesting percentage of matching contributions to eligible employees per year | 20% | ||
Vesting percentage of matching contributions to eligible employees after specified period of service | 100% | ||
Eligibility for employer matching contributions, period of service | 5 years | ||
Matching contributions | $ 5,475,000 | $ 5,434,000 | $ 5,239,000 |
Fair value of EchoStar discretionary contributions of its Class A common stock, net of forfeitures, under 401(k) plan | $ 7,042,000 | $ 7,125,000 | $ 6,921,000 |
RELATED PARTY TRANSACTIONS - _4
RELATED PARTY TRANSACTIONS - ECHOSTAR - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Mar. 17, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related party transactions | ||||
Dividend paid to EchoStar | $ 100,000 | $ 100,000 | $ 100,000 | |
Maximum | Related-party advances | One-year LIBOR | ||||
Related party transactions | ||||
Annual rates | 3% | |||
EchoStar | ||||
Related party transactions | ||||
Related party transaction, amounts of transaction | $ 14,200 | 2,800 | $ 7,500 | |
Revenue from related parties | 17,623 | 21,206 | 20,287 | |
EchoStar Mobile Limited | ||||
Related party transactions | ||||
Revenue from related parties | $ 17,600 | 21,200 | 20,300 | |
Interest rate on converted receivables loan | 5% | |||
EOC | Construction Management Services | ||||
Related party transactions | ||||
Related party costs | $ 1,600 | $ 1,600 | $ 1,500 |
RELATED PARTY TRANSACTIONS - _5
RELATED PARTY TRANSACTIONS - ECHOSTAR - Services and Other Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related party transactions | |||
Related party receivables - EchoStar - non-current | $ 55,834 | $ 56,055 | |
EchoStar | |||
Related party transactions | |||
Services and other revenue - EchoStar | 17,623 | 21,206 | $ 20,287 |
Related party receivables - EchoStar - current | 112,985 | 122,619 | |
Related party receivables - EchoStar - non-current | 55,834 | 56,055 | |
Total related party receivables - EchoStar | $ 168,819 | $ 178,674 |
RELATED PARTY TRANSACTIONS - _6
RELATED PARTY TRANSACTIONS - ECHOSTAR - Echostar - Operating Expenses (Details) - EchoStar - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related party transactions | |||
Operating expenses - EchoStar | $ 75,462 | $ 56,430 | $ 56,859 |
Related party payables - EchoStar - current | 216,504 | 124,578 | |
Related party payables - EchoStar - non-current | 23,423 | 24,118 | |
Total related party payables - EchoStar | $ 239,927 | $ 148,696 |
RELATED PARTY TRANSACTIONS - _7
RELATED PARTY TRANSACTIONS - DISH NETWORK - Overview (Details) - $ / shares | 1 Months Ended | ||||
Sep. 30, 2019 | May 31, 2019 | Feb. 28, 2017 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related party transactions | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Common Stock | BSS Corp. | |||||
Related party transactions | |||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Share of BSS common stock issued for each share of Echostar Class A or Class B common stock (in shares) | 1 | ||||
Common Stock | DISH Network | |||||
Related party transactions | |||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Class A common stock | DISH Network | |||||
Related party transactions | |||||
Entity shares issued per acquiree share (in shares) | 0.23523769 | 0.23523769 | |||
DISH Network | Share Exchange Agreement | EchoStar Technologies segment | |||||
Related party transactions | |||||
Ownership interest acquired by related party (as a percent) | 100% | ||||
DISH Network | Hughes Retail Preferred Tracking Stock | Hughes Retail Group | Satellite and Tracking Stock Transaction | |||||
Related party transactions | |||||
Percentage of economic interest held | 80% |
RELATED PARTY TRANSACTIONS - _8
RELATED PARTY TRANSACTIONS - DISH NETWORK - Services and Other Revenue - DISH Network (Details) - DISH Network - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related party transactions | |||
Services and other revenue - DISH Network | $ 17,832 | $ 21,718 | $ 25,930 |
Trade accounts receivable - DISH Network | $ 1,992 | $ 3,457 |
RELATED PARTY TRANSACTIONS - _9
RELATED PARTY TRANSACTIONS - DISH NETWORK - Telesat Obligation Agreement (Details) | 1 Months Ended |
Sep. 30, 2009 transponder | |
TeleSat Transponder Agreement | Telesat Canada | |
Related party transactions | |
Number of transponders | 32 |
DISH Nimiq 5 Agreement | DISH Network | |
Related party transactions | |
Number of transponders | 32 |
RELATED PARTY TRANSACTIONS -_10
RELATED PARTY TRANSACTIONS - DISH NETWORK - TerreStar Agreement (Details) - DISH Network - TerreStar Agreement | 1 Months Ended |
Dec. 31, 2017 | |
Related party transactions | |
Minimum termination notice period (days) | 21 days |
Required minimum notice for termination of agreement (days) | 90 days |
RELATED PARTY TRANSACTIONS -_11
RELATED PARTY TRANSACTIONS - DISH NETWORK - Hughes Broadband Distribution Agreement (Details) - Hughes Broadband Distribution Agreement | 1 Months Ended |
Oct. 31, 2012 | |
Related party transactions | |
Agreement term (in years) | 5 years |
Automatic renewal period (in years) | 1 year |
Required minimum notice for termination of agreement (days) | 180 days |
RELATED PARTY TRANSACTIONS -_12
RELATED PARTY TRANSACTIONS - DISH NETWORK - DBSD North America Agreement (Details) - DISH Network - DBSD North America Agreement | 1 Months Ended | |
Feb. 28, 2019 | Dec. 31, 2017 | |
Related party transactions | ||
Minimum termination notice period (days) | 180 days | |
Quarter to Quarter | ||
Related party transactions | ||
Required minimum notice for termination of agreement (days) | 120 days | |
Month to Month Basis | ||
Related party transactions | ||
Minimum termination notice period (days) | 21 days |
RELATED PARTY TRANSACTIONS -_13
RELATED PARTY TRANSACTIONS - DISH NETWORK - Hughes Equipment and Services Agreement (Details) - DISH Network - Hughes Equipment And Service Agreement | 1 Months Ended |
Feb. 28, 2019 | |
Related party transactions | |
Agreement term (in years) | 5 years |
Automatic renewal period (in years) | 1 year |
Required minimum notice for termination of agreement (days) | 180 days |
Minimum termination notice period (days) | 365 days |
RELATED PARTY TRANSACTIONS -_14
RELATED PARTY TRANSACTIONS - DISH NETWORK - Operating Expenses - DISH Network (Details) - DISH Network - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related party transactions | |||
Operating expenses - DISH Network | $ 4,545 | $ 4,813 | $ 4,734 |
Trade accounts payable - DISH Network | $ 567 | $ 587 |
RELATED PARTY TRANSACTIONS -_15
RELATED PARTY TRANSACTIONS - DISH NETWORK - Amended and Restated Professional Services Agreement (Details) - DISH Network | 1 Months Ended |
Jan. 31, 2010 | |
Amended and Restated Professional Services Agreement | |
Related party transactions | |
Automatic renewal period (in years) | 1 year |
EchoStar Amended and Restated Professional Services Agreement | |
Related party transactions | |
Required minimum notice for termination of agreement (days) | 60 days |
Required minimum notice for termination of individual service (days) | 30 days |
RELATED PARTY TRANSACTIONS -_16
RELATED PARTY TRANSACTIONS - DISH NETWORK - Collocation and Antenna Space Agreement (Details) - DISH Network - Collocation and Antenna Space Agreements - renewal | 1 Months Ended | |||
Nov. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2019 | Jul. 31, 2015 | |
Related party transactions | ||||
Number of renewal terms | 4 | |||
Term of renewal option (in years) | 3 years | 3 years | ||
Termination notice required (months) | 180 days | |||
Cheyenne, Wyoming | ||||
Related party transactions | ||||
Number of renewal terms | 4 | |||
Term of renewal option (in years) | 3 years | |||
Agreement term (in years) | 5 years | |||
Cheyenne, Wyoming And Gilbert, Arizona | ||||
Related party transactions | ||||
Number of renewal terms | 4 | |||
Term of renewal option (in years) | 3 years | |||
Agreement term (in years) | 5 years | |||
Minimum | ||||
Related party transactions | ||||
Required renewal notice (days) | 90 days | |||
Minimum | Cheyenne, Wyoming | ||||
Related party transactions | ||||
Required renewal notice (days) | 90 days | |||
Minimum | Cheyenne, Wyoming And Gilbert, Arizona | ||||
Related party transactions | ||||
Required renewal notice (days) | 90 days | |||
Maximum | ||||
Related party transactions | ||||
Required renewal notice (days) | 120 days | |||
Maximum | Cheyenne, Wyoming | ||||
Related party transactions | ||||
Required renewal notice (days) | 120 days | |||
Maximum | Cheyenne, Wyoming And Gilbert, Arizona | ||||
Related party transactions | ||||
Required renewal notice (days) | 120 days |
RELATED PARTY TRANSACTIONS -_17
RELATED PARTY TRANSACTIONS - DISH NETWORK - Hughes Broadband and Master Services Agreement (Details) - DISH Network - Hughes Broadband Master Services Agreement - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related party transactions | ||||
Automatic renewal period (in years) | 1 year | |||
Required minimum notice for termination of agreement (days) | 90 days | |||
Cost of sales | $ 6.8 | $ 8.4 | $ 16.6 |
RELATED PARTY TRANSACTIONS -_18
RELATED PARTY TRANSACTIONS - DISH NETWORK - 2019 TT&C Agreement (Details) - DISH Network - TT&C Agreement | 1 Months Ended | |
Jun. 30, 2021 | Sep. 30, 2019 | |
Related party transactions | ||
Term of renewal option (in years) | 3 years | 1 year |
Required renewal notice (days) | 90 days | |
Termination notice required (months) | 12 months |
RELATED PARTY TRANSACTIONS -_19
RELATED PARTY TRANSACTIONS - DISH NETWORK - Referral Marketing Agreement (Details) | 1 Months Ended |
Jun. 30, 2021 | |
DISH Network | Referral Marketing Agreement | |
Related party transactions | |
Termination notice | 90 days |
RELATED PARTY TRANSACTIONS -_20
RELATED PARTY TRANSACTIONS - DISH NETWORK - Other Agreements (Details) - shares | 1 Months Ended | |
Sep. 30, 2019 | May 31, 2019 | |
Class A common stock | DISH Network | ||
Related party transactions | ||
Entity shares issued per acquiree share (in shares) | 0.23523769 | 0.23523769 |
RELATED PARTY TRANSACTIONS -_21
RELATED PARTY TRANSACTIONS - OTHER (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Hughes Systique | |||
Related party transactions | |||
Ownership interest in related party (as a percent) | 42% | ||
Ownership interest percentage by related party | 25% | ||
TerreStar Solutions, Inc. | |||
Related party transactions | |||
Investment nonvoting interest ownership percentage(at least) | 15% | ||
Services and other revenue - DISH Network | $ 2 | $ 1.9 | $ 4.4 |
Trade accounts receivable - DISH Network | $ 0.5 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Schedule of Commitments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Payments Due in the Years Ending December 31, | |
Total future minimum lease payments | $ 200,530 |
2023 | 24,983 |
2024 | 23,063 |
2025 | 19,470 |
2026 | 18,684 |
2027 | 17,168 |
Thereafter | 97,162 |
Continuing Operations | |
Payments Due in the Years Ending December 31, | |
Contractual obligation, Total | 2,200,296 |
2023 | 157,775 |
2024 | 129,863 |
2025 | 125,884 |
2026 | 1,623,836 |
2027 | 31,561 |
Thereafter | 131,377 |
Payments Due in the Years Ending December 31, | |
Total future minimum lease payments | 200,528 |
2023 | 24,983 |
2024 | 23,063 |
2025 | 19,470 |
2026 | 18,684 |
2027 | 17,168 |
Thereafter | 97,160 |
Long-term debt | Continuing Operations | |
Payments Due in the Years Ending December 31, | |
Contractual obligation, Total | 1,500,000 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 | 1,500,000 |
2027 | 0 |
Thereafter | 0 |
Interest on long-term debt | Continuing Operations | |
Payments Due in the Years Ending December 31, | |
Contractual obligation, Total | 356,252 |
2023 | 89,063 |
2024 | 89,063 |
2025 | 89,063 |
2026 | 89,063 |
2027 | 0 |
Thereafter | 0 |
Satellite-related obligations | Continuing Operations | |
Payments Due in the Years Ending December 31, | |
Contractual obligation, Total | 143,516 |
2023 | 43,729 |
2024 | 17,737 |
2025 | 17,351 |
2026 | 16,089 |
2027 | 14,393 |
Thereafter | $ 34,217 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | Sep. 01, 2020 |
License Fee Dispute | |
Loss Contingencies [Line Items] | |
Payment schedule term | 10 years |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Accrual For License Fees (Details) - License Fee Dispute - Hughes Network Systems - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Loss Contingencies [Line Items] | |||
Total accrual | $ 67,483 | $ 80,662 | |
Less: Payments | $ (8,451) | (17,785) | |
Less: Current portion | 10,191 | 11,178 | |
Total long-term accrual | 57,292 | 69,484 | |
Additional license fees | |||
Loss Contingencies [Line Items] | |||
Total accrual | 3,425 | 3,812 | |
Penalties | |||
Loss Contingencies [Line Items] | |||
Total accrual | 3,516 | 3,912 | |
Interest and interest on penalties | |||
Loss Contingencies [Line Items] | |||
Total accrual | $ 78,327 | $ 81,389 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Segment Reporting [Abstract] | |
Number of business segments | 2 |
SEGMENT REPORTING - Schedule of
SEGMENT REPORTING - Schedule of Revenue, EBITDA, and Capital Expenditures by Operating Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting | |||
Total revenue | $ 2,003,343 | $ 1,994,726 | $ 1,897,358 |
Capital expenditures | 239,403 | 296,303 | 355,238 |
EBITDA | 696,493 | 760,381 | 703,983 |
Hughes | |||
Segment Reporting | |||
Total revenue | 1,966,587 | 1,956,226 | 1,860,834 |
ESS | |||
Segment Reporting | |||
Total revenue | 19,132 | 17,295 | 16,237 |
All Other Segments and Eliminations | |||
Segment Reporting | |||
Total revenue | 17,624 | 21,205 | 20,287 |
Intersegment revenue | |||
Segment Reporting | |||
Total revenue | (1,401) | (384) | (1,161) |
Intersegment revenue | Hughes | |||
Segment Reporting | |||
Total revenue | 0 | 0 | 0 |
Intersegment revenue | ESS | |||
Segment Reporting | |||
Total revenue | 1,401 | 384 | 1,161 |
Operating segments | Hughes | |||
Segment Reporting | |||
Total revenue | 1,966,587 | 1,956,226 | 1,860,834 |
Capital expenditures | 239,403 | 296,303 | 355,197 |
EBITDA | 732,929 | 781,824 | 727,608 |
Operating segments | ESS | |||
Segment Reporting | |||
Total revenue | 20,533 | 17,679 | 17,398 |
Capital expenditures | 0 | 0 | 41 |
EBITDA | 14,416 | 9,185 | 7,873 |
Corporate, Non-Segment | |||
Segment Reporting | |||
Total revenue | 16,223 | 20,821 | 19,126 |
Capital expenditures | 0 | 0 | 0 |
EBITDA | $ (50,852) | $ (30,628) | $ (31,498) |
SEGMENT REPORTING- Schedule of
SEGMENT REPORTING- Schedule of Reconciliation of EBITDA to Reported Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting [Abstract] | |||
Income (loss) before income taxes | $ 193,351 | $ 167,728 | $ 39,689 |
Interest income, net | (30,812) | (8,146) | (18,802) |
Interest expense, net of amounts capitalized | 92,386 | 126,499 | 172,466 |
Depreciation and amortization | 431,065 | 464,146 | 498,876 |
Net loss (income) attributable to non-controlling interests | 10,503 | 10,154 | 11,754 |
EBITDA | $ 696,493 | $ 760,381 | $ 703,983 |
Segment Reporting - Geographic
Segment Reporting - Geographic Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Geographic Information | ||
Long-lived assets | $ 2,332,812 | $ 2,457,476 |
North America | ||
Geographic Information | ||
Long-lived assets | 2,075,373 | 2,148,052 |
South and Central America | ||
Geographic Information | ||
Long-lived assets | 206,556 | 267,429 |
Other | ||
Geographic Information | ||
Long-lived assets | $ 50,883 | $ 41,995 |
SUPPLEMENTAL FINANCIAL INFORM_3
SUPPLEMENTAL FINANCIAL INFORMATION - Schedule of Research and Development Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Research and development expenses | $ 32,810 | $ 31,777 | $ 29,448 |
Cost of sales - equipment | |||
Research and development expenses | 31,781 | 29,636 | 19,788 |
Research and development expenses | |||
Research and development expenses | $ 32,810 | $ 31,777 | $ 29,448 |
SUPPLEMENTAL FINANCIAL INFORM_4
SUPPLEMENTAL FINANCIAL INFORMATION - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Selling, general and administrative expenses | |||
Condensed Financial Statements, Captions [Line Items] | |||
Advertising expense | $ 69,000 | $ 82,400 | $ 65,100 |
SUPPLEMENTAL FINANCIAL INFORM_5
SUPPLEMENTAL FINANCIAL INFORMATION - Reconciliation of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 653,132 | $ 429,168 | $ 740,490 | $ 1,139,435 |
Restricted cash | 1,341 | 980 | 807 | 887 |
Total cash and cash equivalents, included restricted amounts | $ 654,473 | $ 430,148 | $ 741,297 | $ 1,140,322 |
SUPPLEMENTAL FINANCIAL INFORM_6
SUPPLEMENTAL FINANCIAL INFORMATION - Schedule of Other Current Assets and Other Non-Current Assets, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Other current assets, net: | ||||
Inventory | $ 123,006 | $ 102,907 | ||
Prepaids and deposits | 23,948 | 27,737 | ||
Other, net | 13,271 | 20,124 | ||
Total other current assets | 275,202 | 276,844 | ||
Other non-current assets, net: | ||||
Capitalized software, net | 116,844 | 124,701 | ||
Contract acquisition costs, net | 64,447 | 82,986 | $ 99,837 | $ 113,592 |
Related party receivables - EchoStar | 55,834 | 56,055 | ||
Deferred tax assets, net | 7,822 | 5,411 | ||
Restricted cash | 1,341 | 980 | ||
Contract fulfillment costs, net | 1,931 | 1,721 | ||
Other, net | 37,658 | 30,986 | ||
Total other non-current assets, net | 285,877 | 302,840 | $ 251,936 | |
EchoStar | ||||
Other current assets, net: | ||||
Related party receivables | 112,985 | 122,619 | ||
DISH Network | ||||
Other current assets, net: | ||||
Related party receivables | $ 1,992 | $ 3,457 |
SUPPLEMENTAL FINANCIAL INFORM_7
SUPPLEMENTAL FINANCIAL INFORMATION - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of period | $ 14,588 | $ 15,386 | $ 23,777 | |
Credit losses | 32,910 | 22,591 | 18,582 | |
Foreign currency translation | 3,871 | 154 | (942) | |
Deductions | (36,011) | (23,543) | (26,031) | |
Balance at end of period | 15,358 | 14,588 | 15,386 | |
Adoption of ASC 326 Increase (Decrease) | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Other current assets, net and other non-current assets, net | $ 13,400 | |||
Other current assets, net | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of period | 0 | 1,747 | 0 | |
Credit losses | 0 | 0 | 1,595 | |
Foreign currency translation | 0 | (1,747) | 152 | |
Deductions | 0 | 0 | 0 | |
Balance at end of period | 0 | 0 | 1,747 | |
Other non-current assets, net | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of period | 16,709 | 12,869 | 0 | |
Credit losses | 0 | 3,328 | 13,378 | |
Foreign currency translation | 0 | 1,159 | (509) | |
Deductions | 0 | (647) | 0 | |
Balance at end of period | $ 16,709 | $ 16,709 | $ 12,869 |
SUPPLEMENTAL FINANCIAL INFORM_8
SUPPLEMENTAL FINANCIAL INFORMATION - Accrued Expenses and Other Current Liabilities and Other Non-current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued expenses and other current liabilities: | ||
Accrued compensation | $ 40,684 | $ 45,630 |
Operating lease obligation | 17,766 | 16,697 |
Accrued interest | 39,194 | 39,289 |
Accrued taxes | 10,631 | 9,790 |
Accrual for license fee dispute | 10,191 | 11,178 |
Other | 58,362 | 61,130 |
Accrued expenses and other current liabilities | 393,899 | 308,879 |
Other non-current liabilities: | ||
Accrual for license fee dispute | 57,292 | 69,484 |
Contract liabilities | 8,326 | 10,669 |
Other | 44,856 | 48,980 |
Total other non-current liabilities | 133,897 | 153,251 |
EchoStar | ||
Accrued expenses and other current liabilities: | ||
Trade accounts payable - DISH Network | 216,504 | 124,578 |
Other non-current liabilities: | ||
Related party payables - EchoStar | 23,423 | 24,118 |
Contract liabilities | 8,326 | 10,669 |
DISH Network | ||
Accrued expenses and other current liabilities: | ||
Trade accounts payable - DISH Network | $ 567 | $ 587 |
SUPPLEMENTAL FINANCIAL INFORM_9
SUPPLEMENTAL FINANCIAL INFORMATION - Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 32,920 | $ 13,778 |
Work-in-process | 16,408 | 11,705 |
Finished goods | 73,678 | 77,424 |
Total inventory | $ 123,006 | $ 102,907 |
SUPPLEMENTAL FINANCIAL INFOR_10
SUPPLEMENTAL FINANCIAL INFORMATION - Capitalized Software Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Financial Statements, Captions [Line Items] | |||
Net carrying amount of externally marketed software | $ 116,844 | $ 124,701 | |
Other non-current assets, net | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net carrying amount of externally marketed software | 116,841 | 124,701 | |
Externally marketed software under development and not yet placed into service | 26,924 | 57,357 | |
Capitalized costs related to development of externally marketed software | 23,105 | 33,543 | $ 38,655 |
Amortization expense relating to externally marketed software | $ 30,965 | $ 25,288 | $ 23,780 |
Weighted-average | |||
Condensed Financial Statements, Captions [Line Items] | |||
Weighted-average useful life (in years) | 4 years |
SUPPLEMENTAL FINANCIAL INFOR_11
SUPPLEMENTAL FINANCIAL INFORMATION - Schedule of Noncash Investing and Financing Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest, net of amounts capitalized | $ 91,583 | $ 118,638 | $ 162,692 |
Cash paid for income taxes | 12,538 | 10,641 | 9,094 |
Non-cash investing and financing activities: | |||
Increase (decrease) in capital expenditures included in accounts payable, net | 8,001 | (347) | (6,198) |
Non-cash net assets received as part of the India JV formation | $ 36,701 | $ 0 | $ 0 |
SUPPLEMENTAL GUARANTOR AND NO_3
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||||
Cash and cash equivalents | $ 653,132 | $ 429,168 | $ 740,490 | $ 1,139,435 |
Marketable investment securities | 799,769 | 854,502 | ||
Trade accounts receivable and contract assets, net | 236,336 | 182,063 | 196,520 | |
Other current assets, net | 275,202 | 276,844 | ||
Total current assets | 1,964,439 | 1,742,577 | ||
Non-current assets: | ||||
Property and equipment, net | 1,376,004 | 1,523,447 | ||
Operating lease right-of-use assets | 150,632 | 148,221 | ||
Goodwill | 532,491 | 511,086 | 511,597 | 506,953 |
Regulatory authorizations, net | 408,619 | 408,959 | 410,451 | 412,363 |
Other intangible assets, net | 15,698 | 13,984 | ||
Other investments, net | 83,523 | 91,226 | ||
Investment in subsidiaries | 0 | 0 | ||
Other non-current assets, net | 285,877 | 302,840 | 251,936 | |
Total non-current assets | 2,852,844 | 2,999,763 | ||
Total assets | 4,817,283 | 4,742,340 | 5,572,035 | |
Current liabilities: | ||||
Trade accounts payable | 98,229 | 105,477 | ||
Contract liabilities | 121,739 | 141,343 | ||
Accrued expenses and other current liabilities | 393,899 | 308,879 | ||
Total current liabilities | 613,867 | 555,699 | ||
Non-current liabilities: | ||||
Long-term debt, net | 1,496,777 | 1,495,994 | ||
Deferred tax liabilities, net | 289,757 | 334,406 | 380,316 | |
Operating lease liabilities | 135,122 | 134,001 | ||
Other non-current liabilities | 133,897 | 153,251 | ||
Total non-current liabilities | 2,055,553 | 2,117,652 | ||
Total liabilities | 2,669,420 | 2,673,351 | ||
Shareholder's equity: | ||||
Total Hughes Satellite Systems Corporation shareholder's equity | 2,051,427 | 2,008,736 | ||
Non-controlling interests | 96,436 | 60,253 | 75,748 | |
Total shareholder's equity | 2,147,863 | 2,068,989 | $ 2,076,376 | 2,134,163 |
Total liabilities and shareholder's equity | 4,817,283 | 4,742,340 | $ 5,572,035 | |
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Marketable investment securities | 0 | 0 | ||
Trade accounts receivable and contract assets, net | 0 | 0 | ||
Other current assets, net | (1,340,303) | (1,044,495) | ||
Total current assets | (1,340,303) | (1,044,495) | ||
Non-current assets: | ||||
Property and equipment, net | 0 | 0 | ||
Operating lease right-of-use assets | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Regulatory authorizations, net | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other investments, net | 0 | 0 | ||
Investment in subsidiaries | (3,671,102) | (3,419,137) | ||
Other non-current assets, net | (140,289) | (94,805) | ||
Total non-current assets | (3,811,391) | (3,513,942) | ||
Total assets | (5,151,694) | (4,558,437) | ||
Current liabilities: | ||||
Trade accounts payable | 0 | 0 | ||
Contract liabilities | 0 | 0 | ||
Accrued expenses and other current liabilities | (1,340,303) | (1,044,495) | ||
Total current liabilities | (1,340,303) | (1,044,495) | ||
Non-current liabilities: | ||||
Long-term debt, net | 0 | 0 | ||
Deferred tax liabilities, net | (410) | 0 | ||
Operating lease liabilities | 0 | 0 | ||
Other non-current liabilities | (139,879) | (94,804) | ||
Total non-current liabilities | (140,289) | (94,804) | ||
Total liabilities | (1,480,592) | (1,139,299) | ||
Shareholder's equity: | ||||
Total Hughes Satellite Systems Corporation shareholder's equity | (3,671,102) | (3,419,138) | ||
Non-controlling interests | 0 | 0 | ||
Total shareholder's equity | (3,671,102) | (3,419,138) | ||
Total liabilities and shareholder's equity | (5,151,694) | (4,558,437) | ||
Hughes Satellite Systems Corporation | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 547,605 | 324,764 | ||
Marketable investment securities | 799,769 | 854,502 | ||
Trade accounts receivable and contract assets, net | 0 | 0 | ||
Other current assets, net | 71 | 170,283 | ||
Total current assets | 1,347,445 | 1,349,549 | ||
Non-current assets: | ||||
Property and equipment, net | 0 | 0 | ||
Operating lease right-of-use assets | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Regulatory authorizations, net | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other investments, net | 8,920 | 0 | ||
Investment in subsidiaries | 3,312,961 | 3,126,926 | ||
Other non-current assets, net | 1,095 | 1,191 | ||
Total non-current assets | 3,322,976 | 3,128,117 | ||
Total assets | 4,670,421 | 4,477,666 | ||
Current liabilities: | ||||
Trade accounts payable | 477 | 0 | ||
Contract liabilities | 0 | 0 | ||
Accrued expenses and other current liabilities | 1,121,740 | 972,936 | ||
Total current liabilities | 1,122,217 | 972,936 | ||
Non-current liabilities: | ||||
Long-term debt, net | 1,496,777 | 1,495,994 | ||
Deferred tax liabilities, net | 0 | 0 | ||
Operating lease liabilities | 0 | 0 | ||
Other non-current liabilities | 0 | 0 | ||
Total non-current liabilities | 1,496,777 | 1,495,994 | ||
Total liabilities | 2,618,994 | 2,468,930 | ||
Shareholder's equity: | ||||
Total Hughes Satellite Systems Corporation shareholder's equity | 2,051,427 | 2,008,736 | ||
Non-controlling interests | 0 | 0 | ||
Total shareholder's equity | 2,051,427 | 2,008,736 | ||
Total liabilities and shareholder's equity | 4,670,421 | 4,477,666 | ||
Guarantor Subsidiaries | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 25,318 | 42,550 | ||
Marketable investment securities | 0 | 0 | ||
Trade accounts receivable and contract assets, net | 168,484 | 127,350 | ||
Other current assets, net | 1,330,813 | 1,056,871 | ||
Total current assets | 1,524,615 | 1,226,771 | ||
Non-current assets: | ||||
Property and equipment, net | 1,140,294 | 1,209,859 | ||
Operating lease right-of-use assets | 121,609 | 117,912 | ||
Goodwill | 504,173 | 504,173 | ||
Regulatory authorizations, net | 400,000 | 400,000 | ||
Other intangible assets, net | 12,499 | 13,984 | ||
Other investments, net | 0 | 9,600 | ||
Investment in subsidiaries | 358,141 | 292,211 | ||
Other non-current assets, net | 261,906 | 299,149 | ||
Total non-current assets | 2,798,622 | 2,846,888 | ||
Total assets | 4,323,237 | 4,073,659 | ||
Current liabilities: | ||||
Trade accounts payable | 85,327 | 92,156 | ||
Contract liabilities | 115,893 | 134,474 | ||
Accrued expenses and other current liabilities | 296,666 | 218,463 | ||
Total current liabilities | 497,886 | 445,093 | ||
Non-current liabilities: | ||||
Long-term debt, net | 0 | 0 | ||
Deferred tax liabilities, net | 288,716 | 334,148 | ||
Operating lease liabilities | 111,052 | 108,431 | ||
Other non-current liabilities | 113,183 | 59,623 | ||
Total non-current liabilities | 512,951 | 502,202 | ||
Total liabilities | 1,010,837 | 947,295 | ||
Shareholder's equity: | ||||
Total Hughes Satellite Systems Corporation shareholder's equity | 3,312,400 | 3,126,364 | ||
Non-controlling interests | 0 | 0 | ||
Total shareholder's equity | 3,312,400 | 3,126,364 | ||
Total liabilities and shareholder's equity | 4,323,237 | 4,073,659 | ||
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 80,209 | 61,854 | ||
Marketable investment securities | 0 | 0 | ||
Trade accounts receivable and contract assets, net | 67,852 | 54,713 | ||
Other current assets, net | 284,621 | 94,185 | ||
Total current assets | 432,682 | 210,752 | ||
Non-current assets: | ||||
Property and equipment, net | 235,710 | 313,588 | ||
Operating lease right-of-use assets | 29,023 | 30,309 | ||
Goodwill | 28,318 | 6,913 | ||
Regulatory authorizations, net | 8,619 | 8,959 | ||
Other intangible assets, net | 3,199 | 0 | ||
Other investments, net | 74,603 | 81,626 | ||
Investment in subsidiaries | 0 | 0 | ||
Other non-current assets, net | 163,165 | 97,305 | ||
Total non-current assets | 542,637 | 538,700 | ||
Total assets | 975,319 | 749,452 | ||
Current liabilities: | ||||
Trade accounts payable | 12,425 | 13,321 | ||
Contract liabilities | 5,846 | 6,869 | ||
Accrued expenses and other current liabilities | 315,796 | 161,975 | ||
Total current liabilities | 334,067 | 182,165 | ||
Non-current liabilities: | ||||
Long-term debt, net | 0 | 0 | ||
Deferred tax liabilities, net | 1,451 | 258 | ||
Operating lease liabilities | 24,070 | 25,570 | ||
Other non-current liabilities | 160,593 | 188,432 | ||
Total non-current liabilities | 186,114 | 214,260 | ||
Total liabilities | 520,181 | 396,425 | ||
Shareholder's equity: | ||||
Total Hughes Satellite Systems Corporation shareholder's equity | 358,702 | 292,774 | ||
Non-controlling interests | 96,436 | 60,253 | ||
Total shareholder's equity | 455,138 | 353,027 | ||
Total liabilities and shareholder's equity | $ 975,319 | $ 749,452 |
SUPPLEMENTAL GUARANTOR AND NO_4
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Consolidating Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | |||
Total revenue | $ 2,003,343 | $ 1,994,726 | $ 1,897,358 |
Costs and expenses: | |||
Selling, general and administrative expenses | 429,877 | 422,235 | 433,408 |
Research and development expenses | 32,810 | 31,777 | 29,448 |
Depreciation and amortization | 431,065 | 464,146 | 498,876 |
Impairment of long-lived assets | 0 | 210 | 0 |
Total costs and expenses | 1,748,891 | 1,695,243 | 1,700,798 |
Operating income (loss) | 254,452 | 299,483 | 196,560 |
Other income (expense): | |||
Interest income, net | 30,812 | 8,146 | 18,802 |
Interest expense, net of amounts capitalized | (92,386) | (126,499) | (172,466) |
Gains (losses) on investments, net | 245 | 2,103 | (232) |
Equity in earnings (losses) of unconsolidated affiliates, net | (5,703) | (5,347) | (6,116) |
Equity in earnings (losses) of subsidiaries, net | 0 | 0 | 0 |
Foreign currency transaction gains (losses), net | 6,016 | (11,494) | 3,427 |
Other, net | (85) | 1,336 | (286) |
Total other income (expense), net | (61,101) | (131,755) | (156,871) |
Income (loss) before income taxes | 193,351 | 167,728 | 39,689 |
Income tax benefit (provision), net | (54,441) | (57,111) | (42,118) |
Net income (loss) | 138,910 | 110,617 | (2,429) |
Less: Net loss (income) attributable to non-controlling interests | 10,503 | 10,154 | 11,754 |
Net income (loss) attributable to HSSC | 149,413 | 120,771 | 9,325 |
Comprehensive income (loss): | |||
Net income (loss) | 138,910 | 110,617 | (2,429) |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 5,475 | (31,317) | (77,646) |
Unrealized gains (losses) on available-for-sale securities | (553) | 490 | (192) |
Other | 0 | (98) | (4) |
Amounts reclassified to net income (loss): | |||
Realized losses (gains) on available-for-sale debt securities | (17) | (5) | (1) |
Equity in other comprehensive income (loss) of subsidiaries, net | 0 | 0 | 0 |
Total other comprehensive income (loss), net of tax | 4,905 | (30,930) | (77,843) |
Comprehensive income (loss) | 143,815 | 79,687 | (80,272) |
Less: Comprehensive loss (income) attributable to non-controlling interests | 8,795 | 14,543 | 27,392 |
Comprehensive income (loss) attributable to HSSC | 152,610 | 94,230 | (52,880) |
Eliminations | |||
Revenue: | |||
Total revenue | (46,101) | (62,362) | (112,358) |
Costs and expenses: | |||
Selling, general and administrative expenses | (1,908) | (1,677) | (1,619) |
Research and development expenses | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 |
Impairment of long-lived assets | 0 | 0 | |
Total costs and expenses | (46,101) | (62,362) | (112,358) |
Operating income (loss) | 0 | 0 | 0 |
Other income (expense): | |||
Interest income, net | (4,989) | (4,951) | (3,801) |
Interest expense, net of amounts capitalized | 4,989 | 4,951 | 3,801 |
Gains (losses) on investments, net | 0 | 0 | 0 |
Equity in earnings (losses) of unconsolidated affiliates, net | 0 | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | (139,452) | (142,812) | (52,772) |
Foreign currency transaction gains (losses), net | 0 | 0 | 0 |
Other, net | 0 | 0 | 0 |
Total other income (expense), net | (139,452) | (142,812) | (52,772) |
Income (loss) before income taxes | (139,452) | (142,812) | (52,772) |
Income tax benefit (provision), net | 0 | 0 | 0 |
Net income (loss) | (139,452) | (142,812) | (52,772) |
Less: Net loss (income) attributable to non-controlling interests | 0 | 0 | 0 |
Net income (loss) attributable to HSSC | (139,452) | (142,812) | (52,772) |
Comprehensive income (loss): | |||
Net income (loss) | (139,452) | (142,812) | (52,772) |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 0 | 0 | 0 |
Unrealized gains (losses) on available-for-sale securities | 0 | 0 | 0 |
Other | 0 | 0 | |
Amounts reclassified to net income (loss): | |||
Realized losses (gains) on available-for-sale debt securities | 0 | 0 | 0 |
Equity in other comprehensive income (loss) of subsidiaries, net | (7,540) | 54,052 | 124,024 |
Total other comprehensive income (loss), net of tax | (7,540) | 54,052 | 124,024 |
Comprehensive income (loss) | (146,992) | (88,760) | 71,252 |
Less: Comprehensive loss (income) attributable to non-controlling interests | 0 | 0 | 0 |
Comprehensive income (loss) attributable to HSSC | (146,992) | (88,760) | 71,252 |
Hughes Satellite Systems Corporation | Reportable Legal Entities | |||
Revenue: | |||
Total revenue | 0 | 0 | 0 |
Costs and expenses: | |||
Selling, general and administrative expenses | 0 | 0 | 0 |
Research and development expenses | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 |
Impairment of long-lived assets | 0 | 0 | |
Total costs and expenses | 0 | 0 | 0 |
Operating income (loss) | 0 | 0 | 0 |
Other income (expense): | |||
Interest income, net | 25,801 | 3,367 | 14,843 |
Interest expense, net of amounts capitalized | (89,846) | (120,635) | (162,012) |
Gains (losses) on investments, net | 28 | 2 | (82) |
Equity in earnings (losses) of unconsolidated affiliates, net | 880 | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | 193,023 | 207,895 | 121,688 |
Foreign currency transaction gains (losses), net | 0 | 0 | 0 |
Other, net | 0 | (1,938) | 0 |
Total other income (expense), net | 129,886 | 88,691 | (25,563) |
Income (loss) before income taxes | 129,886 | 88,691 | (25,563) |
Income tax benefit (provision), net | 19,527 | 32,080 | 34,888 |
Net income (loss) | 149,413 | 120,771 | 9,325 |
Less: Net loss (income) attributable to non-controlling interests | 0 | 0 | 0 |
Net income (loss) attributable to HSSC | 149,413 | 120,771 | 9,325 |
Comprehensive income (loss): | |||
Net income (loss) | 149,413 | 120,771 | 9,325 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 0 | 0 | 0 |
Unrealized gains (losses) on available-for-sale securities | (553) | 490 | (192) |
Other | 0 | 0 | |
Amounts reclassified to net income (loss): | |||
Realized losses (gains) on available-for-sale debt securities | (17) | (5) | (1) |
Equity in other comprehensive income (loss) of subsidiaries, net | 3,770 | (27,026) | (62,012) |
Total other comprehensive income (loss), net of tax | 3,200 | (26,541) | (62,205) |
Comprehensive income (loss) | 152,613 | 94,230 | (52,880) |
Less: Comprehensive loss (income) attributable to non-controlling interests | 0 | 0 | 0 |
Comprehensive income (loss) attributable to HSSC | 152,613 | 94,230 | (52,880) |
Guarantor Subsidiaries | Reportable Legal Entities | |||
Revenue: | |||
Total revenue | 1,697,438 | 1,713,099 | 1,708,270 |
Costs and expenses: | |||
Selling, general and administrative expenses | 346,392 | 331,973 | 359,151 |
Research and development expenses | 32,447 | 31,159 | 28,846 |
Depreciation and amortization | 293,330 | 333,618 | 391,319 |
Impairment of long-lived assets | 210 | 0 | |
Total costs and expenses | 1,376,908 | 1,368,922 | 1,446,208 |
Operating income (loss) | 320,530 | 344,177 | 262,062 |
Other income (expense): | |||
Interest income, net | 5,345 | 5,270 | 4,049 |
Interest expense, net of amounts capitalized | 4,170 | 1,189 | (2,691) |
Gains (losses) on investments, net | 217 | 2,101 | (150) |
Equity in earnings (losses) of unconsolidated affiliates, net | 440 | 1,714 | (6,116) |
Equity in earnings (losses) of subsidiaries, net | (53,571) | (65,083) | (68,916) |
Foreign currency transaction gains (losses), net | 6,704 | (72) | (269) |
Other, net | (28,397) | 3,380 | (645) |
Total other income (expense), net | (65,092) | (51,501) | (74,738) |
Income (loss) before income taxes | 255,438 | 292,676 | 187,324 |
Income tax benefit (provision), net | (62,415) | (84,781) | (65,435) |
Net income (loss) | 193,023 | 207,895 | 121,889 |
Less: Net loss (income) attributable to non-controlling interests | 0 | 0 | 0 |
Net income (loss) attributable to HSSC | 193,023 | 207,895 | 121,889 |
Comprehensive income (loss): | |||
Net income (loss) | 193,023 | 207,895 | 121,889 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 0 | 0 | 0 |
Unrealized gains (losses) on available-for-sale securities | 0 | 0 | 0 |
Other | 0 | 0 | |
Amounts reclassified to net income (loss): | |||
Realized losses (gains) on available-for-sale debt securities | 0 | 0 | 0 |
Equity in other comprehensive income (loss) of subsidiaries, net | 3,770 | (27,026) | (62,012) |
Total other comprehensive income (loss), net of tax | 3,770 | (27,026) | (62,012) |
Comprehensive income (loss) | 196,793 | 180,869 | 59,877 |
Less: Comprehensive loss (income) attributable to non-controlling interests | 0 | 0 | 0 |
Comprehensive income (loss) attributable to HSSC | 196,793 | 180,869 | 59,877 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
Revenue: | |||
Total revenue | 352,006 | 343,989 | 301,446 |
Costs and expenses: | |||
Selling, general and administrative expenses | 85,393 | 91,939 | 75,876 |
Research and development expenses | 363 | 618 | 602 |
Depreciation and amortization | 137,735 | 130,528 | 107,557 |
Impairment of long-lived assets | 0 | 0 | |
Total costs and expenses | 418,084 | 388,683 | 366,948 |
Operating income (loss) | (66,078) | (44,694) | (65,502) |
Other income (expense): | |||
Interest income, net | 4,655 | 4,460 | 3,711 |
Interest expense, net of amounts capitalized | (11,699) | (12,004) | (11,564) |
Gains (losses) on investments, net | 0 | 0 | 0 |
Equity in earnings (losses) of unconsolidated affiliates, net | (7,023) | (7,061) | 0 |
Equity in earnings (losses) of subsidiaries, net | 0 | 0 | 0 |
Foreign currency transaction gains (losses), net | (688) | (11,422) | 3,696 |
Other, net | 28,312 | (106) | 359 |
Total other income (expense), net | 13,557 | (26,133) | (3,798) |
Income (loss) before income taxes | (52,521) | (70,827) | (69,300) |
Income tax benefit (provision), net | (11,553) | (4,410) | (11,571) |
Net income (loss) | (64,074) | (75,237) | (80,871) |
Less: Net loss (income) attributable to non-controlling interests | 10,503 | 10,154 | 11,754 |
Net income (loss) attributable to HSSC | (53,571) | (65,083) | (69,117) |
Comprehensive income (loss): | |||
Net income (loss) | (64,074) | (75,237) | (80,871) |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 5,475 | (31,317) | (77,646) |
Unrealized gains (losses) on available-for-sale securities | 0 | 0 | 0 |
Other | (98) | (4) | |
Amounts reclassified to net income (loss): | |||
Realized losses (gains) on available-for-sale debt securities | 0 | 0 | 0 |
Equity in other comprehensive income (loss) of subsidiaries, net | 0 | 0 | 0 |
Total other comprehensive income (loss), net of tax | 5,475 | (31,415) | (77,650) |
Comprehensive income (loss) | (58,599) | (106,652) | (158,521) |
Less: Comprehensive loss (income) attributable to non-controlling interests | 8,795 | 14,543 | 27,392 |
Comprehensive income (loss) attributable to HSSC | (49,804) | (92,109) | (131,129) |
Services and other revenue | |||
Revenue: | |||
Total revenue | 1,629,194 | 1,724,299 | 1,691,757 |
Costs and expenses: | |||
Cost of sales | 562,849 | 544,915 | 572,637 |
Services and other revenue | Eliminations | |||
Revenue: | |||
Total revenue | (25,523) | (22,609) | (35,349) |
Costs and expenses: | |||
Cost of sales | (29,610) | (23,512) | (33,730) |
Services and other revenue | Hughes Satellite Systems Corporation | Reportable Legal Entities | |||
Revenue: | |||
Total revenue | 0 | 0 | 0 |
Costs and expenses: | |||
Cost of sales | 0 | 0 | 0 |
Services and other revenue | Guarantor Subsidiaries | Reportable Legal Entities | |||
Revenue: | |||
Total revenue | 1,336,782 | 1,428,960 | 1,452,180 |
Costs and expenses: | |||
Cost of sales | 419,074 | 420,767 | 443,806 |
Services and other revenue | Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
Revenue: | |||
Total revenue | 317,935 | 317,948 | 274,926 |
Costs and expenses: | |||
Cost of sales | 173,385 | 147,660 | 162,561 |
Equipment revenue | |||
Revenue: | |||
Total revenue | 374,149 | 270,427 | 205,601 |
Costs and expenses: | |||
Cost of sales | 292,290 | 231,960 | 166,429 |
Equipment revenue | Eliminations | |||
Revenue: | |||
Total revenue | (20,578) | (39,753) | (77,009) |
Costs and expenses: | |||
Cost of sales | (14,583) | (37,173) | (77,009) |
Equipment revenue | Hughes Satellite Systems Corporation | Reportable Legal Entities | |||
Revenue: | |||
Total revenue | 0 | 0 | 0 |
Costs and expenses: | |||
Cost of sales | 0 | 0 | 0 |
Equipment revenue | Guarantor Subsidiaries | Reportable Legal Entities | |||
Revenue: | |||
Total revenue | 360,656 | 284,139 | 256,090 |
Costs and expenses: | |||
Cost of sales | 285,665 | 251,195 | 223,086 |
Equipment revenue | Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
Revenue: | |||
Total revenue | 34,071 | 26,041 | 26,520 |
Costs and expenses: | |||
Cost of sales | $ 21,208 | $ 17,938 | $ 20,352 |
SUPPLEMENTAL GUARANTOR AND NO_5
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Consolidating Statement of Cash Flows (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 138,910,000 | $ 110,617,000 | $ (2,429,000) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 399,942,000 | 551,694,000 | 530,769,000 |
Net cash provided by (used for) operating activities | 538,852,000 | 662,311,000 | 528,340,000 |
Cash flows from investing activities: | |||
Purchases of marketable investment securities | (986,736,000) | (1,517,849,000) | (2,035,712,000) |
Sales and maturities of marketable investment securities | 1,045,950,000 | 1,864,186,000 | 1,482,704,000 |
Expenditures for property and equipment | (239,403,000) | (296,303,000) | (355,238,000) |
Expenditures for externally marketed software | (23,105,000) | (33,543,000) | (38,655,000) |
Distributions (contributions) and advances from (to) subsidiaries, net | 0 | 0 | 0 |
Sales of other investments | 0 | 9,451,000 | 0 |
India JV formation | 7,892,000 | 0 | 0 |
Dividend received from unconsolidated affiliate | 2,000,000 | 0 | 0 |
Net cash provided by (used for) investing activities | (209,186,000) | 25,942,000 | (946,901,000) |
Cash flows from financing activities: | |||
Repurchase and maturity of the 2021 Senior Unsecured Notes | 0 | (901,818,000) | 0 |
Payment of finance lease obligations | (120,000) | (670,000) | (811,000) |
Payment of in-orbit incentive obligations | (2,988,000) | (2,214,000) | (1,554,000) |
Contribution by non-controlling interest holder | 0 | 9,880,000 | 18,241,000 |
Dividend paid to EchoStar | (100,000,000) | (100,000,000) | 0 |
Other, net | 0 | (966,000) | 998,000 |
Contribution (distributions) and advances (to) from parent, net | 0 | 0 | 0 |
Net cash provided by (used for) financing activities | (103,108,000) | (995,788,000) | 16,874,000 |
Effect of exchange rates on cash and cash equivalents | (2,233,000) | (3,614,000) | 2,662,000 |
Net increase (decrease) in cash and cash equivalents | 224,325,000 | (311,149,000) | (399,025,000) |
Cash and cash equivalents, including restricted amounts, beginning of period | 430,148,000 | 741,297,000 | 1,140,322,000 |
Cash and cash equivalents, including restricted amounts, end of period | 654,473,000 | 430,148,000 | 741,297,000 |
Eliminations | |||
Cash flows from operating activities: | |||
Net income (loss) | (139,452,000) | (142,812,000) | (52,772,000) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 139,452,000 | 142,812,000 | 52,772,000 |
Net cash provided by (used for) operating activities | 0 | 0 | 0 |
Cash flows from investing activities: | |||
Purchases of marketable investment securities | 0 | 0 | 0 |
Sales and maturities of marketable investment securities | 0 | 0 | 0 |
Expenditures for property and equipment | 0 | 0 | 0 |
Expenditures for externally marketed software | 0 | 0 | 0 |
Distributions (contributions) and advances from (to) subsidiaries, net | (317,977,000) | (378,074,000) | (142,693,000) |
Sales of other investments | 0 | 0 | |
India JV formation | 0 | ||
Dividend received from unconsolidated affiliate | 0 | ||
Net cash provided by (used for) investing activities | (317,977,000) | (378,074,000) | (142,693,000) |
Cash flows from financing activities: | |||
Repurchase and maturity of the 2021 Senior Unsecured Notes | 0 | ||
Payment of finance lease obligations | 0 | 0 | 0 |
Payment of in-orbit incentive obligations | 0 | 0 | 0 |
Contribution by non-controlling interest holder | 0 | 0 | |
Dividend paid to EchoStar | 0 | 0 | |
Other, net | 0 | 0 | |
Contribution (distributions) and advances (to) from parent, net | 317,977,000 | 378,074,000 | 142,693,000 |
Net cash provided by (used for) financing activities | 317,977,000 | 378,074,000 | 142,693,000 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 | 0 |
Cash and cash equivalents, including restricted amounts, beginning of period | 0 | 0 | 0 |
Cash and cash equivalents, including restricted amounts, end of period | 0 | 0 | 0 |
Hughes Satellite Systems Corporation | Reportable Legal Entities | |||
Cash flows from operating activities: | |||
Net income (loss) | 149,413,000 | 120,771,000 | 9,325,000 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | (205,763,000) | (213,342,000) | (108,780,000) |
Net cash provided by (used for) operating activities | (56,350,000) | (92,571,000) | (99,455,000) |
Cash flows from investing activities: | |||
Purchases of marketable investment securities | (986,736,000) | (1,517,849,000) | (2,035,712,000) |
Sales and maturities of marketable investment securities | 1,045,950,000 | 1,864,186,000 | 1,482,704,000 |
Expenditures for property and equipment | 0 | 0 | 0 |
Expenditures for externally marketed software | 0 | 0 | 0 |
Distributions (contributions) and advances from (to) subsidiaries, net | 317,977,000 | 422,965,000 | 244,411,000 |
Sales of other investments | 0 | 0 | |
India JV formation | 0 | ||
Dividend received from unconsolidated affiliate | 2,000,000 | ||
Net cash provided by (used for) investing activities | 379,191,000 | 769,302,000 | (308,597,000) |
Cash flows from financing activities: | |||
Repurchase and maturity of the 2021 Senior Unsecured Notes | (901,818,000) | ||
Payment of finance lease obligations | 0 | 0 | 0 |
Payment of in-orbit incentive obligations | 0 | 0 | 0 |
Contribution by non-controlling interest holder | 0 | 0 | |
Dividend paid to EchoStar | (100,000,000) | (100,000,000) | |
Other, net | 0 | 0 | |
Contribution (distributions) and advances (to) from parent, net | 0 | 0 | 0 |
Net cash provided by (used for) financing activities | (100,000,000) | (1,001,818,000) | 0 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 222,841,000 | (325,087,000) | (408,052,000) |
Cash and cash equivalents, including restricted amounts, beginning of period | 324,764,000 | 649,851,000 | 1,057,903,000 |
Cash and cash equivalents, including restricted amounts, end of period | 547,605,000 | 324,764,000 | 649,851,000 |
Guarantor Subsidiaries | Reportable Legal Entities | |||
Cash flows from operating activities: | |||
Net income (loss) | 193,023,000 | 207,895,000 | 121,889,000 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 335,155,000 | 479,663,000 | 480,249,000 |
Net cash provided by (used for) operating activities | 528,178,000 | 687,558,000 | 602,138,000 |
Cash flows from investing activities: | |||
Purchases of marketable investment securities | 0 | 0 | 0 |
Sales and maturities of marketable investment securities | 0 | 0 | 0 |
Expenditures for property and equipment | (193,449,000) | (196,902,000) | (202,083,000) |
Expenditures for externally marketed software | (23,105,000) | (33,543,000) | (38,655,000) |
Distributions (contributions) and advances from (to) subsidiaries, net | 0 | (44,891,000) | (101,718,000) |
Sales of other investments | 9,451,000 | 0 | |
India JV formation | 7,892,000 | ||
Dividend received from unconsolidated affiliate | 0 | ||
Net cash provided by (used for) investing activities | (224,446,000) | (265,885,000) | (342,456,000) |
Cash flows from financing activities: | |||
Repurchase and maturity of the 2021 Senior Unsecured Notes | 0 | ||
Payment of finance lease obligations | 0 | 0 | 0 |
Payment of in-orbit incentive obligations | (2,988,000) | (2,214,000) | (1,554,000) |
Contribution by non-controlling interest holder | 0 | 0 | |
Dividend paid to EchoStar | 0 | 0 | |
Other, net | 0 | 0 | |
Contribution (distributions) and advances (to) from parent, net | (317,977,000) | (422,965,000) | (244,411,000) |
Net cash provided by (used for) financing activities | (320,965,000) | (425,179,000) | (245,965,000) |
Effect of exchange rates on cash and cash equivalents | 0 | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | (17,233,000) | (3,506,000) | 13,717,000 |
Cash and cash equivalents, including restricted amounts, beginning of period | 42,549,000 | 46,055,000 | 32,338,000 |
Cash and cash equivalents, including restricted amounts, end of period | 25,316,000 | 42,549,000 | 46,055,000 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
Cash flows from operating activities: | |||
Net income (loss) | (64,074,000) | (75,237,000) | (80,871,000) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 131,098,000 | 142,561,000 | 106,528,000 |
Net cash provided by (used for) operating activities | 67,024,000 | 67,324,000 | 25,657,000 |
Cash flows from investing activities: | |||
Purchases of marketable investment securities | 0 | 0 | 0 |
Sales and maturities of marketable investment securities | 0 | 0 | 0 |
Expenditures for property and equipment | (45,954,000) | (99,401,000) | (153,155,000) |
Expenditures for externally marketed software | 0 | 0 | 0 |
Distributions (contributions) and advances from (to) subsidiaries, net | 0 | 0 | 0 |
Sales of other investments | 0 | 0 | |
India JV formation | 0 | ||
Dividend received from unconsolidated affiliate | 0 | ||
Net cash provided by (used for) investing activities | (45,954,000) | (99,401,000) | (153,155,000) |
Cash flows from financing activities: | |||
Repurchase and maturity of the 2021 Senior Unsecured Notes | 0 | ||
Payment of finance lease obligations | (120,000) | (670,000) | (811,000) |
Payment of in-orbit incentive obligations | 0 | 0 | 0 |
Contribution by non-controlling interest holder | 9,880,000 | 18,241,000 | |
Dividend paid to EchoStar | 0 | 0 | |
Other, net | (966,000) | 998,000 | |
Contribution (distributions) and advances (to) from parent, net | 0 | 44,891,000 | 101,718,000 |
Net cash provided by (used for) financing activities | (120,000) | 53,135,000 | 120,146,000 |
Effect of exchange rates on cash and cash equivalents | (2,233,000) | (3,614,000) | 2,662,000 |
Net increase (decrease) in cash and cash equivalents | 18,717,000 | 17,444,000 | (4,690,000) |
Cash and cash equivalents, including restricted amounts, beginning of period | 62,835,000 | 45,391,000 | 50,081,000 |
Cash and cash equivalents, including restricted amounts, end of period | $ 81,552,000 | $ 62,835,000 | $ 45,391,000 |