Nevada
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26-1232727
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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100 Inverness Terrace East,
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Englewood,
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Colorado
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80112-5308
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(Address of principal executive offices)
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(Zip Code)
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(303)
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706-4000
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Not Applicable
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(Registrant’s telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last report)
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Securities registered pursuant to Section 12(b) of the Act:
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Class A common stock
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$0.001 par value
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The NASDAQ Stock Market LLC
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(Title of each class)
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(Name of each exchange on which registered)
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SATS
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(Ticker symbol)
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Emerging growth company
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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significant risks related to the construction and operation of our satellites, such as the risk of not being able to timely complete the construction of or material malfunction on one or more of our satellites, changes in the space weather environment that could interfere with the operation of our satellites and our general lack of commercial insurance coverage on our satellites;
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our ability to implement and/or realize benefits of our domestic and/or international investments, commercial alliances, partnerships, joint ventures, acquisitions, dispositions and other strategic initiatives and transactions including, without limitation, the BSS Transaction (as defined herein);
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lawsuits relating to the BSS Transaction could result in substantial costs;
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our ability to realize the anticipated benefits of our current satellites and any future satellite we may construct or acquire;
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risks related to our foreign operations and other uncertainties associated with doing business internationally, including changes in foreign exchange rates between foreign currencies and the United States dollar, economic instability, political disturbances and the consequences of being subject to foreign regulation and foreign legal proceedings, including increased operations costs and potential fines and penalties for violations, which may be substantial;
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the failure of third-party providers of components, manufacturing, installation services and customer support services to appropriately deliver the contracted goods or services; and
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our ability to bring advanced technologies to market to keep pace with our customers and competitors.
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Fixed Satellite Services (“FSS”). We provide satellite services to broadcast news organizations, internet service providers and content providers who use our satellites to deliver programming and internet. Our satellites are also used for the transmission of live sporting events, internet access, disaster recovery and satellite news gathering services.
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Government Services. We provide satellite and technical services to U.S. government service providers.
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Network Services. We provide satellite services to companies for private networks that allow delivery of video and data services for corporate communications. Our satellites can be used for point-to-point or point to multi-point communications.
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Satellite
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Segment
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Launch Date
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Nominal Degree Orbital Location (Longitude)
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Depreciable Life (In Years)
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Owned:
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SPACEWAY 3 (1)
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Hughes
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August 2007
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95 W
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10
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EchoStar XVII
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Hughes
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July 2012
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107 W
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15
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EchoStar XIX
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Hughes
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December 2016
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97.1 W
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15
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Al Yah 3 (2)
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Hughes
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January 2018
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20 W
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7
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EchoStar IX (3)
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ESS
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August 2003
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121 W
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12
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EUTELSAT 10A (“W2A”) (4)
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Corporate and Other
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April 2009
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10 E
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-
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EchoStar XXI
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Corporate and Other
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June 2017
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10.25 E
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15
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Finance leases:
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Eutelsat 65 West A
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Hughes
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March 2016
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65 W
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15
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Telesat T19V
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Hughes
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July 2018
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63 W
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15
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EchoStar 105/SES-11
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ESS
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October 2017
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105 W
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15
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(1)
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Depreciable life represents the remaining useful life as of June 8, 2011, the date EchoStar completed its acquisition of Hughes Communications, Inc. (“Hughes Communication”) and its subsidiaries (the “Hughes Acquisition”).
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the assignment of satellite radio frequencies and orbital locations to specific services and companies, the licensing of satellites and earth stations and the granting of related authorizations;
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approval for the relocation of satellites to different orbital locations, the replacement of a satellite with another new or existing satellite and the authorization of specific earth stations to communicate with such newly relocated satellites;
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ensuring compliance with the terms and conditions of assignments, licenses, authorizations and approvals;
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avoiding harmful interference with other radio frequency emitters; and
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ensuring compliance with other applicable provisions of the Communications Act and FCC rules and regulations.
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Name
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Age
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Position
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Charles W. Ergen
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66
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Chairman
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Michael T. Dugan
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71
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Chief Executive Officer, President and Director
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David J. Rayner
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62
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Executive Vice President, Chief Financial Officer, Chief Operating Officer and Treasurer
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Anders N. Johnson
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62
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Chief Strategy Officer and President, EchoStar Satellite Services L.L.C.
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Pradman P. Kaul
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73
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President, Hughes Communications and Director
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Dean A. Manson
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53
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Executive Vice President, General Counsel and Secretary
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•
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the risks associated with developing and constructing new satellites;
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•
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the diversion of our management’s attention from our existing business to integrate or divide the operations and personnel of the acquired, disposed or combined business, technology or joint venture and/or to engage in such investments, dispositions and/or other activities;
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the ability and capacity of our management team to carry out all of our business plans, including with respect to our existing businesses and any businesses we acquire or embark on in the future;
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possible adverse effects on our and our targets’ and partners’ business, financial condition or operating results during the integration process;
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exposure to significant financial losses if the transactions, activities, investments, dispositions and/or the underlying ventures are not successful and/or we are unable to achieve the intended objectives of the transaction, disposition or investment;
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the inability to obtain in the anticipated time frame, or at all, any regulatory approvals required to complete proposed acquisitions, dispositions, activities, transactions or investments;
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the risks associated with complying with regulations applicable to the acquired or developed business or technologies which may cause us to incur substantial expenses;
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the inability to realize anticipated benefits or synergies from acquisitions, dispositions, investments, alliances and/or the development and launch of new satellites;
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the disruption of relationships with employees, vendors or customers; and
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the risks associated with foreign and international operations and/or investments or dispositions.
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In our consumer market, our Hughes segment faces competition primarily from DSL, fiber, fixed wireless and cable internet service providers. Also, other telecommunications, satellite and wireless broadband companies have launched or are planning the launch of consumer internet access services in competition with our service offerings in North, Central and South America. Some of these competitors offer consumer services and hardware at lower prices, higher speeds and/or higher capacity than ours. In addition, terrestrial alternatives do not require our external dish, which may limit customer acceptance of our products. Further, government funding for competing products and services may reduce the demand for our products and services. We may be unsuccessful in competing effectively against DSL, fiber, fixed wireless and cable internet service providers and other satellite broadband providers, which could harm our business, operating results and financial condition.
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In our enterprise network communications market, our Hughes segment faces competition from providers of terrestrial-based networks, such as fiber, DSL, cable modem service, multiprotocol label switching and internet protocol-based virtual private networks, which may have advantages over satellite networks for certain customer applications. Although we also sell terrestrial services to this market, we may not be as cost competitive as other providers and it may become more difficult for us to compete. The network communications industry is characterized by competitive pressures to provide enhanced functionality for the same or lower price with each new generation of technology. Terrestrial-based networks are offered by telecommunications carriers and other large companies, many of which have substantially greater financial resources and greater name recognition than ours. As the prices of our products decrease, we will need to sell more products and/or reduce the per-unit costs to improve or maintain our results of operations. The costs of a satellite network may exceed those of a terrestrial-based network or other networks, especially in areas that have experienced significant DSL and cable internet build-out. It may become more difficult for us to compete with terrestrial and other providers as the number of these areas continues to increase and the cost of their network and hardware services continues to decline. Terrestrial networks also have a competitive edge over satellite networks because of lower latency for data transmission.
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Our ESS segment competes against larger, well-established satellite service companies. Because the satellite services industry is relatively mature, our strategy depends largely on our ability to displace current incumbent providers, which often have the benefit of long-term contracts with customers. These long-term contracts and other factors result in relatively high costs for customers to change service providers, making it more difficult for us to displace customers from their current relationships with our competitors. In addition, the supply of satellite capacity available in the market has increased in recent years, which makes it more difficult for us to sell our services in certain markets and to price our capacity at acceptable levels. Competition may continue to cause downward pressure on prices and further reduce the utilization of our capacity, both of which could have an adverse effect on our financial performance. Our ESS segment also competes with both fiber optic cable and terrestrial delivery systems, which may have a cost advantage, particularly in point-to-point applications where such delivery systems have been installed, and with new delivery systems being developed, which may have lower latency and other advantages.
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Components. A limited number of suppliers manufacture, and in some cases a single supplier manufactures, some of the key components required to build our products. These key components may not be continually available and we may not be able to forecast our component requirements sufficiently in advance, which may have a detrimental effect on supply. If we are required to change suppliers for any reason, we would experience a delay in manufacturing our products if another supplier is not able to meet our requirements on a timely basis. In addition, if we are unable to obtain the necessary volumes of components on favorable terms or prices on a timely basis, we may be unable to produce our products at competitive prices and we may be unable to satisfy demand from our customers. Our reliance on a single or limited group of suppliers, particularly foreign suppliers, and our reliance on subcontractors, involves several risks. These risks include a potential inability to obtain an adequate supply of required components, reduced control over pricing, quality and timely delivery of these components, and the potential bankruptcy, lack of liquidity or operational failure of our suppliers. We do not generally maintain long-term agreements with any of our suppliers or subcontractors for our products. An inability to obtain adequate deliveries or any other circumstances requiring us to seek alternative sources of supply could affect our ability to ship our products on a timely basis, which could damage our relationships with current and prospective customers and harm our business, resulting in a loss of market share and reduced revenue and income.
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Commodity Price Risk. Fluctuations in pricing of raw materials can affect our product costs. To the extent that component pricing does not decline or increases, whether due to inflation, increased demand, decreased supply, trade policies, tariffs or other factors, we may not be able to pass on the impact of increasing raw materials prices, component prices or labor and other costs, to our customers, and we may not be able to operate profitably. Such changes could have an adverse impact on our product costs.
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•
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Manufacturing. While we develop and manufacture prototypes for certain of our products, we use contract manufacturers to produce a significant portion of our hardware. If these contract manufacturers fail to provide
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•
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Installation and customer support services. Some of our products and services, such as our North American and international operations, utilize a network of third-party installers to deploy our hardware. In addition, a portion of our customer support and management is provided by third-party call centers. A decline in levels of service or attention to the needs of our customers could adversely affect our reputation, renewal rates and ability to win new business.
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Other services. Some of our products rely on third parties to provide services necessary for the operation of functionalities of the products, such as third-party cloud computing services and satellite uplink hosting services. The failure of these services could disrupt the operation of certain functionalities of our products, which could harm our customer relationship and result in a loss of sales. In addition, if the agreements for the provision of these services are terminated or not renewed, we could face difficulties replacing these service providers, which would adversely affect our ability to obtain and retain customers and result in reduced revenue and income.
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•
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Complications in complying with restrictions on foreign ownership and investment and limitations on repatriation. We may not be permitted to own our operations in some countries and may have to enter into partnership or joint venture relationships. Many foreign legal regimes and/or our contractual arrangements restrict our repatriation of earnings to the U.S. from our subsidiaries and joint venture entities. Applicable law in such foreign countries may also limit our ability to distribute or access our assets or offer our products and services in certain circumstances. In such event, we will not have access to the cash flow and assets of our subsidiaries and joint ventures.
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Difficulties in following a variety of laws and regulations related to foreign operations. Our international operations are subject to the laws and regulations of many different jurisdictions that may differ significantly from U.S. laws and regulations. For example, local privacy or intellectual property laws may hold us responsible for the data that is transmitted over our network by our customers. In addition, we are subject to the Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions that generally prohibit companies and their intermediaries from making improper payments or giving or promising to give anything of value to foreign officials and other individuals for the purpose of obtaining or retaining business or gaining a competitive advantage. Our policies mandate compliance with these laws. However, we operate in many parts of the world that have experienced corruption to some degree. Compliance with these laws may lead to increased operations costs or loss of business opportunities. Violations of these laws could result in fines or other penalties or sanctions, which could have a material adverse impact on our business, financial condition, results of operations or cash flow.
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•
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Restrictions on space station landing/terrestrial rights. Satellite market access and landing rights and terrestrial wireless rights are dependent on the national regulations established by foreign governments, including, but not limited to obtaining national authorizations or approvals and meeting other regulatory, coordination and registration requirements for satellites. Because regulatory schemes vary by country, we may be subject to laws or regulations in foreign countries of which we may not be aware. Non-compliance with these requirements may result in the loss of the authorizations and licenses to conduct business in these countries, as well as fines or other financial and non-financial penalties for non-compliance with regulations. If that were to be the case, we could be subject to sanctions, penalties and/or other actions by a foreign government that could materially and adversely affect our ability to operate in that country. There is no assurance that any current regulatory approvals held by us are, or will remain, sufficient in the view of foreign regulatory authorities, or that any additional necessary approvals will be granted on a timely basis or at all, in all jurisdictions in which we wish to operate new satellites, or that applicable restrictions in those jurisdictions will not be unduly burdensome. Violations of laws or regulations may result in various sanctions including fines, loss of authorizations and the denial of applications for new authorizations or for the renewal of existing
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Financial and legal constraints and obligations. Operating pursuant to foreign licenses subjects us to certain financial constraints and obligations, including, but not limited to: (a) tax liabilities that may or may not be dependent on revenue; (b) the regulatory requirements associated with maintaining such licenses, which may change over time, are subject to interpretation by foreign courts and regulatory bodies, and may result in additional costs to operate and/or fines, sanctions and penalties being imposed on us or our subsidiaries if found to be violating the terms of such licenses, any or all of which could be material; (c) the burden of creating and maintaining additional entities, branches, facilities and/or staffing in foreign jurisdictions; and (d) legal regulations requiring that we make certain satellite capacity available for “free,” which may impact our revenue. In addition, if we need to pursue legal remedies against our customers or our business partners located outside of the U.S., it may be difficult for us to enforce our rights against them.
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Compliance with applicable export control laws and regulations in the U.S. and other countries. We must comply with all applicable export control and trade sanctions laws and regulations of the U.S. and other countries. U.S. laws and regulations applicable to us include the Arms Export Control Act, ITAR, EAR and trade sanctions laws and regulations administered by OFAC. The export of certain hardware, technical data and services relating to satellites is regulated by BIS under EAR. Other items are controlled for export by the U.S. Department of State’s Directorate of Defense Trade Controls under ITAR. We cannot provide equipment or services to certain countries subject to U.S. trade sanctions unless we first obtain the necessary authorizations from OFAC. Violations of these laws or regulations could result in significant sanctions including fines, more onerous compliance requirements, debarments from export privileges, or loss of authorizations needed to conduct aspects of our international business. A violation of ITAR or other export or trade-related regulations could materially adversely affect our business, financial condition and results of operations.
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Changes in exchange rates between foreign currencies and the U.S. dollar. We conduct our business and incur cost in the local currency of a number of the countries in which we operate. Accordingly, our applicable results of operations are reported in the relevant local currency and then translated to U.S. dollars at the applicable currency exchange rate for inclusion in our financial statements. In addition, we sell our products and services and acquire supplies and components from countries that historically have been, and may continue to be, susceptible to recessions, instability or currency devaluation. These fluctuations in currency exchange rates, recessions and currency devaluations have affected, and may in the future affect, revenue, profits and cash earned on international sales.
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Greater exposure to the possibility of economic instability, the disruption of operations from labor and political disturbances, expropriation or war. As we conduct operations throughout the world, we could be subject to regional or national economic downturns or instability, acts of terrorism, labor or political disturbances or conflicts of various sizes, including wars. Any of these disruptions could detrimentally affect our sales in the affected region or country or lead to damage to, or expropriation of, our property or danger to our personnel.
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Competition with large or state-owned enterprises and/or regulations that effectively limit our operations and favor local competitors. Many of the countries in which we conduct business have traditionally had state-owned or state-granted monopolies on telecommunications services that favor an incumbent service provider. We face competition from these favored and entrenched companies in countries that have not deregulated. The slower pace of deregulation in these countries, including in Asia, Latin America, Middle East, India, Africa and Eastern Europe, has adversely affected, and is likely to continue to adversely affect, the development and growth of our business in these regions.
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Customer credit risks. Customer credit risks are exacerbated in foreign operations because there is often little information available about the credit histories of customers in certain of the foreign countries in which we operate.
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incur additional debt;
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pay dividends or make distributions on HSS’ capital stock or repurchase HSS’ capital stock;
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make certain investments;
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create liens or enter into sale and leaseback transactions;
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enter into transactions with affiliates;
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merge or consolidate with another company;
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transfer and sell assets; and
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allow to exist certain restrictions on its or their ability to pay dividends, make distributions, make other payments, or transfer assets.
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significant remediation costs, such as liability for stolen assets or information, repairs of system damage and/or incentives to customers or business partners in an effort to maintain relationships after an attack;
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significant increased cybersecurity protection costs, which may include the costs of making organizational changes, deploying additional personnel and protection technologies, training employees and engaging third party experts and consultants;
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material increased liability due to financial or other harm inflicted on our partners;
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loss of material revenues resulting from attacks on our satellites or technology, the unauthorized use of proprietary information or the failure to retain or attract customers following an attack;
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significant litigation and legal risks, including regulatory actions by state, federal and international regulators; and
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loss of or damage to reputation.
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•
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Cross directorships and stock ownership. Charles W. Ergen serves as the Chairman of our and DISH’s board of directors, is employed by both companies and has fiduciary duties to our and DISH’s shareholders. Mr. Ergen may have actual or apparent conflicts of interest with respect to matters involving or affecting each company. For example, there is potential for a conflict of interest when we or DISH Network look at acquisitions and other corporate opportunities that may be suitable for both companies. In addition, some of our directors and officers, including Mr. Ergen, own DISH stock and options to purchase DISH stock, certain of which they acquired or were granted prior to our spin-off from DISH in 2008 (the “Spin-off”). These ownership interests could create actual, apparent or potential conflicts of interest when these individuals are faced with decisions that could have different implications for our company and DISH Network.
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Intercompany agreements with DISH Network. We have entered into various agreements with DISH Network. Pursuant to certain agreements, we obtain certain products, services and rights from DISH Network; DISH Network obtains certain products, services and rights from us; and we and DISH Network indemnify each other against certain liabilities arising from our respective businesses. Generally, the amounts paid for products and services provided under the agreements are based on cost plus a fixed margin, which varies depending on the nature of the products and services provided. Certain other intercompany agreements cover matters such as tax sharing and our responsibility for certain liabilities previously undertaken by DISH Network for certain of our businesses. We have also entered into certain commercial agreements with DISH Network. The terms of certain of these agreements were established while we were a wholly-owned subsidiary of DISH and were not the result of arm’s length negotiations. The allocation of assets, liabilities, rights, indemnifications and other obligations between DISH Network and us under certain agreements we have entered into with DISH Network may not necessarily reflect what two unaffiliated parties might have agreed to. Had these agreements been negotiated with unaffiliated third parties, their terms may have been more or less favorable to us. In addition, DISH Network or its affiliates will likely continue to enter into transactions, including joint ventures, acquisitions, dispositions and other strategic initiatives and transactions, with us or other affiliates. Although the terms of any such transactions will be established based upon negotiations between us and DISH Network and, when appropriate, subject to approval by a committee of non-interlocking directors or in certain instances non-interlocking management, there can be no assurance that the terms of any such transactions will be as favorable to us or our subsidiaries or affiliates as may otherwise be obtained in negotiations between unaffiliated third parties.
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Competition for business opportunities. DISH Network may have interests in various companies that have subsidiaries or controlled affiliates that own or operate domestic or foreign services that may compete with services offered by our businesses. DISH Network also has a distribution agreement with ViaSat, a competitor of our Hughes segment, to sell services similar to those offered by our Hughes segment. We may also compete with DISH Network when we participate in auctions for spectrum or orbital slots for our satellites or other business opportunities.
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a capital structure with multiple classes of common stock: a Class A that entitles the holders to one vote per share; a Class B that entitles the holders to ten votes per share; a Class C that entitles the holders to one vote per share, except upon a change in control of our company in which case the holders of Class C are entitled to ten votes per share; and a non-voting Class D;
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a provision that authorizes the issuance of “blank check” preferred stock, which could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt;
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a provision limiting who may call special meetings of shareholders; and
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a provision establishing advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted upon by shareholders at shareholder meetings.
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Location
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Segment(s)
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Function
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Owned:
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Englewood, Colorado
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ESS/Corporate and Other
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Corporate headquarters and engineering offices
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Germantown, Maryland
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Hughes
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Hughes corporate headquarters, engineering offices, network operations and shared hubs
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Griesheim, Germany
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Hughes/Corporate and Other
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Shared hub, operations, administrative offices and warehouse
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Leased:
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|
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Gilbert, Arizona
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Hughes
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Gateways
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San Diego, California
|
|
Hughes
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Engineering and sales offices
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Englewood, Colorado
|
|
Hughes
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Gateways and equipment
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Gaithersburg, Maryland
|
|
Hughes
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Manufacturing and testing facilities and logistics offices
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Gaithersburg, Maryland
|
|
Hughes
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|
Engineering and administrative offices
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Southfield, Michigan
|
|
Hughes
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Shared hub and regional network management center
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Las Vegas, Nevada
|
|
Hughes
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Shared hub, antennae yards, gateway, backup network operation and control center for Hughes corporate headquarters
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Cheyenne, Wyoming
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Hughes/ESS
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Satellite access center, gateways and equipment
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Barueri, Brazil
|
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Hughes/Corporate and Other
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Shared hub, warehouse, operations center and spacecraft operations center
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Sao Paulo, Brazil
|
|
Hughes
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Hughes Brazil corporate headquarters, sales offices and warehouse
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Bangalore, India
|
|
Hughes
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Engineering office and office space
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Gurgaon, India
|
|
Hughes
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Administrative offices, shared hub, operations, warehouse, and development center
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New Delhi, India
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|
Hughes
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Hughes India corporate headquarters
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Milton Keynes, United Kingdom
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Hughes
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Hughes Europe corporate headquarters and operations
|
|
|
For the years ended December 31,
|
||||||||||||||||||
Statements of Operations Data:
|
|
2019
|
|
2018
|
|
2017(1)
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
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|
|
|
||||||||||
Total revenue (2) (3)
|
|
$
|
1,886,081
|
|
|
$
|
1,762,638
|
|
|
$
|
1,525,155
|
|
|
$
|
1,447,223
|
|
|
$
|
1,485,942
|
|
Total costs and expenses
|
|
1,813,004
|
|
|
1,726,501
|
|
|
1,494,593
|
|
|
1,325,364
|
|
|
1,380,939
|
|
|||||
Operating income (loss)
|
|
$
|
73,077
|
|
|
$
|
36,137
|
|
|
$
|
30,562
|
|
|
$
|
121,859
|
|
|
$
|
105,003
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) from continuing operations attributable to EchoStar common stock
|
|
$
|
(102,318
|
)
|
|
$
|
(134,204
|
)
|
|
$
|
123,188
|
|
|
$
|
43,886
|
|
|
$
|
59,189
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings (losses) per share - continuing operations
|
|
$
|
(1.06
|
)
|
|
$
|
(1.39
|
)
|
|
$
|
1.29
|
|
|
$
|
0.47
|
|
|
$
|
0.64
|
|
Diluted earnings (losses) per share - continuing operations
|
|
$
|
(1.06
|
)
|
|
$
|
(1.39
|
)
|
|
$
|
1.27
|
|
|
$
|
0.46
|
|
|
$
|
0.63
|
|
|
|
As of December 31,
|
||||||||||||||||||
Balance Sheet Data:
|
|
2019
|
|
2018
|
|
2017(1)
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and current marketable investments securities
|
|
$
|
2,460,054
|
|
|
$
|
3,210,458
|
|
|
$
|
3,245,617
|
|
|
$
|
3,092,881
|
|
|
$
|
1,527,883
|
|
Total assets
|
|
$
|
7,154,298
|
|
|
$
|
8,661,294
|
|
|
$
|
8,750,014
|
|
|
$
|
9,008,859
|
|
|
$
|
6,572,463
|
|
Total debt and finance lease obligations
|
|
$
|
2,390,219
|
|
|
$
|
3,305,784
|
|
|
$
|
3,371,961
|
|
|
$
|
3,360,387
|
|
|
$
|
1,861,384
|
|
Total stockholders’ equity
|
|
$
|
3,745,553
|
|
|
$
|
4,155,474
|
|
|
$
|
4,177,385
|
|
|
$
|
4,006,805
|
|
|
$
|
3,781,642
|
|
|
|
For the years ended December 31,
|
||||||||||||||||||
Cash Flow Data:
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash flows from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating activities
|
|
$
|
656,322
|
|
|
$
|
734,522
|
|
|
$
|
726,892
|
|
|
$
|
803,343
|
|
|
$
|
776,451
|
|
Investing activities
|
|
$
|
821,958
|
|
|
$
|
(2,098,480
|
)
|
|
$
|
(867,932
|
)
|
|
$
|
(632,199
|
)
|
|
$
|
(275,311
|
)
|
Financing activities
|
|
$
|
(885,311
|
)
|
|
$
|
(136,563
|
)
|
|
$
|
72
|
|
|
$
|
1,475,689
|
|
|
$
|
(120,257
|
)
|
(1)
|
The 2017 Tax Act increased the complexity of our income tax accounting and resulted in significant adjustments to our deferred income tax accounts in 2017. As a result, our results of operations and balance sheet data for the years ended December 31, 2019, 2018 and 2017 are not comparable to our results of operations for the years ended December 31, 2016 and 2015. See Note 16 to our Accompanying Consolidated Financial Statements for further information.
|
(2)
|
On January 1, 2018, we adopted Topic 606, Revenue from Contracts with Customers, using the modified retrospective approach. As a result, total revenues for the year ended December 31, 2019 and 2018 may not be comparable to prior years.
|
(3)
|
On January 1, 2019, we adopted Topic 842, Leases, using the modified retrospective approach. As a result, total revenues for the year ended December 31, 2019 may not be comparable to prior years.
|
•
|
Revenue of $1.9 billion
|
•
|
Operating income of $73.1 million
|
•
|
Net loss from continuing operations of $113.7 million
|
•
|
Net loss attributable to EchoStar common stock of $62.9 million and basic loss per share of common stock of $0.65
|
•
|
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $577.6 million (see reconciliation of this non-GAAP measure in Results of Operations)
|
•
|
Total assets of $7.2 billion
|
•
|
Total liabilities of $3.4 billion
|
•
|
Total stockholders’ equity of $3.7 billion
|
•
|
Cash, cash equivalents and current marketable investment securities of $2.5 billion
|
|
|
As of December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
|
|
|
|
|
|
|
|||
Broadband subscribers
|
|
1,477,000
|
|
|
1,361,000
|
|
|
1,208,000
|
|
|
|
For the Three Months Ended
|
||||||||||
|
|
December 31
|
|
September 30
|
|
June 30
|
|
March 31
|
||||
|
|
|
|
|
|
|
|
|
||||
Net additions, excluding Acquired Subscribers
|
|
20,000
|
|
|
22,000
|
|
|
26,000
|
|
|
28,000
|
|
•
|
our gross subscriber additions were generally flat compared to the third quarter of 2019; and
|
•
|
our net subscriber additions decreased by approximately 2,000 compared to the third quarter of 2019, reflecting increased churn in the fourth quarter compared to the third quarter.
|
|
|
For the years
ended December 31, |
|
Variance
|
|||||||||||
Statements of Operations Data (1)
|
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Services and other revenue
|
|
$
|
1,619,271
|
|
|
$
|
1,557,228
|
|
|
$
|
62,043
|
|
|
4.0
|
|
Equipment revenue
|
|
266,810
|
|
|
205,410
|
|
|
61,400
|
|
|
29.9
|
|
|||
Total revenue
|
|
1,886,081
|
|
|
1,762,638
|
|
|
123,443
|
|
|
7.0
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Cost of sales - services and other
|
|
561,353
|
|
|
563,907
|
|
|
(2,554
|
)
|
|
(0.5
|
)
|
|||
% of total services and other revenue
|
|
34.7
|
%
|
|
36.2
|
%
|
|
|
|
|
|
||||
Cost of sales - equipment
|
|
226,002
|
|
|
176,600
|
|
|
49,402
|
|
|
28.0
|
|
|||
% of total equipment revenue
|
|
84.7
|
%
|
|
86.0
|
%
|
|
|
|
|
|
||||
Selling, general and administrative expenses
|
|
509,145
|
|
|
436,088
|
|
|
73,057
|
|
|
16.8
|
|
|||
% of total revenue
|
|
27.0
|
%
|
|
24.7
|
%
|
|
|
|
|
|
||||
Research and development expenses
|
|
25,739
|
|
|
27,570
|
|
|
(1,831
|
)
|
|
(6.6
|
)
|
|||
% of total revenue
|
|
1.4
|
%
|
|
1.6
|
%
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
490,765
|
|
|
457,116
|
|
|
33,649
|
|
|
7.4
|
|
|||
Impairment of long-lived assets
|
|
—
|
|
|
65,220
|
|
|
(65,220
|
)
|
|
(100.0
|
)
|
|||
Total costs and expenses
|
|
1,813,004
|
|
|
1,726,501
|
|
|
86,503
|
|
|
5.0
|
|
|||
Operating income (loss)
|
|
73,077
|
|
|
36,137
|
|
|
36,940
|
|
|
*
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
|
82,352
|
|
|
80,275
|
|
|
2,077
|
|
|
2.6
|
|
|||
Interest expense, net of amounts capitalized
|
|
(251,016
|
)
|
|
(219,288
|
)
|
|
(31,728
|
)
|
|
14.5
|
|
|||
Gains (losses) on investments, net
|
|
28,912
|
|
|
(12,622
|
)
|
|
41,534
|
|
|
*
|
|
|||
Equity in earnings (losses) of unconsolidated affiliates, net
|
|
(14,734
|
)
|
|
(5,954
|
)
|
|
(8,780
|
)
|
|
*
|
|
|||
Foreign currency transaction gains (losses), net
|
|
(11,590
|
)
|
|
(15,583
|
)
|
|
3,993
|
|
|
(25.6
|
)
|
|||
Other, net
|
|
(166
|
)
|
|
11,249
|
|
|
(11,415
|
)
|
|
*
|
|
|||
Total other income (expense), net
|
|
(166,242
|
)
|
|
(161,923
|
)
|
|
(4,319
|
)
|
|
2.7
|
|
|||
Income (loss) from continuing operations before income taxes
|
|
(93,165
|
)
|
|
(125,786
|
)
|
|
32,621
|
|
|
(25.9
|
)
|
|||
Income tax benefit (provision), net
|
|
(20,488
|
)
|
|
(6,576
|
)
|
|
(13,912
|
)
|
|
*
|
|
|||
Net income (loss) from continuing operations
|
|
(113,653
|
)
|
|
(132,362
|
)
|
|
18,709
|
|
|
(14.1
|
)
|
|||
Net income (loss) from discontinued operations
|
|
39,401
|
|
|
93,729
|
|
|
(54,328
|
)
|
|
(58.0
|
)
|
|||
Net income (loss)
|
|
(74,252
|
)
|
|
(38,633
|
)
|
|
(35,619
|
)
|
|
92.2
|
|
|||
Less: Net income (loss) attributable to non-controlling interests
|
|
(11,335
|
)
|
|
1,842
|
|
|
(13,177
|
)
|
|
*
|
|
|||
Net income (loss) attributable to EchoStar Corporation common stock
|
|
$
|
(62,917
|
)
|
|
$
|
(40,475
|
)
|
|
$
|
(22,442
|
)
|
|
55.4
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
EBITDA (2)
|
|
$
|
577,599
|
|
|
$
|
468,501
|
|
|
$
|
109,098
|
|
|
23.3
|
|
Subscribers, end of period
|
|
1,477,000
|
|
|
1,361,000
|
|
|
116,000
|
|
|
8.5
|
|
(1)
|
An explanation of our key metrics is included in Explanation of Key Metrics and Other Items.
|
(2)
|
A reconciliation of EBITDA to Net income (loss), the most directly comparable U.S. GAAP measure in our Accompanying Consolidated Financial Statements, is included in Results of Operations. For further information on our use of EBITDA, see Explanation of Key Metrics and Other Items.
|
•
|
Services and other revenue from our Hughes segment for the year ended December 31, 2019 increased by $74.9 million, or 5.0%, to $1.6 billion compared to 2018. The increase was primarily attributable to increases in sales of broadband services to our consumer customers of $102.0 million, primarily offset by a decrease in sales of services to our enterprise customers of $30.7 million.
|
•
|
Services and other revenue from our ESS segment for the year ended December 31, 2019 decreased by $11.0 million, or 40.3%, to $16.3 million compared to 2018. The decrease was due to a decrease of $9.2 million in transponder services provided to third parties and a decrease of $1.6 million in satellite capacity leased to DISH Network on the EchoStar IX satellite.
|
|
|
Amounts
|
||
|
|
|
||
Net income (loss) attributable to EchoStar Corporation for the year ended December 31, 2018
|
|
$
|
(40,475
|
)
|
Increase (decrease) in gains on investments, net
|
|
41,534
|
|
|
Increase (decrease) in operating income, including depreciation and amortization
|
|
36,940
|
|
|
Decrease (increase) in net income attributable to non-controlling interests
|
|
13,177
|
|
|
Decrease (increase) in foreign currency transaction losses, net
|
|
3,993
|
|
|
Increase (decrease) in interest income
|
|
2,077
|
|
|
Increase (decrease) in equity in earnings of unconsolidated affiliates, net
|
|
(8,780
|
)
|
|
Increase (decrease) in other, net
|
|
(11,415
|
)
|
|
Decrease (increase) in income tax provision, net
|
|
(13,912
|
)
|
|
Decrease (increase) in interest expense, net of amounts capitalized
|
|
(31,728
|
)
|
|
Increase (decrease) in net income from discontinued operations
|
|
(54,328
|
)
|
|
Net income (loss) attributable to EchoStar Corporation for the year ended December 31, 2019
|
|
$
|
(62,917
|
)
|
|
|
For the years
ended December 31, |
|
Variance
|
|||||||||||
|
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Net income (loss)
|
|
$
|
(74,252
|
)
|
|
$
|
(38,633
|
)
|
|
$
|
(35,619
|
)
|
|
92.2
|
|
Interest income
|
|
(82,352
|
)
|
|
(80,275
|
)
|
|
(2,077
|
)
|
|
2.6
|
|
|||
Interest expense, net of amounts capitalized
|
|
251,016
|
|
|
219,288
|
|
|
31,728
|
|
|
14.5
|
|
|||
Income tax provision (benefit), net
|
|
20,488
|
|
|
6,576
|
|
|
13,912
|
|
|
*
|
|
|||
Depreciation and amortization
|
|
490,765
|
|
|
457,116
|
|
|
33,649
|
|
|
7.4
|
|
|||
Net (income) loss from discontinued operations
|
|
(39,401
|
)
|
|
(93,729
|
)
|
|
54,328
|
|
|
(58.0
|
)
|
|||
Net (income) loss attributable to non-controlling interests
|
|
11,335
|
|
|
(1,842
|
)
|
|
13,177
|
|
|
*
|
|
|||
EBITDA
|
|
$
|
577,599
|
|
|
$
|
468,501
|
|
|
$
|
109,098
|
|
|
23.3
|
|
|
|
Amounts
|
||
|
|
|
||
EBITDA for the year ended December 31, 2018
|
|
$
|
468,501
|
|
Increase (decrease) in gains on investments, net
|
|
41,534
|
|
|
Increase (decrease) in operating income, including depreciation and amortization
|
|
36,940
|
|
|
Increase (decrease) in depreciation and amortization
|
|
33,649
|
|
|
Decrease (increase) in net income attributable to non-controlling interests
|
|
13,177
|
|
|
Decrease (increase) in foreign currency transaction losses, net
|
|
3,993
|
|
|
Increase (decrease) in equity in earnings of unconsolidated affiliates, net
|
|
(8,780
|
)
|
|
Increase (decrease) in other, net
|
|
(11,415
|
)
|
|
EBITDA for the year ended December 31, 2019
|
|
$
|
577,599
|
|
|
|
Hughes
|
|
ESS
|
|
Corporate and Other
|
|
Consolidated
Total |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenue
|
|
$
|
1,852,742
|
|
|
$
|
16,257
|
|
|
$
|
17,082
|
|
|
$
|
1,886,081
|
|
Capital expenditures
|
|
308,781
|
|
|
—
|
|
|
109,293
|
|
|
418,074
|
|
||||
EBITDA
|
|
625,660
|
|
|
6,994
|
|
|
(55,055
|
)
|
|
577,599
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenue
|
|
$
|
1,716,528
|
|
|
$
|
27,231
|
|
|
$
|
18,879
|
|
|
$
|
1,762,638
|
|
Capital expenditures
|
|
390,108
|
|
|
(76,757
|
)
|
|
164,091
|
|
|
477,442
|
|
||||
EBITDA
|
|
601,319
|
|
|
17,764
|
|
|
(150,582
|
)
|
|
468,501
|
|
|
|
For the years
ended December 31, |
|
Variance
|
|||||||||||
|
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Total revenue
|
|
$
|
1,852,742
|
|
|
$
|
1,716,528
|
|
|
$
|
136,214
|
|
|
7.9
|
|
Capital expenditures
|
|
308,781
|
|
|
390,108
|
|
|
(81,327
|
)
|
|
(20.8
|
)
|
|||
EBITDA
|
|
625,660
|
|
|
601,319
|
|
|
24,341
|
|
|
4.0
|
|
|
|
Amounts
|
||
|
|
|
||
EBITDA for the year ended December 31, 2018
|
|
$
|
601,319
|
|
Increase (decrease) in depreciation and amortization
|
|
40,050
|
|
|
Decrease (increase) in net income attributable to non-controlling interests
|
|
13,177
|
|
|
Decrease (increase) in foreign currency transaction losses, net
|
|
2,613
|
|
|
Increase (decrease) in other, net
|
|
(197
|
)
|
|
Increase (decrease) in equity in earnings of unconsolidated affiliates, net
|
|
(5,477
|
)
|
|
Increase (decrease) in gains on investments, net
|
|
(8,890
|
)
|
|
Increase (decrease) in operating income, including depreciation and amortization
|
|
(16,935
|
)
|
|
EBITDA for the year ended December 31, 2019
|
|
$
|
625,660
|
|
|
|
For the years
ended December 31, |
|
Variance
|
|||||||||||
|
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Total revenue
|
|
$
|
16,257
|
|
|
$
|
27,231
|
|
|
$
|
(10,974
|
)
|
|
(40.3
|
)
|
Capital expenditures
|
|
—
|
|
|
(76,757
|
)
|
|
76,757
|
|
|
(100.0
|
)
|
|||
EBITDA
|
|
6,994
|
|
|
17,764
|
|
|
(10,770
|
)
|
|
(60.6
|
)
|
|
|
For the years
ended December 31, |
|
Variance
|
|||||||||||
|
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Total revenue
|
|
$
|
17,082
|
|
|
$
|
18,879
|
|
|
$
|
(1,797
|
)
|
|
(9.5
|
)
|
Capital expenditures
|
|
109,293
|
|
|
164,091
|
|
|
(54,798
|
)
|
|
(33.4
|
)
|
|||
EBITDA
|
|
(55,055
|
)
|
|
(150,582
|
)
|
|
95,527
|
|
|
(63.4
|
)
|
|
|
Amounts
|
||
|
|
|
||
EBITDA for the year ended December 31, 2018
|
|
$
|
(150,582
|
)
|
Increase (decrease) in operating income, including depreciation and amortization
|
|
64,784
|
|
|
Increase (decrease) in gains on investments, net
|
|
50,423
|
|
|
Decrease (increase) in foreign currency transaction losses, net
|
|
1,380
|
|
|
Increase (decrease) in equity in earnings of unconsolidated affiliates, net
|
|
(3,303
|
)
|
|
Increase (decrease) in depreciation and amortization
|
|
(6,538
|
)
|
|
Increase (decrease) in other, net
|
|
(11,219
|
)
|
|
EBITDA for the year ended December 31, 2019
|
|
$
|
(55,055
|
)
|
|
|
For the years
ended December 31, |
|
Variance
|
|||||||||||
Statements of Operations Data (1)
|
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Services and other revenue
|
|
$
|
1,557,228
|
|
|
$
|
1,285,666
|
|
|
$
|
271,562
|
|
|
21.1
|
|
Equipment revenue
|
|
205,410
|
|
|
239,489
|
|
|
(34,079
|
)
|
|
(14.2
|
)
|
|||
Total revenue
|
|
1,762,638
|
|
|
1,525,155
|
|
|
237,483
|
|
|
15.6
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Cost of sales - services and other
|
|
563,907
|
|
|
500,773
|
|
|
63,134
|
|
|
12.6
|
|
|||
% of total services and other revenue
|
|
36.2
|
%
|
|
39.0
|
%
|
|
|
|
|
|
||||
Cost of sales - equipment
|
|
176,600
|
|
|
195,151
|
|
|
(18,551
|
)
|
|
(9.5
|
)
|
|||
% of total equipment revenue
|
|
86.0
|
%
|
|
81.5
|
%
|
|
|
|
|
|
||||
Selling, general and administrative expenses
|
|
436,088
|
|
|
370,500
|
|
|
65,588
|
|
|
17.7
|
|
|||
% of total revenue
|
|
24.7
|
%
|
|
24.3
|
%
|
|
|
|
|
|
||||
Research and development expenses
|
|
27,570
|
|
|
31,745
|
|
|
(4,175
|
)
|
|
(13.2
|
)
|
|||
% of total revenue
|
|
1.6
|
%
|
|
2.1
|
%
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
457,116
|
|
|
385,662
|
|
|
71,454
|
|
|
18.5
|
|
|||
Impairment of long-lived assets
|
|
65,220
|
|
|
10,762
|
|
|
54,458
|
|
|
*
|
|
|||
Total costs and expenses
|
|
1,726,501
|
|
|
1,494,593
|
|
|
231,908
|
|
|
15.5
|
|
|||
Operating income (loss)
|
|
36,137
|
|
|
30,562
|
|
|
5,575
|
|
|
18.2
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
|
80,275
|
|
|
44,619
|
|
|
35,656
|
|
|
79.9
|
|
|||
Interest expense, net of amounts capitalized
|
|
(219,288
|
)
|
|
(184,389
|
)
|
|
(34,899
|
)
|
|
18.9
|
|
|||
Gains (losses) on investments, net
|
|
(12,622
|
)
|
|
53,453
|
|
|
(66,075
|
)
|
|
*
|
|
|||
Equity in earnings (losses) of unconsolidated affiliates, net
|
|
(5,954
|
)
|
|
16,973
|
|
|
(22,927
|
)
|
|
*
|
|
|||
Foreign currency transaction gains (losses), net
|
|
(15,583
|
)
|
|
1,218
|
|
|
(16,801
|
)
|
|
*
|
|
|||
Other, net
|
|
11,249
|
|
|
5,364
|
|
|
5,885
|
|
|
*
|
|
|||
Total other income (expense), net
|
|
(161,923
|
)
|
|
(62,762
|
)
|
|
(99,161
|
)
|
|
*
|
|
|||
Income (loss) from continuing operations before income taxes
|
|
(125,786
|
)
|
|
(32,200
|
)
|
|
(93,586
|
)
|
|
*
|
|
|||
Income tax benefit (provision), net
|
|
(6,576
|
)
|
|
155,107
|
|
|
(161,683
|
)
|
|
*
|
|
|||
Net income (loss) from continuing operations
|
|
(132,362
|
)
|
|
122,907
|
|
|
(255,269
|
)
|
|
*
|
|
|||
Net income (loss) from discontinued operations
|
|
93,729
|
|
|
270,582
|
|
|
(176,853
|
)
|
|
(65.4
|
)
|
|||
Net income (loss)
|
|
(38,633
|
)
|
|
393,489
|
|
|
(432,122
|
)
|
|
*
|
|
|||
Less: Net income (loss) attributable to non-controlling interests
|
|
1,842
|
|
|
928
|
|
|
914
|
|
|
98.5
|
|
|||
Net income (loss) attributable to EchoStar Corporation
|
|
$
|
(40,475
|
)
|
|
$
|
392,561
|
|
|
$
|
(433,036
|
)
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
EBITDA (2)
|
|
$
|
468,501
|
|
|
$
|
492,304
|
|
|
$
|
(23,803
|
)
|
|
(4.8
|
)
|
Subscribers, end of period
|
|
1,361,000
|
|
|
1,208,000
|
|
|
153,000
|
|
|
12.7
|
|
(1)
|
An explanation of our key metrics is included in Explanation of Key Metrics and Other Items.
|
(2)
|
A reconciliation of EBITDA to Net income (loss), the most directly comparable U.S. GAAP measure in our Accompanying Consolidated Financial Statements, is included in Results of Operations. For further information on our use of EBITDA, see Explanation of Key Metrics and Other Items.
|
•
|
Services and other revenue from our Hughes segment for the year ended December 31, 2018 increased by $272.6 million, or 22.0%, to $1.5 billion compared to 2017. The increase was mainly due to increases in sales of broadband services to our consumer and enterprise customers of $271.0 million and $28.1 million, respectively. The increase was partially offset by a decrease of $32.5 million in residential wholesale broadband services.
|
•
|
Services and other revenue from our ESS segment for the year ended December 31, 2018 decreased by $3.2 million, or 10.5%, to $27.2 million compared to 2017. The decrease was primarily a result of a decrease in satellite capacity leased to DISH Network on the EchoStar IX satellite.
|
|
|
Amounts
|
||
|
|
|
||
Net income (loss) attributable to EchoStar Corporation for the year ended December 31, 2017
|
|
$
|
392,561
|
|
Increase (decrease) in interest income
|
|
35,656
|
|
|
Increase (decrease) in other, net
|
|
5,885
|
|
|
Increase (decrease) in operating income, including depreciation and amortization
|
|
5,575
|
|
|
Decrease (increase) in net income attributable to non-controlling interests
|
|
(914
|
)
|
|
Decrease (increase) in foreign currency transaction losses, net
|
|
(16,801
|
)
|
|
Increase (decrease) in equity in earnings of unconsolidated affiliates, net
|
|
(22,927
|
)
|
|
Decrease (increase) in interest expense, net of amounts capitalized
|
|
(34,899
|
)
|
|
Increase (decrease) in gains on investments, net
|
|
(66,075
|
)
|
|
Decrease (increase) in income tax provision, net
|
|
(161,683
|
)
|
|
Increase (decrease) in net income from discontinued operations
|
|
(176,853
|
)
|
|
Net income (loss) attributable to EchoStar Corporation for the year ended December 31, 2018
|
|
$
|
(40,475
|
)
|
|
|
For the years
ended December 31, |
|
Variance
|
|||||||||||
|
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Net income (loss)
|
|
$
|
(38,633
|
)
|
|
$
|
393,489
|
|
|
$
|
(432,122
|
)
|
|
*
|
|
Interest income
|
|
(80,275
|
)
|
|
(44,619
|
)
|
|
(35,656
|
)
|
|
79.9
|
|
|||
Interest expense, net of amounts capitalized
|
|
219,288
|
|
|
184,389
|
|
|
34,899
|
|
|
18.9
|
|
|||
Income tax (benefit) provision, net
|
|
6,576
|
|
|
(155,107
|
)
|
|
161,683
|
|
|
*
|
|
|||
Depreciation and amortization
|
|
457,116
|
|
|
385,662
|
|
|
71,454
|
|
|
18.5
|
|
|||
Net (income) loss from discontinued operations
|
|
(93,729
|
)
|
|
(270,582
|
)
|
|
176,853
|
|
|
(65.4
|
)
|
|||
Net (income) loss attributable to non-controlling interests
|
|
(1,842
|
)
|
|
(928
|
)
|
|
(914
|
)
|
|
98.5
|
|
|||
EBITDA
|
|
$
|
468,501
|
|
|
$
|
492,304
|
|
|
$
|
(23,803
|
)
|
|
(4.8
|
)
|
|
|
Amounts
|
||
|
|
|
||
EBITDA for the year ended December 31, 2017
|
|
$
|
492,304
|
|
Increase (decrease) in depreciation and amortization
|
|
71,454
|
|
|
Increase (decrease) in other, net
|
|
5,885
|
|
|
Increase (decrease) in operating income, including depreciation and amortization
|
|
5,575
|
|
|
Decrease (increase) in net income attributable to non-controlling interests
|
|
(914
|
)
|
|
Decrease (increase) in foreign currency transaction losses, net
|
|
(16,801
|
)
|
|
Increase (decrease) in equity in earnings of unconsolidated affiliates, net
|
|
(22,927
|
)
|
|
Increase (decrease) in gains on investments, net
|
|
(66,075
|
)
|
|
EBITDA for the year ended December 31, 2018
|
|
$
|
468,501
|
|
|
|
Hughes
|
|
ESS
|
|
Corporate and Other
|
|
Consolidated
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue
|
|
$
|
1,716,528
|
|
|
$
|
27,231
|
|
|
$
|
18,879
|
|
|
$
|
1,762,638
|
|
Capital expenditures
|
|
390,108
|
|
|
(76,757
|
)
|
|
164,091
|
|
|
477,442
|
|
||||
EBITDA
|
|
601,319
|
|
|
17,764
|
|
|
(150,582
|
)
|
|
468,501
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue
|
|
$
|
1,477,918
|
|
|
$
|
30,417
|
|
|
$
|
16,820
|
|
|
$
|
1,525,155
|
|
Capital expenditures
|
|
376,502
|
|
|
20,026
|
|
|
169,157
|
|
|
565,685
|
|
||||
EBITDA
|
|
475,222
|
|
|
16,074
|
|
|
1,008
|
|
|
492,304
|
|
|
|
For the years
ended December 31, |
|
Variance
|
||||||||||
|
|
2018
|
|
2017
|
|
Amount
|
|
%
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Total revenue
|
|
$
|
1,716,528
|
|
|
$
|
1,477,918
|
|
|
$
|
238,610
|
|
|
16.1
|
Capital expenditures
|
|
390,108
|
|
|
376,502
|
|
|
13,606
|
|
|
3.6
|
|||
EBITDA
|
|
601,319
|
|
|
475,222
|
|
|
126,097
|
|
|
26.5
|
|
|
Amounts
|
||
|
|
|
||
EBITDA for the year ended December 31, 2017
|
|
$
|
475,222
|
|
Increase (decrease) in operating income, including depreciation and amortization
|
|
83,596
|
|
|
Increase (decrease) in depreciation and amortization
|
|
51,802
|
|
|
Increase (decrease) in gains on investments, net
|
|
1,545
|
|
|
Increase (decrease) in other, net
|
|
694
|
|
|
Decrease (increase) in net income attributable to non-controlling interests
|
|
(260
|
)
|
|
Decrease (increase) in foreign currency transaction losses, net
|
|
(11,280
|
)
|
|
EBITDA for the year ended December 31, 2018
|
|
$
|
601,319
|
|
|
|
For the years
ended December 31, |
|
Variance
|
|||||||||||
|
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Total revenue
|
|
$
|
27,231
|
|
|
$
|
30,417
|
|
|
$
|
(3,186
|
)
|
|
(10.5
|
)
|
Capital expenditures
|
|
(76,757
|
)
|
|
20,026
|
|
|
(96,783
|
)
|
|
*
|
|
|||
EBITDA
|
|
17,764
|
|
|
16,074
|
|
|
1,690
|
|
|
10.5
|
|
|||
* Percentage is not meaningful
|
|
|
|
|
|
|
|
|
|
|
Amounts
|
||
|
|
|
||
EBITDA for the year ended December 31, 2017
|
|
$
|
16,074
|
|
Increase (decrease) in depreciation and amortization
|
|
7,108
|
|
|
Increase (decrease) in operating income, including depreciation and amortization
|
|
(5,418
|
)
|
|
EBITDA for the year ended December 31, 2018
|
|
$
|
17,764
|
|
|
|
For the years
ended December 31, |
|
Variance
|
|||||||||||
|
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Total revenue
|
|
$
|
18,879
|
|
|
$
|
16,820
|
|
|
$
|
2,059
|
|
|
12.2
|
|
Capital expenditures
|
|
164,091
|
|
|
169,157
|
|
|
(5,066
|
)
|
|
(3.0
|
)
|
|||
EBITDA
|
|
(150,582
|
)
|
|
1,008
|
|
|
(151,590
|
)
|
|
*
|
|
|||
* Percentage is not meaningful
|
|
|
|
|
|
|
|
|
|
|
Amounts
|
||
|
|
|
||
EBITDA for the year ended December 31, 2017
|
|
$
|
1,008
|
|
Increase (decrease) in depreciation and amortization
|
|
12,548
|
|
|
Increase (decrease) in other, net
|
|
5,191
|
|
|
Decrease (increase) in net income attributable to non-controlling interests
|
|
(655
|
)
|
|
Decrease (increase) in foreign currency transaction losses, net
|
|
(5,524
|
)
|
|
Increase (decrease) in equity in earnings of unconsolidated affiliates, net
|
|
(22,927
|
)
|
|
Increase (decrease) in gains on investments, net
|
|
(67,619
|
)
|
|
Increase (decrease) in operating income, including depreciation and amortization
|
|
(72,604
|
)
|
|
EBITDA for the year ended December 31, 2018
|
|
$
|
(150,582
|
)
|
|
|
Payments Due in the Year Ending December 31,
|
||||||||||||||||||||||||||
|
|
Total
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-term debt
|
|
$
|
2,400,000
|
|
|
$
|
—
|
|
|
$
|
900,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,500,000
|
|
Finance lease obligations
|
|
1,212
|
|
|
629
|
|
|
487
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Interest on long-term debt
|
|
726,377
|
|
|
157,688
|
|
|
123,375
|
|
|
89,063
|
|
|
89,063
|
|
|
89,063
|
|
|
178,125
|
|
|||||||
Satellite-related obligations
|
|
419,033
|
|
|
192,869
|
|
|
31,036
|
|
|
18,479
|
|
|
18,004
|
|
|
17,620
|
|
|
141,025
|
|
|||||||
Operating lease obligations
|
|
152,722
|
|
|
20,884
|
|
|
17,648
|
|
|
15,384
|
|
|
14,373
|
|
|
13,286
|
|
|
71,147
|
|
|||||||
Total
|
|
$
|
3,699,344
|
|
|
$
|
372,070
|
|
|
$
|
1,072,546
|
|
|
$
|
123,022
|
|
|
$
|
121,440
|
|
|
$
|
119,969
|
|
|
$
|
1,890,297
|
|
(i)
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;
|
(ii)
|
provide reasonable assurance that our transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles in the United States, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and
|
(iii)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|
Page
|
(1) Consolidated Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
2.3*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3*
|
|
|
10.4*
|
|
|
10.5*
|
|
|
10.6*
|
|
|
10.7*
|
|
|
10.8*
|
|
|
10.9*
|
|
|
10.10*
|
|
|
10.11*
|
|
|
10.12*
|
|
|
10.13*
|
|
|
10.14*
|
|
|
10.15*
|
|
|
10.16*
|
|
|
10.17*
|
|
|
10.18*
|
|
|
10.19*
|
|
|
10.20*
|
|
|
10.21*
|
|
|
10.22*
|
|
|
10.23*
|
|
|
10.24*
|
|
|
10.25*
|
|
|
10.26*
|
|
|
10.27*
|
|
|
10.28*
|
|
|
10.29*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase.
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
(H)
|
Filed herewith.
|
(I)
|
Furnished herewith
|
*
|
Incorporated by reference.
|
**
|
Constitutes a management contract or compensatory plan or arrangement.
|
***
|
Certain portions of the exhibit have been omitted in accordance with the Securities and Exchange Commission’s rules and regulations regarding confidential treatment.
|
****
|
Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. We agree to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule or exhibit upon request, subject to our right to request confidential treatment of any requested schedule or exhibit.
|
|
ECHOSTAR CORPORATION
|
|
|
|
|
|
By:
|
/s/ David J. Rayner
|
|
|
David J. Rayner
|
|
|
Executive Vice President,
|
|
|
Chief Financial Officer,
|
|
|
Chief Operating Officer, and
|
|
|
Treasurer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Michael T. Dugan
|
|
Chief Executive Officer, President and Director
|
|
February 20, 2020
|
Michael T. Dugan
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ David J. Rayner
|
|
Executive Vice President, Chief Financial Officer,
|
|
|
David J. Rayner
|
|
Chief Operating Officer and Treasurer
|
|
February 20, 2020
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
*
|
|
Chairman
|
|
February 20, 2020
|
Charles W. Ergen
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 20, 2020
|
R. Stanton Dodge
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 20, 2020
|
Anthony M. Federico
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 20, 2020
|
Pradman P. Kaul
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 20, 2020
|
Jeffrey R. Tarr
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 20, 2020
|
C. Michael Schroeder
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 20, 2020
|
William David Wade
|
|
|
|
|
* By:
|
/s/ Dean A. Manson
|
|
|
|
Dean A. Manson
|
|
|
|
Attorney-in-Fact
|
|
|
|
Page
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
1,519,431
|
|
|
$
|
928,306
|
|
Marketable investment securities
|
|
940,623
|
|
|
2,282,152
|
|
||
Trade accounts receivable and contract assets, net
|
|
196,629
|
|
|
201,096
|
|
||
Other current assets
|
|
179,531
|
|
|
165,809
|
|
||
Current assets of discontinued operations
|
|
—
|
|
|
3,486
|
|
||
Total current assets
|
|
2,836,214
|
|
|
3,580,849
|
|
||
Non-current assets:
|
|
|
|
|
|
|
||
Property and equipment, net
|
|
2,528,738
|
|
|
2,534,666
|
|
||
Operating lease right-of-use assets
|
|
114,042
|
|
|
—
|
|
||
Goodwill
|
|
506,953
|
|
|
504,173
|
|
||
Regulatory authorizations, net
|
|
478,598
|
|
|
430,039
|
|
||
Other intangible assets, net
|
|
29,507
|
|
|
44,231
|
|
||
Other investments, net
|
|
325,405
|
|
|
266,513
|
|
||
Other non-current assets, net
|
|
334,841
|
|
|
338,390
|
|
||
Non-current assets of discontinued operations
|
|
—
|
|
|
962,433
|
|
||
Total non-current assets
|
|
4,318,084
|
|
|
5,080,445
|
|
||
Total assets
|
|
$
|
7,154,298
|
|
|
$
|
8,661,294
|
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Trade accounts payable
|
|
$
|
124,080
|
|
|
$
|
121,437
|
|
Current portion of long-term debt and finance lease obligations
|
|
486
|
|
|
919,582
|
|
||
Contract liabilities
|
|
101,060
|
|
|
72,284
|
|
||
Accrued expenses and other current liabilities
|
|
270,393
|
|
|
181,698
|
|
||
Current liabilities of discontinued operations
|
|
—
|
|
|
50,136
|
|
||
Total current liabilities
|
|
496,019
|
|
|
1,345,137
|
|
||
Non-current liabilities:
|
|
|
|
|
|
|
||
Long-term debt and finance lease obligations, net of current portion
|
|
2,389,733
|
|
|
2,386,202
|
|
||
Deferred tax liabilities, net
|
|
351,692
|
|
|
287,989
|
|
||
Operating lease liabilities
|
|
96,941
|
|
|
—
|
|
||
Other non-current liabilities
|
|
74,360
|
|
|
80,304
|
|
||
Non-current liabilities of discontinued operations
|
|
—
|
|
|
406,188
|
|
||
Total non-current liabilities
|
|
2,912,726
|
|
|
3,160,683
|
|
||
Total liabilities
|
|
3,408,745
|
|
|
4,505,820
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
||
Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at both December 31, 2019 and 2018
|
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 4,000,000,000 shares authorized:
|
|
|
|
|
|
|
||
Class A common stock, $0.001 par value, 1,600,000,000 shares authorized, 56,592,251 shares issued and 50,107,330 shares outstanding at December 31, 2019 and 54,142,566 shares issued and 47,657,645 shares outstanding at December 31, 2018
|
|
57
|
|
|
54
|
|
||
Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at both December 31, 2019 and 2018
|
|
48
|
|
|
48
|
|
||
Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both December 31, 2019 and 2018
|
|
—
|
|
|
—
|
|
||
Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both December 31, 2019 and 2018
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
3,290,483
|
|
|
3,702,522
|
|
||
Accumulated other comprehensive income (loss)
|
|
(122,138
|
)
|
|
(125,100
|
)
|
||
Accumulated earnings (losses)
|
|
632,809
|
|
|
694,129
|
|
||
Treasury stock, at cost
|
|
(131,454
|
)
|
|
(131,454
|
)
|
||
Total EchoStar Corporation stockholders’ equity
|
|
3,669,805
|
|
|
4,140,199
|
|
||
Non-controlling interests
|
|
75,748
|
|
|
15,275
|
|
||
Total stockholders’ equity
|
|
3,745,553
|
|
|
4,155,474
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
7,154,298
|
|
|
$
|
8,661,294
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|||
Services and other revenue
|
|
$
|
1,619,271
|
|
|
$
|
1,557,228
|
|
|
$
|
1,285,666
|
|
Equipment revenue
|
|
266,810
|
|
|
205,410
|
|
|
239,489
|
|
|||
Total revenue
|
|
1,886,081
|
|
|
1,762,638
|
|
|
1,525,155
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|||
Cost of sales - services and other (exclusive of depreciation and amortization)
|
|
561,353
|
|
|
563,907
|
|
|
500,773
|
|
|||
Cost of sales - equipment (exclusive of depreciation and amortization)
|
|
226,002
|
|
|
176,600
|
|
|
195,151
|
|
|||
Selling, general and administrative expenses
|
|
509,145
|
|
|
436,088
|
|
|
370,500
|
|
|||
Research and development expenses
|
|
25,739
|
|
|
27,570
|
|
|
31,745
|
|
|||
Depreciation and amortization
|
|
490,765
|
|
|
457,116
|
|
|
385,662
|
|
|||
Impairment of long-lived assets
|
|
—
|
|
|
65,220
|
|
|
10,762
|
|
|||
Total costs and expenses
|
|
1,813,004
|
|
|
1,726,501
|
|
|
1,494,593
|
|
|||
Operating income (loss)
|
|
73,077
|
|
|
36,137
|
|
|
30,562
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
|
82,352
|
|
|
80,275
|
|
|
44,619
|
|
|||
Interest expense, net of amounts capitalized
|
|
(251,016
|
)
|
|
(219,288
|
)
|
|
(184,389
|
)
|
|||
Gains (losses) on investments, net
|
|
28,912
|
|
|
(12,622
|
)
|
|
53,453
|
|
|||
Equity in earnings (losses) of unconsolidated affiliates, net
|
|
(14,734
|
)
|
|
(5,954
|
)
|
|
16,973
|
|
|||
Foreign currency transaction gains (losses), net
|
|
(11,590
|
)
|
|
(15,583
|
)
|
|
1,218
|
|
|||
Other, net
|
|
(166
|
)
|
|
11,249
|
|
|
5,364
|
|
|||
Total other income (expense), net
|
|
(166,242
|
)
|
|
(161,923
|
)
|
|
(62,762
|
)
|
|||
Income (loss) from continuing operations before income taxes
|
|
(93,165
|
)
|
|
(125,786
|
)
|
|
(32,200
|
)
|
|||
Income tax benefit (provision), net
|
|
(20,488
|
)
|
|
(6,576
|
)
|
|
155,107
|
|
|||
Net income (loss) from continuing operations
|
|
(113,653
|
)
|
|
(132,362
|
)
|
|
122,907
|
|
|||
Net income (loss) from discontinued operations
|
|
39,401
|
|
|
93,729
|
|
|
270,582
|
|
|||
Net income (loss)
|
|
(74,252
|
)
|
|
(38,633
|
)
|
|
393,489
|
|
|||
Less: Net income (loss) attributable to non-controlling interests
|
|
(11,335
|
)
|
|
1,842
|
|
|
928
|
|
|||
Net income (loss) attributable to EchoStar Corporation
|
|
(62,917
|
)
|
|
(40,475
|
)
|
|
392,561
|
|
|||
Less: Net income (loss) attributable to Hughes Retail Preferred Tracking Stock
|
|
—
|
|
|
—
|
|
|
(1,209
|
)
|
|||
Net income (loss) attributable to EchoStar Corporation common stock
|
|
$
|
(62,917
|
)
|
|
$
|
(40,475
|
)
|
|
$
|
393,770
|
|
|
|
|
|
|
|
|
||||||
Earnings (losses) per share - Class A and B common stock:
|
|
|
|
|
|
|
|
|
|
|||
Basic earnings (loss) from continuing operations per share
|
|
$
|
(1.06
|
)
|
|
$
|
(1.39
|
)
|
|
$
|
1.29
|
|
Total basic earnings (loss) per share
|
|
$
|
(0.65
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
4.13
|
|
Diluted earnings (loss) from continuing operations per share
|
|
$
|
(1.06
|
)
|
|
$
|
(1.39
|
)
|
|
$
|
1.27
|
|
Total diluted earnings (loss) per share
|
|
$
|
(0.65
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
4.07
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(74,252
|
)
|
|
$
|
(38,633
|
)
|
|
$
|
393,489
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
|
2,845
|
|
|
(34,399
|
)
|
|
16,413
|
|
|||
Unrealized gains (losses) on available-for-sale securities
|
|
2,571
|
|
|
(962
|
)
|
|
(21,987
|
)
|
|||
Other
|
|
1,466
|
|
|
(1,910
|
)
|
|
92
|
|
|||
Amounts reclassified to net income (loss):
|
|
|
|
|
|
|
||||||
Foreign currency translation realized on impairment of long lived assets
|
|
—
|
|
|
32,136
|
|
|
—
|
|
|||
Realized gains on available-for-sale securities
|
|
(592
|
)
|
|
—
|
|
|
(2,758
|
)
|
|||
Other-than-temporary impairment loss on available-for-sale securities
|
|
—
|
|
|
(278
|
)
|
|
3,298
|
|
|||
Total other comprehensive income (loss), net of tax
|
|
6,290
|
|
|
(5,413
|
)
|
|
(4,942
|
)
|
|||
Comprehensive income (loss)
|
|
(67,962
|
)
|
|
(44,046
|
)
|
|
388,547
|
|
|||
Less: Comprehensive income (loss) attributable to non-controlling interests
|
|
(8,007
|
)
|
|
453
|
|
|
1,337
|
|
|||
Comprehensive income (loss) attributable to EchoStar Corporation
|
|
$
|
(59,955
|
)
|
|
$
|
(44,499
|
)
|
|
$
|
387,210
|
|
|
|
Common
Stock
|
|
Hughes Retail
Preferred
Tracking
Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Accumulated
Earnings
(Losses)
|
|
Treasury
Stock, at cost
|
|
Non-controlling
Interest in
HSS Tracking
Stock
|
|
Non-controlling
Interests
|
|
Total
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance, December 31, 2016
|
|
$
|
100
|
|
|
$
|
6
|
|
|
$
|
3,828,677
|
|
|
$
|
(124,803
|
)
|
|
$
|
314,247
|
|
|
$
|
(98,162
|
)
|
|
$
|
73,910
|
|
|
$
|
12,830
|
|
|
$
|
4,006,805
|
|
Cumulative effect of accounting changes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,508
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,508
|
|
|||||||||
Balance, January 1, 2017
|
|
100
|
|
|
6
|
|
|
3,828,677
|
|
|
(124,803
|
)
|
|
328,755
|
|
|
(98,162
|
)
|
|
73,910
|
|
|
12,830
|
|
|
4,021,313
|
|
|||||||||
Issuances of Class A common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Exercise of stock options
|
|
2
|
|
|
—
|
|
|
36,503
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,505
|
|
|||||||||
Employee benefits
|
|
—
|
|
|
—
|
|
|
11,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,200
|
|
|||||||||
Employee Stock Purchase Plan
|
|
—
|
|
|
—
|
|
|
8,758
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,758
|
|
|||||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
10,103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,103
|
|
|||||||||
Reacquisition and retirement of Tracking Stock pursuant to the Share Exchange
|
|
—
|
|
|
(6
|
)
|
|
(227,278
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73,255
|
)
|
|
—
|
|
|
(300,539
|
)
|
|||||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,443
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409
|
|
|
(5,034
|
)
|
|||||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
392,561
|
|
|
—
|
|
|
(655
|
)
|
|
1,583
|
|
|
393,489
|
|
|||||||||
Other, net
|
|
—
|
|
|
—
|
|
|
1,498
|
|
|
92
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,590
|
|
|||||||||
Balance, December 31, 2017
|
|
102
|
|
|
—
|
|
|
3,669,461
|
|
|
(130,154
|
)
|
|
721,316
|
|
|
(98,162
|
)
|
|
—
|
|
|
14,822
|
|
|
4,177,385
|
|
|||||||||
Cumulative effect of accounting changes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,467
|
|
|
12,656
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,123
|
|
|||||||||
Balance, January 1, 2018
|
|
102
|
|
|
—
|
|
|
3,669,461
|
|
|
(119,687
|
)
|
|
733,972
|
|
|
(98,162
|
)
|
|
—
|
|
|
14,822
|
|
|
4,200,508
|
|
|||||||||
Issuances of Class A common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Exercise of stock options
|
|
—
|
|
|
|
|
4,404
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,404
|
|
||||||||||
Employee benefits
|
|
—
|
|
|
—
|
|
|
7,605
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,605
|
|
|||||||||
Employee Stock Purchase Plan
|
|
—
|
|
|
—
|
|
|
9,368
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,368
|
|
|||||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
9,990
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,990
|
|
|||||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,462
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,389
|
)
|
|
(4,851
|
)
|
|||||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,475
|
)
|
|
—
|
|
|
—
|
|
|
1,842
|
|
|
(38,633
|
)
|
|||||||||
Treasury share repurchase
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,292
|
)
|
|
—
|
|
|
—
|
|
|
(33,292
|
)
|
|||||||||
Other, net
|
|
—
|
|
|
—
|
|
|
1,694
|
|
|
(1,951
|
)
|
|
632
|
|
|
—
|
|
|
|
|
—
|
|
|
375
|
|
||||||||||
Balance, December 31, 2018
|
|
102
|
|
|
—
|
|
|
3,702,522
|
|
|
(125,100
|
)
|
|
694,129
|
|
|
(131,454
|
)
|
|
—
|
|
|
15,275
|
|
|
4,155,474
|
|
|||||||||
Issuances of Class A common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Exercise of stock options
|
|
3
|
|
|
—
|
|
|
67,307
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67,310
|
|
|||||||||
Employee benefits
|
|
—
|
|
|
—
|
|
|
6,654
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,654
|
|
|||||||||
Employee Stock Purchase Plan
|
|
—
|
|
|
—
|
|
|
9,778
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,778
|
|
|||||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
9,353
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,353
|
|
|||||||||
Purchase of non-controlling interest
|
|
—
|
|
|
—
|
|
|
(833
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,480
|
)
|
|
(7,313
|
)
|
|||||||||
Net assets distributed pursuant to the BSS Transaction
|
|
—
|
|
|
—
|
|
|
(532,747
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(532,747
|
)
|
|||||||||
Issuance of equity and contribution of assets pursuant to the Yahsat JV formation
|
|
—
|
|
|
—
|
|
|
29,576
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73,199
|
|
|
102,775
|
|
|||||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,962
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,328
|
|
|
6,290
|
|
|||||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62,917
|
)
|
|
—
|
|
|
—
|
|
|
(11,335
|
)
|
|
(74,252
|
)
|
|||||||||
Other, net
|
|
—
|
|
|
—
|
|
|
(1,127
|
)
|
|
—
|
|
|
1,597
|
|
|
—
|
|
|
—
|
|
|
1,761
|
|
|
2,231
|
|
|||||||||
Balance, December 31, 2019
|
|
$
|
105
|
|
|
$
|
—
|
|
|
$
|
3,290,483
|
|
|
$
|
(122,138
|
)
|
|
$
|
632,809
|
|
|
$
|
(131,454
|
)
|
|
$
|
—
|
|
|
$
|
75,748
|
|
|
$
|
3,745,553
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
$
|
(74,252
|
)
|
|
$
|
(38,633
|
)
|
|
$
|
393,489
|
|
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
588,200
|
|
|
598,178
|
|
|
533,849
|
|
|||
Impairment of long-lived assets
|
|
—
|
|
|
65,220
|
|
|
10,762
|
|
|||
Losses (gains) on investments, net
|
|
(28,912
|
)
|
|
12,109
|
|
|
(53,453
|
)
|
|||
Equity in losses (earnings) of unconsolidated affiliates, net
|
|
14,734
|
|
|
6,037
|
|
|
(15,814
|
)
|
|||
Foreign currency transaction losses (gains), net
|
|
11,590
|
|
|
15,583
|
|
|
(1,218
|
)
|
|||
Deferred tax provision (benefit), net
|
|
32,542
|
|
|
26,327
|
|
|
(288,577
|
)
|
|||
Stock-based compensation
|
|
9,353
|
|
|
9,990
|
|
|
10,103
|
|
|||
Amortization of debt issuance costs
|
|
5,912
|
|
|
7,923
|
|
|
7,378
|
|
|||
Dividends received from unconsolidated affiliates
|
|
2,716
|
|
|
10,000
|
|
|
19,000
|
|
|||
Proceeds from sale of trading securities
|
|
—
|
|
|
—
|
|
|
8,922
|
|
|||
Changes in current assets and current liabilities, net:
|
|
|
|
|
|
|
|
|
|
|||
Trade accounts receivable and contract assets, net
|
|
8,289
|
|
|
(17,842
|
)
|
|
421
|
|
|||
Other current assets
|
|
(39,190
|
)
|
|
18,577
|
|
|
200,584
|
|
|||
Trade accounts payable
|
|
13,149
|
|
|
9,562
|
|
|
(78,419
|
)
|
|||
Contract liabilities
|
|
26,376
|
|
|
7,867
|
|
|
5,322
|
|
|||
Accrued expenses and other current liabilities
|
|
66,352
|
|
|
12,183
|
|
|
7,402
|
|
|||
Changes in non-current assets and non-current liabilities, net
|
|
13,166
|
|
|
(5,070
|
)
|
|
(36,975
|
)
|
|||
Other, net
|
|
6,297
|
|
|
(3,489
|
)
|
|
4,116
|
|
|||
Net cash flows from operating activities
|
|
656,322
|
|
|
734,522
|
|
|
726,892
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Purchases of marketable investment securities
|
|
(993,369
|
)
|
|
(2,973,254
|
)
|
|
(855,717
|
)
|
|||
Sales and maturities of marketable investment securities
|
|
2,391,220
|
|
|
1,498,463
|
|
|
580,235
|
|
|||
Investments in unconsolidated affiliates
|
|
(2,149
|
)
|
|
(115,991
|
)
|
|
—
|
|
|||
Sale of investment in unconsolidated affiliates
|
|
—
|
|
|
1,558
|
|
|
17,781
|
|
|||
Dividend received from unconsolidated affiliate
|
|
2,284
|
|
|
—
|
|
|
—
|
|
|||
Purchase of other investments
|
|
(93,687
|
)
|
|
—
|
|
|
—
|
|
|||
Expenditures for property and equipment
|
|
(418,584
|
)
|
|
(555,141
|
)
|
|
(583,211
|
)
|
|||
Refunds and other receipts related to property and equipment
|
|
—
|
|
|
77,524
|
|
|
4,311
|
|
|||
Expenditures for externally marketed software
|
|
(29,310
|
)
|
|
(31,639
|
)
|
|
(31,331
|
)
|
|||
Purchases of regulatory authorizations
|
|
(34,447
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash flows from investing activities
|
|
821,958
|
|
|
(2,098,480
|
)
|
|
(867,932
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Repurchase and maturity of the 2019 Senior Secured Notes
|
|
(920,923
|
)
|
|
(70,173
|
)
|
|
—
|
|
|||
Repayment of other long-term debt and finance lease obligations
|
|
(29,347
|
)
|
|
(41,019
|
)
|
|
(37,670
|
)
|
|||
Payment of in-orbit incentive obligations
|
|
(5,447
|
)
|
|
(5,350
|
)
|
|
(5,487
|
)
|
|||
Net proceeds from Class A common stock options exercised
|
|
67,337
|
|
|
4,424
|
|
|
35,536
|
|
|||
Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan
|
|
9,779
|
|
|
9,368
|
|
|
8,758
|
|
|||
Treasury share purchase
|
|
—
|
|
|
(33,292
|
)
|
|
—
|
|
|||
Purchase of non-controlling interest
|
|
(7,313
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
603
|
|
|
(521
|
)
|
|
(1,065
|
)
|
|||
Net cash flows from financing activities
|
|
(885,311
|
)
|
|
(136,563
|
)
|
|
72
|
|
|||
Effect of exchange rates on cash and cash equivalents
|
|
(575
|
)
|
|
(2,233
|
)
|
|
1,351
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
592,394
|
|
|
(1,502,754
|
)
|
|
(139,617
|
)
|
|||
Cash and cash equivalents, including restricted amounts, beginning of period
|
|
929,495
|
|
|
2,432,249
|
|
|
2,571,866
|
|
|||
Cash and cash equivalents, including restricted amounts, end of period
|
|
$
|
1,521,889
|
|
|
$
|
929,495
|
|
|
$
|
2,432,249
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|||
Cash paid for interest (including capitalized interest)
|
|
$
|
195,331
|
|
|
$
|
240,596
|
|
|
$
|
207,617
|
|
Cash paid for income taxes
|
|
$
|
3,575
|
|
|
$
|
5,209
|
|
|
$
|
11,033
|
|
•
|
Hughes — which provides broadband satellite technologies and broadband internet services to domestic and international consumer customers and broadband network technologies, managed services, equipment, hardware, satellite services and communication solutions to service providers and enterprise customers. The Hughes segment also designs, provides and installs gateway and terminal equipment to customers for other satellite systems. In addition, our Hughes segment designs, develops, constructs and provides telecommunication networks comprising satellite ground segment systems and terminals to mobile system operators and our enterprise customers.
|
•
|
ESS — which uses certain of our owned and leased in-orbit satellites and related licenses to provide satellite services on a full-time and/or occasional-use basis to United States (“U.S.”) government service providers, internet service providers, broadcast news organizations, content providers and private enterprise customers.
|
•
|
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.
|
•
|
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.
|
|
|
Balance
December 31,
2018
|
|
Adoption of ASC 842 Increase (Decrease)
|
|
Balance January 1, 2019
|
||||||
|
|
|
|
|
|
|
||||||
Other current assets
|
|
$
|
165,809
|
|
|
$
|
(28
|
)
|
|
$
|
165,781
|
|
Operating lease right-of-use assets
|
|
—
|
|
|
120,358
|
|
|
120,358
|
|
|||
Other non-current assets, net
|
|
338,390
|
|
|
(7,272
|
)
|
|
331,118
|
|
|||
Total assets
|
|
8,661,294
|
|
|
113,058
|
|
|
8,774,352
|
|
|||
Accrued expenses and other current liabilities
|
|
181,698
|
|
|
17,453
|
|
|
199,151
|
|
|||
Operating lease liabilities
|
|
—
|
|
|
100,085
|
|
|
100,085
|
|
|||
Other non-current liabilities
|
|
80,304
|
|
|
(3,871
|
)
|
|
76,433
|
|
|||
Total liabilities
|
|
4,505,820
|
|
|
113,667
|
|
|
4,619,487
|
|
|||
Accumulated earnings (losses)
|
|
694,129
|
|
|
(609
|
)
|
|
693,520
|
|
|||
Total stockholders’ equity
|
|
4,155,474
|
|
|
(609
|
)
|
|
4,154,865
|
|
|||
Total liabilities and stockholders’ equity
|
|
8,661,294
|
|
|
113,058
|
|
|
8,774,352
|
|
|
|
For the year ended December 31, 2018
|
||||||||||||||
|
|
As Reported
|
|
Adjustments Due to the
|
|
Balances If We Had Not Adopted the New Standards
|
||||||||||
|
|
|
New Revenue Standard
|
|
New Investment Standard
|
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Statement of Operations:
|
|
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Services and other revenue
|
|
$
|
1,557,228
|
|
|
$
|
2,323
|
|
|
$
|
—
|
|
|
$
|
1,559,551
|
|
Total revenue
|
|
1,762,638
|
|
|
2,323
|
|
|
—
|
|
|
1,764,961
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales - services and other (exclusive of depreciation and amortization)
|
|
563,907
|
|
|
2,738
|
|
|
—
|
|
|
566,645
|
|
||||
Selling, general and administrative expenses
|
|
436,088
|
|
|
8,520
|
|
|
—
|
|
|
444,608
|
|
||||
Total costs and expenses
|
|
1,726,501
|
|
|
11,258
|
|
|
—
|
|
|
1,737,759
|
|
||||
Operating income (loss)
|
|
36,137
|
|
|
(8,935
|
)
|
|
—
|
|
|
27,202
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net of amounts capitalized
|
|
(219,288
|
)
|
|
539
|
|
|
—
|
|
|
(218,749
|
)
|
||||
Gains (losses) on investments, net
|
|
(12,622
|
)
|
|
—
|
|
|
(30,531
|
)
|
|
(43,153
|
)
|
||||
Equity in earnings (losses) of unconsolidated affiliates, net
|
|
(5,954
|
)
|
|
1,278
|
|
|
—
|
|
|
(4,676
|
)
|
||||
Total other income (expense), net
|
|
(161,923
|
)
|
|
1,817
|
|
|
(30,531
|
)
|
|
(190,637
|
)
|
||||
Income (loss) from continuing operations before income taxes
|
|
(125,786
|
)
|
|
(7,118
|
)
|
|
(30,531
|
)
|
|
(163,435
|
)
|
||||
Income tax benefit (provision), net
|
|
(6,576
|
)
|
|
1,852
|
|
|
—
|
|
|
(4,724
|
)
|
||||
Net income (loss)
|
|
(38,633
|
)
|
|
(5,266
|
)
|
|
(30,531
|
)
|
|
(74,430
|
)
|
||||
Net income (loss) attributable to EchoStar Corporation common stock
|
|
(40,475
|
)
|
|
(5,266
|
)
|
|
(30,531
|
)
|
|
(76,272
|
)
|
||||
Earnings (losses) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
(0.42
|
)
|
|
(0.05
|
)
|
|
(0.32
|
)
|
|
(0.79
|
)
|
||||
Diluted
|
|
(0.42
|
)
|
|
(0.05
|
)
|
|
(0.32
|
)
|
|
(0.79
|
)
|
|
|
For the year ended December 31, 2018
|
||||||||||||||
|
|
As Reported
|
|
Adjustments Due to the
|
|
Balances If We Had Not Adopted the New Standards
|
||||||||||
|
|
|
New Revenue Standard
|
|
New Investment Standard
|
|
||||||||||
|
|
|
||||||||||||||
Statement of Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
(38,633
|
)
|
|
$
|
(5,266
|
)
|
|
$
|
(30,531
|
)
|
|
$
|
(74,430
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|||||||
Unrealized gains (losses) on available-for-sale securities
|
|
(962
|
)
|
|
—
|
|
|
(6,485
|
)
|
|
(7,447
|
)
|
||||
Other-than-temporary impairment loss on available-for-sale securities
|
|
—
|
|
|
—
|
|
|
37,016
|
|
|
37,016
|
|
||||
Total other comprehensive income (loss), net of tax
|
|
(5,413
|
)
|
|
—
|
|
|
30,531
|
|
|
25,118
|
|
||||
Comprehensive income (loss)
|
|
(44,046
|
)
|
|
(5,266
|
)
|
|
—
|
|
|
(49,312
|
)
|
||||
Comprehensive income (loss) attributable to EchoStar Corporation
|
|
(44,499
|
)
|
|
(5,266
|
)
|
|
—
|
|
|
(49,765
|
)
|
|
|
As of
|
||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Trade accounts receivable and contract assets, net:
|
|
|
|
|
||||
Sales and services
|
|
$
|
152,632
|
|
|
$
|
154,415
|
|
Leasing
|
|
4,016
|
|
|
7,990
|
|
||
Total trade accounts receivable
|
|
156,648
|
|
|
162,405
|
|
||
Contract assets
|
|
63,758
|
|
|
55,295
|
|
||
Allowance for doubtful accounts
|
|
(23,777
|
)
|
|
(16,604
|
)
|
||
Total trade accounts receivable and contract assets, net
|
|
$
|
196,629
|
|
|
$
|
201,096
|
|
|
|
|
|
|
||||
Contract liabilities:
|
|
|
|
|
||||
Current
|
|
$
|
101,060
|
|
|
$
|
72,284
|
|
Non-current
|
|
10,572
|
|
|
10,133
|
|
||
Total contract liabilities
|
|
$
|
111,632
|
|
|
$
|
82,417
|
|
|
|
Balance at
Beginning of Year |
|
Bad Debt
Expense |
|
Deductions
|
|
Balance at
End of Year |
||||
|
|
|
|
|
|
|
|
|
||||
For the years ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
|
16,604
|
|
|
30,027
|
|
|
(22,854
|
)
|
|
23,777
|
|
December 31, 2018
|
|
12,027
|
|
|
24,984
|
|
|
(20,407
|
)
|
|
16,604
|
|
December 31, 2017
|
|
12,955
|
|
|
9,551
|
|
|
(10,479
|
)
|
|
12,027
|
|
|
|
Hughes
|
|
ESS
|
|
Corporate and Other
|
|
Consolidated
Total |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
North America
|
|
$
|
1,527,823
|
|
|
$
|
16,257
|
|
|
$
|
16,526
|
|
|
$
|
1,560,606
|
|
South and Central America
|
|
125,458
|
|
|
—
|
|
|
448
|
|
|
125,906
|
|
||||
All other
|
|
199,461
|
|
|
—
|
|
|
108
|
|
|
199,569
|
|
||||
Total revenue
|
|
$
|
1,852,742
|
|
|
$
|
16,257
|
|
|
$
|
17,082
|
|
|
$
|
1,886,081
|
|
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
North America
|
|
$
|
1,444,628
|
|
|
$
|
27,231
|
|
|
$
|
18,495
|
|
|
$
|
1,490,354
|
|
South and Central America
|
|
101,632
|
|
|
—
|
|
|
384
|
|
|
102,016
|
|
||||
All other
|
|
170,268
|
|
|
—
|
|
|
—
|
|
|
170,268
|
|
||||
Total revenue
|
|
$
|
1,716,528
|
|
|
$
|
27,231
|
|
|
$
|
18,879
|
|
|
$
|
1,762,638
|
|
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
North America
|
|
$
|
1,204,750
|
|
|
$
|
30,417
|
|
|
$
|
16,829
|
|
|
$
|
1,251,996
|
|
South and Central America
|
|
90,000
|
|
|
—
|
|
|
—
|
|
|
90,000
|
|
||||
All other
|
|
183,168
|
|
|
—
|
|
|
(9
|
)
|
|
183,159
|
|
||||
Total revenue
|
|
$
|
1,477,918
|
|
|
$
|
30,417
|
|
|
$
|
16,820
|
|
|
$
|
1,525,155
|
|
|
|
Hughes
|
|
ESS
|
|
Corporate and Other
|
|
Consolidated
Total |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
Services and other revenue:
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
$
|
1,535,966
|
|
|
$
|
10,464
|
|
|
$
|
6,493
|
|
|
$
|
1,552,924
|
|
Lease revenue
|
|
50,073
|
|
|
5,793
|
|
|
10,481
|
|
|
66,347
|
|
||||
Total services and other revenue
|
|
1,586,039
|
|
|
16,257
|
|
|
16,974
|
|
|
1,619,271
|
|
||||
Equipment revenue:
|
|
|
|
|
|
|
|
|
||||||||
Equipment
|
|
115,052
|
|
|
—
|
|
|
107
|
|
|
115,159
|
|
||||
Design, development and construction services
|
|
145,646
|
|
|
—
|
|
|
—
|
|
|
145,646
|
|
||||
Lease revenue
|
|
6,005
|
|
|
—
|
|
|
—
|
|
|
6,005
|
|
||||
Total equipment revenue
|
|
266,703
|
|
|
—
|
|
|
107
|
|
|
266,810
|
|
||||
Total revenue
|
|
$
|
1,852,742
|
|
|
$
|
16,257
|
|
|
$
|
17,082
|
|
|
$
|
1,886,081
|
|
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Services and other revenue:
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
$
|
1,313,059
|
|
|
$
|
21,044
|
|
|
$
|
5,821
|
|
|
$
|
1,339,924
|
|
Lease revenue
|
|
198,059
|
|
|
6,187
|
|
|
13,058
|
|
|
217,304
|
|
||||
Total services and other revenue
|
|
1,511,118
|
|
|
27,231
|
|
|
18,879
|
|
|
1,557,228
|
|
||||
Equipment revenue:
|
|
|
|
|
|
|
|
|
||||||||
Equipment
|
|
119,657
|
|
|
—
|
|
|
—
|
|
|
119,657
|
|
||||
Design, development and construction services
|
|
85,753
|
|
|
—
|
|
|
—
|
|
|
85,753
|
|
||||
Total equipment revenue
|
|
205,410
|
|
|
—
|
|
|
—
|
|
|
205,410
|
|
||||
Total revenue
|
|
$
|
1,716,528
|
|
|
$
|
27,231
|
|
|
$
|
18,879
|
|
|
$
|
1,762,638
|
|
|
|
For the year ended December 31, 2019
|
||
|
|
|
||
Sales-type lease revenue:
|
|
|
||
Revenue at lease commencement
|
|
$
|
6,005
|
|
Interest income
|
|
784
|
|
|
Total sales-type lease revenue
|
|
6,789
|
|
|
Operating lease revenue
|
|
65,563
|
|
|
Total lease revenue
|
|
$
|
72,352
|
|
|
|
Amounts
|
||
|
|
|
||
Year ending December 31,
|
|
|
||
2020
|
|
$
|
42,316
|
|
2021
|
|
33,545
|
|
|
2022
|
|
31,666
|
|
|
2023
|
|
30,551
|
|
|
2024
|
|
28,444
|
|
|
After 2024
|
|
123,844
|
|
|
Total lease payments
|
|
$
|
290,366
|
|
|
|
As of
December 31, 2019 |
|
For the year ended December 31, 2019
|
||||||||||||
|
|
Cost
|
|
Accumulated Depreciation
|
|
Net
|
|
Depreciation Expense
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Customer premises equipment
|
|
$
|
1,377,914
|
|
|
$
|
(1,043,431
|
)
|
|
$
|
334,483
|
|
|
$
|
182,523
|
|
Satellites
|
|
104,620
|
|
|
(31,360
|
)
|
|
73,260
|
|
|
7,495
|
|
||||
Real estate
|
|
46,930
|
|
|
(16,048
|
)
|
|
30,882
|
|
|
923
|
|
||||
Total
|
|
$
|
1,529,464
|
|
|
$
|
(1,090,839
|
)
|
|
$
|
438,625
|
|
|
$
|
190,941
|
|
|
|
Amounts
|
||
|
|
|
||
Right-of-use assets:
|
|
|
||
Operating
|
|
$
|
114,042
|
|
Finance
|
|
325,826
|
|
|
Total right-of-use assets
|
|
$
|
439,868
|
|
|
|
|
||
Lease liabilities:
|
|
|
||
Current:
|
|
|
||
Operating
|
|
$
|
14,651
|
|
Finance
|
|
486
|
|
|
Total current
|
|
15,137
|
|
|
Non-current:
|
|
|
||
Operating
|
|
96,941
|
|
|
Finance
|
|
565
|
|
|
Total non-current
|
|
97,506
|
|
|
Total lease liabilities
|
|
$
|
112,643
|
|
|
|
For the year ended December 31, 2019
|
||
|
|
|
||
Lease cost:
|
|
|
||
Operating lease cost
|
|
$
|
24,342
|
|
Finance lease cost:
|
|
|
||
Amortization of right-of-use assets
|
|
26,489
|
|
|
Interest on lease liabilities
|
|
173
|
|
|
Total finance lease cost
|
|
26,662
|
|
|
Short-term lease cost
|
|
434
|
|
|
Variable lease cost
|
|
8,837
|
|
|
Total lease cost
|
|
$
|
60,275
|
|
|
|
As of
December 31, 2019 |
|
|
|
|
|
Lease term and discount rate:
|
|
|
|
Weighted average remaining lease term:
|
|
|
|
Finance leases
|
|
2.1 years
|
|
Operating leases
|
|
10.3 years
|
|
|
|
|
|
Weighted average discount rate:
|
|
|
|
Finance leases
|
|
11.9
|
%
|
Operating leases
|
|
6.1
|
%
|
|
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Year ending December 31,
|
|
|
|
|
|
|
||||||
2020
|
|
$
|
20,884
|
|
|
$
|
629
|
|
|
$
|
21,513
|
|
2021
|
|
17,648
|
|
|
487
|
|
|
18,135
|
|
|||
2022
|
|
15,384
|
|
|
96
|
|
|
15,480
|
|
|||
2023
|
|
14,373
|
|
|
—
|
|
|
14,373
|
|
|||
2024
|
|
13,286
|
|
|
—
|
|
|
13,286
|
|
|||
After 2024
|
|
71,147
|
|
|
—
|
|
|
71,147
|
|
|||
Total future minimum lease payments
|
|
152,722
|
|
|
1,212
|
|
|
153,934
|
|
|||
Less: Interest
|
|
(41,130
|
)
|
|
(161
|
)
|
|
(41,291
|
)
|
|||
Total lease liabilities
|
|
$
|
111,592
|
|
|
$
|
1,051
|
|
|
$
|
112,643
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
Services and other revenue - DISH Network
|
|
$
|
195,942
|
|
|
$
|
305,229
|
|
|
$
|
337,079
|
|
Services and other revenue - other
|
|
16,260
|
|
|
23,496
|
|
|
23,274
|
|
|||
Total revenue
|
|
212,202
|
|
|
328,725
|
|
|
360,353
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
||||||
Cost of services and other
|
|
28,057
|
|
|
40,398
|
|
|
62,573
|
|
|||
Selling, general and administrative expenses
|
|
8,946
|
|
|
159
|
|
|
(4,493
|
)
|
|||
Depreciation and amortization
|
|
97,435
|
|
|
141,062
|
|
|
136,528
|
|
|||
Total costs and expenses
|
|
134,438
|
|
|
181,619
|
|
|
194,608
|
|
|||
Operating income (loss)
|
|
77,764
|
|
|
147,106
|
|
|
165,745
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
||||||
Interest expense
|
|
(17,865
|
)
|
|
(29,280
|
)
|
|
(32,851
|
)
|
|||
Total other income (expense), net
|
|
(17,865
|
)
|
|
(29,280
|
)
|
|
(32,851
|
)
|
|||
Income (loss) from discontinued operations before income taxes
|
|
59,899
|
|
|
117,826
|
|
|
132,894
|
|
|||
Income tax benefit (provision), net
|
|
(20,498
|
)
|
|
(24,097
|
)
|
|
129,179
|
|
|||
Net income (loss) from discontinued operations
|
|
$
|
39,401
|
|
|
$
|
93,729
|
|
|
$
|
262,073
|
|
|
|
As of
December 31, 2018 |
||
|
|
|
||
Assets:
|
|
|
||
Prepaids and deposits
|
|
$
|
3,486
|
|
Current assets of discontinued operations
|
|
3,486
|
|
|
Property and equipment, net
|
|
880,242
|
|
|
Regulatory authorizations, net
|
|
65,615
|
|
|
Other non-current assets, net
|
|
16,576
|
|
|
Non-current assets of discontinued operations
|
|
962,433
|
|
|
Total assets of discontinued operations
|
|
$
|
965,919
|
|
|
|
|
||
Liabilities:
|
|
|
||
Current portion of finance lease obligations
|
|
$
|
39,995
|
|
Accrued interest
|
|
2,066
|
|
|
Accrued expenses and other current liabilities
|
|
8,075
|
|
|
Current liabilities of discontinued operations
|
|
50,136
|
|
|
Finance lease obligations
|
|
187,002
|
|
|
Deferred tax liabilities, net
|
|
177,944
|
|
|
Other non-current liabilities
|
|
41,242
|
|
|
Non-current liabilities of discontinued operations
|
|
406,188
|
|
|
Total liabilities of discontinued operations
|
|
$
|
456,324
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss) from discontinued operations
|
|
$
|
39,401
|
|
|
$
|
93,729
|
|
|
$
|
262,073
|
|
Depreciation and amortization
|
|
97,435
|
|
|
141,062
|
|
|
136,528
|
|
|||
|
|
|
|
|
|
|
||||||
Investing activities:
|
|
|
|
|
|
|
||||||
Expenditures for property and equipment
|
|
510
|
|
|
175
|
|
|
699
|
|
|||
|
|
|
|
|
|
|
||||||
Financing activities:
|
|
|
|
|
|
|
||||||
Payment of finance lease obligations
|
|
27,203
|
|
|
35,886
|
|
|
32,177
|
|
|||
Payment of in-orbit incentive obligations
|
|
4,474
|
|
|
4,883
|
|
|
4,727
|
|
|
|
Amount
|
||
|
|
|
||
Revenue:
|
|
|
||
Equipment, services and other revenue - DISH Network
|
|
$
|
143,118
|
|
Equipment, services and other revenue - other
|
|
10,344
|
|
|
Total revenue
|
|
153,462
|
|
|
Costs and expenses:
|
|
|
||
Cost of equipment, services and other
|
|
121,967
|
|
|
Selling, general and administrative expenses
|
|
5,439
|
|
|
Research and development expenses
|
|
4,635
|
|
|
Depreciation and amortization
|
|
11,659
|
|
|
Total costs and expenses
|
|
143,700
|
|
|
Operating income (loss)
|
|
9,762
|
|
|
Other income (expense):
|
|
|
||
Interest expense
|
|
(15
|
)
|
|
Equity in earnings (losses) of unconsolidated affiliates, net
|
|
(1,159
|
)
|
|
Other, net
|
|
(57
|
)
|
|
Total other income (expense), net
|
|
(1,231
|
)
|
|
Income (loss) from discontinued operations before income taxes
|
|
8,531
|
|
|
Income tax benefit (provision), net
|
|
(22
|
)
|
|
Net income (loss) from discontinued operations
|
|
$
|
8,509
|
|
|
|
Amounts
|
||
|
|
|
||
Operating activities:
|
|
|
||
Net income (loss) from discontinued operations
|
|
$
|
8,509
|
|
Depreciation and amortization
|
|
11,659
|
|
|
|
|
|
||
Investing activities:
|
|
|
||
Expenditures for property and equipment
|
|
12,516
|
|
|
|
|
|
||
Financing activities:
|
|
|
||
Payment of finance lease obligations
|
|
607
|
|
|
|
Amounts
|
||
|
|
|
||
Assets:
|
|
|
||
Cash and cash equivalents
|
|
$
|
7,858
|
|
Other current assets
|
|
7,106
|
|
|
Property and equipment
|
|
88,358
|
|
|
Regulatory authorization
|
|
4,498
|
|
|
Goodwill
|
|
2,128
|
|
|
Other long-term assets
|
|
1,502
|
|
|
Total assets
|
|
$
|
111,450
|
|
|
|
|
||
Liabilities:
|
|
|
||
Accounts payable and accrued liabilities
|
|
$
|
6,516
|
|
Other current liabilities
|
|
2,159
|
|
|
Total liabilities
|
|
$
|
8,675
|
|
|
|
|
||
Total purchase price (1)
|
|
$
|
102,775
|
|
|
|
Amounts
|
||
|
|
|
||
Satellite payload
|
|
$
|
50,738
|
|
Regulatory authorization
|
|
4,498
|
|
|
Total
|
|
$
|
55,236
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to EchoStar Corporation common stock:
|
|
|
|
|
|
|
||||||
Net income (loss) from continuing operations
|
|
$
|
(102,318
|
)
|
|
$
|
(134,204
|
)
|
|
$
|
123,188
|
|
Net income (loss) from discontinued operations
|
|
39,401
|
|
|
93,729
|
|
|
270,582
|
|
|||
Net income (loss) attributable to EchoStar Corporation common stock
|
|
$
|
(62,917
|
)
|
|
$
|
(40,475
|
)
|
|
$
|
393,770
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Class A and B common stock:
|
|
|
|
|
|
|
||||||
Basic
|
|
96,738
|
|
|
96,250
|
|
|
95,425
|
|
|||
Dilutive impact of stock awards outstanding
|
|
—
|
|
|
—
|
|
|
1,316
|
|
|||
Diluted
|
|
96,738
|
|
|
96,250
|
|
|
96,741
|
|
|||
|
|
|
|
|
|
|
||||||
Earnings (losses) per share:
|
|
|
|
|
|
|
|
|
|
|||
Class A and B common stock:
|
|
|
|
|
|
|
||||||
Basic:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(1.06
|
)
|
|
$
|
(1.39
|
)
|
|
$
|
1.29
|
|
Discontinued operations
|
|
0.41
|
|
|
0.97
|
|
|
2.84
|
|
|||
Total basic earnings (loss) per share
|
|
$
|
(0.65
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
4.13
|
|
Diluted:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(1.06
|
)
|
|
$
|
(1.39
|
)
|
|
$
|
1.27
|
|
Discontinued operations
|
|
0.41
|
|
|
0.97
|
|
|
2.80
|
|
|||
Total diluted earnings (loss) per share
|
|
$
|
(0.65
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
4.07
|
|
|
|
Cumulative Foreign Currency Translation Adjustments
|
|
Unrealized Gain (Loss) On Available-For-Sale Securities
|
|
Other
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2017
|
|
$
|
(119,430
|
)
|
|
$
|
(10,801
|
)
|
|
$
|
77
|
|
|
$
|
(130,154
|
)
|
Cumulative effect of accounting changes
|
|
—
|
|
|
10,467
|
|
|
—
|
|
|
10,467
|
|
||||
Balance, January 1, 2018
|
|
(119,430
|
)
|
|
(334
|
)
|
|
77
|
|
|
(119,687
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
|
(34,399
|
)
|
|
(962
|
)
|
|
(1,910
|
)
|
|
(37,271
|
)
|
||||
Amounts reclassified to net income (loss)
|
|
32,136
|
|
|
(278
|
)
|
|
—
|
|
|
31,858
|
|
||||
Other comprehensive income (loss)
|
|
(2,263
|
)
|
|
(1,240
|
)
|
|
(1,910
|
)
|
|
(5,413
|
)
|
||||
Balance, December 31, 2018
|
|
(121,693
|
)
|
|
(1,574
|
)
|
|
(1,833
|
)
|
|
(125,100
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
|
(483
|
)
|
|
2,571
|
|
|
1,466
|
|
|
3,554
|
|
||||
Amounts reclassified to net income (loss)
|
|
—
|
|
|
(592
|
)
|
|
—
|
|
|
(592
|
)
|
||||
Other comprehensive income (loss)
|
|
(483
|
)
|
|
1,979
|
|
|
1,466
|
|
|
2,962
|
|
||||
Balance, December 31, 2019
|
|
$
|
(122,176
|
)
|
|
$
|
405
|
|
|
$
|
(367
|
)
|
|
$
|
(122,138
|
)
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Marketable investment securities:
|
|
|
|
|
|
|
||
Debt securities:
|
|
|
|
|
||||
Corporate bonds
|
|
$
|
577,570
|
|
|
$
|
1,735,653
|
|
Other debt securities
|
|
335,580
|
|
|
464,997
|
|
||
Total debt securities
|
|
913,150
|
|
|
2,200,650
|
|
||
Equity securities
|
|
35,566
|
|
|
90,976
|
|
||
Total marketable investment securities
|
|
948,716
|
|
|
2,291,626
|
|
||
Less: Restricted marketable investment securities
|
|
8,093
|
|
|
9,474
|
|
||
Total marketable investment securities
|
|
$
|
940,623
|
|
|
$
|
2,282,152
|
|
|
|
Amortized
|
|
Unrealized
|
|
Estimated
|
||||||||||
|
|
Cost
|
|
Gains
|
|
Losses
|
|
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate bonds
|
|
$
|
567,926
|
|
|
$
|
518
|
|
|
$
|
(2
|
)
|
|
$
|
568,442
|
|
Other debt securities
|
|
335,572
|
|
|
8
|
|
|
—
|
|
|
335,580
|
|
||||
Total available-for-sale debt securities
|
|
$
|
903,498
|
|
|
$
|
526
|
|
|
$
|
(2
|
)
|
|
$
|
904,022
|
|
As of December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate bonds
|
|
$
|
1,689,093
|
|
|
$
|
318
|
|
|
$
|
(1,896
|
)
|
|
$
|
1,687,515
|
|
Other debt securities
|
|
464,993
|
|
|
7
|
|
|
(3
|
)
|
|
464,997
|
|
||||
Total available-for-sale debt securities
|
|
$
|
2,154,086
|
|
|
$
|
325
|
|
|
$
|
(1,899
|
)
|
|
$
|
2,152,512
|
|
|
|
As of December 31,
|
||||||||||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate bonds
|
|
$
|
—
|
|
|
$
|
577,570
|
|
|
$
|
577,570
|
|
|
$
|
—
|
|
|
$
|
1,735,653
|
|
|
$
|
1,735,653
|
|
Other debt securities
|
|
8,093
|
|
|
327,487
|
|
|
335,580
|
|
|
9,474
|
|
|
455,523
|
|
|
464,997
|
|
||||||
Total debt securities
|
|
8,093
|
|
|
905,057
|
|
|
913,150
|
|
|
9,474
|
|
|
2,191,176
|
|
|
2,200,650
|
|
||||||
Equity securities
|
|
27,933
|
|
|
7,633
|
|
|
35,566
|
|
|
85,298
|
|
|
5,678
|
|
|
90,976
|
|
||||||
Total marketable investment securities
|
|
$
|
36,026
|
|
|
$
|
912,690
|
|
|
$
|
948,716
|
|
|
$
|
94,772
|
|
|
$
|
2,196,854
|
|
|
$
|
2,291,626
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Raw materials
|
|
$
|
4,240
|
|
|
$
|
4,856
|
|
Work-in-process
|
|
6,979
|
|
|
13,901
|
|
||
Finished goods
|
|
68,402
|
|
|
56,622
|
|
||
Total inventory
|
|
$
|
79,621
|
|
|
$
|
75,379
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Property and equipment, net:
|
|
|
|
|
||||
Satellites, net
|
|
$
|
1,749,576
|
|
|
$
|
1,764,454
|
|
Other property and equipment, net
|
|
779,162
|
|
|
770,212
|
|
||
Total property and equipment, net
|
|
$
|
2,528,738
|
|
|
$
|
2,534,666
|
|
Satellite
|
|
Segment
|
|
Launch Date
|
|
Nominal Degree Orbital Location (Longitude)
|
|
Depreciable Life (In Years)
|
|
|
|
|
|
|
|
|
|
Owned:
|
|
|
|
|
|
|
|
|
SPACEWAY 3 (1)
|
|
Hughes
|
|
August 2007
|
|
95 W
|
|
10
|
EchoStar XVII
|
|
Hughes
|
|
July 2012
|
|
107 W
|
|
15
|
EchoStar XIX
|
|
Hughes
|
|
December 2016
|
|
97.1 W
|
|
15
|
Al Yah 3 (2)
|
|
Hughes
|
|
January 2018
|
|
20 W
|
|
7
|
EchoStar IX (3)
|
|
ESS
|
|
August 2003
|
|
121 W
|
|
12
|
EUTELSAT 10A (“W2A”) (4)
|
|
Corporate and Other
|
|
April 2009
|
|
10 E
|
|
-
|
EchoStar XXI
|
|
Corporate and Other
|
|
June 2017
|
|
10.25 E
|
|
15
|
|
|
|
|
|
|
|
|
|
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
|
|
|
Depreciable Life
(In Years)
|
|
As of December 31,
|
||||||
|
|
|
2019
|
|
2018
|
|||||
|
|
|
|
|
|
|
||||
Satellites, net:
|
|
|
|
|
|
|
||||
Satellites - owned
|
|
7 to 15
|
|
$
|
1,816,303
|
|
|
$
|
1,760,252
|
|
Satellites - acquired under finance leases
|
|
10 to 15
|
|
381,163
|
|
|
385,592
|
|
||
Construction in progress
|
|
—
|
|
365,133
|
|
|
277,583
|
|
||
Total satellites
|
|
|
|
2,562,599
|
|
|
2,423,427
|
|
||
Accumulated depreciation
|
|
|
|
(813,023
|
)
|
|
(658,973
|
)
|
||
Total satellites, net
|
|
|
|
$
|
1,749,576
|
|
|
$
|
1,764,454
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Depreciation and amortization expense:
|
|
|
|
|
|
|
||||||
Satellites - owned
|
|
$
|
130,705
|
|
|
$
|
124,987
|
|
|
$
|
93,064
|
|
Satellites acquired under finance leases
|
|
25,755
|
|
|
20,269
|
|
|
9,962
|
|
|||
Total depreciation and amortization expense
|
|
$
|
156,460
|
|
|
$
|
145,256
|
|
|
$
|
103,026
|
|
|
|
|
|
|
|
|
||||||
Capitalized interest
|
|
$
|
22,576
|
|
|
$
|
18,285
|
|
|
$
|
52,015
|
|
|
|
Depreciable Life (In Years)
|
|
As of December 31,
|
||||||
|
|
|
2019
|
|
2018
|
|||||
|
|
|
|
|
|
|
||||
Other property and equipment, net:
|
|
|
|
|
|
|
||||
Land
|
|
—
|
|
$
|
28,943
|
|
|
$
|
33,571
|
|
Buildings and improvements
|
|
1 to 40
|
|
113,938
|
|
|
170,816
|
|
||
Furniture, fixtures, equipment and other
|
|
1 to 12
|
|
855,274
|
|
|
791,035
|
|
||
Customer premises equipment
|
|
2 to 4
|
|
1,377,914
|
|
|
1,159,977
|
|
||
Construction in progress
|
|
|
|
52,986
|
|
|
29,443
|
|
||
Total other property and equipment
|
|
|
|
2,429,055
|
|
|
2,184,842
|
|
||
Accumulated depreciation
|
|
|
|
(1,649,893
|
)
|
|
(1,414,630
|
)
|
||
Other property and equipment, net
|
|
|
|
$
|
779,162
|
|
|
$
|
770,212
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Other property and equipment depreciation expense:
|
|
|
|
|
|
|
||||||
Buildings and improvements
|
|
$
|
5,791
|
|
|
$
|
11,285
|
|
|
$
|
16,976
|
|
Furniture, fixtures, equipment and other
|
|
90,885
|
|
|
82,945
|
|
|
72,208
|
|
|||
Customer premises equipment
|
|
194,906
|
|
|
174,749
|
|
|
146,562
|
|
|||
Total depreciation expense
|
|
$
|
291,582
|
|
|
$
|
268,979
|
|
|
$
|
235,746
|
|
|
|
Finite lived
|
|
|
|
|
||||||||||||||
|
|
Cost
|
|
Accumulated Amortization
|
|
Total
|
|
Indefinite lived
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
As of December 31, 2016
|
|
$
|
87,959
|
|
|
$
|
(14,983
|
)
|
|
$
|
72,976
|
|
|
$
|
406,042
|
|
|
$
|
479,018
|
|
Impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,000
|
)
|
|
(6,000
|
)
|
|||||
Amortization expense
|
|
—
|
|
|
(5,097
|
)
|
|
(5,097
|
)
|
|
—
|
|
|
(5,097
|
)
|
|||||
Currency translation adjustments
|
|
4,662
|
|
|
(1,262
|
)
|
|
3,400
|
|
|
—
|
|
|
3,400
|
|
|||||
As of December 31, 2017
|
|
92,621
|
|
|
(21,342
|
)
|
|
71,279
|
|
|
400,042
|
|
|
471,321
|
|
|||||
Impairment
|
|
(37,476
|
)
|
|
7,848
|
|
|
(29,628
|
)
|
|
—
|
|
|
(29,628
|
)
|
|||||
Amortization expense
|
|
—
|
|
|
(5,190
|
)
|
|
(5,190
|
)
|
|
—
|
|
|
(5,190
|
)
|
|||||
Currency translation adjustments
|
|
(8,358
|
)
|
|
1,894
|
|
|
(6,464
|
)
|
|
—
|
|
|
(6,464
|
)
|
|||||
As of December 31, 2018
|
|
46,787
|
|
|
(16,790
|
)
|
|
29,997
|
|
|
400,042
|
|
|
430,039
|
|
|||||
Additions
|
|
12,833
|
|
|
—
|
|
|
12,833
|
|
|
39,491
|
|
|
52,324
|
|
|||||
Amortization expense
|
|
—
|
|
|
(3,672
|
)
|
|
(3,672
|
)
|
|
—
|
|
|
(3,672
|
)
|
|||||
Currency translation adjustments
|
|
(1,169
|
)
|
|
318
|
|
|
(851
|
)
|
|
758
|
|
|
(93
|
)
|
|||||
As of December 31, 2019
|
|
$
|
58,451
|
|
|
$
|
(20,144
|
)
|
|
$
|
38,307
|
|
|
$
|
440,291
|
|
|
$
|
478,598
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average useful life
|
|
|
|
13 years
|
|
|
|
|
|
|
|
Amount
|
||
|
|
||
For the years ending December 31,
|
|
|
|
2020
|
$
|
4,467
|
|
2021
|
4,458
|
|
|
2022
|
4,458
|
|
|
2023
|
4,458
|
|
|
2024
|
4,467
|
|
|
Thereafter
|
15,999
|
|
|
Total
|
$
|
38,307
|
|
|
|
Customer Relationships
|
|
Patents
|
|
Trademarks and Licenses
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Cost:
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2016
|
|
$
|
270,300
|
|
|
$
|
60,835
|
|
|
$
|
29,700
|
|
|
$
|
360,835
|
|
Additions
|
|
—
|
|
|
465
|
|
|
—
|
|
|
465
|
|
||||
As of December 31, 2017
|
|
270,300
|
|
|
61,300
|
|
|
29,700
|
|
|
361,300
|
|
||||
Write-off
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
||||
As of December 31, 2018
|
|
270,300
|
|
|
61,283
|
|
|
29,700
|
|
|
361,283
|
|
||||
As of December 31, 2019
|
|
$
|
270,300
|
|
|
$
|
61,283
|
|
|
$
|
29,700
|
|
|
$
|
361,283
|
|
Accumulated amortization:
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2016
|
|
$
|
(214,544
|
)
|
|
$
|
(57,266
|
)
|
|
$
|
(8,291
|
)
|
|
$
|
(280,101
|
)
|
Amortization expense
|
|
(17,098
|
)
|
|
(3,661
|
)
|
|
(1,485
|
)
|
|
(22,244
|
)
|
||||
As of December 31, 2017
|
|
(231,642
|
)
|
|
(60,927
|
)
|
|
(9,776
|
)
|
|
(302,345
|
)
|
||||
Amortization expense
|
|
(13,145
|
)
|
|
(94
|
)
|
|
(1,485
|
)
|
|
(14,724
|
)
|
||||
Write-off
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
As of December 31, 2018
|
|
(244,787
|
)
|
|
(61,004
|
)
|
|
(11,261
|
)
|
|
(317,052
|
)
|
||||
Amortization expense
|
|
(13,146
|
)
|
|
(93
|
)
|
|
(1,485
|
)
|
|
(14,724
|
)
|
||||
As of December 31, 2019
|
|
$
|
(257,933
|
)
|
|
$
|
(61,097
|
)
|
|
$
|
(12,746
|
)
|
|
$
|
(331,776
|
)
|
Carrying amount:
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2016
|
|
$
|
55,756
|
|
|
$
|
3,569
|
|
|
$
|
21,409
|
|
|
$
|
80,734
|
|
As of December 31, 2017
|
|
$
|
38,658
|
|
|
$
|
373
|
|
|
$
|
19,924
|
|
|
$
|
58,955
|
|
As of December 31, 2018
|
|
$
|
25,513
|
|
|
$
|
279
|
|
|
$
|
18,439
|
|
|
$
|
44,231
|
|
As of December 31, 2019
|
|
$
|
12,367
|
|
|
$
|
186
|
|
|
$
|
16,954
|
|
|
$
|
29,507
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average useful life
|
|
8 years
|
|
6 years
|
|
20 years
|
|
|
|
Amount
|
||
|
|
||
For the years ending December 31,
|
|
|
|
2020
|
$
|
11,074
|
|
2021
|
4,449
|
|
|
2022
|
1,485
|
|
|
2023
|
1,485
|
|
|
2024
|
1,485
|
|
|
Thereafter
|
9,529
|
|
|
Total
|
$
|
29,507
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Other investments, net:
|
|
|
|
|
||||
Equity method investments
|
|
$
|
166,209
|
|
|
$
|
182,035
|
|
Other equity investments
|
|
66,627
|
|
|
81,578
|
|
||
Other debt investments, net
|
|
92,569
|
|
|
2,900
|
|
||
Total other investments, net
|
|
$
|
325,405
|
|
|
$
|
266,513
|
|
|
|
As of December 31,
|
||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||
|
|
Dish Mexico
|
|
All Investees
|
|
Dish Mexico
|
|
All Investees
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
||||||||
Current assets
|
|
$
|
158,481
|
|
|
$
|
346,868
|
|
|
$
|
147,140
|
|
|
$
|
162,593
|
|
Non-current assets
|
|
260,742
|
|
|
502,931
|
|
|
187,130
|
|
|
188,077
|
|
||||
Total assets
|
|
$
|
419,223
|
|
|
$
|
849,799
|
|
|
$
|
334,270
|
|
|
$
|
350,670
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
|
$
|
123,159
|
|
|
$
|
147,010
|
|
|
$
|
128,708
|
|
|
$
|
129,837
|
|
Non-current liabilities
|
|
175,418
|
|
|
176,819
|
|
|
109,643
|
|
|
110,460
|
|
||||
Total liabilities
|
|
$
|
298,577
|
|
|
$
|
323,829
|
|
|
$
|
238,351
|
|
|
$
|
240,297
|
|
|
|
As of December 31,
|
||||||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
|
Dish Mexico
|
|
All Investees
|
|
Dish Mexico
|
|
All Investees
|
|
Dish Mexico
|
|
All Investees
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income statement data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
|
$
|
287,984
|
|
|
$
|
330,535
|
|
|
$
|
444,264
|
|
|
$
|
475,559
|
|
|
$
|
497,096
|
|
|
$
|
535,153
|
|
Operating income (loss)
|
|
(9,701
|
)
|
|
(35,747
|
)
|
|
(55,062
|
)
|
|
(43,553
|
)
|
|
15,094
|
|
|
31,919
|
|
||||||
Income (loss) before income taxes
|
|
(27,479
|
)
|
|
(50,410
|
)
|
|
(33,449
|
)
|
|
(23,701
|
)
|
|
18,267
|
|
|
32,739
|
|
||||||
Net income (loss)
|
|
(19,871
|
)
|
|
(42,967
|
)
|
|
(20,126
|
)
|
|
(10,378
|
)
|
|
15,658
|
|
|
30,130
|
|
||||||
Net income (loss) attributable to EchoStar
|
|
(11,401
|
)
|
|
(14,734
|
)
|
|
(10,828
|
)
|
|
(5,954
|
)
|
|
9,946
|
|
|
16,973
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Other debt investments, net:
|
|
|
|
|
||||
Cost basis
|
|
$
|
102,878
|
|
|
$
|
2,900
|
|
Discount
|
|
(10,309
|
)
|
|
—
|
|
||
Total other debt investments, net
|
|
$
|
92,569
|
|
|
$
|
2,900
|
|
|
|
Effective Interest Rate
|
|
As of December 31,
|
||||||||||||||
|
|
|
2019
|
|
2018
|
|||||||||||||
|
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Senior Secured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
6 1/2% Senior Secured Notes due 2019
|
|
6.959%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
920,836
|
|
|
$
|
932,696
|
|
5 1/4% Senior Secured Notes due 2026
|
|
5.320%
|
|
750,000
|
|
|
825,308
|
|
|
750,000
|
|
|
695,865
|
|
||||
Senior Unsecured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
7 5/8% Senior Unsecured Notes due 2021
|
|
8.062%
|
|
900,000
|
|
|
963,783
|
|
|
900,000
|
|
|
934,902
|
|
||||
6 5/8% Senior Unsecured Notes due 2026
|
|
6.688%
|
|
750,000
|
|
|
833,903
|
|
|
750,000
|
|
|
696,353
|
|
||||
Less: Unamortized debt issuance costs
|
|
|
|
(10,832
|
)
|
|
—
|
|
|
(16,757
|
)
|
|
—
|
|
||||
Subtotal
|
|
|
|
2,389,168
|
|
|
$
|
2,622,994
|
|
|
3,304,079
|
|
|
$
|
3,259,816
|
|
||
Finance lease obligations
|
|
|
|
1,051
|
|
|
|
|
|
1,705
|
|
|
|
|
||||
Total debt and finance lease obligations
|
|
|
|
2,390,219
|
|
|
|
|
|
3,305,784
|
|
|
|
|
||||
Less: Current portion
|
|
|
|
(486
|
)
|
|
|
|
|
(919,582
|
)
|
|
|
|
||||
Long-term debt and finance lease obligations, net of current portion
|
|
|
|
$
|
2,389,733
|
|
|
|
|
|
$
|
2,386,202
|
|
|
|
|
•
|
secured obligations of HSS;
|
•
|
secured by security interests in substantially all existing and future tangible and intangible assets of HSS and certain of its subsidiaries on a first priority basis, subject to certain exceptions;
|
•
|
effectively junior to HSS’ obligations that are secured by assets that are not part of the collateral that secures the 2026 Senior Secured Notes, in each case, to the extent of the value of the collateral securing such obligations;
|
•
|
effectively senior to HSS’ 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 existing and future obligations of HSS that are expressly subordinated to the 2026 Senior Secured Notes;
|
•
|
structurally junior to any existing and future obligations of any of HSS’ 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 HSS’ 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.
|
•
|
unsecured senior obligations of HSS;
|
•
|
ranked equally with all existing and future unsubordinated indebtedness (including as between the 2021 Senior Unsecured Notes and the 2026 Senior Unsecured Notes) and effectively junior to any secured indebtedness up to the value of the assets securing such indebtedness;
|
•
|
effectively junior to HSS’ obligations that are secured to the extent of the value of the collateral securing such obligations;
|
•
|
senior in right of payment to all existing and future obligations of HSS that are expressly subordinated to the respective Unsecured Notes;
|
•
|
structurally junior to any existing and future obligations of any of HSS’ subsidiaries that do not guarantee the respective Unsecured Notes; and
|
•
|
unconditionally guaranteed, jointly and severally, on a general senior secured basis by certain of HSS’ 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.
|
•
|
incur additional debt;
|
•
|
pay dividends or make distributions on HSS’ or their capital stock or repurchase HSS’ 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 its or their ability to pay dividends, make distributions, make other payments, or transfer assets.
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
120,295
|
|
|
$
|
33,176
|
|
|
$
|
14,488
|
|
Foreign
|
|
(213,460
|
)
|
|
(158,962
|
)
|
|
(46,688
|
)
|
|||
Income (loss) from continuing operations before income taxes
|
|
$
|
(93,165
|
)
|
|
$
|
(125,786
|
)
|
|
$
|
(32,200
|
)
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Current benefit (provision), net:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
(5,089
|
)
|
|
$
|
(1,476
|
)
|
|
$
|
(1,429
|
)
|
State
|
|
286
|
|
|
4,881
|
|
|
267
|
|
|||
Foreign
|
|
(633
|
)
|
|
(2,690
|
)
|
|
(2,335
|
)
|
|||
Total current benefit (provision), net
|
|
$
|
(5,436
|
)
|
|
$
|
715
|
|
|
$
|
(3,497
|
)
|
|
|
|
|
|
|
|
||||||
Deferred benefit (provision), net:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
(7,511
|
)
|
|
$
|
6,857
|
|
|
$
|
168,625
|
|
State
|
|
(10,964
|
)
|
|
(14,375
|
)
|
|
(4,482
|
)
|
|||
Foreign
|
|
3,423
|
|
|
227
|
|
|
(5,539
|
)
|
|||
Total deferred benefit (provision), net
|
|
(15,052
|
)
|
|
(7,291
|
)
|
|
158,604
|
|
|||
Total income tax benefit (provision), net
|
|
$
|
(20,488
|
)
|
|
$
|
(6,576
|
)
|
|
$
|
155,107
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Statutory rate
|
|
$
|
19,565
|
|
|
$
|
26,415
|
|
|
$
|
11,270
|
|
State income taxes, net of federal provision (benefit)
|
|
(8,137
|
)
|
|
(10,519
|
)
|
|
(3,165
|
)
|
|||
Permanent differences
|
|
(6,531
|
)
|
|
(1,367
|
)
|
|
1,154
|
|
|||
Tax credits
|
|
12,453
|
|
|
7,825
|
|
|
5,622
|
|
|||
Valuation allowance
|
|
(54,251
|
)
|
|
(50,118
|
)
|
|
(4,642
|
)
|
|||
Enactment of Tax Cuts and Job Act of 2017
|
|
—
|
|
|
—
|
|
|
144,945
|
|
|||
Rates different than statutory
|
|
18,786
|
|
|
20,254
|
|
|
77
|
|
|||
Other
|
|
(2,373
|
)
|
|
934
|
|
|
(154
|
)
|
|||
Total income tax benefit (provision), net
|
|
$
|
(20,488
|
)
|
|
$
|
(6,576
|
)
|
|
$
|
155,107
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
|
|
|
||
Net operating losses, credit and other carryforwards
|
|
$
|
289,353
|
|
|
$
|
284,300
|
|
Unrealized losses on investments, net
|
|
39,018
|
|
|
41,852
|
|
||
Accrued expenses
|
|
19,660
|
|
|
22,125
|
|
||
Stock-based compensation
|
|
5,772
|
|
|
10,210
|
|
||
Other assets
|
|
28,163
|
|
|
22,366
|
|
||
Total deferred tax assets
|
|
381,966
|
|
|
380,853
|
|
||
Valuation allowance
|
|
(181,032
|
)
|
|
(109,762
|
)
|
||
Deferred tax assets after valuation allowance
|
|
$
|
200,934
|
|
|
$
|
271,091
|
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
$
|
(544,158
|
)
|
|
$
|
(553,480
|
)
|
Other liabilities
|
|
(1,217
|
)
|
|
(1,290
|
)
|
||
Total deferred tax liabilities
|
|
(545,375
|
)
|
|
(554,770
|
)
|
||
Total net deferred tax liabilities
|
|
$
|
(344,441
|
)
|
|
$
|
(283,679
|
)
|
|
|
|
|
|
||||
Net deferred tax asset foreign jurisdiction
|
|
$
|
7,251
|
|
|
$
|
4,310
|
|
Net deferred tax liability domestic
|
|
(351,692
|
)
|
|
(287,989
|
)
|
||
Total net deferred tax liabilities
|
|
$
|
(344,441
|
)
|
|
$
|
(283,679
|
)
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Unrecognized tax benefit balance as of beginning of period:
|
|
$
|
69,540
|
|
|
$
|
63,296
|
|
|
$
|
63,502
|
|
Additions based on tax positions related to the current year
|
|
861
|
|
|
4,361
|
|
|
1,116
|
|
|||
Additions based on tax positions related to prior years
|
|
—
|
|
|
2,539
|
|
|
258
|
|
|||
Reductions based on tax positions related to prior years
|
|
—
|
|
|
(656
|
)
|
|
(852
|
)
|
|||
Reductions based on expirations of statute of limitations
|
|
—
|
|
|
—
|
|
|
(728
|
)
|
|||
Balance as of end of period
|
|
$
|
70,401
|
|
|
$
|
69,540
|
|
|
$
|
63,296
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||
Exercise Price Range
|
|
Number Outstanding as of December 31, 2019
|
|
Weighted-
Average
Remaining
Contractual Term
(In Years)
|
|
Weighted-
Average
Exercise
Price
|
|
Number Exercisable as of December 31, 2019
|
|
Weighted-
Average
Remaining
Contractual Term
(In Years)
|
|
Weighted-
Average
Exercise
Price
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
$0.00 - $20.00
|
|
62,662
|
|
|
1
|
|
$
|
17.15
|
|
|
62,662
|
|
|
1
|
|
$
|
17.15
|
|
$20.01 - $25.00
|
|
3,221
|
|
|
3
|
|
22.96
|
|
|
3,221
|
|
|
3
|
|
22.96
|
|
||
$25.01 - $30.00
|
|
405,635
|
|
|
3
|
|
29.74
|
|
|
405,635
|
|
|
3
|
|
29.74
|
|
||
$30.01 - $35.00
|
|
681,044
|
|
|
5
|
|
33.03
|
|
|
411,674
|
|
|
3
|
|
33.09
|
|
||
$35.01 - $40.00
|
|
1,608,113
|
|
|
9
|
|
38.77
|
|
|
196,175
|
|
|
6
|
|
38.32
|
|
||
$40.01 - $45.00
|
|
1,062,153
|
|
|
5
|
|
42.16
|
|
|
1,012,766
|
|
|
5
|
|
42.03
|
|
||
$45.01 - $50.00
|
|
926,539
|
|
|
7
|
|
48.41
|
|
|
384,305
|
|
|
7
|
|
48.36
|
|
||
$50.01 - $55.00
|
|
63,277
|
|
|
6
|
|
52.69
|
|
|
34,509
|
|
|
5
|
|
57.73
|
|
||
|
|
4,812,644
|
|
|
7
|
|
43.40
|
|
|
2,510,947
|
|
|
5
|
|
38.76
|
|
|
|
For the years ended December 31,
|
|||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total options outstanding, beginning of period
|
|
5,013,038
|
|
|
$
|
41.80
|
|
|
4,951,256
|
|
|
$
|
41.42
|
|
|
5,968,763
|
|
|
$
|
39.30
|
|
Granted
|
|
1,959,597
|
|
|
38.12
|
|
|
215,500
|
|
|
51.71
|
|
|
1,262,500
|
|
|
57.12
|
|
|||
Exercised
|
|
(1,986,937
|
)
|
|
33.89
|
|
|
(108,318
|
)
|
|
40.67
|
|
|
(1,018,507
|
)
|
|
35.84
|
|
|||
Forfeited and canceled
|
|
(173,054
|
)
|
|
48.99
|
|
|
(45,400
|
)
|
|
50.21
|
|
|
(1,261,500
|
)
|
|
51.63
|
|
|||
Total options outstanding, end of period
|
|
4,812,644
|
|
|
43.40
|
|
|
5,013,038
|
|
|
41.80
|
|
|
4,951,256
|
|
|
41.42
|
|
|||
Exercisable at end of period
|
|
2,510,947
|
|
|
38.76
|
|
|
3,710,138
|
|
|
38.59
|
|
|
3,143,656
|
|
|
36.98
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Stock-based compensation expense:
|
|
|
|
|
|
|
||||||
Research and development expenses
|
|
$
|
465
|
|
|
$
|
634
|
|
|
$
|
1,010
|
|
Selling, general and administrative expenses
|
|
8,860
|
|
|
9,442
|
|
|
10,579
|
|
|||
Total stock-based compensation expense
|
|
$
|
9,325
|
|
|
$
|
10,076
|
|
|
$
|
11,589
|
|
|
|
For the years ended December 31,
|
||||
|
|
2019
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
Assumptions:
|
|
|
|
|
|
|
Risk-free interest rate
|
|
1.83% - 2.54%
|
|
2.25% - 2.99%
|
|
1.98% - 2.05%
|
Volatility
|
|
23.58% - 30.95%
|
|
22.77% - 23.28%
|
|
24.20% - 26.69%
|
Expected term of options (in years)
|
|
5.7 - 5.8
|
|
5.7 - 5.8
|
|
5.7 - 5.8
|
Weighted-average grant-date fair value
|
|
$10.22 - $14.49
|
|
$12.38 - $16.23
|
|
$15.25 - $16.49
|
|
|
Payments Due in the Year Ending December 31,
|
||||||||||||||||||||||||||
|
|
Total
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-term debt
|
|
$
|
2,400,000
|
|
|
$
|
—
|
|
|
$
|
900,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,500,000
|
|
Finance lease obligations
|
|
1,212
|
|
|
629
|
|
|
487
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Interest on long-term debt
|
|
726,377
|
|
|
157,688
|
|
|
123,375
|
|
|
89,063
|
|
|
89,063
|
|
|
89,063
|
|
|
178,125
|
|
|||||||
Satellite-related obligations
|
|
419,033
|
|
|
192,869
|
|
|
31,036
|
|
|
18,479
|
|
|
18,004
|
|
|
17,620
|
|
|
141,025
|
|
|||||||
Operating lease obligations
|
|
152,722
|
|
|
20,884
|
|
|
17,648
|
|
|
15,384
|
|
|
14,373
|
|
|
13,286
|
|
|
71,147
|
|
|||||||
Total
|
|
$
|
3,699,344
|
|
|
$
|
372,070
|
|
|
$
|
1,072,546
|
|
|
$
|
123,022
|
|
|
$
|
121,440
|
|
|
$
|
119,969
|
|
|
$
|
1,890,297
|
|
|
|
Hughes
|
|
ESS
|
|
Corporate and Other
|
|
Consolidated
Total |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
External revenue
|
|
$
|
1,852,742
|
|
|
$
|
15,131
|
|
|
$
|
18,208
|
|
|
$
|
1,886,081
|
|
Intersegment revenue
|
|
—
|
|
|
1,126
|
|
|
(1,126
|
)
|
|
—
|
|
||||
Total revenue
|
|
$
|
1,852,742
|
|
|
$
|
16,257
|
|
|
$
|
17,082
|
|
|
$
|
1,886,081
|
|
EBITDA
|
|
$
|
625,660
|
|
|
$
|
6,994
|
|
|
$
|
(55,055
|
)
|
|
$
|
577,599
|
|
Capital expenditures
|
|
$
|
308,781
|
|
|
$
|
—
|
|
|
$
|
109,293
|
|
|
$
|
418,074
|
|
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
External revenue
|
|
$
|
1,716,169
|
|
|
$
|
27,009
|
|
|
$
|
19,460
|
|
|
$
|
1,762,638
|
|
Intersegment revenue
|
|
359
|
|
|
222
|
|
|
(581
|
)
|
|
—
|
|
||||
Total revenue
|
|
$
|
1,716,528
|
|
|
$
|
27,231
|
|
|
$
|
18,879
|
|
|
$
|
1,762,638
|
|
EBITDA
|
|
$
|
601,319
|
|
|
$
|
17,764
|
|
|
$
|
(150,582
|
)
|
|
$
|
468,501
|
|
Capital expenditures
|
|
$
|
390,108
|
|
|
$
|
(76,757
|
)
|
|
$
|
164,091
|
|
|
$
|
477,442
|
|
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
External revenue
|
|
$
|
1,476,131
|
|
|
$
|
30,405
|
|
|
$
|
18,619
|
|
|
$
|
1,525,155
|
|
Intersegment revenue
|
|
1,787
|
|
|
12
|
|
|
(1,799
|
)
|
|
—
|
|
||||
Total revenue
|
|
$
|
1,477,918
|
|
|
$
|
30,417
|
|
|
$
|
16,820
|
|
|
$
|
1,525,155
|
|
EBITDA
|
|
$
|
475,222
|
|
|
$
|
16,074
|
|
|
$
|
1,008
|
|
|
$
|
492,304
|
|
Capital expenditures
|
|
$
|
376,502
|
|
|
$
|
20,026
|
|
|
$
|
169,157
|
|
|
$
|
565,685
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
EBITDA
|
|
$
|
577,599
|
|
|
$
|
468,501
|
|
|
$
|
492,304
|
|
Interest income
|
|
82,352
|
|
|
80,275
|
|
|
44,619
|
|
|||
Interest expense, net of amounts capitalized
|
|
(251,016
|
)
|
|
(219,288
|
)
|
|
(184,389
|
)
|
|||
Depreciation and amortization
|
|
(490,765
|
)
|
|
(457,116
|
)
|
|
(385,662
|
)
|
|||
Net income (loss) attributable to non-controlling interests
|
|
(11,335
|
)
|
|
1,842
|
|
|
928
|
|
|||
Income (loss) from continuing operations before income taxes
|
|
$
|
(93,165
|
)
|
|
$
|
(125,786
|
)
|
|
$
|
(32,200
|
)
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
||||||
Long-lived assets:
|
|
|
|
|
||||
North America
|
|
$
|
3,092,773
|
|
|
$
|
3,201,459
|
|
South and Central America
|
|
310,226
|
|
|
192,932
|
|
||
All other
|
|
140,797
|
|
|
118,718
|
|
||
Total long-lived assets
|
|
$
|
3,543,796
|
|
|
$
|
3,513,109
|
|
|
For the Three Months Ended
|
||||||||||||||
|
December 31
|
|
September 30
|
|
June 30
|
|
March 31
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|||||||
Total revenue
|
$
|
499,006
|
|
|
$
|
472,262
|
|
|
$
|
460,431
|
|
|
$
|
454,382
|
|
Operating income (loss)
|
23,597
|
|
|
26,093
|
|
|
(4,661
|
)
|
|
28,048
|
|
||||
Net income (loss)
|
(63,094
|
)
|
|
(21,106
|
)
|
|
(5,060
|
)
|
|
15,008
|
|
||||
Net income (loss) from continuing operations attributable to EchoStar common stock
|
(46,297
|
)
|
|
(20,317
|
)
|
|
(30,660
|
)
|
|
(5,044
|
)
|
||||
Net income (loss) attributable to EchoStar Corporation common stock
|
(53,118
|
)
|
|
(18,309
|
)
|
|
(5,692
|
)
|
|
14,202
|
|
||||
Basic income (loss) from continuing operations per share
|
(0.48
|
)
|
|
(0.21
|
)
|
|
(0.32
|
)
|
|
(0.05
|
)
|
||||
Basic earnings (losses) per share
|
(0.55
|
)
|
|
(0.19
|
)
|
|
(0.06
|
)
|
|
0.15
|
|
||||
Diluted earnings (losses) per share
|
(0.55
|
)
|
|
(0.19
|
)
|
|
(0.06
|
)
|
|
0.15
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue
|
$
|
453,983
|
|
|
$
|
456,274
|
|
|
$
|
438,549
|
|
|
$
|
413,832
|
|
Operating income (loss)
|
(50,776
|
)
|
|
38,328
|
|
|
32,977
|
|
|
15,608
|
|
||||
Net income (loss)
|
(111,648
|
)
|
|
16,502
|
|
|
77,684
|
|
|
(21,171
|
)
|
||||
Net income (loss) from continuing operations attributable to EchoStar common stock
|
(129,324
|
)
|
|
(3,572
|
)
|
|
55,779
|
|
|
(57,087
|
)
|
||||
Net income (loss) attributable to EchoStar common stock
|
(112,198
|
)
|
|
16,052
|
|
|
77,222
|
|
|
(21,551
|
)
|
||||
Basic income (loss) from continuing operations per share
|
(1.33
|
)
|
|
(0.04
|
)
|
|
0.58
|
|
|
(0.60
|
)
|
||||
Basic earnings (losses) per share
|
(1.17
|
)
|
|
0.17
|
|
|
0.80
|
|
|
(0.22
|
)
|
||||
Diluted earnings (losses) per share
|
(1.17
|
)
|
|
0.17
|
|
|
0.80
|
|
|
(0.22
|
)
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Services and other revenue - DISH Network
|
|
$
|
53,429
|
|
|
$
|
73,465
|
|
|
$
|
108,619
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Trade accounts receivable - DISH Network
|
|
$
|
10,683
|
|
|
$
|
14,200
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Operating expenses - DISH Network
|
|
$
|
5,198
|
|
|
$
|
3,889
|
|
|
$
|
3,787
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Trade accounts payable - DISH Network
|
|
$
|
1,923
|
|
|
$
|
1,698
|
|
|
|
As of December 31,
|
||||
|
|
2019
|
|
2018
|
||
|
|
|
|
|
||
Other receivables - DISH Network
|
|
92,892
|
|
|
95,114
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Cost of sales - equipment
|
|
$
|
24,495
|
|
|
$
|
23,422
|
|
|
$
|
27,899
|
|
Research and development expenses
|
|
25,739
|
|
|
27,570
|
|
|
31,745
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Other current assets:
|
|
|
|
|
||||
Trade accounts receivable - DISH Network
|
|
$
|
10,683
|
|
|
$
|
14,200
|
|
Inventory
|
|
79,621
|
|
|
75,379
|
|
||
Prepaids and deposits
|
|
67,014
|
|
|
57,691
|
|
||
Other
|
|
22,213
|
|
|
18,539
|
|
||
Total other current assets
|
|
$
|
179,531
|
|
|
$
|
165,809
|
|
|
|
|
|
|
||||
Other non-current assets, net:
|
|
|
|
|
||||
Other receivables - DISH Network
|
|
$
|
92,892
|
|
|
$
|
95,114
|
|
Restricted marketable investment securities
|
|
8,093
|
|
|
9,474
|
|
||
Restricted cash
|
|
2,458
|
|
|
1,189
|
|
||
Deferred tax assets, net
|
|
7,251
|
|
|
4,310
|
|
||
Capitalized software, net
|
|
101,786
|
|
|
96,760
|
|
||
Contract acquisition costs, net
|
|
96,723
|
|
|
104,013
|
|
||
Contract fulfillment costs, net
|
|
3,010
|
|
|
3,240
|
|
||
Other
|
|
22,628
|
|
|
24,290
|
|
||
Total other non-current assets, net
|
|
$
|
334,841
|
|
|
$
|
338,390
|
|
|
|
|
|
|
||||
Accrued expenses and other current liabilities:
|
|
|
|
|
||||
Trade accounts payable - DISH Network
|
|
$
|
1,923
|
|
|
$
|
1,698
|
|
Accrued interest
|
|
42,622
|
|
|
45,350
|
|
||
Accrued compensation
|
|
50,787
|
|
|
54,242
|
|
||
Accrued taxes
|
|
18,525
|
|
|
16,013
|
|
||
Operating lease obligation
|
|
14,651
|
|
|
—
|
|
||
Other
|
|
141,885
|
|
|
64,395
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
270,393
|
|
|
$
|
181,698
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Cash and cash equivalents, including restricted amounts, beginning of period:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
928,306
|
|
|
$
|
2,431,456
|
|
|
$
|
2,571,143
|
|
Restricted cash
|
|
1,189
|
|
|
793
|
|
|
723
|
|
|||
Total cash and cash equivalents, included restricted amounts, beginning of period
|
|
$
|
929,495
|
|
|
$
|
2,432,249
|
|
|
$
|
2,571,866
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents, including restricted amounts, end of period:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
1,519,431
|
|
|
$
|
928,306
|
|
|
$
|
2,431,456
|
|
Restricted cash
|
|
2,458
|
|
|
1,189
|
|
|
793
|
|
|||
Total cash and cash equivalents, included restricted amounts, end of period
|
|
$
|
1,521,889
|
|
|
$
|
929,495
|
|
|
$
|
2,432,249
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Employee benefits paid in Class A common stock
|
|
$
|
6,654
|
|
|
$
|
7,605
|
|
|
$
|
11,200
|
|
Property and equipment financed under finance lease obligations
|
|
349
|
|
|
364
|
|
|
8,484
|
|
|||
Increase (decrease) in capital expenditures included in accounts payable, net
|
|
(11,111
|
)
|
|
7,318
|
|
|
(3,831
|
)
|
|||
Capitalized in-orbit incentive obligations
|
|
—
|
|
|
—
|
|
|
43,890
|
|
|||
Non-cash net assets exchanged for Tracking Stock (Note 5)
|
|
—
|
|
|
—
|
|
|
299,888
|
|
|||
Non-cash net assets exchanged for BSS Transaction (Note 5)
|
|
532,855
|
|
|
—
|
|
|
—
|
|
|||
Non-cash net assets received in exchange for a 20% ownership interest in our existing Brazilian subsidiary
|
|
94,918
|
|
|
—
|
|
|
—
|
|
•
|
4,000,000,000 shares of common stock, par value $0.001 per share, of which 1,600,000,000 shares are designated Class A common stock, 800,000,000 shares are designated Class B common stock, 800,000,000 shares are designated Class C common stock and 800,000,000 shares are designated Class D common stock; and
|
•
|
20,000,000 shares of preferred stock, par value $0.001 per share.
|
PREAMBLE
|
1
|
RECITALS
|
1
|
1.
|
DEFINITIONS 1
|
2.
|
SCOPE OF WORK 9
|
3.
|
DELIVERABLE ITEMS AND DELIVERY SCHEDULE 10
|
4.
|
PRICE 10
|
5.
|
PAYMENT TERMS 11
|
6.
|
PURCHASER FURNISHED ITEMS 13
|
7.
|
COMPLIANCE WITH LAWS; EXPORT LICENSES 16
|
8.
|
INSPECTION; ACCESS TO WORK 18
|
9.
|
SATELLITE PRE-SHIPMENT REVIEW 20
|
10.
|
INFORMATION REGARDING CORRECTIVE MEASURES; OTHER SIMILAR SATELLITES 23
|
11.
|
DELIVERY of THE Satellite and Other Deliverable Items 24
|
12.
|
ACCEPTANCE OF THE SATELLITE AND IOT 24
|
13.
|
ACCEPTANCE INSPECTION FOR DELIVERABLE ITEMS OTHER THAN THE SATELLITE 25
|
14.
|
LIQUIDATED DAMAGES *** 27
|
15.
|
TITLE AND RISK OF LOSS 27
|
16.
|
WARRANTIES 28
|
17.
|
*** 30
|
18.
|
CHANGES 30
|
19.
|
INTELLECTUAL PROPERTY *** 31
|
20.
|
INDEMNIFICATION 31
|
21.
|
TERMINATION FOR CONVENIENCE 33
|
22.
|
TERMINATION FOR DEFAULT 34
|
23.
|
FORCE MAJEURE 36
|
24.
|
INTELLECTUAL PROPERTY RIGHTS; LICENSES 37
|
25.
|
DISCLOSURE AND HANDLING OF CONFIDENTIAL INFORMATION 39
|
26.
|
PUBLICITY; PUBLIC RELEASE OF INFORMATION 40
|
27.
|
OPTIONS 41
|
28.
|
INSURANCE AND RISK MANAGEMENT SERVICES 42
|
29.
|
DISPUTE RESOLUTION 44
|
30.
|
INTER-PARTY WAIVER OF LIABILITY FOR A LAUNCH 45
|
31.
|
LIMITATION OF LIABILITY 46
|
32.
|
GROUND STORAGE 47
|
33.
|
SUBCONTRACTS 48
|
34.
|
KEY PERSONNEL 48
|
35.
|
NOTICES 48
|
36.
|
GENERAL 49
|
40.
|
PURCHASER DELAY OF WORK 52
|
1
|
DEFINITIONS
|
1.1
|
“Acceptance” or “Accepted” (i) with respect to the Satellite shall be as provided in Article 12; and (ii) with respect to any Deliverable Item other than the Satellite shall be as provided in Article 13.
|
1.2
|
“Additional Satellite” has the meaning set forth in Article 27.2.
|
1.3
|
“Additional Storage Period” has the meaning set forth in Article 32.7.2.
|
1.4
|
“Affiliate” means, with respect to a Party, any person or entity directly or indirectly controlling, controlled by or under common control with such Party.
|
1.5
|
“Article” means an article of this Contract.
|
1.6
|
“Attachment(s)” means any and all attachment(s) that are attached to this Contract or to any Exhibit and incorporated in this Contract or any Exhibit by reference in their entirety, as may be amended from time to time in accordance with the terms hereof.
|
1.7
|
“Attributable to Purchaser” means an event or occurrence solely caused by an act or omission of Purchaser or Purchaser’s representatives, consultants or subcontractors unless such act or omission was performed in accordance with direction or instruction provided by Contractor.
|
1.8
|
“Business Day” means any day other than a Saturday, Sunday or any other day on which national banks are authorized to be closed in New York City, New York.
|
1.9
|
“Candidate Launch Vehicles” means the following launch vehicles: ***
|
1.10
|
“Change of Control” means: (i) the transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of Contractor to any individual, entity or group (here and hereinafter, as such term is used in Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended); (ii) the liquidation or dissolution of Contractor or the adoption of a plan by the stockholders of Contractor relating to the dissolution or liquidation of the Contractor; (iii) the acquisition by any individual, entity or group, directly or indirectly, of the power to direct the management and policies of Contractor whether through the ownership of voting securities, by contract or otherwise; or (iv) the acquisition by any individual, entity or group of beneficial ownership, directly or indirectly, of more than *** of the voting power of the total outstanding voting stock of Contractor or any Affiliate that controls Contractor.
|
1.11
|
***
|
1.12
|
***
|
1.13
|
“Component” means each unit, system and subsystem of the Satellite and all other Satellite hardware and software required to be provided by Contractor hereunder.
|
1.14
|
“Contract” means the articles of this executed contract and all exhibits and attachments hereto, which are hereby incorporated by reference in their entirety, as any of the foregoing may be amended from time to time in accordance with the terms and conditions hereof.
|
1.15
|
“Contractor” has the meaning set forth in the Preamble and includes any of the Contractor’s successors or assignees permitted hereunder.
|
1.16
|
“Cure Letter” has the meaning set forth in Article 9.8.
|
1.17
|
“Defect” means (i) with respect to the Satellite or Deliverable Items of Hardware other than the Satellite, any defect or nonconformance in design, material or workmanship, or failure to meet or perform in accordance with the applicable specification of this Contract; or (ii) with respect to any Deliverable Services, any failure to meet the applicable specification or requirements set forth in this Contract in Article 16.4.
|
1.18
|
“Deliverable Data” means the data and documentation required to be Delivered to Purchaser as specified in the Statement of Work. In the event that Purchaser terminates this Contract for Contractor’s default pursuant to Article 22, or in the event of a termination by Contractor under Article 22.5 that is determined to have been wrongful, the definition of “Deliverable Data” shall be expanded to include copies (machine readable and hard copy) of: (i) all source code, object code and VHDL code owned by Contractor; and (ii) all other source code, object code and VHDL code for which Contractor has the ability to grant a royalty-free license, that in each case is necessary or useful to support the remaining design, manufacturing, testing and delivery of the Satellite and the Launch and in-orbit operation of the Satellite.
|
1.19
|
“Deliverable Item” means any of the items listed in Article 3.1 and any Additional Satellites, Replacement Satellites or other items ordered by Purchaser pursuant to Article 27 and, collectively, the “Deliverable Items”.
|
1.20
|
“Delivery” or “Deliver” or “Delivered” (i) with respect to the Satellite, has the meaning provided in Article 11; and (ii) with respect to any Deliverable Item other than the Satellite has the meaning provided in Article 11.
|
1.21
|
“Designated Orbital Location” means the geostationary orbital slot at 95.2° west longitude.
|
1.22
|
“DSS Performance Specification” means the dynamic satellite simulator’s performance specification attached as Exhibit F, as such Exhibit may be amended from time to time in accordance with the terms of this Contract.
|
1.23
|
“Effective Date of Contract” or “EDC” has the meaning set forth in the Preamble.
|
1.24
|
***
|
1.25
|
“Exhibit(s)” means the exhibit(s) identified in Article 2.1 and attached hereto and incorporated in this Contract by reference in their entirety, as may be amended from time to time in accordance with the terms hereof.
|
1.26
|
“FCC” means the U.S. Federal Communications Commission.
|
1.27
|
“Firm Fixed Price” or “FFP” has the meaning set forth in Article 4.
|
1.28
|
“Force Majeure” has the meaning set forth in Article 23.1.
|
1.29
|
***
|
1.30
|
“Ground Insurance” has the meaning set forth in Article 28.2.1.
|
1.31
|
“Ground Storage” means that period where the Satellite is held in storage on the ground at a Contractor controlled facility for an extended period after completion of SPSR and prior to Launch.
|
1.32
|
***
|
1.33
|
***
|
1.34
|
***
|
1.35
|
***
|
1.36
|
***
|
1.37
|
***
|
1.38
|
*** means, with respect to the Satellite, the period commencing at 12:01 a.m. Greenwich Mean Time on the day following the IOT Complete Date for the Satellite and ending on the last day of the Satellite Stated Life.
|
1.39
|
“Intellectual Property” has the meaning set forth in Article 24.1.
|
1.40
|
“Intellectual Property Claim” has the meaning set forth in Article 19.1.
|
1.41
|
***
|
1.42
|
“In-Orbit Testing” or “IOT” means the testing of the Satellite in-orbit in accordance with the Satellite Test Plan.
|
1.43
|
“Intentional Ignition” means, with respect to the Satellite, ***. This definition shall be replaced by the definition of “Intentional Ignition” in the Launch Services Agreement applicable to Launch of the Satellite and/or any launch insurance policy placed by the Purchaser.
|
1.44
|
“IOT Review” or “IOTR” has the meaning set forth in the Statement of Work.
|
1.45
|
“IOT Complete Date” has the meaning set forth in Article 12.3.
|
1.46
|
“Joint Intellectual Property” has the meaning set forth in Article 24.3.
|
1.47
|
***
|
1.48
|
“Key Personnel” has the meaning set forth in Article 34.
|
1.49
|
***
|
1.50
|
“Launch Agency” means the provider ultimately responsible for conducting the Launch Services for the Satellite.
|
1.51
|
“Launch Services” means those services provided by the Launch Agency pursuant to the Launch Services Agreement.
|
1.52
|
“Launch Services Agreement” or “LSA” means the contract between Purchaser, or an Affiliate of Purchaser, and the Launch Agency, which provides for Launch Services for the Satellite, as such contract may be amended from time to time in accordance with its terms.
|
1.53
|
“Launch Site” means the location that will be used by the Launch Agency for purposes of launching the Satellite. This definition will be replaced by the definition of “Launch Site” from the Launch Service Agreement applicable to the Launch of the Satellite.
|
1.54
|
“Launch Support” or “Launch Support Services” means those services specified in the Statement of Work to be provided by Contractor in support of Launch.
|
1.55
|
“Launch Vehicle” means the launch vehicle selected by Purchaser and used for Launch of the Satellite.
|
1.56
|
“LIBOR” means the rate of interest per annum, at any relevant time, at which thirty (30) day U.S. dollar deposits are offered at such time in the London interbank market. LIBOR for any calendar week (through and including Sunday of such week) shall be at the applicable LIBOR rate set forth in the Wall Street Journal (and if a range the average of such range) on the first Business Day of such week and shall remain the rate used in this Contract as LIBOR until the first Business Day of the following week. In the event the Wall Street Journal does not publish such a rate, the Party to whom an amount is owed shall select a reputable alternate source, as determined in such Party’s reasonable judgment, from which LIBOR shall be ascertained and used under this Contract.
|
1.57
|
“Losses” has the meaning set forth in Article 20.1.1.
|
1.58
|
“Major Subcontract” and “Major Subcontractors” have the meaning set forth in Article 33.1.
|
1.59
|
“Milestone” means a portion of the Work upon completion of which a payment is to be made in accordance with Exhibit E.
|
1.60
|
“Mission Assurance Plan” means the mission assurance plan attached as Exhibit C, as such Exhibit may be amended from time to time in accordance with the terms of this Contract.
|
1.61
|
“Mission Operations Support Services” means the orbit-raising, IOT and related services specified in the Statement of Work to be performed by Contractor for the Satellite.
|
1.62
|
***
|
1.63
|
***
|
1.64
|
“NSP” means not separately priced.
|
1.65
|
“Partial Loss” means, with respect to the Satellite on or after Intentional Ignition, that Transponder Failure(s) have occurred, but the Satellite is not a Total Loss.
|
1.66
|
“Party” or “Parties” has the meaning set forth in the Preamble.
|
1.67
|
“Payment Plan” means the payment plan, as set forth in Exhibit E, as may be amended from time to time in accordance with the terms of this Contract.
|
1.68
|
“Performance Specification” means either the Satellite Performance Specification or the DSS Performance Specification.
|
1.69
|
***
|
1.70
|
“PMO” means the Purchaser’s program management office.
|
1.71
|
“Proprietary Information” has the meaning set forth in Article 25.1.
|
1.72
|
“Purchaser” or “Hughes” has the meaning set forth in the Preamble and includes any of the Purchaser’s successors or assignees permitted hereunder.
|
1.73
|
“Purchaser Associate(s)” means Purchaser’s Affiliates and Purchaser’s and its Affiliates’ duly appointed consultants, agents and representatives (who are not Competitor of Contractor).
|
1.74
|
“Purpose of IOT Review” has the meaning set forth in Article 12.3.
|
1.75
|
“Raw Materials, Work-in-Process and Finished Goods” means (i) the Satellite; (ii) all Components; (iii) all Deliverable Items; and (iv) all rights in Intellectual Property, Proprietary Information and other data and information that are to be and/or actually are delivered to Purchaser under this Contract. The foregoing shall constitute “Raw Materials, Work-in-Process and Finished Goods” as the same shall be in the process of performance, manufacture, assembly, integration, testing, delivery or completion at any given point in time, whether raw materials, work in process or finished goods, whether now owned or after-acquired and whether now existing or hereafter coming into existence; but, in each case, only to the extent identified to this Contract, which shall be deemed to occur only when such goods have been installed on the Satellite or designated for the Satellite. Contractor shall install goods on the Satellite and designate goods for the Satellite in a manner consistent with Contractor’s customary practices. In furtherance and without limitation of the foregoing, such installation and designation shall be performed and administered by Contractor on a non-discriminatory basis as compared to the other satellites that Contractor is building.
|
1.76
|
“Replacement Satellite” has the meaning set forth in Article 27.1.1.
|
1.77
|
“Required SPSR Complete Date” means *** prior to the date scheduled for the Satellite Delivery in Article 3.1.
|
1.78
|
“Risk Management Services” means the risk management services to be provided by Contractor in accordance with the Statement of Work and Article 28.
|
1.79
|
“Satellite” means a communications satellite that is to be manufactured by Contractor pursuant to this Contract.
|
1.80
|
“Satellite Anomaly” means, with respect to the Satellite following Launch, a condition or occurrence that has or may have a material adverse impact on the Satellite Stated Life or performance of such Satellite.
|
1.81
|
“Satellite Performance Specification” or “Specification” means the Satellite performance specification attached as Exhibit B, as such Exhibit may be amended from time to time in accordance with the terms of this Contract.
|
1.82
|
“Satellite Pre-Shipment Review” or “SPSR” has the meaning set forth in Article 9.1.
|
1.83
|
“Satellite Replacement Option” has the meaning set forth in Article 27.1.1.
|
1.84
|
“Satellite Replacement Option Exercise” has the meaning set forth in Article 27.1.1.
|
1.85
|
“Satellite Stated Life” or “Mission Life” means *** from completion of the IOT Review.
|
1.86
|
“Satellite Test Plan” means the satellite test plan attached as Exhibit D, as such Exhibit may be amended from time to time in accordance with the terms of this Contract.
|
1.87
|
“SCF” means satellite control facility that performs TT&C for the Satellite.
|
1.88
|
***
|
1.89
|
***
|
1.90
|
“SPSR Complete Date” has the meaning set forth in Article 9.6.
|
1.91
|
“Statement of Work” or “SOW” means the statement of work attached as Exhibit A, as such Exhibit may be amended from time to time in accordance with the terms of this Contract.
|
1.92
|
***
|
1.93
|
“Subcontract” means a contract or purchase order awarded by Contractor to a Subcontractor or a contract or purchase order awarded by a Subcontractor at any tier for performance of any Work.
|
1.94
|
“Subcontractor” means any person or business entity that has been awarded a Subcontract.
|
1.95
|
“Technical Data and Information” has the meaning set forth in Article 24.1.
|
1.96
|
“Terminated Ignition” means, with respect to the Satellite, ***. This definition will be replaced by the equivalent definition from the Launch Service Agreement applicable to the “Launch” of the Satellite and/or any launch insurance policy placed by the Purchaser.
|
1.97
|
“Termination Default” has the meaning set forth in ***
|
1.98
|
“Test Bed” means the equipment to be supplied by Contractor (if Purchaser exercises the Test Bed Option) in accordance with Section 9.0 of Exhibit A and meeting the technical requirements set forth in Appendix E.1 to Exhibit B.
|
1.99
|
“Test Bed Option” has the meaning set forth in Article 27.3.
|
1.100
|
“Total Loss” means with respect to the Satellite on or after Launch: (i) the complete loss, destruction or failure of such Satellite; or (ii) as defined in Purchaser’s insurance policy regarding risks relating to the Launch and/or in-orbit operation of the Satellite in place at the time of Launch (if any) if defined differently therein.
|
1.101
|
“Training Services” means the training to be provided by Contractor in accordance with the Statement of Work.
|
1.102
|
“Transaction Document” has the meaning set forth in Article 5.6.
|
1.103
|
“Transponder” means the equipment ***
|
1.104
|
“Transponder Failure” means the failure of a Transponder, for reasons not Attributable to Purchaser, at any time to meet any of the following requirements of Exhibit B, Satellite Performance Specification:
|
11.104.1
|
***, as set forth in Exhibit B, Satellite Performance Specification;
|
11.104.2
|
*** as set forth in Exhibit B, Satellite Performance Specification, under all operating conditions ***
|
11.104.3
|
*** as set forth in Exhibit B, Satellite Performance Specification; or
|
11.104.4
|
*** as set forth in Exhibit B, Satellite Performance Specification.
|
1.105
|
“TT&C” means telemetry, tracking and control.
|
1.106
|
“UCC” means the Uniform Commercial Code of the State of New York or, ***, the State of Delaware, in either case as in effect from time to time.
|
1.107
|
***
|
1.108
|
“Work” means all design, development, construction, manufacturing, labor and services, including without limitation tests to be performed and any and all Deliverable Items, including without limitation the Satellite, Deliverable Data, Launch Support Services, Mission Operations Support Services, Support and Training Services, Risk Management
|
2.
|
SCOPE OF WORK
|
2.1
|
Provision of Services and Materials.
|
(vi)
|
Exhibit F, Dynamic Satellite Simulator Performance Specification, dated April 19, 2017; and
|
(vii)
|
***
|
2.2
|
Satellite Configuration.
|
3.
|
DELIVERABLE ITEMS AND DELIVERY SCHEDULE
|
3.1
|
Deliverable Items.
|
Item
|
Description
|
Delivery Schedule
|
Delivery Location
|
1.
|
Satellite
|
***
|
***
|
2.
|
Deliverable Data
|
Per Exhibit A, SOW
|
Contractor-designated web site
|
3.
|
Support and Training Services
|
Per Exhibit A, SOW
|
Contractor’s facilities and Purchaser’s SCF
|
4.
|
Launch Support Services
|
Per Exhibit A, SOW
|
Per Exhibit A, SOW
|
5.
|
Mission Operations Support Services
|
Per Exhibit A, SOW
|
Per Exhibit A, SOW
|
6.
|
Risk Management Services
|
Per Exhibit A, SOW and Article 28
|
Contractor’s facilities and per Exhibit A, SOW
|
7.
|
Dynamic Satellite Simulator
|
Per Exhibit A, SOW
|
Purchaser’s SCF or Purchaser designated facility
|
8.
|
Scale Models
|
Per Exhibit A, SOW
|
PMO
|
3.2
|
Avoidance and Mitigation of Delays.
|
4.
|
PRICE
|
5.
|
PAYMENT TERMS
|
5.1
|
Payment Plan.
|
5.2
|
Payment Conditions.
|
5.2.1
|
Milestone Payments. Absent a bona fide dispute, each Milestone payment specified in Exhibit E, Payment Plan, shall in each case become payable upon Contractor’s completion of each Milestone in accordance with the Contract and satisfaction of the criteria for Milestone completion set forth in the Reference column of Table 6.1 of Exhibit A, after which Contractor shall submit an invoice for payment. *** Contractor’s invoice for any payment due from Purchaser upon the completion of a Milestone described in Exhibit E, Payment Plan, shall be accompanied by (i) a certification that the Milestone has been completed in accordance with the requirements of this Contract, and (ii) the necessary or appropriate supporting data and documentation as required hereunder, if any, or as Purchaser may reasonably request within *** after receipt of invoice. Purchaser shall pay in full such invoice (or, if applicable, the undisputed portion thereof) within *** after receipt of the required invoice, certification and (as applicable) data and documentation.
|
5.2.2
|
Non-Warranty Payments. Absent a bona fide dispute, all amounts payable to Contractor with respect to non-warranty work performed pursuant to Article 16.3 shall be paid no later than *** after submission of an invoice by Contractor certifying that such non-warranty work has been completed.
|
5.3
|
Late Payment.
|
5.4
|
Invoices.
|
5.5
|
Payment Bank.
|
5.6
|
***
|
5.7
|
Audit Rights and Procedures.
|
6.
|
PURCHASER FURNISHED ITEMS
|
6.1
|
Purchaser-Furnished Support.
|
6.2
|
Communications Authorizations.
|
6.3
|
Radio Frequency Coordination.
|
6.4
|
Licenses and Permits.
|
6.5
|
Satellite Performance Data.
|
6.6
|
Late Delivery of Purchaser-Furnished Support.
|
6.7
|
Launch Services.
|
6.7.1
|
Selection of Launch Vehicle. Purchaser shall be responsible for the provision of Launch Services for the Satellite. Contractor shall provide engineering and other customary services pursuant to Exhibit A to maintain compatibility of the Satellite for Launch with the list of Candidate Launch Vehicles. *** Purchaser shall notify Contractor in writing of its down-selection to the *** Candidate Launch Vehicles. At all times prior to the Final Launch Vehicle Selection Date, Contractor shall to maintain Satellite compatibility with Launch on both of the *** Candidate Launch Vehicles and shall provide customary launch vehicle integration activities for both of the *** Candidate Launch Vehicles in support of the then-currently scheduled Launch date. In the event there are *** Purchaser does not notify Contractor of its down-selection to *** Candidate Launch Vehicles on or before *** or changes its selection of either of the *** Candidate Launch Vehicles after *** and such failure or change causes an increase or decrease in costs of, or the time required for, the performance of this Contract, *** and this Contract shall be modified in writing in accordance with and subject to Article 18. *** For the avoidance of doubt, in the event that Purchaser notifies Contractor of its down-selection to *** Candidate Launch Vehicles on or before ***, then notwithstanding anything to the contrary set forth herein, ***
|
6.7.2
|
Final Launch Vehicle Selection. On or before *** prior to the later of: *** Purchaser shall notify Contractor in writing of its final selection of a Launch Vehicle for the Launch of the Satellite from the *** Candidate Launch Vehicles, and shall use reasonable commercial efforts to select a Launch date compatible with Contractor’s then-currently scheduled Satellite Delivery date; provided that in no event shall Purchaser select a Launch date that is earlier than Contractor’s then-currently scheduled Satellite Delivery date. In the event Purchaser does not notify Contractor of its final selection of a Launch Vehicle for the Launch of the Satellite on or before *** or changes its final selection of a Launch Vehicle after *** and such failure or subsequent change causes an increase or decrease in costs of, or the time required for, the performance of this Contract, *** and this Contract shall be modified in writing in accordance with and subject to Article 18. For the avoidance of doubt, in the event that Purchaser notifies Contractor of its final selection of a Launch Vehicle for the
|
6.7.3
|
***
|
6.7.4
|
Launch Support. Contractor shall provide all reasonably necessary assistance to, and shall communicate and cooperate with, the Launch Agency so as to support the successful, on-time completion of the Work and integration of the Satellite with the Launch Vehicle and the provision of the Launch Support Services in accordance with the terms of this Contract. Purchaser shall provide all reasonably necessary assistance to Contractor so as to ensure Contractor and any affected Subcontractors have the necessary access and information from the Launch Agency to perform as specified. *** All communications of Contractor and its Subcontractors with the Launch Agency are subject to any required export authorizations, which Contractor shall be responsible for obtaining and maintaining as provided in Article 7.3.
|
6.8
|
Consignment.
|
7.
|
COMPLIANCE WITH LAWS; EXPORT LICENSES
|
7.1
|
General.
|
7.2
|
Compliance with U.S. Laws.
|
7.3
|
Licenses and Other Approvals.
|
7.4
|
No Unauthorized Exports or Retransfers.
|
8.
|
INSPECTION; ACCESS TO WORK
|
8.1
|
Work in Progress at Contractor’s Plant.
|
8.2
|
Work in Progress at Subcontractors’ Plants.
|
8.3
|
Remedy for Non-Compliance.
|
8.4
|
On-Site Facilities for Purchaser’s Personnel.
|
8.5
|
Foreign Persons as Purchaser Representatives.
|
8.6
|
Meetings and Presentations.
|
8.7
|
Interference with Operations.
|
8.8
|
Notification.
|
8.9
|
Purchaser Inspection Not Acceptance.
|
8.10
|
Electronically-Generated Information.
|
9.
|
SATELLITE PRE-SHIPMENT REVIEW
|
9.1
|
Contractor to Conduct a Review of the Satellite Prior to Shipment.
|
9.2
|
Time, Place, and Notice of SPSR.
|
9.3
|
Conduct and Purpose of SPSR.
|
9.4
|
Waivers and Deviations.
|
9.5
|
Purchaser’s Inspection Agents.
|
9.6
|
SPSR Results.
|
9.7
|
SPSR Results Find Non-Conformance.
|
9.8
|
Repairs or Replacement for Non-Conformance.
|
9.9
|
Inspection Costs ***.
|
9.10
|
Correction of Deficiencies after SPSR.
|
9.11
|
Warranty Obligations.
|
9.12
|
Repaired or Replaced Satellite.
|
10.
|
INFORMATION REGARDING CORRECTIVE MEASURES; OTHER SIMILAR SATELLITES
|
10.1
|
Defect in Contractor’s Satellites.
|
10.2
|
Correction of Defects.
|
11.
|
DELIVERY OF THE SATELLITE AND OTHER DELIVERABLE ITEMS
|
12.
|
ACCEPTANCE OF THE SATELLITE AND IOT
|
12.1
|
Satellite Acceptance
|
12.2
|
Launch Support and Mission Operations Support Services.
|
12.3
|
IOT
|
12.4
|
TT&C
|
12.5
|
Warranty Obligation.
|
13.
|
ACCEPTANCE INSPECTION FOR DELIVERABLE ITEMS OTHER THAN THE SATELLITE
|
13.1
|
Inspection of Deliverable Items of Hardware Other Than The Satellite.
|
13.2
|
Purchaser’s Inspection Agents.
|
13.3
|
Pending Waivers.
|
13.4
|
Acceptance Inspection Results.
|
13.5
|
Acceptance Inspection; Equipment and Facilities.
|
13.6
|
Warranty Obligations.
|
13.7
|
Repair or Replace Deliverable Items.
|
13.8
|
Deliverable Data.
|
14.
|
LIQUIDATED DAMAGES ***
|
14.1
|
Liquidated Damages.
|
***
|
***
|
***
|
***
|
***
|
***
|
***
|
***
|
***
|
***
|
***
|
***
|
***
|
***
|
***
|
***
|
15.
|
TITLE AND RISK OF LOSS
|
15.1
|
Satellite.
|
15.1.1
|
Passage of Title and Risk of Loss. Except as provided in Articles 22.2, 22.3 and 23.2, and subject to Article ***, title and risk of loss to the Satellite shall pass from Contractor to Purchaser, upon ***.
|
15.1.2
|
Terminated Ignition. In the event of a Terminated Ignition, once the launch pad has been declared safe and the Launch Agency authorizes the start of the demating operations, Contractor shall, upon Purchaser’s request, immediately take all necessary actions to prepare the Satellite for a relaunch, including without limitation: (i) supporting the Launch Agency in demating the Satellite from the Launch Vehicle and conducting defueling operations; (ii) directly performing inspection and testing, refurbishment, storage, repair and replacement of damaged Component(s) (damaged as a result of the Terminated Ignition or related activities) and transportation of the Satellite to and from the Launch Site; and (iii) providing additional Launch support services for the subsequent Launch of the Satellite. *** Upon Purchaser’s request, the Parties shall establish a new due date for the repaired/refurbished Satellite.
|
15.1.3
|
Remedies. ***. CONTRACTOR MAKES NO WARRANTY AS TO THE PERFORMANCE OF ANY LAUNCH VEHICLE. THE FOREGOING SHALL NOT PREJUDICE OR LIMIT EITHER PARTY’S RIGHTS AND OBLIGATIONS WITH RESPECT TO ARTICLE 25, DISCLOSURE AND HANDLING OF PROPRIETARY INFORMATION AND ARTICLE 24, INTELLECTUAL PROPERTY.
|
15.2
|
Deliverable Items Other Than The Satellite.
|
16.
|
WARRANTIES
|
16.1
|
Terms and Period of Warranty.
|
16.1.1
|
Satellite. ***
|
16.1.2
|
Deliverable Items of Hardware Other Than The Satellite. Contractor warrants that each Deliverable Item of hardware other than the Satellite Delivered under this Contract shall be manufactured and will perform in conformity with the Performance Specification (as may be waived pursuant to Article 13.3) applicable to such Deliverable Item in every respect and will be free from Defects ***
|
16.1.3
|
Disclaimer. EXCEPT AND TO THE EXTENT PROVIDED IN ARTICLE 16.1 AND ARTICLE 16.4, CONTRACTOR HAS NOT MADE NOR DOES IT HEREBY MAKE ANY REPRESENTATION OR WARRANTY, WHETHER WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF DESIGN, OPERATION, CONDITION, QUALITY, SUITABILITY OR MERCHANTABILITY OR FITNESS FOR USE OR FOR A PARTICULAR PURPOSE, ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, WITH REGARD TO ANY SATELLITE OR ANY OTHER DELIVERABLE ITEM.
|
16.2
|
Repair or Replacement.
|
16.2.1
|
Satellite Anomalies. Without limiting its obligations under Article 10, Contractor shall investigate any Satellite Anomaly arising during the life of the Satellite, and *** to promptly correct any such anomaly that is correctable by Contractor from Purchaser’s SCF using the facilities and equipment available at such site or is otherwise correctable in accordance with the Satellite Anomaly resolution support services set forth in Section 7 of Exhibit A, Statement of Work. Such reasonable efforts shall be conducted *** to resolve Defects or Satellite Anomalies by on-ground means, including software patches or updates, or
|
16.2.2
|
Deliverable Items of Hardware Other Than The Satellite. Without prejudice to Purchaser’s rights and Contractor’s duties and obligations under Articles 4 (solely with respect to Contractor’s indemnification obligations), 6 (solely with respect to Contractor’s indemnification obligations), 12.4, 12.5, 16 (except as expressly limited therein), 19, 20 and 31.3, during the applicable period specified in Article 16.1.2 for any Deliverable Item of hardware other than the Satellite, ***, any Defect in such Deliverable Item discovered by Purchaser, shall be remedied by Contractor *** by repair or replacement of the defective Component (at Contractor’s election). For any such Deliverable Item, Contractor shall determine if repair or replacement is required to be performed at Contractor’s plant. If required, Purchaser shall ship to Contractor’s designated facility any such Deliverable Item. Contractor shall be responsible, in accordance with its standard commercial practice, *** for any such Deliverable Item once repaired or replaced to Purchaser at the location designated therefor in Article 3.1 ***. Risk of loss for any such Deliverable Item shall transfer to Contractor upon Delivery of such Deliverable Item to the shipping carrier by Purchaser, and risk of loss shall transfer to Purchaser for any such Deliverable Item once repaired or replaced pursuant to this Article 16.2.2 upon receipt thereof by Purchaser at the location designated therefor in Article 3.1. ***
|
16.3
|
Use Conditions Not Covered by Warranty.
|
16.4
|
Warranty for Training and Services.
|
16.5
|
Software.
|
16.6
|
Subcontractor Warranties.
|
18.
|
CHANGES
|
18.1
|
Right to Adjustment.
|
18.2
|
Cost Adjustments.
|
18.3
|
Equitable Adjustment.
|
19.
|
INTELLECTUAL PROPERTY ***
|
19.2
|
Infringing Equipment.
|
19.3
|
Combinations and Modifications.
|
19.4
|
***
|
20.
|
INDEMNIFICATION
|
20.1
|
Contractor’s Indemnification of Purchaser for Bodily Injury and Property Damage.
|
20.1.1
|
Contractor, at its sole cost and expense, shall defend, indemnify and hold harmless Purchaser and its Affiliates and its and their respective directors, officers, employees, shareholders (excluding claims for diminution in share value), agents and representatives, from and against any losses, damages, liabilities, suits and expenses as well as costs and expenses, including without limitation court costs and reasonable attorneys’ fees (collectively, “Losses”) attributable to third party claims for: (i) death or bodily injury to or damage to the property of such third-party, but only if such Losses were caused by, or resulted from, a negligent act or omission or willful misconduct of Contractor and/or its employees, subcontractors, agents, or representatives at any tier, or any of them; or (ii) any loss of or damage to or destruction of, Purchaser-furnished equipment and facilities while in Contractor’s possession or control. For the avoidance of doubt, and except for Losses attributable to third party claims for bodily injury or property damage resulting from the Gross Negligence or willful misconduct of Contractor, Contractor shall have no indemnity obligation under this Article 20.1 for any Losses with respect to the operation or use of the Satellite after Launch, even if such Losses are attributable to an act or omission of Contractor or its employees prior to Launch. *** For purposes of this Article 20.1.1, ***
|
20.1.2
|
Contractor, at its own expense, shall defend, indemnify and hold harmless the Indemnified Companies and their respective shareholders, directors, officers and employees, from and against all Losses in connection with claims arising out of, or relating to, Contractor’s breaches of its obligations in Article 4.
|
20.2
|
Purchaser’s Indemnity.
|
20.3
|
Conditions to Indemnification.
|
(i)
|
Purchaser shall be the only party entitled to enforce Articles 19 and 20 on behalf of itself and any of the Indemnified Companies, and the Parties agree that none of the Indemnified Companies shall be considered as third-party beneficiaries entitled to enforce Articles 19 and 20 directly against Contractor. The Party seeking indemnification shall promptly advise the other Party in writing of the filing of any suit or of any written or oral claim upon receipt thereof (provided that any delay in providing such notice to Contractor shall relieve Contractor of its indemnity obligations only to the extent that the delay materially prejudices Contractor with respect to defense of such claim) and shall provide the other Party, at its request and at the Indemnifying Party’s expense, with copies of all documentation relevant to such suit or claim;
|
(ii)
|
The Party seeking indemnification shall not make any admission nor shall it reach a compromise or settlement without the prior written approval of the other Party, which approval shall not be unreasonably withheld, conditioned or delayed; and
|
(iii)
|
The indemnifying Party shall assist and assume, when not contrary to the governing rules of procedure, the defense of any claim or suit in settlement thereof and shall satisfy any judgments rendered by a court of competent jurisdiction in such suits and shall make all settlement payments. The Party seeking indemnification may participate in any defense at its own expense, using counsel reasonably acceptable to the indemnifying Party, provided there is no conflict of interest and that such participation would not adversely affect the conduct of the proceedings.
|
20.4
|
Waiver of Subrogation.
|
21.
|
TERMINATION FOR CONVENIENCE
|
21.1
|
Reimbursement of Contractor.
|
21.1.1
|
Purchaser may terminate this Contract without cause, in whole or in part, at any time prior to Launch by giving Contractor written notice of such termination. In the event of such termination, Contractor will immediately cease work as directed in the termination notice. The parties agree that the termination charges pursuant to this Article 21.1 shall be negotiated by the parties, ***
|
(i)
|
***
|
(ii)
|
***
|
21.1.2
|
With respect to inventory items not desired by Purchaser, Contractor shall upon Purchaser’s request use its reasonable best efforts to reuse and resell such items, and ***. Title to inventory items not desired by Purchaser that are reused and/or resold by Contractor shall remain with Contractor.
|
21.1.5
|
The remedies set forth in this Article 21 shall be *** in the event Purchaser exercises a termination for convenience.
|
21.2
|
Partial Termination.
|
21.3
|
Title Transfer.
|
21.4
|
Minimize Termination Costs.
|
21.5
|
Continued Efforts.
|
22.
|
TERMINATION FOR DEFAULT
|
22.1
|
Failure to Perform by Contractor.
|
22.2
|
Termination Liability.
|
22.3
|
Partially Completed Items and Work In Process; Contractor’s Reimbursement for Terminated Work.
|
22.5
|
Contractor Termination.
|
22.6
|
Survival.
|
22.7
|
No Right to Terminate.
|
23.
|
FORCE MAJEURE
|
23.1
|
Force Majeure Event.
|
23.2
|
Termination for Force Majeure.
|
24.
|
INTELLECTUAL PROPERTY RIGHTS; LICENSES
|
24.1
|
Intellectual Property Rights.
|
24.2
|
Rights in Data.
|
24.3
|
Purchaser and Joint Intellectual Property.
|
24.4
|
Purchaser Intellectual Property.
|
24.5
|
Survival of Intellectual Property Rights.
|
25.
|
DISCLOSURE AND HANDLING OF CONFIDENTIAL INFORMATION
|
25.1
|
Definition of Proprietary Information.
|
25.2
|
Terms for Handling and Use of Proprietary Information.
|
25.3
|
Disclosure to Competitors.
|
25.4
|
Legally Required Disclosures.
|
25.5
|
Title; Return.
|
25.6
|
Disclosure of Contract Terms.
|
26.
|
PUBLICITY; PUBLIC RELEASE OF INFORMATION
|
(i)
|
information that is publicly available from any governmental agency or that is or otherwise becomes publicly available without breach of this Contract; and
|
(ii)
|
disclosure required by applicable law or regulation, including without limitation, disclosure required by the Securities and Exchange Commission or the Nasdaq Stock Market or any other securities exchange on which the securities of a Party or its Affiliate is then trading.
|
27.
|
OPTIONS
|
27.1
|
Replacement Satellite.
|
27.1.1
|
Satellite Replacement Option. In the event of loss, destruction or damage of the Satellite following Launch, or as described in Section 15.3, *** Purchaser may exercise such option in writing (“Satellite Replacement Option Exercise”) at any time during the period from EDC until the later of *** and (c) the period of time for Purchaser’s election as set forth in Article 15.3. Upon Satellite Replacement Option Exercise, ***.
|
27.1.2
|
Satellite Replacement Price. *** provided however, that such price shall be subject to the provisions set forth in Article 39. *** For the avoidance of doubt, Purchaser shall be responsible for the provision of Launch Services for the Replacement Satellite.
|
27.1.3
|
Exercise of Satellite Replacement Option. The Parties shall promptly incorporate the exercise of this option into the Contract through an amendment in accordance with Article 36.5.
|
27.1.4
|
Changes to the Replacement Satellite. Purchaser may modify the Performance Specification and/or the Work for the Replacement Satellite, provided that any such modification shall be treated as a change pursuant to Article 18.
|
27.2
|
Additional Satellites.
|
27.3
|
Test Bed.
|
28.
|
INSURANCE AND RISK MANAGEMENT SERVICES
|
28.1
|
Insurance Support.
|
28.2
|
Contractor’s Insurance.
|
28.2.1
|
Ground Insurance. During the period from EDC until Launch, Contractor shall obtain and maintain, ***, insurance coverage (the “Ground Insurance”) against all risks of loss, including without limitation earthquake and other natural disasters and damage to the Satellite and its Components in an amount sufficient to cover the greater of: (i) the Contractor’s full replacement value of the Satellite; and (ii) the amounts paid by Purchaser with respect to the Satellite. Such insurance shall be on reasonable and customary terms and shall include: (a) coverage for removal of debris, and insuring the structures, machines, equipment, facilities, fixtures and other properties constituting part of the project; (b) transit coverage, including without limitation ocean marine coverage (unless insured by the supplier); (c) off-site coverage for any key equipment; and (d) off-site coverage covering any property or equipment not stored on the construction site. The deductible for such insurance shall not exceed *** Contractor shall have Purchaser and/or its designees named as an additional named insured and additional loss payee on such insurance policy(ies) to the extent of their interest(s). Prior to commencing the Work, and whenever requested by Purchaser, Contractor agrees to furnish to Purchaser certificates of insurance evidencing that insurance required under this Article 28.2.1 is in full force and effect.
|
28.2.2
|
CGL Insurance. During the period from EDC until Launch, Contractor shall obtain and maintain, ***, Comprehensive General Liability Insurance (CGL) and other insurances to provide coverage of *** for bodily injury and/or property damage. Coverage shall include but not necessarily be limited to, premises and operations, products and completed operations
|
28.2.3
|
Changes to Ground and CGL Insurance. Without limiting the generality of the foregoing, and to the extent Contractor is required to change material terms and conditions of such Ground Insurance or CGL, *** Contractor shall provide certificates of insurance which shall contain an endorsement setting forth that *** Contractor shall use commercially reasonable efforts to cause such insurance policies to contain a waiver of subrogation rights by the insurer against Purchaser, its Affiliates and their owners, officers, directors, employees, agents, subcontractors and customers. ***
|
29.
|
DISPUTE RESOLUTION
|
29.1
|
Informal Dispute Resolution.
|
(i)
|
If, during the course of the Work, a Party believes it has a Dispute with the other Party, the disputing Party shall give written notice thereof, which notice will describe the Dispute and may recommend corrective action to be taken by the other Party. Contractor’s program manager shall promptly consult with Purchaser contract manager in an effort to reach an agreement to resolve the Dispute;
|
(ii)
|
In the event that agreement cannot be reached within *** of receipt of written notice, either Party may request that the Dispute be escalated, and the respective positions of the Parties shall be forwarded to an executive level higher than that under paragraph (i) above for resolution of the Dispute;
|
(iii)
|
In the event agreement cannot be reached within *** of receipt of written notice, either Party may request that the Dispute be escalated, and the respective positions of the Parties shall be forwarded to the Chief Executive Officer (CEO) or equivalent of each Party for resolution of the Dispute; and
|
(iv)
|
In the event agreement is not reached as provided in paragraphs (i), (ii), or (iii) above within a total of *** after receipt of the written notice described in Paragraph A above, either Party may proceed in accordance with Article 29.2.
|
29.2
|
Litigation.
|
30.
|
INTER-PARTY WAIVER OF LIABILITY FOR A LAUNCH
|
30.1
|
Launch Services Agreement Inter-Party Waiver of Liability.
|
30.2
|
Waiver of Subrogation.
|
30.3
|
Indemnity Related to the Inter-Party Waiver of Liability.
|
30.4
|
Survival of Obligations.
|
30.5
|
Third-Party Claims Coverage.
|
31.
|
LIMITATION OF LIABILITY
|
31.1
|
Limitation.
|
31.2
|
Liability.
|
31.5
|
Survival.
|
32.
|
GROUND STORAGE
|
32.1
|
Notification.
|
32.2
|
Location.
|
32.3
|
Charges.
|
32.4
|
Payments.
|
32.5
|
Title and Risk of Loss.
|
32.6
|
Notification of Intention to Launch a Previously Stored Satellite.
|
33.
|
SUBCONTRACTS
|
33.2
|
No Privity of Contract.
|
34.
|
KEY PERSONNEL
|
35.
|
NOTICES
|
35.1
|
Written Notification.
|
35.2
|
Change of Address.
|
36.
|
GENERAL
|
36.1
|
Binding Effect; Assignment.
|
36.2
|
Severability.
|
36.3
|
Captions.
|
36.4
|
Relationships of the Parties.
|
36.5
|
Entire Agreement.
|
36.6
|
Standard of Conduct.
|
36.7
|
Construction.
|
36.8
|
Counterparts.
|
36.9
|
Applicable Law.
|
36.10
|
Survival.
|
36.11
|
U.N. Convention on the International Sales of Goods.
|
36.12
|
Waiver.
|
36.13
|
Third-Party Beneficiaries.
|
36.14
|
Specific Performance.
|
36.15
|
Order of Precedence.
|
40.
|
PURCHASER DELAY OF WORK
|
Legal Entity
|
|
State or Country of Incorporation
|
Hughes Satellite Systems Corporation
|
|
Colorado
|
Hughes Communications, Inc.
|
|
Delaware
|
Hughes Network Systems, LLC
|
|
Delaware
|
Hughes Systique Corporation (1)
|
|
Delaware
|
HNS Participacoes e Empreendimentos, S.A.
|
|
Brazil
|
HNS Americas Comunicacoes, Ltda
|
|
Brazil
|
Hughes Telecommunicacoes do Brasil, Ltda
|
|
Brazil
|
Hughes Communications India Private Ltd
|
|
India
|
EchoStar Operating L.L.C.
|
|
Colorado
|
EchoStar Corporation
|
|
Nevada
|
EchoStar Satellite Services L.L.C.
|
|
Delaware
|
EchoStar XXIV L.L.C.
|
|
Colorado
|
EchoStar Mexico Holdings Corporation
|
|
Colorado
|
EchoStar Real Estate Corporation IV
|
|
Colorado
|
EchoStar Orbital L.L.C.
|
|
Colorado
|
Sawatch Limited
|
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United Kingdom
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EchoStar Mobile Limited
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Ireland
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Form
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Registration Statement No.
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Description
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S-8
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333-218658
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Additional shares for Amended and Restated EchoStar Corporation 2017 Employee Stock Purchase Plan
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S-8
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333-218657
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EchoStar Corporation 2017 Stock Incentive Plan
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EchoStar Corporation 2017 Non-Employee Director Stock Incentive Plan
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S-8
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333-162339
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Additional shares for EchoStar Corporation 2008 Employee Stock Purchase Plan
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S-8
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333-148416
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EchoStar Corporation (f/k/a EchoStar Holding Corporation) 2008 Stock Incentive Plan
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EchoStar Corporation (f/k/a EchoStar Holding Corporation) 2008 Employee Stock Purchase Plan
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EchoStar Corporation (f/k/a EchoStar Holding Corporation) 2008 Nonemployee Director Stock Option Plan
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EchoStar Corporation (f/k/a EchoStar Holding Corporation) 2008 Class B CEO Stock Option Plans
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/s/ KPMG LLP
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Denver, Colorado
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February 20, 2020
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Signature
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Title
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Date
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/s/ Charles W. Ergen
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Director
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February 20, 2020
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Charles W. Ergen
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/s/ R. Stanton Dodge
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Director
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February 20, 2020
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R. Stanton Dodge
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/s/ Anthony M. Federico
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Director
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February 20, 2020
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Anthony M. Federico
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/s/ Pradman P. Kaul
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Director
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February 20, 2020
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Pradman P. Kaul
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/s/ Jeffrey R. Tarr
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Director
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February 20, 2020
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Jeffrey R. Tarr
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/s/ C. Michael Schroeder
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Director
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February 20, 2020
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C. Michael Schroeder
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/s/ William David Wade
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Director
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February 20, 2020
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William David Wade
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 20, 2020
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/s/ Michael T. Dugan
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Chief Executive Officer, President and Director
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(Principal Executive Officer)
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 20, 2020
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/s/ David J. Rayner
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Executive Vice President, Chief Financial Officer,
Chief Operating Officer and Treasurer
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(Principal Financial and Accounting Officer)
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(i)
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the Annual Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934; and
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(ii)
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the information contained in this Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 20, 2020
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/s/ Michael T. Dugan
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Name:
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Michael T. Dugan
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Title:
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Chief Executive Officer, President and Director
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(Principal Executive Officer)
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/s/ David J. Rayner
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Name:
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David J. Rayner
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Title:
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Executive Vice President, Chief Financial Officer,
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Chief Operating Officer and Treasurer
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(Principal Financial and Accounting Officer)
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•
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Consolidated revenues of $499.0 million.
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•
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Net loss from continuing operations of $56.3 million, consolidated net loss attributable to EchoStar common stock of $53.1 million, and diluted loss per share of $(0.55).
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•
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Consolidated Adjusted EBITDA of $155.9 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).
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•
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Consolidated revenues of $1.9 billion.
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•
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Net loss from continuing operations of $113.7 million, consolidated net loss attributable to EchoStar common stock of $62.9 million, and diluted loss per share of $(0.65).
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•
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Consolidated Adjusted EBITDA of $582.8 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).
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•
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Consolidated revenue increased 10% or $45.0 million year over year.
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•
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Adjusted EBITDA increased 19% or $25.1 million year over year.
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◦
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Hughes segment Adjusted EBITDA increased by $25.9 million primarily driven by higher revenue and associated margin from our consumer business and enterprise equipment sales. Adjusted EBITDA excludes all activity related to the India license fee dispute discussed below.
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◦
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ESS segment Adjusted EBITDA was flat.
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◦
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Corporate and Other segment Adjusted EBITDA decreased by $0.5 million. The segment was impacted by the loss of the revenue and EBITDA associated with the transfer of certain real estate assets to DISH Network Corporation as part of the BSS transaction that were not treated as discontinued operations as well as continued investment in corporate development activities. This was partially offset by smaller equity losses of unconsolidated affiliates. During the fourth quarter, we changed our accounting policy to record our share of net earnings or losses of unconsolidated affiliates on a three month-lag. Based on this change, our results exclude Q4-19 activity from these equity investments.
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•
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License fee dispute with the Government of India:
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◦
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In October 2019, the Supreme Court of India issued an order affirming certain license fee assessments, interest, penalties, and interest on the penalties imposed by the Indian Department of Telecommunications (“DOT”) related to a license fee dispute with the Government of India that dates back over a decade and has affected the entire Indian Telecom industry. On February 14, 2020, the Supreme Court of India denied the petitions filed by us and other telecommunication service providers asking the court to modify the order to permit the DOT to calculate the final amount due and extend the payment deadline. To date, the DOT has issued us written assessments of $28.4 million for the license fees, penalties and interest. It is possible the DOT’s assessment may be modified depending on the methodology it uses to calculate interest over the period in question.
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◦
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As a result of the Supreme Court’s decisions and based on the DOT’s current methodology for assessing penalties and interest, we booked an additional accrual of $60.8 million during the quarter which also impacted Net income (loss) attributable to non-controlling interest. This is summarized as follows (amounts in millions):
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SG&A expense
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$
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2.3
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Interest expense, net of amounts capitalized
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$
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58.5
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Total
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$
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60.8
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Net income (loss) attributable to non-controlling interest
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$
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9.4
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•
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Net loss from continuing operations was $56.3 million, a decrease of loss by $72.5 million from last year. The decreased loss was primarily due to an impairment of long-lived asset of $65.2 million in Q4-18, higher net gains on investments of $45.0 million, and higher operating income (excluding impairments) of $9.2 million. This was partially offset by higher net interest expense of $45.5 million which includes $58.5 of interest related to the license fee dispute with the Government of India discussed above. Excluding the impact of the license fee dispute (tax effected), Net earnings from continuing operations would have been $4.3 million.
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•
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Hughes broadband subscribers are approximately 1,477,000 as of December 31, 2019 including approximately 237,000 subscribers in Central and South America.
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•
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Cash, cash equivalents and current marketable investment securities were $2.5 billion as of December 31, 2019.
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For the three months
ended December 31, |
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For the twelve months
ended December 31, |
||||||||||||
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2019
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2018
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2019
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2018
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||||||||
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Revenue
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Hughes
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$
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491,823
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$
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444,642
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$
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1,852,742
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$
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1,716,528
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EchoStar Satellite Services
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4,384
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4,669
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16,257
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27,231
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||||
Corporate and Other
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2,799
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4,672
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17,082
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18,879
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||||
Total revenue
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$
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499,006
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$
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453,983
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$
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1,886,081
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$
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1,762,638
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||||||||
Adjusted EBITDA
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|
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||||||||
Hughes
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$
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176,738
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$
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150,809
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$
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666,890
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$
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616,532
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EchoStar Satellite Services
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1,988
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2,286
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6,994
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17,764
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||||
Corporate & Other:
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|
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||||||||
Corporate overhead, operating and other
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(23,090
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)
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(18,988
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)
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(81,859
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)
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(73,237
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)
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||||
Equity in earnings (losses) of unconsolidated affiliates, net
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250
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(3,303
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)
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(9,257
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)
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(5,954
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)
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||||
Total Corporate & Other
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(22,840
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)
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(22,291
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)
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(91,116
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)
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(79,191
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)
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||||
Total Adjusted EBITDA
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$
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155,886
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$
|
130,804
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$
|
582,768
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|
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$
|
555,105
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|
|
|
|
|
|
|
|
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|
||||||||
Net income (loss) from continuing operations
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|
$
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(56,273
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)
|
|
$
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(128,774
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)
|
|
$
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(113,653
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)
|
|
$
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(132,362
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)
|
Expenditures for property and equipment
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|
$
|
103,723
|
|
|
$
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139,817
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|
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$
|
418,074
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|
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$
|
477,442
|
|
|
|
For the three months
ended December 31, |
|
For the twelve months
ended December 31, |
||||||||||||
|
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2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
(63,094
|
)
|
|
$
|
(111,648
|
)
|
|
$
|
(74,252
|
)
|
|
$
|
(38,633
|
)
|
Interest income
|
|
(17,535
|
)
|
|
(24,038
|
)
|
|
(82,352
|
)
|
|
(80,275
|
)
|
||||
Interest expense, net of amounts capitalized
|
|
94,203
|
|
|
55,250
|
|
|
251,016
|
|
|
219,288
|
|
||||
Income tax provision (benefit), net
|
|
7,882
|
|
|
(1,698
|
)
|
|
20,488
|
|
|
6,576
|
|
||||
Depreciation and amortization
|
|
129,146
|
|
|
118,379
|
|
|
490,765
|
|
|
457,116
|
|
||||
Net (income) loss from discontinued operations
|
|
6,821
|
|
|
(17,126
|
)
|
|
(39,401
|
)
|
|
(93,729
|
)
|
||||
Net (income) loss attributable to non-controlling interests
|
|
9,976
|
|
|
(550
|
)
|
|
11,335
|
|
|
(1,842
|
)
|
||||
EBITDA
|
|
167,399
|
|
|
18,569
|
|
|
577,599
|
|
|
468,501
|
|
||||
(Gains) losses on investments, net
|
|
(825
|
)
|
|
44,227
|
|
|
(28,912
|
)
|
|
12,622
|
|
||||
Impairment of long-lived assets
|
|
—
|
|
|
65,220
|
|
|
—
|
|
|
65,220
|
|
||||
Litigation expense
|
|
(627
|
)
|
|
2,750
|
|
|
25,701
|
|
|
2,750
|
|
||||
Vendor settlement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,571
|
)
|
||||
License fee dispute - India, net of non-controlling interests
|
|
(7,150
|
)
|
|
—
|
|
|
(3,210
|
)
|
|
—
|
|
||||
Foreign currency transaction (gains) losses, net
|
|
(2,911
|
)
|
|
38
|
|
|
11,590
|
|
|
15,583
|
|
||||
Adjusted EBITDA
|
|
$
|
155,886
|
|
|
$
|
130,804
|
|
|
$
|
582,768
|
|
|
$
|
555,105
|
|
EchoStar Investor Relations
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EchoStar Media Relations
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Terry Brown
Phone: +1 303-728-5179
Email: terry.brown@echostar.com
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Sharyn Nerenberg
Phone: +1 301-428-7124
Email: sharyn.nerenberg@echostar.com
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
1,519,431
|
|
|
$
|
928,306
|
|
Marketable investment securities
|
|
940,623
|
|
|
2,282,152
|
|
||
Trade accounts receivable and contract assets, net
|
|
196,629
|
|
|
201,096
|
|
||
Other current assets
|
|
179,531
|
|
|
165,809
|
|
||
Current assets of discontinued operations
|
|
—
|
|
|
3,486
|
|
||
Total current assets
|
|
2,836,214
|
|
|
3,580,849
|
|
||
Non-current assets:
|
|
|
|
|
|
|
||
Property and equipment, net
|
|
2,528,738
|
|
|
2,534,666
|
|
||
Operating lease right-of-use assets
|
|
114,042
|
|
|
—
|
|
||
Goodwill
|
|
506,953
|
|
|
504,173
|
|
||
Regulatory authorizations, net
|
|
478,598
|
|
|
430,039
|
|
||
Other intangible assets, net
|
|
29,507
|
|
|
44,231
|
|
||
Other investments, net
|
|
325,405
|
|
|
266,513
|
|
||
Other non-current assets, net
|
|
334,841
|
|
|
338,390
|
|
||
Non-current assets of discontinued operations
|
|
—
|
|
|
962,433
|
|
||
Total non-current assets
|
|
4,318,084
|
|
|
5,080,445
|
|
||
Total assets
|
|
$
|
7,154,298
|
|
|
$
|
8,661,294
|
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Trade accounts payable
|
|
$
|
124,080
|
|
|
$
|
121,437
|
|
Current portion of long-term debt and finance lease obligations
|
|
486
|
|
|
919,582
|
|
||
Contract liabilities
|
|
101,060
|
|
|
72,284
|
|
||
Accrued expenses and other current liabilities
|
|
270,393
|
|
|
181,698
|
|
||
Current liabilities of discontinued operations
|
|
—
|
|
|
50,136
|
|
||
Total current liabilities
|
|
496,019
|
|
|
1,345,137
|
|
||
Non-current liabilities:
|
|
|
|
|
|
|
||
Long-term debt and finance lease obligations, net of current portion
|
|
2,389,733
|
|
|
2,386,202
|
|
||
Deferred tax liabilities, net
|
|
351,692
|
|
|
287,989
|
|
||
Operating lease liabilities
|
|
96,941
|
|
|
—
|
|
||
Other non-current liabilities
|
|
74,360
|
|
|
80,304
|
|
||
Non-current liabilities of discontinued operations
|
|
—
|
|
|
406,188
|
|
||
Total non-current liabilities
|
|
2,912,726
|
|
|
3,160,683
|
|
||
Total liabilities
|
|
3,408,745
|
|
|
4,505,820
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
||||
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
||
Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at both December 31, 2019 and 2018
|
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 4,000,000,000 shares authorized:
|
|
|
|
|
|
|
||
Class A common stock, $0.001 par value, 1,600,000,000 shares authorized, 56,592,251 shares issued and 50,107,330 shares outstanding at December 31, 2019 and 54,142,566 shares issued and 47,657,645 shares outstanding at December 31, 2018
|
|
57
|
|
|
54
|
|
||
Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at both December 31, 2019 and 2018
|
|
48
|
|
|
48
|
|
||
Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both December 31, 2019 and 2018
|
|
—
|
|
|
—
|
|
||
Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both December 31, 2019 and 2018
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
3,290,483
|
|
|
3,702,522
|
|
||
Accumulated other comprehensive income (loss)
|
|
(122,138
|
)
|
|
(125,100
|
)
|
||
Accumulated earnings (losses)
|
|
632,809
|
|
|
694,129
|
|
||
Treasury stock, at cost
|
|
(131,454
|
)
|
|
(131,454
|
)
|
||
Total EchoStar Corporation stockholders’ equity
|
|
3,669,805
|
|
|
4,140,199
|
|
||
Non-controlling interests
|
|
75,748
|
|
|
15,275
|
|
||
Total stockholders’ equity
|
|
3,745,553
|
|
|
4,155,474
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
7,154,298
|
|
|
$
|
8,661,294
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|||
Services and other revenue
|
|
$
|
1,619,271
|
|
|
$
|
1,557,228
|
|
|
$
|
1,285,666
|
|
Equipment revenue
|
|
266,810
|
|
|
205,410
|
|
|
239,489
|
|
|||
Total revenue
|
|
1,886,081
|
|
|
1,762,638
|
|
|
1,525,155
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|||
Cost of sales - services and other (exclusive of depreciation and amortization)
|
|
561,353
|
|
|
563,907
|
|
|
500,773
|
|
|||
Cost of sales - equipment (exclusive of depreciation and amortization)
|
|
226,002
|
|
|
176,600
|
|
|
195,151
|
|
|||
Selling, general and administrative expenses
|
|
509,145
|
|
|
436,088
|
|
|
370,500
|
|
|||
Research and development expenses
|
|
25,739
|
|
|
27,570
|
|
|
31,745
|
|
|||
Depreciation and amortization
|
|
490,765
|
|
|
457,116
|
|
|
385,662
|
|
|||
Impairment of long-lived assets
|
|
—
|
|
|
65,220
|
|
|
10,762
|
|
|||
Total costs and expenses
|
|
1,813,004
|
|
|
1,726,501
|
|
|
1,494,593
|
|
|||
Operating income (loss)
|
|
73,077
|
|
|
36,137
|
|
|
30,562
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
|
82,352
|
|
|
80,275
|
|
|
44,619
|
|
|||
Interest expense, net of amounts capitalized
|
|
(251,016
|
)
|
|
(219,288
|
)
|
|
(184,389
|
)
|
|||
Gains (losses) on investments, net
|
|
28,912
|
|
|
(12,622
|
)
|
|
53,453
|
|
|||
Equity in earnings (losses) of unconsolidated affiliates, net
|
|
(14,734
|
)
|
|
(5,954
|
)
|
|
16,973
|
|
|||
Foreign currency transaction gains (losses), net
|
|
(11,590
|
)
|
|
(15,583
|
)
|
|
1,218
|
|
|||
Other, net
|
|
(166
|
)
|
|
11,249
|
|
|
5,364
|
|
|||
Total other income (expense), net
|
|
(166,242
|
)
|
|
(161,923
|
)
|
|
(62,762
|
)
|
|||
Income (loss) from continuing operations before income taxes
|
|
(93,165
|
)
|
|
(125,786
|
)
|
|
(32,200
|
)
|
|||
Income tax benefit (provision), net
|
|
(20,488
|
)
|
|
(6,576
|
)
|
|
155,107
|
|
|||
Net income (loss) from continuing operations
|
|
(113,653
|
)
|
|
(132,362
|
)
|
|
122,907
|
|
|||
Net income (loss) from discontinued operations
|
|
39,401
|
|
|
93,729
|
|
|
270,582
|
|
|||
Net income (loss)
|
|
(74,252
|
)
|
|
(38,633
|
)
|
|
393,489
|
|
|||
Less: Net income (loss) attributable to non-controlling interests
|
|
(11,335
|
)
|
|
1,842
|
|
|
928
|
|
|||
Net income (loss) attributable to EchoStar Corporation
|
|
(62,917
|
)
|
|
(40,475
|
)
|
|
392,561
|
|
|||
Less: Net income (loss) attributable to Hughes Retail Preferred Tracking Stock
|
|
—
|
|
|
—
|
|
|
(1,209
|
)
|
|||
Net income (loss) attributable to EchoStar Corporation common stock
|
|
$
|
(62,917
|
)
|
|
$
|
(40,475
|
)
|
|
$
|
393,770
|
|
|
|
|
|
|
|
|
||||||
Earnings (losses) per share - Class A and B common stock:
|
|
|
|
|
|
|
|
|
|
|||
Basic earnings (loss) from continuing operations per share
|
|
$
|
(1.06
|
)
|
|
$
|
(1.39
|
)
|
|
$
|
1.29
|
|
Total basic earnings (loss) per share
|
|
$
|
(0.65
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
4.13
|
|
Diluted earnings (loss) from continuing operations per share
|
|
$
|
(1.06
|
)
|
|
$
|
(1.39
|
)
|
|
$
|
1.27
|
|
Total diluted earnings (loss) per share
|
|
$
|
(0.65
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
4.07
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
$
|
(74,252
|
)
|
|
$
|
(38,633
|
)
|
|
$
|
393,489
|
|
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
588,200
|
|
|
598,178
|
|
|
533,849
|
|
|||
Impairment of long-lived assets
|
|
—
|
|
|
65,220
|
|
|
10,762
|
|
|||
Losses (gains) on investments, net
|
|
(28,912
|
)
|
|
12,109
|
|
|
(53,453
|
)
|
|||
Equity in losses (earnings) of unconsolidated affiliates, net
|
|
14,734
|
|
|
6,037
|
|
|
(15,814
|
)
|
|||
Foreign currency transaction losses (gains), net
|
|
11,590
|
|
|
15,583
|
|
|
(1,218
|
)
|
|||
Deferred tax provision (benefit), net
|
|
32,542
|
|
|
26,327
|
|
|
(288,577
|
)
|
|||
Stock-based compensation
|
|
9,353
|
|
|
9,990
|
|
|
10,103
|
|
|||
Amortization of debt issuance costs
|
|
5,912
|
|
|
7,923
|
|
|
7,378
|
|
|||
Dividends received from unconsolidated affiliates
|
|
2,716
|
|
|
10,000
|
|
|
19,000
|
|
|||
Proceeds from sale of trading securities
|
|
—
|
|
|
—
|
|
|
8,922
|
|
|||
Changes in current assets and current liabilities, net:
|
|
|
|
|
|
|
|
|||||
Trade accounts receivable and contract assets, net
|
|
8,289
|
|
|
(17,842
|
)
|
|
421
|
|
|||
Other current assets
|
|
(39,190
|
)
|
|
18,577
|
|
|
200,584
|
|
|||
Trade accounts payable
|
|
13,149
|
|
|
9,562
|
|
|
(78,419
|
)
|
|||
Contract liabilities
|
|
26,376
|
|
|
7,867
|
|
|
5,322
|
|
|||
Accrued expenses and other current liabilities
|
|
66,352
|
|
|
12,183
|
|
|
7,402
|
|
|||
Changes in non-current assets and non-current liabilities, net
|
|
13,166
|
|
|
(5,070
|
)
|
|
(36,975
|
)
|
|||
Other, net
|
|
6,297
|
|
|
(3,489
|
)
|
|
4,116
|
|
|||
Net cash flows from operating activities
|
|
656,322
|
|
|
734,522
|
|
|
726,892
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Purchases of marketable investment securities
|
|
(993,369
|
)
|
|
(2,973,254
|
)
|
|
(855,717
|
)
|
|||
Sales and maturities of marketable investment securities
|
|
2,391,220
|
|
|
1,498,463
|
|
|
580,235
|
|
|||
Investments in unconsolidated affiliates
|
|
(2,149
|
)
|
|
(115,991
|
)
|
|
—
|
|
|||
Sale of investment in unconsolidated affiliates
|
|
—
|
|
|
1,558
|
|
|
17,781
|
|
|||
Dividend received from unconsolidated affiliate
|
|
2,284
|
|
|
—
|
|
|
—
|
|
|||
Purchase of other investments
|
|
(93,687
|
)
|
|
—
|
|
|
—
|
|
|||
Expenditures for property and equipment
|
|
(418,584
|
)
|
|
(555,141
|
)
|
|
(583,211
|
)
|
|||
Refunds and other receipts related to property and equipment
|
|
—
|
|
|
77,524
|
|
|
4,311
|
|
|||
Expenditures for externally marketed software
|
|
(29,310
|
)
|
|
(31,639
|
)
|
|
(31,331
|
)
|
|||
Purchases of regulatory authorizations
|
|
(34,447
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash flows from investing activities
|
|
821,958
|
|
|
(2,098,480
|
)
|
|
(867,932
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Repurchase and maturity of the 2019 Senior Secured Notes
|
|
(920,923
|
)
|
|
(70,173
|
)
|
|
—
|
|
|||
Repayment of other long-term debt and finance lease obligations
|
|
(29,347
|
)
|
|
(41,019
|
)
|
|
(37,670
|
)
|
|||
Payment of in-orbit incentive obligations
|
|
(5,447
|
)
|
|
(5,350
|
)
|
|
(5,487
|
)
|
|||
Net proceeds from Class A common stock options exercised
|
|
67,337
|
|
|
4,424
|
|
|
35,536
|
|
|||
Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan
|
|
9,779
|
|
|
9,368
|
|
|
8,758
|
|
|||
Treasury share purchase
|
|
—
|
|
|
(33,292
|
)
|
|
—
|
|
|||
Purchase of non-controlling interest
|
|
(7,313
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
603
|
|
|
(521
|
)
|
|
(1,065
|
)
|
|||
Net cash flows from financing activities
|
|
(885,311
|
)
|
|
(136,563
|
)
|
|
72
|
|
|||
Effect of exchange rates on cash and cash equivalents
|
|
(575
|
)
|
|
(2,233
|
)
|
|
1,351
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
592,394
|
|
|
(1,502,754
|
)
|
|
(139,617
|
)
|
|||
Cash and cash equivalents, including restricted amounts, beginning of period
|
|
929,495
|
|
|
2,432,249
|
|
|
2,571,866
|
|
|||
Cash and cash equivalents, including restricted amounts, end of period
|
|
$
|
1,521,889
|
|
|
$
|
929,495
|
|
|
$
|
2,432,249
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|||
Cash paid for interest (including capitalized interest)
|
|
$
|
195,331
|
|
|
$
|
240,596
|
|
|
$
|
207,617
|
|
Cash paid for income taxes
|
|
$
|
3,575
|
|
|
$
|
5,209
|
|
|
$
|
11,033
|
|