Property and Equipment and Intangible Assets

12 Months Ended

Dec. 31, 2023

Property and Equipment and Intangible Assets

Property and Equipment and Intangible Assets

7.     Property and Equipment and Intangible Assets

Property and Equipment

Property and equipment consisted of the following:

	Depreciable			As of
	Life			December 31,		December 31,
	(In Years)			2023		2022
				(In thousands)
Equipment leased to customers	2	-	5	$	1,181,193	$	1,318,272
Satellites	6	-	15		1,718,865		1,718,865
Satellites acquired under finance lease agreements		15			344,447		344,447
Furniture, fixtures, equipment and other	2	-	20		908,924		903,190
5G Network Deployment equipment (1)	3	-	15		4,263,327		770,153
Software and computer equipment	2	-	6		2,111,305		1,666,962
Buildings and improvements	5	-	40		381,757		380,519
Land		-			17,513		17,513
Construction in progress		-			1,802,000		3,170,623
Total property and equipment					12,729,331		10,290,544
Accumulated depreciation					(5,327,384)		(4,650,425)
Property and equipment, net				$	7,401,947	$	5,640,119

(1) Includes 5G Network Deployment assets acquired under finance lease agreements.

Construction in progress consisted of the following:

	As of
	December 31,		December 31,
	2023		2022
	(In thousands)
Pay-TV	$	162,055	$	36,936
Retail Wireless		—		—
5G Network Deployment		1,639,945		3,133,687
Total construction in progress	$	1,802,000	$	3,170,623

Depreciation and amortization expense consisted of the following:

	For the Years Ended December 31,
	2023		2022		2021
	(In thousands)
Equipment leased to customers	$	166,950	$	191,746	$	244,755
Satellites		134,948		148,051		189,126
Buildings, furniture, fixtures, equipment and other		91,942		40,703		25,279
5G Network Deployment equipment		371,640		29,992		8,263
Software and computer equipment		235,820		153,040		93,119
Intangible assets and other amortization expense		180,621		153,541		164,310
Total depreciation and amortization	$	1,181,921	$	717,073	$	724,852

Cost of sales and operating expense categories included in our accompanying Consolidated Statements of Operations and Comprehensive Income (Loss) do not include depreciation and amortization expense related to satellites, equipment leased to customers, or our 5G Network Deployment equipment and software.

Activity relating to our asset retirement obligations was as follows:

	As of December 31,
	2023		2022
	(In thousands)
Balance at beginning of period	$	183,135	$	51,551
Liabilities incurred		74,189		124,822
Accretion expense		20,963		6,762
Revision to estimated cash flows		—		—
Balance at end of period	$	278,287	$	183,135
Total included in Other long-term liabilities	$	278,287	$	183,135

The corresponding assets, net of accumulated depreciation, related to asset retirement obligations were $217 million and $162 million as of December 31, 2023 and 2022, respectively.

Satellites Pay-TV Segment

Our Pay-TV segment currently utilizes nine satellites in geostationary orbit approximately 22,300 miles above the equator, seven of which we own and depreciate over their estimated useful life. We also lease two satellites from third parties: Anik F3, which is accounted for as an operating lease, and Nimiq 5, which is accounted for as a finance lease and is depreciated over its economic life. As of July 2023, we no longer lease the Ciel II satellite.

As of December 31, 2023, our Pay-TV segment satellite fleet consisted of the following:

		Degree	Lease
	Launch	Orbital	Termination
Satellites	Date	Location	Date
Owned:
EchoStar X	February 2006	110	N/A
EchoStar XI	July 2008	110	N/A
EchoStar XIV	March 2010	119	N/A
EchoStar XV	July 2010	61.5	N/A
EchoStar XVI	November 2012	61.5	N/A
EchoStar XVIII	June 2016	61.5	N/A
EchoStar XXIII	March 2017	110	N/A
Under Construction:
EchoStar XXV	2026	110	N/A
Leased from Other Third-Party:
Anik F3	April 2007	118.7	April 2025
Nimiq 5	September 2009	72.7	September 2024

Satellite Under Construction

EchoStar XXV. On March 20, 2023, we entered into a contract with Maxar Space LLC for the construction of EchoStar XXV, a DBS satellite that is capable of providing service to the continental United States (“CONUS”) and is intended to be used at the 110 degree orbital location. During the fourth quarter of 2023, we entered into an agreement with Space Exploration Technologies Corp (“SpaceX”) for launch services for this satellite, which is expected to be launched during 2026.

Satellite Anomalies

Operation of our DISH TV services requires that we have adequate satellite transmission capacity for the programming that we offer. While we generally have had in-orbit satellite capacity sufficient to transmit our existing channels and some backup capacity to recover the transmission of certain critical programming, our backup capacity is limited.

In the event of a failure or loss of any of our owned or leased satellites, we may need to acquire or lease additional satellite capacity or relocate one of our other owned or leased satellites and use it as a replacement for the failed or lost satellite. Such a failure could result in a prolonged loss of critical programming or a significant delay in our plans to expand programming as necessary to remain competitive and thus may have a material adverse effect on our business, financial condition and results of operations.

In the past, certain of our owned and leased satellites have experienced anomalies, some of which have had a significant adverse impact on their remaining useful life and/or commercial operation. There can be no assurance that future anomalies will not impact the remaining useful life and/or commercial operation of any of the owned and leased satellites in our fleet. See Note 2 for further information on evaluation of impairment. There can be no assurance that we can recover critical transmission capacity in the event one or more of our owned or leased in-orbit satellites were to fail. We generally do not carry commercial launch or in-orbit insurance on any of the satellites that we own and therefore, we will bear the risk associated with any uninsured launch or in-orbit satellite failures.

Intangible Assets

As of December 31, 2023 and 2022, our identifiable intangibles subject to amortization consisted of the following:

	As of December 31,
	2023				2022
	Intangible		Accumulated		Intangible		Accumulated
	Assets		Amortization		Assets		Amortization
	(In thousands)
Technology-based	$	63,766	$	(60,590)	$	63,545	$	(60,022)
Trademarks		135,134		(71,640)		135,134		(61,007)
Contract-based		41,500		(41,500)		41,500		(41,500)
Customer relationships		628,598		(535,778)		628,598		(366,357)
Total	$	868,998	$	(709,508)	$	868,777	$	(528,886)

These identifiable intangibles are included in “Intangible assets, net” on our Consolidated Balance Sheets. Amortization of these intangible assets is recorded on a straight-line basis over an average finite useful life primarily ranging from approximately two to 20 years. Amortization was $181 million, $154 million and $164 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Estimated future amortization of our identifiable intangible assets as of December 31, 2023 is as follows (in thousands):

For the Years Ended December 31,
	(In thousands)
2024	$	95,641
2025		13,534
2026		11,838
2027		11,355
2028		10,872
Thereafter		16,029
Total	$	159,269

Goodwill

Goodwill represents the excess of the consideration transferred over the estimated fair values of assets acquired and liabilities assumed as of the acquisition date and is not subject to amortization but is subject to impairment testing annually or whenever indicators of impairment arise.

During the year ended December 31, 2023 we recorded a noncash impairment charge for goodwill of $225 million in “Impairment of long-lived assets and goodwill” on our Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 2 for further information. The non-recurring measurement of fair value of goodwill is classified as Level 3 in the fair value hierarchy.

As of December 31, 2023 and 2022, our goodwill consisted of the following:

	As of
	December 31,		December 31,
	2023		2022
	(In thousands)
Pay-TV	$	—	$	6,457
Retail Wireless		—		98,657
5G Network Deployment		—		119,903
Total goodwill	$	—	$	225,017

Regulatory Authorizations – Pay-TV and 5G Network Deployment Segments

As of December 31, 2023 and 2022, our Regulatory Authorizations with indefinite lives consisted of the following:

	As of December 31,
	2023		2022
	(In thousands)
Owned:
DBS Licenses	$	677,409	$	677,409
700 MHz Licenses		711,871		711,871
AWS-4 Licenses		1,940,000		1,940,000
H Block Licenses		1,671,506		1,671,506
600 MHz Licenses		6,213,335		6,212,579
MVDDS Licenses		24,000		24,000
28 GHz Licenses		2,883		2,883
24 GHz Licenses		11,772		11,772
37 GHz, 39 GHz & 47 GHz Licenses		202,533		202,533
3550-3650 MHz Licenses		912,939		912,939
3.7-3.98 GHz Licenses		2,969		2,688
3.45-3.55 GHz Licenses		7,327,989		7,327,989
1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz		972		—
AWS-3		5,618,930		5,618,930
Subtotal		25,319,108		25,317,099
Noncontrolling Investments:
SNR		4,271,459		4,271,459
Capitalized Interest (1)		8,523,682		7,344,515
Total	$	38,114,249	$	36,933,073

(1) See Note 2 for further information.