Property and Equipment

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

The following table presents the components of Property and equipment, net:

	As of
	September 30, 2022		December 31, 2021
Property and equipment, net:
Satellites, net	$	1,575,202	$	1,610,623
Other property and equipment, net	676,056		727,662
Total property and equipment, net	$	2,251,258	$	2,338,285

Satellites

As of September 30, 2022, our satellite fleet consisted of ten geosynchronous (“GEO”) satellites, seven of which are owned and three of which are leased. They are all in geosynchronous orbit, approximately 22,300 miles above the equator. Our owned S-band low-earth orbit (“LEO”) nano-satellites are not included in the table below.

The following table presents our GEO satellite fleet as of September 30, 2022:

GEO Satellite	Segment	Launch Date	Nominal Degree Orbital Location (Longitude)	Depreciable Life (In Years)
Owned:
SPACEWAY 3 (1)	Hughes	August 2007	95 W	10
EchoStar XVII	Hughes	July 2012	107 W	15
EchoStar XIX	Hughes	December 2016	97.1 W	15
Al Yah 3 (2)	Hughes	January 2018	20 W	7
EchoStar IX (3) (4)	ESS	August 2003	121 W	12
EUTELSAT 10A (“W2A”) (5)	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

(1)    Depreciable life represents the remaining useful life as of June 8, 2011, the date EchoStar completed the acquisition of Hughes Communications, Inc. (“Hughes Communications”) and its subsidiaries (the “Hughes Acquisition”).

(2) Upon consummation of our joint venture with Al Yah Satellite Communications Company PrJSC (“Yahsat”) in Brazil in November 2019, we acquired the Brazilian Ka-band payload on this satellite. Depreciable life represents the remaining useful life as of November 2019.

(3)    We own the Ka-band and Ku-band payloads on this satellite.

(4)    EchoStar IX is approaching its end of station-kept life. The Company expects to place the satellite in an inclined-orbit in the fourth quarter of 2022 or first quarter of 2023, but this ability is dependent upon events beyond our control and may not occur on schedule if at all. Inclined-orbit will extend its life but impact revenue generating capabilities.

(5)    We acquired the S-band payload on this satellite in December 2013. Prior to acquisition, the S-band payload experienced an anomaly at the time of launch and, as a result, is not fully operational.

The following table presents the components of our satellites, net:

	Depreciable Life (In Years)	As of
		September 30, 2022		December 31, 2021
Satellites, net:
Satellites - owned	7 to 15	$	1,807,256	$	1,806,664
Satellites - acquired under finance leases	15	357,163		354,170
Construction in progress	—	593,905		541,422
Total satellites		2,758,324		2,702,256
Accumulated depreciation:
Satellites - owned		(1,068,584)		(995,962)
Satellites - acquired under finance leases		(114,538)		(95,671)
Total accumulated depreciation		(1,183,122)		(1,091,633)
Total satellites, net		$	1,575,202	$	1,610,623

The following table presents the depreciation expense associated with our satellites, net:

	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021
Depreciation expense:
Satellites - owned	$	24,176	$	22,775	$	72,654	$	77,517
Satellites - acquired under finance leases	6,003		7,434		18,127		22,031
Total depreciation expense	$	30,179	$	30,209	$	90,781	$	99,548

The following table presents capitalized interest associated with our satellites and satellite-related ground infrastructure:

	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021
Capitalized interest	$	11,130	$	9,183	$	32,395	$	27,473

Construction in Progress

In August 2017, we entered into a contract for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite. The EchoStar XXIV satellite is primarily intended to provide additional capacity for our HughesNet satellite internet service (the “HughesNet service”) in North, Central and South America as well as enterprise broadband services. Capital expenditures associated with the construction and launch of the EchoStar XXIV satellite are included in Corporate and Other segment in our segment reporting.

Satellite-Related Commitments

As of September 30, 2022 and December 31, 2021 our satellite-related commitments were $257.0 million and $342.2 million, respectively. These include payments pursuant to: i) agreements for the construction of the EchoStar XXIV satellite, ii) the EchoStar XXIV launch contract, iii) regulatory authorizations and non-lease costs associated with our finance lease satellites, in-orbit incentives relating to certain satellites and commitments for satellite service arrangements.

In certain circumstances, the dates on which we are obligated to pay our contractual obligations could change.

Satellite Anomalies and Impairments

We are not aware of any anomalies with respect to our owned or leased satellites or payloads that have had any significant adverse effect on their remaining useful lives, the commercial operation of the satellites or payloads or our operating results or financial position as of and for the three and nine months ended September 30, 2022.

Fair Value of In-Orbit Incentives

As of September 30, 2022 and December 31, 2021, the fair values of our in-orbit incentive obligations approximated their carrying amounts of $50.8 million and $53.2 million, respectively.