Property and Equipment and Intangible Assets

12 Months Ended

Dec. 31, 2023

Property and Equipment and Intangible Assets

Property and Equipment and Intangible Assets

8.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	$	1,977,450	$	2,161,173
Satellites	5	-	15		4,168,766		3,527,788
Satellites acquired under finance lease agreements		15			712,832		705,090
Furniture, fixtures, equipment and other	1	-	20		1,691,389		1,479,063
5G Network Deployment equipment (1)	3	-	15		4,263,327		770,153
Software and computer equipment	2	-	6		2,503,597		2,026,648
Buildings and improvements	1	-	40		538,815		497,386
Land		-			46,675		46,638
Construction in progress		-			1,844,338		3,979,145
Total property and equipment					17,747,189		15,193,084
Accumulated depreciation					(8,185,355)		(7,288,127)
Property and equipment, net				$	9,561,834	$	7,904,957

(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
Broadband and Satellite Services (1)		42,338		808,522
Total construction in progress	$	1,844,338	$	3,979,145

(1) In August 2017, we entered into a contract for the design and construction of the EchoStar XXIV satellite, a next-generation, high throughput geostationary satellite. The satellite began service in December 2023 and is expected to bring further consumer broadband capacity across North and South America and generate additional sales in other markets, including in-flight Wi-Fi, enterprise networking and cellular backhaul for mobile network operators across the two continents. The satellite was placed into service in the fourth quarter of 2023.

Depreciation and amortization expense consisted of the following:

	For the Years Ended December 31,
	2023		2022		2021
	(In thousands)
Equipment leased to customers	$	329,449	$	400,651	$	473,130
Satellites		264,433		268,994		318,685
Buildings, furniture, fixtures, equipment and other		144,722		98,762		96,658
5G Network Deployment equipment		371,640		29,992		8,263
Software and computer equipment		270,200		185,538		118,671
Intangible assets and other amortization expense		217,479		190,958		198,539
Total depreciation and amortization	$	1,597,923	$	1,174,895	$	1,213,946

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, and amortization of development costs of externally marketed software.

Activity relating to our asset retirement obligations was as follows:

	As of
	December 31,		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.

Satellites - Broadband and Satellite Services Segment

Our Broadband and Satellite Services segment currently utilizes nine satellites in geostationary orbit approximately 22,300 miles above the equator, six of which we own and depreciate over their estimated useful life. We also lease three satellites from third parties, which are accounted for as finance leases and are depreciated over their economic life.

As of December 31, 2023, our Broadband and Satellite Services segment satellite fleet consisted of the following:

		Degree	Lease
	Launch	Orbital	Termination
Satellites	Date	Location	Date
Owned:
EchoStar IX	August 2003	121	N/A
EchoStar XVII	July 2012	107	N/A
EchoStar XIX	December 2016	97.1	N/A
EchoStar XXI	June 2017	10.25	N/A
Al Yah 3	January 2018	20	N/A
EchoStar XXIV	July 2023	95.2	N/A
Leased from Other Third-Party:
Eutelsat 65 West A	March 2016	65	July 2031
Telesat T19V	July 2018	63	August 2033
EchoStar 105/SES-11	October 2017	105	November 2028

Eutelsat 10A satellite was deorbited in the fourth quarter of 2023. The Spaceway 3 satellite was deorbited in January 2024 and is excluded from the table above.

Satellite Anomalies and Impairments

Our satellites may experience anomalies from time to time, some of which may have a significant adverse effect on their remaining useful lives, the commercial operation of the satellites or our operating results or financial position. We are not aware of any anomalies with respect to our owned or leased satellites that have had any such significant adverse effect during the year ended December 31, 2023.

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 in-orbit insurance on our satellites or payloads because we have assessed that the cost of insurance is not economical relative to the risk of failures. Therefore, we generally bear the risk of any in-orbit failures. Pursuant to the terms of our joint venture agreement with Al Yah Satellite Communications Company PrJSC (“Yahsat”) in Brazil in 2019, we are required to maintain insurance for the Al Yah 3 Brazilian payload during the commercial in-orbit service of such payload, subject to certain limitations on coverage. The insurance policies were procured by Yahsat, under which we and Yahsat are the beneficiaries of any claims in proportion to their shareholdings. An insurance claim was submitted in the second quarter of 2023 for compensation with respect to the reduction in estimated useful life of the Al Yah 3 satellite. We have obtained certain insurance for our EchoStar XXIV satellite covering launch plus the first year of operations. We will continue to assess circumstances going forward and make insurance-related decisions on a case-by-case basis.

Intangible Assets

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

	As of
	December 31, 2023				December 31, 2022
	Intangible		Accumulated		Intangible		Accumulated
	Assets		Amortization		Assets		Amortization
	(In thousands)
Technology-based	$	115,166	$	(111,989)	$	114,945	$	(111,422)
Trademarks		164,834		(90,326)		164,834		(78,209)
Contract-based		41,500		(41,500)		41,500		(41,500)
Customer relationships		902,858		(807,651)		903,083		(637,442)
Total	$	1,224,358	$	(1,051,466)	$	1,224,362	$	(868,573)

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 $183 million, $156 million and $169 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	$	97,918
2025		15,812
2026		14,115
2027		12,851
2028		12,357
Thereafter		19,617
Total	$	172,670

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 $758 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
Broadband and Satellite Services		—		532,491
Total goodwill	$	—	$	757,508

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.

Regulatory Authorizations – Broadband and Satellite Services Segment

As of December 31, 2023 and 2022, our Regulatory Authorizations for our Broadband and Satellite Services segment with indefinite lives consisted of the following:

	As of December 31,
	2023		2022
	(In thousands)
95 W	$	200,000	$	200,000
107 W		200,000		200,000
Sirion-1 Filing		39,160		39,160
Total	$	439,160	$	439,160

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

	As of
	December 31, 2023				December 31, 2022
	Finite Lived		Accumulated		Finite Lived		Accumulated
	Assets		Amortization		Assets		Amortization
	(In thousands)
Total	$	58,061	$	(38,490)	$	55,317	$	(31,946)

These identifiable intangibles are included in “Regulatory Authorizations, net” on our Consolidated Balance Sheets. Amortization of these intangible assets is recorded on a straight-line basis over an average finite useful life of thirteen years. Amortization was $5 million for the year ended December 31, 2023 and $4 million and $4 million for the years ended December 31, 2022 and 2021, respectively. Foreign currency translation adjustments were gains of $1 million, losses of $2 million and gains of $1 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	$	5,607
2025		4,055
2026		4,055
2027		1,880
2028		589
Thereafter		3,385
Total	$	19,571