10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549 

FORM 10-Q

(Mark One) 

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2021.

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                TO                    

Commission File Number: 333-179121

 Hughes Satellite Systems Corporation

(Exact name of registrant as specified in its charter) 

Colorado			45-0897865
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
100 Inverness Terrace East,	Englewood,	Colorado	80112-5308
(Address of principal executive offices)			(Zip Code)
(303)	706-4000		Not Applicable
(Registrant’s telephone number, including area code)			(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☐ No ☒ 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒ No ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer	☐	Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☒	Smaller reporting company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No ☒ 

As of April 29, 2021, the registrant’s outstanding common stock consisted of 1,078 shares of common stock, $0.01 par value per share. 

The Registrant meets the conditions set forth in General Instructions (H)(1)(a) and (b) of Form 10-Q and is therefore filing this Quarterly Report on Form 10-Q with the reduced disclosure format. 

* The Registrant currently is not subject to the filing requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 and is filing this Quarterly Report on Form 10-Q on a voluntary basis. The Registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months as if it were subject to such filing requirements during such period. 

TABLE OF CONTENTS

Disclosure Regarding Forward Looking Statements		i
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020 (audited)	1
	Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020 (unaudited)	3
	Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2021 and 2020 (unaudited)	4
	Consolidated Statements of Shareholder’s Equity for the three months ended March 31, 2021 and 2020 (unaudited)	5
	Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (unaudited)	6
	Notes to the Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Narrative Analysis of Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	*
Item 4.	Controls and Procedures	51
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	*
Item 3.	Defaults Upon Major Securities	*
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	52
	Signatures	53

*This item has been omitted pursuant to the reduced disclosure format as set forth in General Instructions (H)(2) of Form 10-Q.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about our estimates, expectations, future developments, plans, objectives, strategies, financial condition, expected impact of regulatory developments and legal proceedings, opportunities in our industries and businesses and other trends and projections for the next fiscal quarter and beyond. All statements, other than statements of historical facts, may be forward-looking statements. Forward-looking statements may also be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “estimate,” “expect,” “predict,” ”project,” “continue,” “future,” “will,” “would,” “could,” “can,” “may” and similar terms. These forward-looking statements are based on information available to us as of the date of this Form 10-Q and represent management’s current views and assumptions based on past experience and trends, current economic and industry conditions, expected future developments and other relevant factors. Forward-looking statements are not guarantees of future performance, events or results and involve potential known and unknown risks, uncertainties, including the impact of the coronavirus pandemic (COVID-19), and other factors, many of which may be beyond our control and may pose a risk to our operating and financial condition both the near- and long-term. Accordingly, actual performance, events or results could differ materially from those expressed or implied in the forward-looking statements due to a number of factors including, but not limited to:

•significant risks related to our ability to operate and control our satellites, operational and environmental risks related to our owned and leased satellites, and risks related to our satellites under construction;

•our ability and the ability of third parties with whom we engage to operate our business as a result of the COVID-19 pandemic, including regulatory and competitive considerations;

•our ability to implement and/or realize benefits of our investments and other strategic initiatives;

•legal proceedings relating to the BSS Transaction or other matters that could result in substantial costs and material adverse effects to our business;

•risks related to our foreign operations and other uncertainties associated with doing business internationally;

•risks related to our dependency upon third-party providers; and

•risks related to our human capital resources.

Other factors that could cause or contribute to such differences include, but are not limited to, those discussed under the caption Risk Factors in Part II, Item 1A of this Form 10-Q and in Part I, Item 1A of our most recent Annual Report on Form 10-K (“Form 10-K”) filed with the Securities and Exchange Commission (“SEC”), those discussed in Management’s Narrative Analysis of Results of Operations in Part I, Item 2 of this Form 10-Q and in Part II, Item 7 of our Form 10-K and those discussed in other documents we file with the SEC.

All cautionary statements made herein should be read as being applicable to all forward-looking statements wherever they appear. Investors should consider the risks and uncertainties described herein and should not place undue reliance on any forward-looking statements. We do not undertake, and specifically disclaim, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Although we believe that the expectations reflected in any forward-looking statements are reasonable, we cannot guarantee future results, events, levels of activity, performance or achievements. We do not assume responsibility for the accuracy and completeness of any forward-looking statements. We assume no responsibility for updating forward-looking information contained or incorporated by reference herein or in any documents we file with the SEC, except as required by law.

Should one or more of the risks or uncertainties described herein or in any documents we file with the SEC occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.

i

PART I — FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

HUGHES SATELLITE SYSTEMS CORPORATION

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share amounts)

(Unaudited)

	As of
	March 31, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	1,403,926	$	740,490
Marketable investment securities	515,306		1,203,296
Trade accounts receivable and contract assets, net	187,272		183,988
Other current assets, net	286,689		291,815
Total current assets	2,393,193		2,419,589
Non-current assets:
Property and equipment, net	1,631,221		1,691,523
Operating lease right-of-use assets	131,452		128,266
Goodwill	510,945		511,597
Regulatory authorizations, net	409,960		410,451
Other intangible assets, net	16,246		18,340
Other investments, net	102,163		103,924
Other non-current assets, net	302,416		307,677
Total non-current assets	3,104,403		3,171,778
Total assets	$	5,497,596	$	5,591,367
Liabilities and Shareholder's Equity
Current liabilities:
Trade accounts payable	$	104,683	$	118,568
Current portion of long-term debt, net	808,758		898,237
Contract liabilities	112,507		104,569
Accrued expenses and other current liabilities	328,316		325,587
Total current liabilities	1,354,264		1,446,961
Non-current liabilities:
Long-term debt, net	1,495,436		1,495,256
Deferred tax liabilities, net	376,366		369,940
Operating lease liabilities	118,452		114,877
Other non-current liabilities	86,642		87,957
Total non-current liabilities	2,076,896		2,068,030
Total liabilities	3,431,160		3,514,991
Commitments and contingencies

The accompanying notes are an integral part of these Consolidated Financial Statements.

1

HUGHES SATELLITE SYSTEMS CORPORATION

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share amounts)

(Unaudited)

Shareholder's equity:
Preferred stock, $0.001 par value,1,000,000 shares authorized, none issued and outstanding at both March 31, 2021 and December 31, 2020	—		—
Common stock, $0.01 par value, 1,000,000 shares authorized, 1,078 shares issued and outstanding at both March 31, 2021 and December 31, 2020	—		—
Additional paid-in capital	1,487,590		1,486,730
Accumulated other comprehensive income (loss)	(175,060)		(146,840)
Accumulated earnings (losses)	690,147		671,570
Total Hughes Satellite Systems Corporation shareholder's equity	2,002,677		2,011,460
Non-controlling interests	63,759		64,916
Total shareholder's equity	2,066,436		2,076,376
Total liabilities and shareholder's equity	$	5,497,596	$	5,591,367

The accompanying notes are an integral part of these Consolidated Financial Statements.

2

HUGHES SATELLITE SYSTEMS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands)

(Unaudited)

	For the three months ended March 31,
	2021		2020
Revenue:
Services and other revenue	$	432,991	$	410,238
Equipment revenue	52,239		57,309
Total revenue	485,230		467,547
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)	131,412		143,885
Cost of sales - equipment (exclusive of depreciation and amortization)	45,140		45,908
Selling, general and administrative expenses	104,370		115,860
Research and development expenses	7,545		6,254
Depreciation and amortization	122,664		125,965
Impairment of long-lived assets	210		—
Total costs and expenses	411,341		437,872
Operating income (loss)	73,889		29,675
Other income (expense):
Interest income	2,394		8,892
Interest expense, net of amounts capitalized	(41,922)		(42,192)
Gains (losses) on investments, net	—		(164)
Equity in earnings (losses) of unconsolidated affiliates, net	(1,761)		(1,087)
Foreign currency transaction gains (losses), net	(3,360)		(7,528)
Other, net	(973)		(278)
Total other income (expense), net	(45,622)		(42,357)
Income (loss) before income taxes	28,267		(12,682)
Income tax benefit (provision), net	(10,637)		(5,231)
Net income (loss)	17,630		(17,913)
Less: Net loss (income) attributable to non-controlling interests	947		3,442
Net income (loss) attributable to HSSC	$	18,577	$	(14,471)

The accompanying notes are an integral part of these Consolidated Financial Statements.

3

HUGHES SATELLITE SYSTEMS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands)

(Unaudited)

	For the three months ended March 31,
	2021		2020
Net income (loss)	$	17,630	$	(17,913)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(33,742)		(82,836)
Unrealized gains (losses) on available-for-sale securities	(88)		(2,479)
Other	—		(405)
Total other comprehensive income (loss), net of tax	(33,830)		(85,720)
Comprehensive income (loss)	(16,200)		(103,633)
Less: Comprehensive loss (income) attributable to non-controlling interests	6,557		19,765
Comprehensive income (loss) attributable to HSSC	$	(9,643)	$	(83,868)

The accompanying notes are an integral part of these Consolidated Financial Statements.

4

HUGHES SATELLITE SYSTEMS CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY

(Amounts in thousands) 

(Unaudited)

	Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Earnings (Losses)		Non-controlling Interests		Total
Balance, December 31, 2019	$	1,478,636	$	(84,636)	$	664,415	$	75,748	$	2,134,163
Cumulative effect of accounting changes	—		—		(2,169)		(240)		(2,409)
Balance, January 1, 2020	1,478,636		(84,636)		662,246		75,508		2,131,754
Stock-based compensation	1,457		—		—		—		1,457
Issuance of equity and contribution of assets pursuant to the Yahsat JV formation	4,338		—		—		(1,514)		2,824
Contribution by non-controlling interest holder	—		—		—		4,000		4,000
Other comprehensive income (loss)	—		(69,397)		—		(16,323)		(85,720)
Net income (loss)	—		—		(14,471)		(3,442)		(17,913)
Other, net	(684)		—		—		—		(684)
Balance, March 31, 2020	$	1,483,747	$	(154,033)	$	647,775	$	58,229	$	2,035,718
Balance, December 31, 2020	$	1,486,730	$	(146,840)	$	671,570	$	64,916	$	2,076,376
Stock-based compensation	860		—		—		—		860
Contribution by non-controlling interest holder	—		—		—		5,400		5,400
Other comprehensive income (loss)	—		(28,220)		—		(5,610)		(33,830)
Net income (loss)	—		—		18,577		(947)		17,630
Balance, March 31, 2021	$	1,487,590	$	(175,060)	$	690,147	$	63,759	$	2,066,436

The accompanying notes are an integral part of these Consolidated Financial Statements.

5

HUGHES SATELLITE SYSTEMS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	For the three months ended March 31,
	2021		2020
Cash flows from operating activities:
Net income (loss)	$	17,630	$	(17,913)
Adjustments to reconcile net income (loss) to cash flows provided by (used for) operating activities:
Depreciation and amortization	122,664		125,965
Impairment of long-lived assets	210		—
Losses (gains) on investments, net	—		164
Equity in losses (earnings) of unconsolidated affiliates, net	1,761		1,087
Foreign currency transaction losses (gains), net	3,360		7,528
Deferred tax provision (benefit), net	6,584		1,526
Stock-based compensation	860		1,457
Amortization of debt issuance costs	1,118		1,050
Other, net	10,981		(810)
Changes in assets and liabilities, net:
Trade accounts receivable and contract assets, net	(6,078)		(8,162)
Other current assets, net	1,826		(21,268)
Trade accounts payable	(15,484)		(10,984)
Contract liabilities	7,938		(3,213)
Accrued expenses and other current liabilities	(33,091)		(5,007)
Non-current assets and non-current liabilities, net	1,170		(6,196)
Net cash provided by (used for) operating activities	121,449		65,224
Cash flows from investing activities:
Purchases of marketable investment securities	(310,528)		(365,877)
Sales and maturities of marketable investment securities	1,003,198		490,020
Expenditures for property and equipment	(82,196)		(91,517)
Expenditures for externally marketed software	(7,846)		(8,638)
Net cash provided by (used for) investing activities	602,628		23,988
Cash flows from financing activities:
Repurchase of the 2021 Senior Unsecured Notes	(62,588)		—
Payment of finance lease obligations	(329)		(215)
Payment of in-orbit incentive obligations	(1,104)		(203)
Contribution by non-controlling interest holder	5,400		4,000
Other, net	(292)		979
Net cash provided by (used for) financing activities	(58,913)		4,561
Effect of exchange rates on cash and cash equivalents	(1,700)		(4,618)
Net increase (decrease) in cash and cash equivalents	663,464		89,155
Cash and cash equivalents, including restricted amounts, beginning of period	741,297		1,140,322
Cash and cash equivalents, including restricted amounts, end of period	$	1,404,761	$	1,229,477

The accompanying notes are an integral part of these Consolidated Financial Statements.

6

HUGHES SATELLITE SYSTEMS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1.    ORGANIZATION AND BUSINESS ACTIVITIES

Principal Business

Hughes Satellite Systems Corporation (which, together with its subsidiaries, is referred to as “HSSC,” the “Company,” “we,” “us” and “our”) is a holding company and a subsidiary of EchoStar Corporation (“EchoStar”). We are a global provider of broadband satellite technologies, broadband internet services for consumer customers, which include home and small to medium-sized businesses, and satellite services. We also deliver innovative network technologies, managed services and communications solutions for enterprise customers, which include aeronautical and government enterprises. We operate in the following two business segments:

•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.

Our operations also include various corporate departments (primarily Executive, Treasury, Strategic Development, Human Resources, Information Technology, Finance, Accounting, Real Estate and Legal) and other activities, such as costs incurred in certain satellite development programs and other business development activities, and gains or losses from certain of our investments, that have not been assigned to our business segments. These activities, costs and income, as well as eliminations of intersegment transactions, are accounted for in Corporate and Other in our segment reporting. We also divide our operations by primary geographic market as follows: (i) North America (the U.S. and its territories, Mexico, and Canada); (ii) South and Central America and (iii) Other (Asia, Africa, Australia, Europe, India, and the Middle East). Refer to Note 14. Segment Reporting for further detail.

NOTE 2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These unaudited Consolidated Financial Statements and the accompanying notes (collectively, the “Consolidated Financial Statements”) are prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required for complete financial statements prepared in conformity with U.S. GAAP. In our opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. However, our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.

All amounts presented in these Consolidated Financial Statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted.

Refer to Note 2. Summary of Significant Accounting Policies to the consolidated financial statements in our Form 10-K for a summary and discussion of our significant accounting policies, except as updated below.

Use of Estimates

We are required to make certain estimates and assumptions that affect the amounts reported in these Consolidated Financial Statements. The most significant estimates and assumptions are used in determining: (i) inputs used to recognize revenue over time, including amortization periods for deferred contract acquisition costs; (ii) allowances

7

HUGHES SATELLITE SYSTEMS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

for doubtful accounts; (iii) deferred taxes and related valuation allowances, including uncertain tax positions; (iv) loss contingencies; (v) fair value of financial instruments; (vi) fair value of assets and liabilities acquired in business combinations; and (vii) asset impairment testing.

We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts and such differences may be material to our financial statements. Additionally, changing economic conditions may increase the inherent uncertainty in the estimates and assumptions indicated above. We review our estimates and assumptions periodically and the effects of revisions thereto are reflected in the period they occur or prospectively if the revised estimate affects future periods.

Principles of Consolidation

We consolidate all entities in which we have a controlling financial interest. We are deemed to have a controlling financial interest in variable interest entities in which we are the primary beneficiary and in other entities in which we own more than 50% of the outstanding voting shares and other shareholders do not have substantive rights to participate in management. For entities we control but do not wholly own, we record a non-controlling interest within shareholder’s equity for the portion of the entity’s equity attributed to the non-controlling ownership interests. All significant intercompany balances and transactions have been eliminated in consolidation.

Recently Adopted Accounting Pronouncements

On January 1, 2021, we adopted Accounting Standard Update (“ASU”) No. 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 is part of the Financial Accounting Standards Board (“FASB”) overall simplification initiative and seeks to simplify the accounting for income taxes by updating certain guidance and removing certain exceptions. Our adoption of this ASU did not have a material impact on our Consolidated Financial Statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. The guidance may be applied upon issuance of ASC 848 through December 31, 2022. We expect to utilize the optional expedients provided by the guidance for contracts amended solely to use an alternative reference rate. We have evaluated the impact of adopting this new guidance and do not expect it to have a material impact on our Consolidated Financial Statements.

8

HUGHES SATELLITE SYSTEMS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

NOTE 3.     REVENUE RECOGNITION

Contract Balances

The following table presents the components of our contract balances:

	As of
	March 31, 2021		December 31, 2020
Trade accounts receivable and contract assets, net:
Sales and services	$	150,021	$	149,513
Leasing	4,648		4,553
Total trade accounts receivable	154,669		154,066
Contract assets	46,267		45,308
Allowance for doubtful accounts	(13,664)		(15,386)
Total trade accounts receivable and contract assets, net	$	187,272	$	183,988
Contract liabilities:
Current	$	112,507	$	104,569
Non-current	10,357		10,519
Total contract liabilities	$	122,864	$	115,088

The following table presents the revenue recognized in the Consolidated Statement of Operations that was previously included within contract liabilities:

	For the three months ended March 31,
	2021		2020
Revenue	$	63,081	$	52,172

Contract Acquisition Costs

The following table presents the activity in our contract acquisition costs, net:

	For the three months ended March 31,
	2021		2020
Balance at beginning of period	$	99,837	$	113,592
Additions	18,400		26,474
Amortization expense	(22,769)		(25,675)
Foreign currency translation	(875)		(3,994)
Balance at end of period	$	94,593	$	110,397

Performance Obligations

As of March 31, 2021, the remaining performance obligations for our customer contracts with original expected durations of more than one year was $939.7 million. Performance obligations expected to be satisfied within one year and greater than one year are 37% and 63%, respectively. This amount and percentages exclude agreements with consumer customers in our Hughes segment, our leasing arrangements and agreements with certain customers under which collectability of all amounts due through the term of contracts is uncertain.

9

HUGHES SATELLITE SYSTEMS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Disaggregation of Revenue

Geographic Information

The following table presents our revenue from customer contracts disaggregated by primary geographic market and by segment:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended March 31, 2021
North America	$	398,759	$	4,089	$	(88)	$	402,760
South and Central America	43,030		—		—		43,030
Other	34,070		—		5,370		39,440
Total revenue	$	475,859	$	4,089	$	5,282	$	485,230
For the three months ended March 31, 2020
North America	$	382,715	$	4,652	$	(285)	$	387,082
South and Central America	33,956		—		—		33,956
Other	41,811		—		4,698		46,509
Total revenue	$	458,482	$	4,652	$	4,413	$	467,547

10

HUGHES SATELLITE SYSTEMS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Nature of Products and Services

The following table presents our revenue disaggregated by the nature of products and services and by segment:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended March 31, 2021
Services and other revenue:
Services	$	413,519	$	2,690	$	—	$	416,209
Lease revenue	10,101		1,399		5,282		16,782
Total services and other revenue	423,620		4,089		5,282		432,991
Equipment revenue:
Equipment	28,521		—		—		28,521
Design, development and construction services	21,636		—		—		21,636
Lease revenue	2,082		—		—		2,082
Total equipment revenue	52,239		—		—		52,239
Total revenue	$	475,859	$	4,089	$	5,282	$	485,230
For the three months ended March 31, 2020
Services and other revenue:
Services	$	390,000	$	2,765	$	—	$	392,765
Lease revenue	11,173		1,887		4,413		17,473
Total services and other revenue	401,173		4,652		4,413		410,238
Equipment revenue:
Equipment	24,839		—		—		24,839
Design, development and construction services	31,557		—		—		31,557
Lease revenue	913		—		—		913
Total equipment revenue	57,309		—		—		57,309
Total revenue	$	458,482	$	4,652	$	4,413	$	467,547

Lease Revenue

The following table presents our lease revenue by type of lease:

	For the three months ended March 31,
	2021		2020
Sales-type lease revenue:
Revenue at lease commencement	$	2,082	$	913
Interest income	73		69
Total sales-type lease revenue	2,155		982
Operating lease revenue	16,709		17,404
Total lease revenue	$	18,864	$	18,386

Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $13.4 million and $13.0 million as of March 31, 2021 and December 31, 2020, respectively.

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The following table presents future operating lease payments to be received as of March 31, 2021:

	Amounts
Year ending December 31,
2021 (remainder)	$	30,433
2022	34,082
2023	32,000
2024	29,740
2025	28,482
2026 and beyond	47,562
Total lease payments	$	202,299

The following table presents amounts for assets subject to operating leases, which are included in Property and equipment, net:

	As of
	March 31, 2021						December 31, 2020
	Cost		Accumulated Depreciation		Net		Cost		Accumulated Depreciation		Net
Customer premises equipment	$	1,737,049	$	(1,370,538)	$	366,511	$	1,706,328	$	(1,317,210)	$	389,118
Satellites	104,620		(40,078)		64,542		104,620		(38,335)		66,285
Total	$	1,841,669	$	(1,410,616)	$	431,053	$	1,810,948	$	(1,355,545)	$	455,403

The following table presents depreciation expense for assets subject to operating leases, which is included in Depreciation and amortization:

	For the three months ended March 31,
	2021		2020
Customer premises equipment	$	60,967	$	49,504
Satellites	1,744		1,744
Total	$	62,711	$	51,248

NOTE 4.    MARKETABLE INVESTMENT SECURITIES

The following table presents our Marketable investment securities:

	As of
	March 31, 2021		December 31, 2020
Marketable investment securities:
Available-for-sale debt securities:
Corporate bonds	$	109,598	$	276,361
Commercial paper	327,648		823,173
Other debt securities	78,054		103,756
Total available-for-sale debt securities	515,300		1,203,290
Equity securities	6		6
Total marketable investment securities	$	515,306	$	1,203,296

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Debt Securities

Available-for-Sale

The following table presents the components of our available-for-sale debt securities:

	Amortized		Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
As of March 31, 2021
Corporate bonds	$	109,600	$	10	$	(12)	$	109,598
Commercial paper	327,648		—		—		327,648
Other debt securities	78,108		2		(56)		78,054
Total available-for-sale debt securities	$	515,356	$	12	$	(68)	$	515,300
As of December 31, 2020
Corporate bonds	$	276,327	$	59	$	(25)	$	276,361
Commercial paper	823,173		—		—		823,173
Other debt securities	103,758		3		(5)		103,756
Total available-for-sale debt securities	$	1,203,258	$	62	$	(30)	$	1,203,290

The following table presents the activity on our available-for-sale debt securities:

	For the three months ended March 31,
	2021		2020
Proceeds from sales	$	95,765	$	10,000

As of March 31, 2021, we have $491.2 million of available-for-sale debt securities with contractual maturities of one year or less and $24.1 million with contractual maturities greater than one year. 

Equity Securities

The following table presents the activity of our equity securities:

	For the three months ended March 31,
	2021		2020
Gains (losses) on investments, net	$	—	$	(164)

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Fair Value Measurements

The following table presents our marketable investment securities categorized by the fair value hierarchy, certain of which have historically experienced volatility:

	Level 1		Level 2		Total
As of March 31, 2021
Cash equivalents (including restricted)	$	508	$	1,317,529	$	1,318,037
Available-for-sale debt securities:
Corporate bonds	$	—	$	109,598	$	109,598
Commercial paper	—		327,648		327,648
Other debt securities	32,498		45,556		78,054
Total available-for-sale debt securities	32,498		482,802		515,300
Equity securities	6		—		6
Total marketable investment securities	$	32,504	$	482,802	$	515,306
As of December 31, 2020
Cash equivalents (including restricted)	$	128	$	654,853	$	654,981
Available-for-sale debt securities:
Corporate bonds	$	—	$	276,361	$	276,361
Commercial paper	—		823,173		823,173
Other debt securities	95,497		8,259		103,756
Total available-for-sale debt securities	95,497		1,107,793		1,203,290
Equity securities	6		—		6
Total marketable investment securities	$	95,503	$	1,107,793	$	1,203,296

As of March 31, 2021 and December 31, 2020, we did not have any investments that were categorized within Level 3 of the fair value hierarchy.

NOTE 5.    PROPERTY AND EQUIPMENT

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

	As of
	March 31, 2021		December 31, 2020
Property and equipment, net:
Satellites, net	$	919,813	$	954,559
Other property and equipment, net	711,408		736,964
Total property and equipment, net	$	1,631,221	$	1,691,523

Satellites

As of March 31, 2021, our operating satellite fleet consisted of eight satellites, five of which are owned and three of which are leased. They are all in geosynchronous orbit, approximately 22,300 miles above the equator.

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The following table presents our operating satellite fleet as of March 31, 2021 which consists of both owned and leased satellites:

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
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 its acquisition of Hughes Communications, Inc. and its subsidiaries (the “Hughes Acquisition”).

(2) Upon consummation of our joint venture with 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.

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

	Depreciable Life (In Years)	As of
		March 31, 2021		December 31, 2020
Satellites, net:
Satellites - owned	7 to 15	$	1,500,070	$	1,503,596
Satellites - acquired under finance leases	15	352,261		352,245
Total satellites		1,852,331		1,855,841
Accumulated depreciation:
Satellites - owned		(855,104)		(827,274)
Satellites - acquired under finance leases		(77,414)		(74,008)
Total accumulated depreciation		(932,518)		(901,282)
Total satellites, net		$	919,813	$	954,559

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

	For the three months ended March 31,
	2021		2020
Depreciation expense:
Satellites - owned	$	27,068	$	27,068
Satellites - acquired under finance leases	7,201		6,013
Total depreciation expense	$	34,269	$	33,081

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

	For the three months ended March 31,
	2021		2020
Capitalized interest	$	1,246	$	637

Satellite-Related Commitments

As of March 31, 2021 and December 31, 2020 our satellite-related commitments were $215.1 million and $224.4 million, respectively. These primarily include payments pursuant to regulatory authorizations, non-lease costs associated with our finance lease satellites, in-orbit incentives relating to certain satellites and commitments for satellite service arrangements.

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

Satellite Anomalies and Impairments

We are not aware of any anomalies with respect to our owned or leased satellites or payloads that have had any significant adverse effect on their remaining useful lives, the commercial operation of the satellites or payloads or our operating results or financial position as of and for the three months ended March 31, 2021.

Fair Value of In-Orbit Incentives

As of March 31, 2021 and December 31, 2020, the fair values of our in-orbit incentive obligations approximated their carrying amounts of $54.3 million and $55.4 million, respectively.

NOTE 6.    REGULATORY AUTHORIZATIONS

The following table presents our Regulatory authorizations, net:

	Finite lived
	Cost		Accumulated Amortization		Total		Indefinite lived		Total
Balance, December 31, 2019	$	12,524	$	(161)	$	12,363	$	400,000	$	412,363
Amortization expense	—		(100)		(100)		—		(100)
Currency translation adjustments	(1,020)		—		(1,020)		—		(1,020)
Balance, March 31, 2020	$	11,504	$	(261)	$	11,243	$	400,000	$	411,243
Balance, December 31, 2020	$	11,505	$	(1,054)	$	10,451	$	400,000	$	410,451
Amortization expense	—		(208)		(208)		—		(208)
Currency translation adjustments	(321)		38		(283)		—		(283)
Balance, March 31, 2021	$	11,184	$	(1,224)	$	9,960	$	400,000	$	409,960
Weighted-average useful life (in years)			14

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NOTE 7.    OTHER INVESTMENTS

The following table presents our Other investments, net:

	As of
	March 31, 2021		December 31, 2020
Other investments, net:
Equity method investments	$	94,812	$	96,573
Other equity investments	7,351		7,351
Total other investments, net	$	102,163	$	103,924

Equity Method Investments

Deluxe/EchoStar LLC

We own 50% of Deluxe/EchoStar LLC (“Deluxe”), a joint venture that we entered into in 2010 to build an advanced digital cinema satellite distribution network targeting delivery to digitally equipped theaters in the U.S. and Canada.

Broadband Connectivity Solutions (Restricted) Limited

In August 2018, we entered into an agreement with Yahsat to establish a new entity, Broadband Connectivity Solutions (Restricted) Limited (together with its subsidiaries, “BCS”), to provide commercial Ka-band satellite broadband services across Africa, the Middle East and southwest Asia operating over Yahsat's Al Yah 2 and Al Yah 3 Ka-band satellites. The transaction was consummated in December 2018 when we invested $100.0 million in cash in exchange for a 20% interest in BCS. Under the terms of the agreement, we may also acquire, for further cash investments, additional ownership interests in BCS in the future provided certain conditions are met. We supply network operations and management services and equipment to BCS.

Financial Information for Our Equity Method Investments

The following table presents revenue recognized:

	For the three months ended March 31,
	2021		2020
Deluxe	$	1,631	$	1,255
BCS	$	1,348	$	1,669

The following table presents trade accounts receivable:

	As of
	March 31, 2021		December 31, 2020
Deluxe	$	1,318	$	716
BCS	$	5,043	$	9,347

Other Equity Investments

During the three months ended March 31, 2021 and 2020, we did not identify any observable price changes requiring an adjustment to our investments.

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NOTE 8.    LONG-TERM DEBT

The following table presents the carrying amount and fair values of our Current portion of long-term debt, net and Long-term debt, net:

	Effective Interest Rate	As of
		March 31, 2021				December 31, 2020
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Secured Notes:
5 1/4% Senior Secured Notes due 2026	5.320%	$	750,000	$	830,933	$	750,000	$	834,045
Senior Unsecured Notes:
7 5/8% Senior Unsecured Notes due 2021	8.062%	809,486		821,555		900,000		924,003
6 5/8% Senior Unsecured Notes due 2026	6.688%	750,000		834,383		750,000		852,810
Less: Unamortized debt issuance costs		(5,292)		—		(6,507)		—
Total long-term debt		2,304,194		2,486,871		2,393,493		2,610,858
Less: Current portion, net		(808,758)		(821,555)		(898,237)		(924,003)
Long-term debt, net		$	1,495,436	$	1,665,316	$	1,495,256	$	1,686,855

As of March 31, 2021, we have repurchased a total of $90.5 million in principal of the 2021 Senior Unsecured Notes in open market trades.

NOTE 9.    INCOME TAXES

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

Our interim income tax provision and our interim estimate of our annual effective tax rate are influenced by several factors, including foreign losses and capital gains and losses for which related deferred tax assets are partially offset by a valuation allowance, changes in tax laws and relative changes in unrecognized tax benefits. Additionally, our effective tax rate can be affected by the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income or loss is lower.

Our income tax provision was $10.6 million for the three months ended March 31, 2021 compared to $5.2 million for the three months ended March 31, 2020. Our estimated effective income tax rate was 37.6% and (41.2)% for the three months ended March 31, 2021 and 2020, respectively. The variations in our effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2021 were primarily due to excluded foreign losses where the company carries a full valuation allowance. The variations in our effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2020 were primarily due to the increase in our valuation allowance associated with certain foreign losses and the impact of state and local taxes, partially offset by the change in net unrealized losses that are capital in nature and research and experimentation credits.

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NOTE 10.    RELATED PARTY TRANSACTIONS - ECHOSTAR

The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations.

Services and Other Revenue — EchoStar

The following table presents our Services and other revenue from EchoStar:

	For the three months ended March 31,
	2021		2020
Services and other revenue - EchoStar	$	5,371	$	4,699

The following table presents the corresponding related party receivables:

	As of
	March 31, 2021		December 31, 2020
Related party receivables - EchoStar - current	$	114,225	$	116,220
Related party receivables - EchoStar - non-current	54,970		57,136
Total related party receivables - EchoStar	$	169,195	$	173,356

Receivables. EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current. No repayment schedule for these receivables has been determined.

EchoStar Mobile Limited Service Agreements. We provide services and lease equipment to support the business of EchoStar Mobile Limited, a subsidiary of EchoStar that is licensed by the European Union and its member states (“EU”) to provide mobile satellite services and complementary ground component services covering the entire EU using S-band spectrum. Generally, the amounts EchoStar’s other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded revenue in Services and other revenue of $5.4 million and $4.7 million for the three months ended March 31, 2021 and 2020, respectively, related to these services. Additionally, we have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5%, that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current.

Operating Expenses — EchoStar

The following table presents our operating expenses from EchoStar:

	For the three months ended March 31,
	2021		2020
Operating expenses - EchoStar	$	15,387	$	12,642

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The following table presents the corresponding related party payables:

	As of
	March 31, 2021		December 31, 2020
Related party payables - EchoStar - current	$	51,396	$	51,420
Related party payables - EchoStar - non-current	24,533		25,114
Total related party payables - EchoStar	$	75,929	$	76,534

Payables. We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current. No repayment schedule for these payables has been determined.

Shared Corporate Services. We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall

each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. Effective March 2017, and as a result of the Share Exchange (as defined below), we implemented a new methodology for determining the cost of these shared corporate services. We and EchoStar, including EchoStar’s other subsidiaries, may each terminate a particular shared corporate service for any reason upon at least 30 days’ notice. We recorded these expenses within Operating expenses - EchoStar for shared corporate services received from EchoStar and its other subsidiaries of $0.4 million and $4.4 million for the three months ended March 31, 2021 and 2020, respectively.

Real Estate. We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy.

Cash Advances. EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our

foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2021 and 2022. Advances under these agreements bear interest at annual rates ranging from one to three percent, subject to periodic adjustment based on the one-year U.S. LIBOR rate. We report amounts payable under these agreements within Related party payables - EchoStar - non-current.

Construction Management Services for EchoStar XXIV satellite. In August 2017, a subsidiary of EchoStar entered into a contract with Maxar Space, LLC (formerly Space Systems/Loral, LLC), for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite, with an expected launch in the second half of 2022. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $0.3 million and $0.3 million for the three months ended March 31, 2021 and 2020, respectively.

Other Agreements

BSS Transaction. Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement (as defined below), and as part of the BSS Transaction (as defined below), we and our subsidiaries transferred certain of the BSS Business (as defined below) to BSS Corp. (as defined below), and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. See Note 1. Organization and Business Activities for further information.

Share Exchange Agreement. Prior to consummation of the Share Exchange, EchoStar was required to complete steps necessary for the transferring of certain assets and liabilities to DISH and certain of its subsidiaries. As part of these steps, subsidiaries of EchoStar that, prior to the consummation of the Share Exchange, owned EchoStar’s business of providing online video delivery and satellite video delivery for broadcasters and pay-TV operators, including satellite uplinking/downlinking, transmission services, signal processing and conditional access

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management, and other services and related assets and liabilities were contributed to one of our subsidiaries in consideration for additional shares of HSSC’s common stock that were then issued to a subsidiary of EchoStar.

NOTE 11.    RELATED PARTY TRANSACTIONS - DISH NETWORK

Overview

EchoStar Corporation and DISH have operated as separate publicly-traded companies since 2008 (the “Spin-off”). A substantial majority of the voting power of the shares of each of EchoStar Corporation and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family.

In January 2017, EchoStar and certain of its subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries pursuant to which, in February 2017, we received all of the shares of preferred tracking stock previously issued by us and one of our subsidiaries (the “Tracking Stock”), representing an 80% economic interest in the residential retail satellite broadband business of our Hughes segment, in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of our EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). The Tracking Stock was retired in March 2017.

In September 2019, pursuant to a master transaction agreement (the “Master Transaction Agreement”) with DISH and a wholly-owned subsidiary of DISH (“Merger Sub”), (i) we transferred certain real property and the various businesses, products, licenses, technology, revenues, billings, operating activities, assets and liabilities primarily related to the former portion of our ESS segment that managed, marketed and provided (1) broadcast satellite services primarily to DISH and its subsidiaries (“DISH Network”) and our joint venture Dish Mexico, and (2) telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network and a portion of our other businesses (collectively, the “BSS Business”) to one of our former subsidiaries, EchoStar BSS Corporation (“BSS Corp.”), (ii) we distributed to each holder of shares of our Class A or Class B common stock entitled to receive consideration in the transaction an amount of shares of common stock of BSS Corp., par value $0.001 per share (“BSS Common Stock”), equal to one share of BSS Common Stock for each share of our Class A or Class B common stock owned by such stockholder (the “Distribution”); and (iii) immediately after the Distribution, (1) Merger Sub merged with and into BSS Corp. (the “Merger”), such that BSS Corp. became a wholly-owned subsidiary of DISH and with DISH then owning and operating the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”).

In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we, EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network, on the one hand, obtains certain products, services and rights from us, EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future.

The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations.

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Services and Other Revenue — DISH Network

The following table presents our Services and other revenue - DISH Network:

	For the three months ended March 31,
	2021		2020
Services and other revenue - DISH Network	$	5,727	$	7,587

The following table presents the related trade accounts receivable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts receivable - DISH Network	$	4,449	$	4,706

Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. Subject to availability, DISH Network generally has the right to continue leasing satellite capacity from us on the EchoStar IX satellite on a month-to-month basis.

Telesat Obligation Agreement. In September 2009, we entered into an agreement with Telesat Canada to lease satellite capacity from Telesat Canada on all 32 direct broadcast satellite (“DBS”) transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we entered into an agreement with DISH Network, pursuant to which DISH Network leased satellite capacity from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement (the “DISH Nimiq 5 Agreement”). Under the terms of the DISH Nimiq 5 Agreement, DISH Network made certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service. We transferred the Telesat Transponder Agreement to DISH Network in September 2019 as part of the BSS Transaction; however, we retained certain obligations related to DISH Network’s performance under that agreement and we entered into an agreement with DISH Network whereby DISH Network compensates us for retaining such obligations.

TerreStar Agreement. In March 2012, DISH Network completed its acquisition of substantially all the assets of TerreStar Networks Inc. (“TerreStar”). Prior to DISH Network’s acquisition of substantially all the assets of TerreStar and EchoStar’s completion of the Hughes Acquisition, TerreStar and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services for TerreStar’s ground-based communications equipment (the “TerreStar Agreements”). In December 2017, we and DISH Network amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DISH Network generally has the right to continue to receive warranty services from us for our products on a month-to-month basis unless terminated by DISH Network upon at least 21 days’ written notice to us. DISH Network generally has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis unless these services are terminated by DISH Network upon at least 90 days’ written notice to us. The provision of hosting services will continue until May 2022. In addition, DISH Network generally may terminate any and all services for convenience subject to providing us with prior notice and/or payment of termination charges. In March 2020, we entered into an agreement with DISH Network pursuant to which we perform certain work and provide certain credits to amounts owed to us under the TerreStar Agreements in exchange for DISH Network’s granting us rights to use certain satellite capacity under the Amended and Restated Professional Services Agreement (as defined below). As a result, we and DISH Network amended the TerreStar Agreements to suspend our provision of warranty services to DISH Network from April 2020 through December 2020. Following the expiration of this suspension, we have recommenced providing warranty services to DISH Network.

Hughes Broadband Distribution Agreement. Effective October 2012, we and DISH Network entered into a distribution agreement (the “Distribution Agreement”) pursuant to which DISH Network has the right, but not the obligation, to market, sell and distribute our Gen 4 HughesNet service. DISH Network pays us a monthly per subscriber wholesale service fee for our Gen 4 HughesNet service based upon a subscriber’s service level and

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based upon certain volume subscription thresholds. The Distribution Agreement also provides that DISH Network has the right, but not the obligation, to purchase certain broadband equipment from us to support the sale of the Gen 4 HughesNet service. The Distribution Agreement had an initial term of five years with automatic renewal for successive one-year terms unless terminated by either party with a written notice at least 180 days’ before the expiration of the then-current term. In February 2014, we and DISH Network entered into an amendment to the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement until March 2024. Upon expiration or termination of the Distribution Agreement, we and DISH Network will continue to provide our Gen 4 HughesNet service to the then-current DISH Network subscribers pursuant to the terms and conditions of the Distribution Agreement.

DBSD North America Agreement. In March 2012, DISH Network completed its acquisition of all of the equity of DBSD North America, Inc. (“DBSD North America”). Prior to DISH Network’s acquisition of DBSD North America and EchoStar’s completion of the Hughes Acquisition, DBSD North America and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services of DBSD North America’s gateway and ground-based communications equipment. In December 2017, we and DBSD North America amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DBSD North America has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis, unless terminated by DBSD North America upon at least 120 days’ written notice to us. In February 2019, we further amended these agreements to provide DBSD North America with the right to continue to receive warranty services from us on a month-to-month basis until December 2023, unless terminated by DBSD North America upon at least 21 days’ written notice to us. The provision of hosting services will continue until February 2022 and will automatically renew for an additional five-year period until February 2027 unless terminated by DBSD North America upon at least 180 days’ written notice to us. In addition, DBSD North America generally may terminate any and all such services for convenience, subject to providing us with prior notice and/or payment of termination charges.

Hughes Equipment and Services Agreement. In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days‘ written notice to us or by us with at least 365 days’ written notice to DISH Network.

Operating Expenses — DISH Network

The following table presents our operating expenses related to DISH Network:

	For the three months ended March 31,
	2021		2020
Operating expenses - DISH Network	$	1,099	$	1,137

The following table presents the related trade accounts payable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts payable - DISH Network	$	417	$	477

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Amended and Restated Professional Services Agreement.   In connection with the Spin-off, EchoStar entered

into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”).  In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services.  Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the Share Exchange, including access to antennas owned by DISH Network for our use in performing TT&C services and maintenance and support services for our antennas (collectively, the “TT&C Antennas”). In September 2019, in connection with the BSS Transaction, EchoStar and DISH further amended the Professional Services Agreement (the “Amended and Restated Professional Services Agreement”) to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 10. Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 1, 2022 and renews automatically for successive one-year periods thereafter, unless the agreement is terminated earlier by either party upon at least 60 days’ notice.  However, either party may generally terminate the Amended and Restated Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice, unless the statement of work for particular services states otherwise. Certain services provided under the Amended and Restated Professional Services Agreement may survive the termination of the agreement.

Collocation and Antenna Space Agreements. We and DISH Network have entered into an agreement pursuant to which DISH Network provided us with collocation space in El Paso, Texas. This agreement was for an initial period ending in August 2015, and provided us with renewal options for two consecutive three-year terms. Effective August 2015, we exercised our first renewal option for a period ending in August 2018 and in April 2018 we exercised our second renewal option for a period ending in August 2021. In connection with the Share Exchange, effective March 2017, we also entered into certain agreements pursuant to which DISH Network provides collocation and antenna space to EchoStar through February 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; Spokane, Washington; and Englewood, Colorado. In October 2019, we provided a termination notice for our New Braunfels, Texas agreement to be effective May 2020. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. Generally, we may renew our collocation and antenna space agreements for three-year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 180 days’ prior written notice. In September 2019, in connection with the BSS Transaction, we entered into an agreement pursuant to which DISH Network provided us with certain additional collocation space in Cheyenne, Wyoming for a period that ended in September 2020. The fees for the services provided under these agreements depend on the number of racks located at the location.

Also in connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing in August 2020, with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. In March 2021, we entered into additional agreements pursuant to which DISH Network provides us with a gateway, including antenna space in Cheyenne, Wyoming and Gilbert, Arizona. Both agreements are for a period of five years with four three-year

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renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term.

Hughes Broadband Master Services Agreement.  In conjunction with the launch of our EchoStar XIX satellite, in March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our Gen 5 HughesNet service and related equipment and other telecommunication services and (ii) installs Gen 5 HughesNet service equipment with respect to activations generated by DISH Network.  Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The Hughes Broadband MSA has an initial term of five years through March 2022 with automatic renewal for successive one-year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our Gen 5 HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $1.9 million and $4.6 million for the three months ended March 31, 2021 and 2020, respectively.

2019 TT&C Agreement.  In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). The fees for services provided under the 2019 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided.  Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months’ notice.

Other Receivables - DISH Network

Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off.  Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Code, because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar and its subsidiaries will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed.

In light of the Tax Sharing Agreement, among other things, and in connection with EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount of that includes the federal tax benefit DISH received as a result of our operations.

In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network.

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Other Agreements

Master Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) EchoStar completed the Distribution; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by the parties, including EchoStar’s representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities.  EchoStar and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively.

BSS Transaction Intellectual Property and Technology License Agreement. Effective September 2019, in connection with the BSS Transaction, we, EchoStar and DISH Network entered into an intellectual property and technology license agreement (the “BSS IPTLA”) pursuant to which we, EchoStar and its other subsidiaries and DISH Network license to each other certain intellectual property and technology. The BSS IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the BSS IPTLA, we, EchoStar and its other subsidiaries granted to DISH Network a license to our and their intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the BSS Business acquired pursuant to the BSS Transaction, including a limited license to use the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks during a transition period.  EchoStar retains full ownership of the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks. In addition, DISH Network granted a license back to us, EchoStar and its other subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in our, EchoStar and its other subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the BSS Transaction.

BSS Transaction Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries’ with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction.

Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect.

BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except

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that EchoStar is responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred to DISH Network in connection with the BSS Transaction.

Share Exchange Agreement. In February 2017 EchoStar consummated the Share Exchange, following which EchoStar and certain of its and our subsidiaries no longer operate the transferred EchoStar Technologies businesses and the Tracking Stock was retired and is no longer outstanding and all agreements, arrangements and policy statements with respect to such Tracking Stock terminated and are of no further effect. Pursuant to the Share Exchange Agreement, EchoStar and certain of its and our subsidiaries transferred certain assets, investments in joint ventures, spectrum licenses and real estate properties and DISH Network assumed certain liabilities relating to the transferred assets and businesses. The Share Exchange Agreement contained customary representations and warranties by the parties, including representations by EchoStar related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. EchoStar and DISH Network also agreed to customary indemnification provisions whereby each party indemnifies the other against certain losses with respect to breaches of representations, warranties or covenants and certain liabilities and if certain actions undertaken by EchoStar or DISH causes the transaction to be taxable to the other party after closing.

Share Exchange Intellectual Property and Technology License Agreement. Effective March 2017, in connection with the Share Exchange, EchoStar and one of its other subsidiaries and DISH Network entered into an intellectual property and technology license agreement (“IPTLA”) pursuant to which we, EchoStar and its other subsidiaries and DISH Network license to each other certain intellectual property and technology. The IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the IPTLA, we, EchoStar and its other subsidiaries granted to DISH Network a license to our and their intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the businesses acquired pursuant to the Share Exchange, including a limited license to use the “ECHOSTAR” trademark during a transition period.  EchoStar retains full ownership of the “ECHOSTAR” trademark. In addition, DISH Network granted a license back to us, EchoStar and its other subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in our, EchoStar and its other subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the Share Exchange.

Share Exchange Tax Matters Agreement. Effective March 2017, in connection with the Share Exchange, EchoStar and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries with respect to taxes of the transferred businesses pursuant to the Share Exchange. Generally, EchoStar is responsible for all tax returns and tax liabilities for the transferred businesses and assets for periods prior to the Share Exchange and DISH Network is responsible for all tax returns and tax liabilities for the transferred businesses and assets from and after the Share Exchange. Both EchoStar and DISH Network made certain tax-related representations and are subject to various tax-related covenants after the consummation of the Share Exchange. Both EchoStar and DISH Network have agreed to indemnify each other if there is a breach of any such tax representation or violation of any such tax covenant and that breach or violation results in the Share Exchange not qualifying for tax free treatment for the other party. In addition, DISH Network has agreed to indemnify EchoStar if the transferred businesses are acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons and such acquisition results in the Share Exchange not qualifying for tax free treatment. The tax matters agreement supplements the Tax Sharing Agreement outlined above which continues in full force and effect.

NOTE 12.    RELATED PARTY TRANSACTIONS - OTHER

Hughes Systique Corporation

We contract with Hughes Systique Corporation (“Hughes Systique”) for software development services. In addition to our approximately 43% ownership in Hughes Systique, Mr. Pradman Kaul, the President of our subsidiary Hughes Communications, Inc. and a member of our board of directors, and his brother, who is the Chief Executive Officer and President of Hughes Systique, own in the aggregate approximately 25%, on an undiluted basis, of Hughes Systique’s outstanding shares as of March 31, 2021. Furthermore, Mr. Pradman Kaul serves on the board of directors of Hughes Systique. Hughes Systique is a variable interest entity and we are considered the primary beneficiary of Hughes Systique due to, among other factors, our ability to direct the activities that most significantly impact the economic performance of Hughes Systique. As a result, we consolidate Hughes Systique’s financial

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statements in these Consolidated Financial Statements.

TerreStar Solutions

DISH Network owns more than 15% of TerreStar Solutions, Inc. (“TSI”). In May 2018, we and TSI entered into an equipment and services agreement pursuant to which we design, manufacture and install upgraded ground communications network equipment for TSI’s network and provide, among other things, warranty and support services. We recognized revenue of $0.4 million and $2.2 million for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and December 31, 2020, we had $1.5 million and $0.4 million trade accounts receivable from TSI.

NOTE 13.    CONTINGENCIES

Patents and Intellectual Property

Many entities, including some of our competitors, have, or may have in the future, patents and other intellectual property rights that cover or affect products or services directly or indirectly related to those that we offer. We may not be aware of all patents and other intellectual property rights that our products and services may potentially infringe. Damages in patent infringement cases can be substantial, and in certain circumstances can be tripled. Further, we cannot estimate the extent to which we may be required in the future to obtain licenses with respect to intellectual property rights held by others and the availability and cost of any such licenses. Various parties have asserted patent and other intellectual property rights with respect to our products and services. We cannot be certain that these parties do not own the rights they claim, that these rights are not valid or that our products and services do not infringe on these rights. Further, we cannot be certain that we would be able to obtain licenses from these parties on commercially reasonable terms or, if we were unable to obtain such licenses, that we would be able to redesign our products and services to avoid infringement.

Certain Arrangements with DISH Network

In connection with EchoStar’s spin-off from DISH in 2008, EchoStar entered into a separation agreement with DISH Network that provides, among other things, for the division of certain liabilities, including liabilities resulting from litigation. Under the terms of the separation agreement, EchoStar assumed certain liabilities that relate to its and our business, including certain designated liabilities for acts or omissions that occurred prior to the Spin-off. Certain specific provisions govern intellectual property related claims under which EchoStar will generally only be liable for its and its subsidiaries’ acts or omissions following the Spin-off and DISH Network will indemnify EchoStar for any liabilities or damages resulting from intellectual property claims relating to the period prior to the Spin-off as well as DISH Network’s acts or omissions following the Spin-off. In connection with the Share Exchange and BSS Transaction, EchoStar and certain of its and our subsidiaries entered into the Share Exchange Agreement and the Master Transaction Agreement, respectively, and other agreements which provide, among other things, for the division of certain liabilities, including liabilities relating to taxes, intellectual property and employees and liabilities resulting from litigation and the assumption of certain liabilities that relate to the transferred businesses and assets. These agreements also contain additional indemnification provisions between EchoStar and us and DISH Network for, in the case of the Share Exchange, certain pre-existing liabilities and legal proceedings and, in the case of the BSS Transaction, certain losses with respect to breaches of certain representations and covenants and certain liabilities.

Litigation

We are involved in a number of legal proceedings concerning matters arising in connection with the conduct of our business activities. Many of these proceedings are at preliminary stages and/or seek an indeterminate amount of damages. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable and to determine if accruals are appropriate. We record an accrual for litigation and other loss contingencies when we determine that a loss is probable, and the amount of the loss can be reasonably estimated. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made. There can be no assurance that legal proceedings against us will be resolved in

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amounts that will not differ from the amounts of our recorded accruals. Legal fees and other costs of defending legal proceedings are charged to expense as incurred.

For certain proceedings, management is unable to predict with any degree of certainty the outcome or provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons: (i) the proceedings are in various stages; (ii) damages have not been sought or specified; (iii) damages are unsupported, indeterminate and/or exaggerated in management’s opinion; (iv) there is uncertainty as to the outcome of pending trials, appeals, motions or other proceedings; (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties are involved (as with many patent-related cases). Except as described below, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material effect on our financial condition, operating results or cash flows, though there is no assurance that the resolution and outcomes of these proceedings, individually or in the aggregate, will not be material to our financial condition, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period.

We intend to vigorously defend the proceedings against us. In the event that a court, tribunal, other body or jury ultimately rules against us, we may be subject to adverse consequences, including, without limitation, substantial damages, which may include treble damages, fines, penalties, compensatory damages and/or other equitable or injunctive relief that could require us to materially modify our business operations or certain products or services that we offer to our consumers.

Shareholder Litigation

On July 2, 2019, the City of Hallandale Beach Police Officers’ and Firefighters’ Personnel Retirement Trust, purporting to sue on behalf of a class of EchoStar Corporation’s stockholders, filed a complaint in the District Court of Clark County, Nevada against EchoStar’s directors, Charles W. Ergen, R. Stanton Dodge, Anthony M. Federico, Pradman P. Kaul, C. Michael Schroeder, Jeffrey R. Tarr, William D. Wade, and Michael T. Dugan; our chief financial officer, David J. Rayner; EchoStar ; HSSC; our former subsidiary BSS Corp.; and DISH and its subsidiary Merger Sub. On September 5, 2019, the defendants filed motions to dismiss. On October 11, 2019, the plaintiffs filed an amended complaint removing Messrs. Dodge, Federico, Kaul, Schroeder, Tarr and Wade as defendants. The amended complaint alleges that Mr. Ergen, as our controlling stockholder, breached fiduciary duties to EchoStar’s minority stockholders by structuring the BSS Transaction with inadequate consideration and improperly influencing our and EchoStar’s boards of directors to approve the BSS Transaction. The amended complaint also alleges that the other defendants aided and abetted such alleged breaches. The plaintiffs seek equitable and monetary relief, including the issuance of additional DISH Common Stock, and other costs and disbursements, including attorneys’ fees on behalf of the purported class. On November 11, 2019, we and the other defendants filed separate motions to dismiss plaintiff’s amended complaint and during a hearing on January 13, 2020 the court denied these motions. On February 10, 2020, we and the other defendants filed answers to the amended complaint. The Court certified plaintiff’s class on January 11, 2021. We intend to vigorously defend this case. We cannot predict its outcome with any degree of certainty.

License Fee Dispute with Government of India, Department of Telecommunications

In 1994, the Government of India promulgated a “National Telecommunications Policy” under which the government liberalized the telecommunications sector and required telecommunications service providers to pay fixed license fees. Pursuant to this policy, our subsidiary Hughes Communications India Private Limited (“HCIPL”), formerly known as Hughes Escorts Communications Limited, obtained a license to operate a data network over satellite using VSAT systems. In 2002, HCIPL’s license was amended pursuant to a new government policy that was first established in 1999. The new policy eliminated the fixed license fees and instead required each telecommunications service provider to pay license fees based on its adjusted gross revenue (“AGR”). In March 2005, the Indian Department of Telecommunications (“DOT”) notified HCIPL that, based on its review of HCIPL’s audited accounts and AGR statements, HCIPL must pay additional license fees and penalties and interest on such fees and penalties. HCIPL responded that the DOT had improperly calculated its AGR by including revenue from licensed and unlicensed activities. The DOT rejected this explanation and in 2006, HCIPL filed a petition with an administrative tribunal (the “Tribunal”), challenging the DOT’s calculation of its AGR. The DOT also issued license fee assessments to other telecommunications service providers and a number of similar petitions were filed by several

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(Unaudited)

other such providers with the Tribunal. These petitions were amended, consolidated, remanded and re-appealed several times. On April 23, 2015, the Tribunal issued a judgment affirming the DOT’s calculation of AGR for the telecommunications service providers but reversing the DOT’s imposition of interest, penalties and interest on such penalties as excessive. Over subsequent years, the DOT and HCIPL and other telecommunications service providers, respectively, filed several appeals of the Tribunal’s ruling. On October 24, 2019, the Supreme Court of India (“Supreme Court”) issued an order (the “October 2019 Order”) affirming the license fee assessments imposed by the DOT, including its imposition of interest, penalties and interest on the penalties, but without indicating the amount HCIPL is required to pay the DOT, and ordering payment by January 23, 2020. On November 23, 2019, HCIPL and other telecommunication service providers filed a petition asking the Supreme Court to reconsider the October 2019 Order. The petition was denied on January 20, 2020. On January 22, 2020, HCIPL and other telecommunication service providers filed an application requesting that the Supreme Court modify the October 2019 Order to permit the DOT to calculate the final amount due and extend HCIPL’s and the other telecommunication service providers’ payment deadline. On February 14, 2020, the Supreme Court directed HCIPL and the other telecommunication service providers to explain why the Supreme Court should not initiate contempt proceedings for failure to pay the amounts due. During a hearing on March 18, 2020, the Supreme Court ordered that all amounts that were due before the October 2019 Order must be paid, including interest, penalties and interest on the penalties. The Supreme Court also ordered that the parties appear for a further hearing addressing, potentially among other things, a proposal by the DOT to allow for extended or deferred payments of amounts due. On June 11, 2020, the Supreme Court ordered HCIPL and the other telecommunication service providers to submit affidavits addressing the proposal made by the DOT to extend the time frame for payment of the amounts owed and for HCIPL and the other telecommunication providers to provide security for such payments. On September 1, 2020, the Supreme Court issued a judgment permitting a 10-year payment schedule. Under this payment schedule, HCIPL is required to make an annual payment every March 31, through 2031. Following the Supreme Court of India’s October 2019 judgment, HCIPL made payments during the first quarter of 2020, and an additional payment on March 31, 2021.

The following table presents the components of the accrual:

	As of
	March 31, 2021		December 31, 2020
Additional license fees	$	3,867	$	3,890
Penalties	3,969		3,992
Interest and interest on penalties	77,774		76,871
Less: Payments	(8,574)		(2,975)
Total accrual	$	77,036	$	81,778

Any eventual payments made with respect to the ultimate outcome of this matter may be different from our accrual and such differences could be significant.

Other

In addition to the above actions, we are subject to various other legal proceedings and claims, which arise in the ordinary course of business. As part of our ongoing operations, we are subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as by governmental/regulatory authorities responsible for enforcing the laws and regulations to which we may be subject. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the federal government. Some states have adopted similar state whistleblower and false claims provisions. In addition, we from time to time receive inquiries from federal, state and foreign agencies regarding compliance with various laws and regulations.

In our opinion, the amount of ultimate liability with respect to any of these other actions is unlikely to materially affect our financial position, results of operations or cash flows, though the resolutions and outcomes, individually or in the aggregate, could be material to our financial position, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period.

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(Unaudited)

We also indemnify our directors, officers and employees for certain liabilities that might arise from the performance of their responsibilities for us. Additionally, in the normal course of its business, we enter into contracts pursuant to which we may make a variety of representations and warranties and indemnify the counterparty for certain losses. Our possible exposure under these arrangements cannot be reasonably estimated as this involves the resolution of claims made, or future claims that may be made, against us or our officers, directors or employees, the outcomes of which are unknown and not currently predictable or estimable.

NOTE 14.    SEGMENT REPORTING

Business segments are components of an enterprise for which separate financial information is available and regularly evaluated by our chief operating decision maker (“CODM”), who is our Chief Executive Officer. We operate in two business segments, Hughes and ESS, as described in Note 1. Organization and Business Activities.

The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, and net income (loss) attributable to non-controlling interests (“EBITDA”).

Total assets by segment have not been reported herein because the information is not provided to our CODM on a regular basis. 

The following table presents revenue, EBITDA and capital expenditures for each of our business segments:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended March 31, 2021
External revenue	$	475,859	$	4,001	$	5,370	$	485,230
Intersegment revenue	—		88		(88)		—
Total revenue	$	475,859	$	4,089	$	5,282	$	485,230
EBITDA	$	198,578	$	1,919	$	(9,091)	$	191,406
Capital expenditures	$	82,196	$	—	$	—	$	82,196
For the three months ended March 31, 2020
External revenue	$	458,482	$	4,367	$	4,698	$	467,547
Intersegment revenue	—		285		(285)		—
Total revenue	$	458,482	$	4,652	$	4,413	$	467,547
EBITDA	$	154,641	$	2,030	$	(6,646)	$	150,025
Capital expenditures	$	91,517	$	—	$	—	$	91,517

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(Unaudited)

The following table reconciles Net income (loss) in the Consolidated Statements of Operations to EBITDA:

	For the three months ended March 31,
	2021		2020
Net income (loss)	$	17,630	$	(17,913)
Interest income, net	(2,394)		(8,892)
Interest expense, net of amounts capitalized	41,922		42,192
Income tax benefit (provision), net	10,637		5,231
Depreciation and amortization	122,664		125,965
Net loss (income) attributable to non-controlling interests	947		3,442
EBITDA	$	191,406	$	150,025

NOTE 15.    SUPPLEMENTAL FINANCIAL INFORMATION

Other Current Assets, Net and Other Non-current Assets, Net

The following table presents the components of Other current assets, net, and Other non-current assets, net:

	As of
	March 31, 2021		December 31, 2020
Other current assets, net:
Trade accounts receivable - DISH Network	$	4,449	$	4,706
Inventory	95,439		97,831
Prepaids and deposits	43,812		42,243
Related party receivables - EchoStar	114,225		116,220
Other, net	28,764		30,815
Total other current assets	$	286,689	$	291,815
Other non-current assets, net:
Restricted cash	$	835	$	807
Deferred tax assets, net	1,520		1,679
Capitalized software, net	118,953		116,661
Contract acquisition costs, net	94,593		99,837
Contract fulfillment costs, net	1,916		2,580
Related party receivables - EchoStar	54,970		57,136
Other, net	29,629		28,977
Total other non-current assets, net	$	302,416	$	307,677

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(Unaudited)

Accrued Expenses and Other Current Liabilities and Other Non-Current Liabilities

The following table presents the components of Accrued expenses and other current liabilities and Other non-current liabilities:

	As of
	March 31, 2021		December 31, 2020
Accrued expenses and other current liabilities:
Related party payables - EchoStar	$	51,396	$	51,421
Trade accounts payable - DISH Network	417		477
Accrued interest	34,514		42,388
Accrued compensation	44,489		52,231
Accrued taxes	11,937		11,780
Operating lease obligation	14,986		14,670
Other	170,577		152,620
Total accrued expenses and other current liabilities	$	328,316	$	325,587
Other non-current liabilities:
Related party payables - EchoStar	$	24,533	$	25,114
Other	62,109		62,843
Total other non-current liabilities	$	86,642	$	87,957

Inventory

The following table presents the components of inventory:

	As of
	March 31, 2021		December 31, 2020
Raw materials	$	5,308	$	4,564
Work-in-process	7,054		8,280
Finished goods	83,077		84,987
Total inventory	$	95,439	$	97,831

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(Unaudited)

Supplemental and Non-cash Investing and Financing Activities

The following table presents the supplemental and non-cash investing and financing activities:

	For the three months ended March 31,
	2021		2020
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	$	45,329	$	49,563
Cash paid for income taxes	$	276	$	716
Non-cash investing and financing activities:
Increase (decrease) in capital expenditures included in accounts payable, net	$	(973)	$	(5,359)

NOTE 16.    SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

Certain of our wholly-owned subsidiaries (together, the “Guarantor Subsidiaries”) have fully and unconditionally guaranteed, on a joint and several basis, the obligations of our 5 1/4% Senior Secured Notes due August 1, 2026, 7 5/8% Senior Unsecured Notes due 2021 and 6 5/8% Senior Unsecured Notes due August 1, 2026 (collectively, the “Notes”).

The indentures governing the Notes contain restrictive covenants that, among other things, impose limitations on our ability and the ability of certain of our subsidiaries to pay dividends or make distributions, incur additional debt, make certain investments, create liens or enter into sale and leaseback transactions, merge or consolidate with another company, transfer and sell assets, enter into transactions with affiliates or allow to exist certain restrictions on the ability of certain of our subsidiaries to pay dividends, make distributions, make other payments, or transfer assets to us.

In lieu of separate financial statements of the Guarantor Subsidiaries, we have prepared the accompanying consolidating financial information in accordance with Rule 3-10(f) of Regulation S-X. This includes:

•the accompanying balance sheet;

•the accompanying statement of operations and comprehensive income (loss); and

•the accompanying statement of cash flows.

This also includes consolidating financial information as follows:

•the Guarantor Subsidiaries on a combined basis;

•the non-guarantor subsidiaries of HSSC on a combined basis; and

•the eliminations necessary to arrive at the corresponding information of HSSC on a consolidated basis.

This accompanying consolidating financial information should be read in conjunction with these Consolidated Financial Statements.

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(Unaudited)

Consolidating Balance Sheet as of March 31, 2021

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Assets
Current assets:
Cash and cash equivalents	$	1,313,882	$	36,207	$	53,837	$	—	$	1,403,926
Marketable investment securities	515,306		—		—		—		515,306
Trade accounts receivable and contract assets, net	—		130,895		56,377		—		187,272
Other current assets, net	148,125		922,870		93,812		(878,118)		286,689
Total current assets	1,977,313		1,089,972		204,026		(878,118)		2,393,193
Non-current assets:
Property and equipment, net	—		1,277,785		353,436		—		1,631,221
Operating lease right-of-use assets	—		104,304		27,148		—		131,452
Goodwill	—		504,173		6,772		—		510,945
Regulatory authorizations, net	—		400,000		9,960		—		409,960
Other intangible assets, net	—		16,246		—		—		16,246
Other investments, net	—		15,455		86,708		—		102,163
Investment in subsidiaries	2,965,049		322,434		—		(3,287,483)		—
Other non-current assets, net	700		304,863		91,659		(94,806)		302,416
Total non-current assets	2,965,749		2,945,260		575,683		(3,382,289)		3,104,403
Total assets	$	4,943,062	$	4,035,232	$	779,709	$	(4,260,407)	$	5,497,596
Liabilities and Shareholder's Equity
Current liabilities:
Trade accounts payable	$	—	$	89,812	$	14,871	$	—	$	104,683
Current portion of long-term debt, net	808,758		—		—		—		808,758
Contract liabilities	—		107,467		5,040		—		112,507
Accrued expenses and other current liabilities	635,846		341,850		228,738		(878,118)		328,316
Total current liabilities	1,444,604		539,129		248,649		(878,118)		1,354,264
Non-current liabilities:
Long-term debt, net	1,495,436		—		—		—		1,495,436
Deferred tax liabilities, net	345		373,485		2,536		—		376,366
Operating lease liabilities	—		96,042		22,410		—		118,452
Other non-current liabilities	—		62,089		119,359		(94,806)		86,642
Total non-current liabilities	1,495,781		531,616		144,305		(94,806)		2,076,896
Total liabilities	2,940,385		1,070,745		392,954		(972,924)		3,431,160
Shareholder's equity:
Total Hughes Satellite Systems Corporation shareholder's equity	2,002,677		2,964,487		322,996		(3,287,483)		2,002,677
Non-controlling interests	—		—		63,759		—		63,759
Total shareholder's equity	2,002,677		2,964,487		386,755		(3,287,483)		2,066,436
Total liabilities and shareholder's equity	$	4,943,062	$	4,035,232	$	779,709	$	(4,260,407)	$	5,497,596

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(Unaudited)

Consolidating Balance Sheet as of December 31, 2020

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Assets
Current assets:
Cash and cash equivalents	$	649,851	$	46,055	$	44,584	$	—	$	740,490
Marketable investment securities	1,203,296		—		—		—		1,203,296
Trade accounts receivable and contract assets, net	—		129,572		54,416		—		183,988
Other current assets, net	148,158		830,912		171,676		(858,931)		291,815
Total current assets	2,001,305		1,006,539		270,676		(858,931)		2,419,589
Non-current assets:
Property and equipment, net	—		1,312,673		378,850		—		1,691,523
Operating lease right-of-use assets	—		99,578		28,688		—		128,266
Goodwill	—		504,173		7,424		—		511,597
Regulatory authorizations, net	—		400,000		10,451		—		410,451
Other intangible assets, net	—		18,340		—		—		18,340
Other investments, net	—		103,924		—		—		103,924
Investment in subsidiaries	2,942,178		251,394		—		(3,193,572)		—
Other non-current assets, net	700		307,661		94,031		(94,715)		307,677
Total non-current assets	2,942,878		2,997,743		519,444		(3,288,287)		3,171,778
Total assets	$	4,944,183	$	4,004,282	$	790,120	$	(4,147,218)	$	5,591,367
Liabilities and Shareholder's Equity
Current liabilities:
Trade accounts payable	$	—	$	98,914	$	19,654	$	—	$	118,568
Current portion of long-term debt, net	898,237		—		—		—		898,237
Contract liabilities	—		99,838		4,731		—		104,569
Accrued expenses and other current liabilities	529,661		352,121		302,736		(858,931)		325,587
Total current liabilities	1,427,898		550,873		327,121		(858,931)		1,446,961
Non-current liabilities:
Long-term debt, net	1,495,256		—		—		—		1,495,256
Deferred tax liabilities, net	9,569		357,835		2,536		—		369,940
Operating lease liabilities	—		91,241		23,636		—		114,877
Other non-current liabilities	—		62,717		119,955		(94,715)		87,957
Total non-current liabilities	1,504,825		511,793		146,127		(94,715)		2,068,030
Total liabilities	2,932,723		1,062,666		473,248		(953,646)		3,514,991
Shareholder's equity:
Total Hughes Satellite Systems Corporation shareholder's equity	2,011,460		2,941,616		251,956		(3,193,572)		2,011,460
Non-controlling interests	—		—		64,916		—		64,916
Total shareholder's equity	2,011,460		2,941,616		316,872		(3,193,572)		2,076,376
Total liabilities and shareholder's equity	$	4,944,183	$	4,004,282	$	790,120	$	(4,147,218)	$	5,591,367

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(Unaudited)

Consolidating Statement of Operations and Comprehensive Income (Loss)

For the Three Months Ended March 31, 2021

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Revenue:
Services and other revenue	$	—	$	363,697	$	77,703	$	(8,409)	$	432,991
Equipment revenue	—		61,037		8,046		(16,844)		52,239
Total revenue	—		424,734		85,749		(25,253)		485,230
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)	—		103,207		36,229		(8,024)		131,412
Cost of sales - equipment (exclusive of depreciation and amortization)	—		56,430		5,369		(16,659)		45,140
Selling, general and administrative expenses	—		83,543		21,397		(570)		104,370
Research and development expenses	—		7,358		187		—		7,545
Depreciation and amortization	—		94,252		28,412		—		122,664
Impairment of long-lived assets	—		210		—		—		210
Total costs and expenses	—		345,000		91,594		(25,253)		411,341
Operating income (loss)	—		79,734		(5,845)		—		73,889
Other income (expense):
Interest income	1,036		1,287		1,281		(1,210)		2,394
Interest expense, net of amounts capitalized	(40,244)		45		(2,933)		1,210		(41,922)
Equity in earnings (losses) of unconsolidated affiliates, net	—		219		(1,980)		—		(1,761)
Equity in earnings (losses) of subsidiaries, net	50,143		(12,617)		—		(37,526)		—
Foreign currency transaction gains (losses), net	—		(3)		(3,357)		—		(3,360)
Other, net	(1,582)		744		(135)		—		(973)
Total other income (expense), net	9,353		(10,325)		(7,124)		(37,526)		(45,622)
Income (loss) before income taxes	9,353		69,409		(12,969)		(37,526)		28,267
Income tax benefit (provision), net	9,224		(19,266)		(595)		—		(10,637)
Net income (loss)	18,577		50,143		(13,564)		(37,526)		17,630
Less: Net loss (income) attributable to non-controlling interests	—		—		947		—		947
Net income (loss) attributable to HSSC	$	18,577	$	50,143	$	(12,617)	$	(37,526)	$	18,577
Comprehensive income (loss):
Net income (loss)	$	18,577	$	50,143	$	(13,564)	$	(37,526)	$	17,630
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		—		(33,742)		—		(33,742)
Unrealized gains (losses) on available-for-sale securities	(88)		—		—		—		(88)
Amounts reclassified to net income (loss):
Equity in other comprehensive income (loss) of subsidiaries, net	(28,132)		(28,132)		—		56,264		—
Total other comprehensive income (loss), net of tax	(28,220)		(28,132)		(33,742)		56,264		(33,830)
Comprehensive income (loss)	(9,643)		22,011		(47,306)		18,738		(16,200)
Less: Comprehensive loss (income) attributable to non-controlling interests	—		—		6,557		—		6,557
Comprehensive income (loss) attributable to HSSC	$	(9,643)	$	22,011	$	(40,749)	$	18,738	$	(9,643)

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(Unaudited)

Consolidating Statement of Operations and Comprehensive Income (Loss)

For the Three Months Ended March 31, 2020

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Revenue:
Services and other revenue	$	—	$	354,399	$	64,928	$	(9,089)	$	410,238
Equipment revenue	—		65,586		5,410		(13,687)		57,309
Total revenue	—		419,985		70,338		(22,776)		467,547
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)	—		110,471		42,063		(8,649)		143,885
Cost of sales - equipment (exclusive of depreciation and amortization)	—		55,374		4,221		(13,687)		45,908
Selling, general and administrative expenses	—		95,818		20,482		(440)		115,860
Research and development expenses	—		6,109		145		—		6,254
Depreciation and amortization	—		99,359		26,606		—		125,965
Total costs and expenses	—		367,131		93,517		(22,776)		437,872
Operating income (loss)	—		52,854		(23,179)		—		29,675
Other income (expense):
Interest income	7,953		971		891		(923)		8,892
Interest expense, net of amounts capitalized	(40,472)		(613)		(2,030)		923		(42,192)
Gains (losses) on investments, net	—		(164)		—		—		(164)
Equity in earnings (losses) of unconsolidated affiliates, net	—		(1,087)		—		—		(1,087)
Equity in earnings (losses) of subsidiaries, net	10,630		(29,167)		—		18,537		—
Foreign currency transaction gains (losses), net	—		(2)		(7,526)		—		(7,528)
Other, net	—		(275)		(3)		—		(278)
Total other income (expense), net	(21,889)		(30,337)		(8,668)		18,537		(42,357)
Income (loss) before income taxes	(21,889)		22,517		(31,847)		18,537		(12,682)
Income tax benefit (provision), net	7,418		(11,804)		(845)		—		(5,231)
Net income (loss)	(14,471)		10,713		(32,692)		18,537		(17,913)
Less: Net loss (income) attributable to non-controlling interests	—		—		3,442		—		3,442
Net income (loss) attributable to HSSC	$	(14,471)	$	10,713	$	(29,250)	$	18,537	$	(14,471)
Comprehensive income (loss):
Net income (loss)	$	(14,471)	$	10,713	$	(32,692)	$	18,537	$	(17,913)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		—		(82,836)		—		(82,836)
Unrealized gains (losses) on available-for-sale securities	(2,479)		—		—		—		(2,479)
Other	—		—		(405)		—		(405)
Equity in other comprehensive income (loss) of subsidiaries, net	(66,918)		(66,918)		—		133,836		—
Total other comprehensive income (loss), net of tax	(69,397)		(66,918)		(83,241)		133,836		(85,720)
Comprehensive income (loss)	(83,868)		(56,205)		(115,933)		152,373		(103,633)
Less: Comprehensive loss (income) attributable to non-controlling interests	—		—		19,765		—		19,765
Comprehensive income (loss) attributable to HSSC	$	(83,868)	$	(56,205)	$	(96,168)	$	152,373	$	(83,868)

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(Unaudited)

Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2021

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Cash flows from operating activities:
Net income (loss)	$	18,577	$	50,143	$	(13,564)	$	(37,526)	$	17,630
Adjustments to reconcile net income (loss) to net cash flows from operating activities	(61,725)		102,402		25,616		37,526		103,819
Net cash provided by (used for) operating activities	(43,148)		152,545		12,052		—		121,449
Cash flows from investing activities:
Purchases of marketable investment securities	(310,528)		—		—		—		(310,528)
Sales and maturities of marketable investment securities	1,003,198		—		—		—		1,003,198
Expenditures for property and equipment	—		(52,246)		(29,950)		—		(82,196)
Expenditures for externally marketed software	—		(7,846)		—		—		(7,846)
Distributions (contributions) and advances from (to) subsidiaries, net	77,097		(24,100)		—		(52,997)		—
Net cash provided by (used for) investing activities	769,767		(84,192)		(29,950)		(52,997)		602,628
Cash flows from financing activities:
Repurchase of the 2021 Senior Unsecured Notes	(62,588)		—		—		—		(62,588)
Payment of finance lease obligations	—		—		(329)		—		(329)
Payment of in-orbit incentive obligations	—		(1,104)		—		—		(1,104)
Contribution by non-controlling interest holder	—		—		5,400		—		5,400
Other, net	—		—		(292)		—		(292)
Contribution (distributions) and advances (to) from parent, net	—		(77,097)		24,100		52,997		—
Net cash provided by (used for) financing activities	(62,588)		(78,201)		28,879		52,997		(58,913)
Effect of exchange rates on cash and cash equivalents	—		—		(1,700)		—		(1,700)
Net increase (decrease) in cash and cash equivalents	664,031		(9,848)		9,281		—		663,464
Cash and cash equivalents, including restricted amounts, beginning of period	649,851		46,055		45,391		—		741,297
Cash and cash equivalents, including restricted amounts, end of period	$	1,313,882	$	36,207	$	54,672	$	—	$	1,404,761

39

HUGHES SATELLITE SYSTEMS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2020

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Cash flows from operating activities:
Net income (loss)	$	(14,471)	$	10,713	$	(32,692)	$	18,537	$	(17,913)
Adjustments to reconcile net income (loss) to net cash flows from operating activities	(22,215)		95,031		28,858		(18,537)		83,137
Net cash provided by (used for) operating activities	(36,686)		105,744		(3,834)		—		65,224
Cash flows from investing activities:
Purchases of marketable investment securities	(365,877)		—		—		—		(365,877)
Sales and maturities of marketable investment securities	490,020		—		—		—		490,020
Expenditures for property and equipment	—		(61,134)		(30,383)		—		(91,517)
Expenditures for externally marketed software	—		(8,638)		—		—		(8,638)
Distributions (contributions) and advances from (to) subsidiaries, net	29,290		(18,939)		—		(10,351)		—
Net cash provided by (used for) investing activities	153,433		(88,711)		(30,383)		(10,351)		23,988
Cash flows from financing activities:
Payment of finance lease obligations	—		—		(215)		—		(215)
Payment of in-orbit incentive obligations	—		(203)		—		—		(203)
Contribution by non-controlling interest holder	—		—		4,000		—		4,000
Other, net	—		—		979		—		979
Contribution (distributions) and advances (to) from parent, net	—		(29,290)		18,939		10,351		—
Net cash provided by (used for) financing activities	—		(29,493)		23,703		10,351		4,561
Effect of exchange rates on cash and cash equivalents	—		—		(4,618)		—		(4,618)
Net increase (decrease) in cash and cash equivalents	116,747		(12,460)		(15,132)		—		89,155
Cash and cash equivalents, including restricted amounts, beginning of period	1,057,903		32,338		50,081		—		1,140,322
Cash and cash equivalents, including restricted amounts, end of period	$	1,174,650	$	19,878	$	34,949	$	—	$	1,229,477

40

ITEM 2.    MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS

Unless the context indicates otherwise, the terms “we,” “us,” “HSSC,” the “Company” and “our” refer to Hughes Satellite Systems Corporation and its subsidiaries. The following Management’s Narrative Analysis of Results of Operations (“Management’s Narrative Analysis”) should be read in conjunction with our accompanying Consolidated Financial Statements and notes thereto (“Accompanying Consolidated Financial Statements”) in Item 1 of this Quarterly Report on Form 10-Q (“Form 10-Q”).  This Management’s Narrative Analysis is intended to help provide an understanding of our financial condition, changes in our financial condition and our results of operations.  Many of the statements in this Management’s Narrative Analysis are forward-looking statements that involve assumptions and are subject to risks and uncertainties that are often difficult to predict and beyond our control. Actual results could differ materially from those expressed or implied by such forward-looking statements.  Refer to the Disclosure Regarding Forward-Looking Statements in this Form 10-Q for further discussion.  For a discussion of additional risks, uncertainties and other factors that could impact our results of operations or financial condition, refer to the Risk Factors in Part II, Item 1A of this Form 10-Q and in Part I, Item 1A of our most recent Annual Report on Form 10-K (“Form 10-K”) filed with the Securities and Exchange Commission (“SEC”).  Further, such forward-looking statements speak only as of the date of this Form 10-Q and we undertake no obligation to update them.

EXECUTIVE SUMMARY

We are a holding company and a subsidiary of EchoStar.  We were formed as a Colorado corporation in March 2011.  We are a global provider of broadband satellite technologies, broadband internet services for consumer customers, which include home and small to medium-sized businesses, and satellite services. We also deliver innovative network technologies, managed services and communications solutions for enterprise customers, which include aeronautical and government enterprises.

We currently operate in two business segments:  Hughes and ESS. These segments are consistent with the way we make decisions regarding the allocation of resources, as well as how operating results are reviewed by our chief operating decision maker, who is the Company’s Chief Executive Officer.

Our operations also include various corporate departments (primarily Executive, Treasury, Strategic Development, Human Resources, Information Technology, Finance, Accounting, Real Estate and Legal) and other activities, such as costs incurred in certain satellite development programs and other business development activities, and gains or losses from certain of our investments, that have not been assigned to our business segments. These activities, costs and income, as well as eliminations of intersegment transactions, are accounted for in Corporate and Other in our segment reporting.

All amounts presented in this Management’s Narrative Analysis, unless otherwise noted, are expressed in thousands of United States (“U.S.”) dollars, except share and per share amounts and unless otherwise noted.

Highlights from our financial results are as follows:

Consolidated Results of Operations for the Three Months Ended March 31, 2021:

•Revenue of $485.2 million

•Operating income (loss) of $73.9 million

•Net income (loss) of $17.6 million

•Net income (loss) attributable to HSSC of $18.6 million

•Earnings before interest, taxes, depreciation and amortization, and net income (loss) attributable to non-controlling interests (“EBITDA”) of $191.4 million (see reconciliation of this non-GAAP measure in Results of Operations)

Consolidated Financial Condition as of March 31, 2021:

•Total assets of $5.5 billion

•Total liabilities of $3.4 billion

•Total shareholder’s equity of $2.1 billion

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Item 2. MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS - CONTINUED

•Cash and cash equivalents and marketable investment securities of $1.9 billion

Hughes Segment

Our Hughes segment is a global provider of broadband satellite technologies and broadband internet services to consumer customers and broadband network technologies, managed services, equipment, hardware, satellite services and communications solutions to consumer 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.

We incorporate advances in technology to reduce costs and to increase the functionality and reliability of our products and services.  Through advanced and proprietary methodologies, technologies, software and techniques, we continue to improve the efficiency of our networks.  We invest in technologies to enhance our system and network management capabilities, specifically our managed services for enterprises.  We also continue to invest in next generation technologies that can be applied to our future products and services.

We continue to focus our efforts on growing our consumer revenue by maximizing utilization of our existing satellites while planning for new satellites to be launched or acquired. Our consumer revenue growth depends on our success in adding new and retaining existing subscribers across wholesale and retail channels, as well as increasing our Average Revenue Per User/subscriber (“ARPU”). Service costs related to ongoing support for our direct and indirect customers and partners are typically impacted most significantly by our growth. The growth of our enterprise businesses relies heavily on global economic conditions and the competitive landscape for pricing relative to competitors and alternative technologies. We have seen a limited number of our enterprise customers file for bankruptcy protection. We have reserved an amount related to pre-petition receivables and are working closely with these customers on providing post-petition services and products, as well as working with the customer regarding collection of pre-petition amounts.

Our Hughes segment currently uses capacity from three of our satellites (the SPACEWAY 3 satellite, the EchoStar XVII satellite and the EchoStar XIX satellite), our Al Yah 3 Brazilian payload and additional satellite capacity acquired from third-party providers to provide services to our customers. Growth of our consumer subscriber base in the U.S. continues to be constrained where we are nearing or have reached maximum capacity in most areas. While these constraints are not expected to be resolved until we launch new satellites, we continue to focus on revenue growth in all areas and consumer subscriber growth in the areas where we have available capacity.

In May 2019, we entered into an agreement with Bharti Airtel Limited (“BAL”) and its subsidiary, Bharti Airtel Services Limited (together with BAL, “Bharti”), pursuant to which Bharti will contribute its very small aperture terminal (“VSAT”) telecommunications services and hardware business in India to our two existing Indian subsidiaries that conduct our VSAT services and hardware business. The combined entities will provide broadband satellite and hybrid solutions for enterprise networks. Upon consummation of the transaction, Bharti will have a 33% ownership interest in the combined business. The completion of the transaction is subject to customary regulatory approvals and closing conditions. No assurance can be given that the transaction will be consummated on the terms agreed to or at all.

In August 2017, a subsidiary of EchoStar entered into a long-term 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 (“HughesNet service”) in North, Central and South America as well as enterprise broadband services. The EchoStar XXIV satellite is expected to be launched in the second half of 2022. Further delays or impediments could have a material adverse impact on our business operations, future revenues, financial position and prospects, the completion of manufacture of the EchoStar XXIV satellite and our planned expansion of satellite broadband services throughout North, South and Central America. In December 2020, we entered into an agreement with a launch provider for the launch of EchoStar XXIV. Capital expenditures associated with the construction and launch of the EchoStar XXIV satellite are included in EchoStar’s Corporate and Other in its segment reporting.

42

Item 2. MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS - CONTINUED

We continue our efforts to expand our consumer satellite services business outside of the U.S. We have been delivering high-speed consumer satellite broadband services in Brazil since July 2016 and are also providing satellite broadband internet service in several other Latin American countries. In September 2015, we entered into 15-year agreements with affiliates of Telesat Canada for Ka-band capacity on the Telesat T19V satellite located at the 63 degree west longitude orbital location, which was launched in July 2018. Telesat T19V was placed in service during the fourth quarter of 2018 and augmented the capacity being provided by the EUTELSAT 65 West A satellite and the EchoStar XIX satellite in South America. In March 2021, we entered into an agreement for additional capacity on the Telesat T19V satellite over Puerto Rico.

Our broadband subscribers include customers that subscribe to our HughesNet services in the U.S. and Latin America through retail, wholesale and small/medium enterprise service channels.

The following table presents our approximate number of broadband subscribers:

	As of
	March 31, 2021	December 31, 2020
United States	1,164,000	1,189,000
Latin America	389,000	375,000
Total broadband subscribers	1,553,000	1,564,000

The following table presents the approximate number of net subscriber additions:

	For the three months ended
	March 31, 2021	December 31, 2020
United States	(25,000)	(27,000)
Latin America	14,000	11,000
Total net subscriber additions	(11,000)	(16,000)

Our U.S. consumer subscriber base in certain areas continues to be capacity constrained and we are managing the available capacity to maintain service quality to our existing subscribers. While the balancing of total subscribers relative to capacity utilization in the first quarter resulted in lower total subscribers, ARPU increased.

In Latin America, we continued to see growth in our subscriber base and net subscriber additions compared to the fourth quarter of 2020, mainly due to higher gross subscriber additions.

As of March 31, 2021 and December 31, 2020, our Hughes segment had $1.4 billion and $1.3 billion of contracted revenue backlog, respectively. We define Hughes contracted revenue backlog as our expected future revenue under enterprise customer contracts that are non-cancelable, including lease revenue.

ESS Segment

Our ESS segment provides satellite services on a full-time and/or occasional-use basis to U.S. government service providers, internet service providers, broadcast news organizations, content providers and private enterprise customers. We operate our ESS business using primarily the EchoStar IX satellite and the EchoStar 105/SES-11 satellite and related infrastructure. Revenue in our ESS segment depends largely on our ability to continuously make use of our available satellite capacity with existing customers and our ability to enter into commercial relationships with new customers. Our ESS segment, like others in the fixed satellite services industry, has encountered, and may continue to encounter, negative pressure on transponder rates and demand.

43

Item 2. MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS - CONTINUED

As of March 31, 2021 and December 31, 2020, our ESS segment had contracted revenue backlog of $9.2 million and $6.7 million, respectively. We define contracted revenue backlog for our ESS segment as contracted future satellite lease revenue.

Other Business Opportunities

Our industry continues to evolve with the increasing worldwide demand for broadband internet access for information, entertainment and commerce. The current COVID-19 pandemic has made even more evident the worldwide need and demand for connectivity and communications to facilitate an ever-increasing virtual global community and workplace. In addition to fiber and wireless systems, technologies such as geostationary high throughput satellites, low-earth orbit (“LEO”) networks, medium-earth orbit (“MEO”) systems, balloons and High Altitude Platform Systems are expected to continue to play significant roles in enabling global broadband access, networks and services. We intend to use our expertise, technologies, capital, investments, global presence, relationships and other capabilities to continue to provide broadband internet systems, equipment, networks and services for information, the internet-of-things, entertainment, education, remote-connectivity and commerce across industries and communities globally for consumer and enterprise customers. We are closely tracking the developments in next-generation satellite businesses, and we are seeking to utilize our services, technologies, licenses and expertise to find new commercial opportunities for our business.

We intend to continue to selectively explore opportunities to pursue investments, commercial alliances, partnerships, joint ventures, acquisitions, dispositions and other strategic initiatives and transactions, domestically and internationally, that we believe may allow us to increase our existing market share, increase our satellite capacity, expand into new satellite and other technologies, markets and customers, broaden our portfolio of services, products and intellectual property, make our business more valuable, align us for future growth and expansion, maximize the return on our investments and strengthen our business and relationships with our customers. We may allocate or dispose of significant resources for long-term value that may not have a short or medium-term or any positive impact on our revenue, results of operations, or cash flow.

Cybersecurity

On December 8, 2020, the cyber security company FireEye announced that they detected a sophisticated nation state level cyber campaign that targeted FireEye, other public and private companies, and government organizations. FireEye reported that the attack against them was facilitated through the Orion IT management software owned by a company called SolarWinds. Based on information from FireEye, we reviewed all instances of SolarWinds software in use at the Company and have determined that the version we are using is not susceptible to the malware within the version that is compromised.

The SolarWinds hack continues to evolve. Specifically, there have been many reports of intrusions into Microsoft Exchange on-premise systems possibly due to the SolarWinds issue and other unrelated matters. While we are customers of Microsoft, to date, our investigations into the announced issues indicate that we were not detrimentally affected by the vulnerabilities due to our security controls and other proactive measures which include security patching. We continue to receive information about these breaches from the U.S. government and private security firms, and we use this data to update our defense systems and to investigate our own networks for compromise. We will continue to update our systems as more information comes to light in reference to these issues.

We are not aware of any additional cyber-incidents with respect to our owned or leased satellites or other networks, equipment or systems that have had a material adverse effect on our business, costs, operations, prospects, results of operation or financial position during the three months ended March 31, 2021 and through May 6, 2021. There can be no assurance, however, that any such incident can be detected or thwarted or will not have such a material adverse effect in the future.

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Item 2. MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS - CONTINUED

RESULTS OF OPERATIONS

Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

The following table presents our consolidated results of operations for the three months ended March 31, 2021 compared to the three months ended March 31, 2020:

	For the three months ended March 31,						Variance
Statements of Operations Data	2021			2020			Amount		%
Revenue:
Services and other revenue	$	432,991		$	410,238		$	22,753	5.5
Equipment revenue	52,239			57,309			(5,070)		(8.8)
Total revenue	485,230			467,547			17,683		3.8
Costs and expenses:
Cost of sales - services and other	131,412			143,885			(12,473)		(8.7)
% of total services and other revenue	30.3		%	35.1		%
Cost of sales - equipment	45,140			45,908			(768)		(1.7)
% of total equipment revenue	86.4		%	80.1		%
Selling, general and administrative expenses	104,370			115,860			(11,490)		(9.9)
% of total revenue	21.5		%	24.8		%
Research and development expenses	7,545			6,254			1,291		20.6
% of total revenue	1.6		%	1.3		%
Depreciation and amortization	122,664			125,965			(3,301)		(2.6)
Impairment of long-lived assets	210			—			210		*
Total costs and expenses	411,341			437,872			(26,531)		(6.1)
Operating income (loss)	73,889			29,675			44,214		*
Other income (expense):
Interest income, net	2,394			8,892			(6,498)		(73.1)
Interest expense, net of amounts capitalized	(41,922)			(42,192)			270		(0.6)
Gains (losses) on investments, net	—			(164)			164		(100.0)
Equity in earnings (losses) of unconsolidated affiliates, net	(1,761)			(1,087)			(674)		62.0
Foreign currency transaction gains (losses), net	(3,360)			(7,528)			4,168		(55.4)
Other, net	(973)			(278)			(695)		*
Total other income (expense), net	(45,622)			(42,357)			(3,265)		7.7
Income (loss) before income taxes	28,267			(12,682)			40,949		*
Income tax benefit (provision), net	(10,637)			(5,231)			(5,406)		*
Net income (loss)	17,630			(17,913)			35,543		*
Less: Net income (loss) attributable to non-controlling interests	947			3,442			(2,495)		(72.5)
Net income (loss) attributable to HSSC	$	18,577		$	(14,471)		$	33,048	*
Other data:
EBITDA (1)	$	191,406		$	150,025		$	41,381	27.6
Subscribers, end of period	1,553,000			1,516,000			37,000		2.4

*    Percentage is not meaningful

(1)    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.

45

Item 2. MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS - CONTINUED

The following discussion relates to our results of operations for the three months ended March 31, 2021 and 2020.

Services and other revenue.  Services and other revenue totaled $433.0 million for the three months ended March 31, 2021, an increase of $22.8 million, or 5.5%, as compared to 2020. The increase was primarily attributable to increases in sales of broadband services to our consumer customers of $27.0 million, partially offset by a decrease in sales of services to our enterprise customers of $3.1 million. These variances reflect the negative impact of exchange rate fluctuations of $5.4 million, primarily attributable to our consumer customers.

Equipment revenue. Equipment revenue totaled $52.2 million for the three months ended March 31, 2021, a decrease of $5.1 million, or 8.8%, as compared to 2020. The decrease was primarily attributable to decreases in hardware sales of $4.8 million to our mobile satellite systems customers.

Cost of sales - services and other.  Cost of sales - services and other totaled $131.4 million for the three months ended March 31, 2021, a decrease of $12.5 million, or 8.7%, as compared to 2020. The decrease was attributable to lower costs of services provided to our consumer and enterprise customers primarily associated with field services and leased satellite capacity as well as a non-recurring decrease in a certain international regulatory fee of $4.5 million.

Cost of sales - equipment.  Cost of sales - equipment totaled $45.1 million for the three months ended March 31, 2021, a decrease of $0.8 million, or 1.7%, as compared to 2020. 

Selling, general and administrative expenses.  Selling, general and administrative expenses totaled $104.4 million for the three months ended March 31, 2021, a decrease of $11.5 million, or 9.9%, as compared to 2020. The decrease was primarily attributable to decreased sales and marketing expenses of $9.6 million from our Hughes segment mainly associated with our consumer customers and decreases in bad debt expense of $2.4 million.

Depreciation and amortization.  Depreciation and amortization expenses totaled $122.7 million for the three months ended March 31, 2021, a decrease of $3.3 million, or 2.6%, as compared to 2020.  The decrease was primarily attributable to decreases in other property and equipment depreciation expense of $2.0 million and decreases in amortization of intangibles of $1.5 million.

Interest income, net.  Interest income, net totaled $2.4 million for the three months ended March 31, 2021, a decrease of $6.5 million, or 73.1%, as compared to 2020, primarily attributable to decreases in the yield on our marketable investment securities.

Foreign currency transaction gains (losses), net. Foreign currency transaction gains (losses), net totaled $3.4 million in losses for the three months ended March 31, 2021, as compared to $7.5 million in losses for the three months ended March 31, 2020, a positive change of $4.2 million. The change was due to the net impact of foreign exchange rate fluctuations of certain foreign currencies during the quarter.

Income tax benefit (provision), net.  Income tax benefit (provision), net was $(10.6) million in provision for the three months ended March 31, 2021, as compared to $(5.2) million for the three months ended March 31, 2020. Our effective income tax rate was 37.6% for the three months ended March 31, 2021, compared to (41.2)% for the same period in 2020.  The variations in our effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2021 were primarily due to excluded foreign losses where the company carries a full valuation allowance. For the three months ended March 31, 2020, the variations in our effective tax rate from the U.S. federal statutory rate were primarily due to the change in net unrealized losses that are capital in nature, various permanent tax differences, the impact of state and local taxes, and increase in our valuation allowance associated with certain foreign losses.

46

Item 2. MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS - CONTINUED

Net income (loss) attributable to HSSC.  The following table reconciles the change in Net income (loss) attributable to HSSC:

	Amounts
Net income (loss) attributable to HSSC for the three months ended March 31, 2020	$	(14,471)
Increase (decrease) in interest income, net	(6,498)
Decrease (increase) in income tax benefit (provision), net	(5,406)
Decrease (increase) in net income (loss) attributable to non-controlling interests	(2,495)
Increase (decrease) in other, net	(695)
Increase (decrease) in gains (losses) on investments, net	164
Decrease (increase) in equity in earnings (losses) of unconsolidated affiliates, net	(674)
Decrease (increase) in interest expense, net of amounts capitalized	270
Increase (decrease) in foreign currency transaction gains (losses), net	4,168
Increase (decrease) in operating income (loss), including depreciation and amortization	44,214
Net income (loss) attributable to HSSC for the three months ended March 31, 2021	$	18,577

EBITDA.  EBITDA is a non-GAAP financial measure and is described under Explanation of Key Metrics and Other Items below.  The following table reconciles EBITDA to Net income (loss), the most directly comparable U.S. GAAP measure in our Accompanying Consolidated Financial Statements:

	For the three months ended March 31,				Variance
	2021		2020		Amount		%
Net income (loss)	$	17,630	$	(17,913)	$	35,543	*
Interest income, net	(2,394)		(8,892)		6,498		(73.1)
Interest expense, net of amounts capitalized	41,922		42,192		(270)		(0.6)
Income tax provision (benefit), net	10,637		5,231		5,406		*
Depreciation and amortization	122,664		125,965		(3,301)		(2.6)
Net loss (income) attributable to non-controlling interests	947		3,442		(2,495)		(72.5)
EBITDA	$	191,406	$	150,025	$	41,381	27.6

* Percentage is not meaningful.

The following table reconciles the change in EBITDA: 

	Amounts
EBITDA for the three months ended March 31, 2020	$	150,025
Increase (decrease) in operating income (loss), excluding depreciation and amortization	40,913
Increase (decrease) in foreign currency transaction gains (losses), net	4,168
Increase (decrease) in gains (losses) on investments, net	164
Decrease (increase) in equity in earnings (losses) of unconsolidated affiliates, net	(674)
Increase (decrease) in other, net	(695)
Decrease (increase) in net loss (income) attributable to non-controlling interests	(2,495)
EBITDA for the three months ended March 31, 2021	$	191,406

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Item 2. MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS - CONTINUED

Segment Operating Results and Capital Expenditures

The following tables present our operating results, capital expenditures and EBITDA by segment for the three months ended March 31, 2021, as compared to the three months ended March 31, 2020:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended March 31, 2021
Total revenue	$	475,859	$	4,089	$	5,282	$	485,230
Capital expenditures	82,196		—		—		82,196
EBITDA	198,578		1,919		(9,091)		191,406
For the three months ended March 31, 2020
Total revenue	$	458,482	$	4,652	$	4,413	$	467,547
Capital expenditures	91,517		—		—		91,517
EBITDA	154,641		2,030		(6,646)		150,025

Hughes Segment

	For the three months ended March 31,				Variance
	2021		2020		Amount		%
Total revenue	$	475,859	$	458,482	$	17,377	3.8
Capital expenditures	82,196		91,517		(9,321)		(10.2)
EBITDA	198,578		154,641		43,937		28.4

Total revenue was $475.9 million for the three months ended March 31, 2021, an increase of $17.4 million, or 3.8%, as compared to 2020.  Services and other revenue increased primarily due to increases in sales of broadband services to our consumer customers of $27.0 million, partially offset by a decrease in sales of services to our enterprise customers of $3.1 million. Equipment revenue decreased primarily due to decreases in hardware sales of $4.8 million to our mobile satellite systems customers. These variances reflect the negative impact of exchange rate fluctuations of $5.9 million.

Capital expenditures were $82.2 million for the three months ended March 31, 2021, a decrease of $9.3 million, or 10.2%, as compared to 2020, primarily due to decreases in expenditures associated with our consumer business, partially offset by increased expenditures related to construction of our satellite-related ground infrastructure.

The following table reconciles the change in the Hughes Segment EBITDA: 

	Amounts
EBITDA for the three months ended March 31, 2020	$	154,641
Increase (decrease) in operating income (loss), excluding depreciation and amortization	41,297
Increase (decrease) in foreign currency transaction gains (losses), net	4,165
Increase (decrease) in other, net	887
Increase (decrease) in gains (losses) on investments, net	164
Decrease (increase) in equity in earnings (losses) of unconsolidated affiliates, net	(81)
Decrease (increase) in net loss (income) attributable to non-controlling interests	(2,495)
EBITDA for the three months ended March 31, 2021	$	198,578

48

Item 2. MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS - CONTINUED

ESS Segment

	For the three months ended March 31,				Variance
	2021		2020		Amount		%
Total revenue	$	4,089	$	4,652	$	(563)	(12.1)
EBITDA	1,919		2,030		(111)		(5.5)

Total revenue was $4.1 million for the three months ended March 31, 2021, a decrease of $0.6 million, or 12.1%, as compared to 2020, primarily due to a decrease in transponder services provided to third parties.

EBITDA was $1.9 million for the three months ended March 31, 2021, a decrease of $0.1 million, or 5.5%, as compared to 2020, primarily due to the decrease in overall ESS revenue.

Corporate and Other

	For the three months ended March 31,				Variance
	2021		2020		Amount		%
Total revenue	$	5,282	$	4,413	$	869	19.7
EBITDA	(9,091)		(6,646)		(2,445)		36.8

The following table reconciles the change in the Corporate and Other Segment EBITDA:  

	Amounts
EBITDA for the three months ended March 31, 2020	$	(6,646)
Increase (decrease) in other, net	(1,583)
Decrease (increase) in equity in earnings (losses) of unconsolidated affiliates, net	(592)
Increase (decrease) in operating income (loss), excluding depreciation and amortization	(273)
Increase (decrease) in foreign currency transaction gains (losses), net	3
EBITDA for the three months ended March 31, 2021	$	(9,091)

49

Item 2. MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS - CONTINUED

EXPLANATION OF KEY METRICS AND OTHER ITEMS

Services and other revenue.  Services and other revenue primarily includes the sales of consumer and enterprise broadband services, maintenance and other contracted services, revenue associated with satellite and transponder leases and services, satellite uplinking/downlinking, subscriber wholesale service fees for the HughesNet service professional services and facilities rental revenue.

Equipment revenue.  Equipment revenue primarily includes broadband equipment and networks sold to customers in our consumer and enterprise markets.

Cost of sales - services and other.  Cost of sales - services and other primarily includes the cost of broadband services provided to our consumer and enterprise customers, maintenance and other contracted services, costs associated with satellite and transponder leases and services, professional services and facilities rental.

Cost of sales - equipment. Cost of sales - equipment consists primarily of the cost of broadband equipment and networks sold to customers in our consumer and enterprise markets. It also includes certain other costs associated with the deployment of equipment to our customers.

Selling, general and administrative expenses.  Selling, general and administrative expenses primarily include selling and marketing costs and employee-related costs associated with administrative services (e.g., information systems, human resources and other services), including stock-based compensation expense.  It also includes professional fees (e.g. legal, information systems and accounting services) and other expenses associated with facilities and administrative services.

Research and development expenses.  Research and development expenses primarily include costs associated with the design and development of products to support future growth and provide new technology and innovation to our customers.

Impairment of long-lived assets. Impairment of long-lived assets includes our impairment losses related to our property and equipment, goodwill, regulatory authorizations and other intangible assets.

Interest income, net.  Interest income, net primarily includes interest earned on our cash, cash equivalents and marketable investment securities, and other investments including premium amortization and discount accretion on debt securities.

Interest expense, net of amounts capitalized. Interest expense, net of amounts capitalized primarily includes interest expense associated with our debt and finance lease obligations (net of capitalized interest), amortization of debt issuance costs and interest expense related to certain legal proceedings.

Gains (losses) on investments, net.  Gains (losses) on investments, net primarily includes changes in fair value of our marketable equity securities and other investments for which we have elected the fair value option. It may also include realized gains and losses on the sale or exchange of our available-for-sale debt securities, other-than-temporary impairment losses on our available-for-sale securities, realized gains and losses on the sale or exchange of equity securities and debt securities without readily determinable fair value and adjustments to the carrying amount of investments in unconsolidated affiliates and marketable equity securities resulting from impairments and observable price changes.

Equity in earnings (losses) of unconsolidated affiliates, net. Equity in earnings (losses) of unconsolidated affiliates, net includes earnings or losses from our investments accounted for using the equity method.

Foreign currency transaction gains (losses), net. Foreign currency transaction gains (losses), net include gains and losses resulting from the re-measurement of transactions denominated in foreign currencies.

Other, net.  Other, net primarily includes dividends received from our marketable investment securities and other non-operating income and expense items that are not appropriately classified elsewhere in the Consolidated Statements of Operations in our Accompanying Consolidated Financial Statements.

50

Item 2. MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS - CONTINUED

Earnings before interest, taxes, depreciation and amortization (“EBITDA”). EBITDA is defined as Net income (loss) excluding Interest income and expense, net, Income tax benefit (provision), net, Depreciation and amortization, and Net income (loss) attributable to non-controlling interests.  EBITDA is not a measure determined in accordance with U.S. GAAP. This non-GAAP measure is reconciled to Net income (loss) in our discussion of Results of Operations above. EBITDA should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with U.S. GAAP. EBITDA is used by our management as a measure of operating efficiency and overall financial performance for benchmarking against our peers and competitors. Management believes EBITDA provides meaningful supplemental information regarding the underlying operating performance of our business and is appropriate to enhance an overall understanding of our financial performance. Management also believes that EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties to evaluate the performance of companies in our industry.

Subscribers. Subscribers include customers that subscribe to our HughesNet service, through retail, wholesale and small/medium enterprise service channels.

ITEM 4.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Form 10-Q such that the information required to be disclosed in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rule 15d-15(f) under the Exchange Act) that occurred during the three months ended March 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We continue to review our internal control over financial reporting and may from time to time make changes aimed at enhancing its effectiveness and to ensure that our systems evolve with our business.

51

PART II — OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

For a discussion of legal proceedings, refer to Part I, Item 1. Financial Statements - Note 13. Contingencies - Litigation in this Form 10-Q.

ITEM 1A.    RISK FACTORS

Item 1A, Risk Factors, of our Form 10-K for the year ended December 31, 2020 includes a detailed discussion of our risk factors.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.    OTHER INFORMATION

Financial Results

On May 6, 2021, EchoStar issued a press release (the “Press Release”) announcing its financial results for the quarter ended March 31, 2021. A copy of the Press Release is furnished herewith as Exhibit 99.1. The foregoing information, including the exhibit related thereto, is furnished in response to Item 2.02 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or otherwise, and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act, except as otherwise expressly stated in any such filing.

ITEM 6.    EXHIBITS

Exhibit No.	Description
31.1 (H)	Section 302 Certification of Chief Executive Officer.
31.2 (H)	Section 302 Certification of Chief Financial Officer.
32.1 (H)	Section 906 Certifications of Chief Executive Officer and Chief Financial Officer.
99.1 (I)	Press release dated May 6, 2021 issued by EchoStar Corporation regarding financial results for the period ended March 31, 2021.
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.

52

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

		HUGHES SATELLITE SYSTEMS CORPORATION
Date: May 6, 2021	By:	/s/ Michael T. Dugan
		Michael T. Dugan
		Chief Executive Officer, President and Director
		(Principal Executive Officer)
Date: May 6, 2021	By:	/s/ David J. Rayner
		David J. Rayner
		Executive Vice President, Chief Financial Officer, Chief Operating Officer and Treasurer
		(Principal Financial and Accounting Officer)

53

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Section 302 Certification

I, Michael T. Dugan, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Hughes Satellite Systems Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    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;

b)    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;

c)    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

d)    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

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    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

b)    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.

Date: May 6, 2021
By:	/s/ Michael T. Dugan
Name:	Michael T. Dugan
Title:	Chief Executive Officer, President and Director
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Section 302 Certification

I, David J. Rayner, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Hughes Satellite Systems Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    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;

b)    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;

c)    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

d)    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

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    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

b)    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. 

Date: May 6, 2021
By:	/s/ David J. Rayner
Name:	David J. Rayner
Title:	Executive Vice President, Chief Financial Officer, Chief Operating Officer and Treasurer
	(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS OFCHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

Section 906 Certifications

In connection with the quarterly report for the quarter ended March 31, 2021 on Form 10-Q (the “Report”), of Hughes Satellite Systems Corporation (the “Company”) as filed with the Securities and Exchange Commission on the date hereof, we, Michael T. Dugan and David J. Rayner, Chief Executive Officer and Chief Financial Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

(i)    the Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934; and

(ii)    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

Date: May 6, 2021
By:	/s/ Michael T. Dugan
Name:	Michael T. Dugan
Title:	Chief Executive Officer, President and Director
	(Principal Executive Officer)
By:	/s/ David J. Rayner
Name:	David J. Rayner
Title:	Executive Vice President, Chief Financial Officer, Chief Operating Officer and Treasurer
	(Principal Financial and Accounting Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS BEEN PROVIDED TO THE COMPANY AND WILL BE RETAINED BY THE COMPANY AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.

EX-99.1

Exhibit 99.1

EchoStar Announces Financial Results for the Three Months Ended March 31, 2021

Englewood, CO, May 6, 2021—EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three months ended March 31, 2021.

Three Months Ended March 31, 2021 Financial Highlights:

•Consolidated revenues of $482.6 million.

•Net income of $77.6 million, consolidated net income attributable to EchoStar common stock of $78.5 million, and basic and diluted earnings per share of $0.84.

•Consolidated Adjusted EBITDA of $185.7 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

“I am pleased with the company’s financial performance in the first quarter of 2021,” commented Michael Dugan, CEO and President of EchoStar. “We grew revenue, net income, and Adjusted EBITDA over the same period last year by focusing on meeting our customers’ needs for connectivity and prudently managing all areas of the business.”

Three Months Ended March 31, 2021 - Additional Information:

•Consolidated revenue increased 3.6% or $16.9 million year over year primarily driven by higher sales of broadband services to our consumer customers. This increase included an estimated negative foreign exchange impact of $5.9 million.

•Adjusted EBITDA increased 25% or $37.1 million year over year.

◦Hughes segment Adjusted EBITDA increased $39.7 million year over year. The increase was driven primarily by the higher gross margin associated with the growth in our consumer broadband service revenue and lower selling, general and administrative expenses.

◦ESS segment Adjusted EBITDA was essentially flat year over year.

◦Corporate and Other segment Adjusted EBITDA decreased by $2.5 million year over year. The decrease was primarily due to lower equity in earnings of unconsolidated affiliates, net, and higher legal expense.

•Net income increased $135.3 million to $77.6 million. The increase was primarily due to higher operating income of $42.9 million and higher gains on investments, net, of $125.3 million, partially offset by higher income tax expense, net, of $29.6 million.

•Total Hughes broadband subscribers are approximately 1,553,000 as of March 31, 2021. Subscribers in the US decreased by 25,000 to approximately 1,164,000. In Latin America, subscribers increased by 14,000 to approximately 389,000.

•For the three months ended March 31, 2021, approximately 70% of Hughes segment revenue was attributable to our consumer customers with approximately 30% attributable to our enterprise customers.

•Cash, cash equivalents and current marketable investment securities were $2.3 billion as of March 31, 2021.

•For the three months ended March 31, 2021, we purchased 4,770,714 shares of our Class A common stock in open market trades.

•For the three months ended March 31, 2021, we purchased $90.5 million of our 7.625% Sr. Unsecured Notes due June 2021 in open market trades.

    1

Set forth below is a table highlighting certain of EchoStar’s segment results for the three months ended March 31, 2021 and 2020 (amounts in thousands) (all US GAAP amounts reference results from operations):

	For the three months ended March 31,
	2021		2020
Revenue
Hughes	$	475,859	$	458,482
EchoStar Satellite Services	4,089		4,652
Corporate and Other	2,634		2,532
Total revenue	$	482,582	$	465,666
Adjusted EBITDA
Hughes	$	201,937	$	162,219
EchoStar Satellite Services	1,919		2,030
Corporate & Other:
Corporate overhead, operating and other	(21,468)		(20,124)
Equity in earnings (losses) of unconsolidated affiliates, net	3,353		4,512
Total Corporate & Other	(18,115)		(15,612)
Total Adjusted EBITDA	$	185,741	$	148,637
Net income (loss)	$	77,572	$	(57,737)
Expenditures for property and equipment	$	179,235	$	104,604

    2

Reconciliation of GAAP to Non-GAAP Measurement (amounts in thousands):

	For the three months ended March 31,
	2021		2020
Net income (loss)	$	77,572	$	(57,737)
Interest income, net	(5,949)		(15,583)
Interest expense, net of amounts capitalized	34,667		36,233
Income tax provision (benefit), net	22,147		(7,492)
Depreciation and amortization	129,286		132,368
Net loss (income) attributable to non-controlling interests	947		3,442
EBITDA	258,670		91,231
(Gains) losses on investments, net	(78,600)		46,672
Impairment of long-lived assets	230		—
License fee dispute - India, net of non-controlling interests	(210)		(110)
Loss on Debt Repurchase	1,582		—
Foreign currency transaction (gains) losses, net	4,069		10,844
Adjusted EBITDA	$	185,741	$	148,637

Note on Use of Non-GAAP Financial Measures

EBITDA is defined as “Net income (loss)” excluding “Interest income, net,” Interest expense, net of amounts capitalized,” “Income tax benefit (provision), net,” “Depreciation and amortization,” and “Net income (loss) attributable to non-controlling interests.”

Adjusted EBITDA is defined as EBITDA excluding Gains and losses on investments, net, Foreign currency transaction gains (losses), net, and other non-recurring or non-operational items. EBITDA and Adjusted EBITDA are not measures determined in accordance with US GAAP. EBITDA and Adjusted EBITDA are reconciled to Net income (loss) in the table above and should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with US GAAP. Our management uses EBITDA and Adjusted EBITDA as measures of our operating efficiency and overall financial performance for benchmarking against our peers and competitors. Management believes that these non-GAAP measures provide meaningful supplemental information regarding the underlying operating performance of our business and are appropriate to enhance an overall understanding of our financial performance. Management also believes that EBITDA and Adjusted EBITDA are useful to investors because they are frequently used by securities analysts, investors, and other interested parties to evaluate the performance of companies in our industry.

The consolidated financial statements of EchoStar for the periods ended March 31, 2021 and 2020 are attached to this press release. Detailed financial data and other information are available in EchoStar’s Quarterly Report on Form 10-Q for the period ended March 31, 2021 filed today with the Securities and Exchange Commission.

EchoStar will host a conference call to discuss its earnings on Thursday, May 6, 2021 at 11:00 a.m. Eastern Time. The conference call will be broadcast live in listen-only mode on EchoStar’s investor relations website at ir.echostar.com. To ask a question, the dial in numbers are (833) 562-0124 (toll-free) and (661) 567-1102 (international), Conference ID 1976218.

    3

About EchoStar Corporation

EchoStar Corporation (NASDAQ: SATS) is a premier global provider of satellite communications solutions. Headquartered in Englewood, Colo., and conducting business around the globe, EchoStar is a pioneer in secure communications technologies through its Hughes Network Systems and EchoStar Satellite Services business segments.

Safe Harbor Statement under the US Private Securities Litigation Reform Act of 1995

This press release may contain statements that are forward looking, as that term is defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. When used in this release, the words “believe,” “anticipate,” “goal,” “seek,” “estimate,” “expect,” “intend,” “project,” “continue,” “future,” “will,” “would,” “can,” “may,” “plans,” and similar expressions and the use of future dates are intended to identify forward‑looking statements. Although management believes that the expectations reflected in these forward‑looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. We assume no responsibility for the accuracy of forward-looking statements or information or for updating forward-looking information or statements. These statements are subject to certain risks, uncertainties, and assumptions. See “Risk Factors” in EchoStar’s Annual Report on Form 10-K for the period ended December 31, 2020 as filed with the Securities and Exchange Commission and in the other documents EchoStar files with the Securities and Exchange Commission from time to time.

###

Contact Information

EchoStar Investor Relations	EchoStar Media Relations
Terry Brown Phone: +1 303-728-5179 Email: terry.brown@echostar.com	Sharyn Nerenberg Phone: +1 301-428-7124 Email: sharyn.nerenberg@echostar.com

    4

ECHOSTAR CORPORATION

Consolidated Balance Sheets

(Amounts in thousands, except share and per share amounts)

	As of
	March 31, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	1,583,747	$	896,005
Marketable investment securities	735,418		1,638,271
Trade accounts receivable and contract assets, net	187,280		183,989
Other current assets, net	190,958		189,821
Total current assets	2,697,403		2,908,086
Non-current assets:
Property and equipment, net	2,420,917		2,390,313
Operating lease right-of-use assets	131,601		128,303
Goodwill	510,945		511,597
Regulatory authorizations, net	476,092		478,762
Other intangible assets, net	16,316		18,433
Other investments, net	347,615		284,937
Other non-current assets, net	350,920		352,921
Total non-current assets	4,254,406		4,165,266
Total assets	$	6,951,809	$	7,073,352
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable	$	106,500	$	122,366
Current portion of long-term debt, net	808,758		898,237
Contract liabilities	112,507		104,569
Accrued expenses and other current liabilities	304,018		299,999
Total current liabilities	1,331,783		1,425,171
Non-current liabilities:
Long-term debt, net	1,495,436		1,495,256
Deferred tax liabilities, net	378,271		359,896
Operating lease liabilities	118,569		114,886
Other non-current liabilities	69,885		70,893
Total non-current liabilities	2,062,161		2,040,931
Total liabilities	3,393,944		3,466,102
Commitments and contingencies

    5

ECHOSTAR CORPORATION

Consolidated Balance Sheets

(Amounts in thousands, except share and per share amounts)

Stockholders' equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at both March 31, 2021 and December 31, 2020	—		—
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, 57,712,888 shares issued and 44,551,347 shares outstanding at March 31, 2021 and 57,254,201 shares issued and 48,863,374 shares outstanding at December 31, 2020	58		57
Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at both March 31, 2021 and December 31, 2020	48		48
Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both March 31, 2021 and December 31, 2020	—		—
Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both March 31, 2021 and December 31, 2020	—		—
Additional paid-in capital	3,333,047		3,321,426
Accumulated other comprehensive income (loss)	(215,476)		(187,876)
Accumulated earnings (losses)	662,110		583,591
Treasury shares, at cost	(285,681)		(174,912)
Total EchoStar Corporation stockholders' equity	3,494,106		3,542,334
Non-controlling interests	63,759		64,916
Total stockholders' equity	3,557,865		3,607,250
Total liabilities and stockholders' equity	$	6,951,809	$	7,073,352

    6

ECHOSTAR CORPORATION

Consolidated Statements of Operations

(Amounts in thousands, except per share amounts)

	For the three months ended March 31,
	2021		2020
Revenue:
Services and other revenue	$	430,337	$	408,357
Equipment revenue	52,245		57,309
Total revenue	482,582		465,666
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)	132,789		145,252
Cost of sales - equipment (exclusive of depreciation and amortization)	45,151		45,908
Selling, general and administrative expenses	114,119		125,281
Research and development expenses	7,545		6,254
Depreciation and amortization	129,286		132,368
Impairment of long-lived assets	230		—
Total costs and expenses	429,120		455,063
Operating income (loss)	53,462		10,603
Other income (expense):
Interest income, net	5,949		15,583
Interest expense, net of amounts capitalized	(34,667)		(36,233)
Gains (losses) on investments, net	78,600		(46,672)
Equity in earnings (losses) of unconsolidated affiliates, net	1,374		2,613
Foreign currency transaction gains (losses), net	(4,069)		(10,844)
Other, net	(930)		(279)
Total other income (expense), net	46,257		(75,832)
Income (loss) before income taxes	99,719		(65,229)
Income tax benefit (provision), net	(22,147)		7,492
Net income (loss)	77,572		(57,737)
Less: Net loss (income) attributable to non-controlling interests	947		3,442
Net income (loss) attributable to EchoStar Corporation common stock	$	78,519	$	(54,295)
Earnings (losses) per share - Class A and B common stock:
Basic and diluted earnings (losses) per share	$	0.84	$	(0.56)

    7

ECHOSTAR CORPORATION

Consolidated Statements of Cash Flows

(Amounts in thousands)

	For the three months ended March 31,
	2021		2020
Cash flows from operating activities:
Net income (loss)	$	77,572	$	(57,737)
Adjustments to reconcile net income (loss) to cash flows provided by (used for) operating activities:
Depreciation and amortization	129,286		132,368
Impairment of long-lived assets	230		—
Losses (gains) on investments, net	(78,600)		46,672
Equity in losses (earnings) of unconsolidated affiliates, net	(1,374)		(2,613)
Foreign currency transaction losses (gains), net	4,069		10,844
Deferred tax provision (benefit), net	18,370		(10,064)
Stock-based compensation	2,011		2,384
Amortization of debt issuance costs	1,118		1,050
Other, net	11,551		(4,899)
Changes in assets and liabilities, net:
Trade accounts receivable and contract assets, net	(6,090)		(7,664)
Other current assets, net	(1,736)		(16,127)
Trade accounts payable	(18,375)		(9,559)
Contract liabilities	7,938		(3,212)
Accrued expenses and other current liabilities	(27,447)		(4,922)
Non-current assets and non-current liabilities, net	(1,636)		(5,226)
Net cash provided by (used for) operating activities	116,887		71,295
Cash flows from investing activities:
Purchases of marketable investment securities	(389,071)		(550,891)
Sales and maturities of marketable investment securities	1,361,632		687,579
Expenditures for property and equipment	(179,235)		(104,604)
Expenditures for externally marketed software	(7,846)		(8,638)
Purchase of other investments	(50,000)		(5,500)
Sales of other investments	1,500		—
Net cash provided by (used for) investing activities	736,980		17,946
Cash flows from financing activities:
Repurchase of the 2021 Senior Unsecured Notes	(62,588)		—
Payment of finance lease obligations	(329)		(215)
Payment of in-orbit incentive obligations	(1,104)		(801)
Net proceeds from Class A common stock options exercised	—		150
Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan	2,486		2,924
Treasury share repurchase	(107,862)		(5,893)
Contribution by non-controlling interest holder	5,400		4,000
Other, net	(292)		817
Net cash provided by (used for) financing activities	(164,289)		982
Effect of exchange rates on cash and cash equivalents	(1,808)		(4,809)
Net increase (decrease) in cash and cash equivalents	687,770		85,414
Cash and cash equivalents, including restricted amounts, beginning of period	896,812		1,521,889
Cash and cash equivalents, including restricted amounts, end of period	$	1,584,582	$	1,607,303

    8

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2021	Apr. 29, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	333-179121
Entity Registrant Name	Hughes Satellite Systems Corporation
Entity Incorporation, State or Country Code	CO
Entity Tax Identification Number	45-0897865
Entity Address, Address Line One	100 Inverness Terrace East,
Entity Address, City or Town	Englewood,
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80112-5308
City Area Code	(303)
Local Phone Number	706-4000
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Emerging Growth Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1,078
Entity Central Index Key	0001533758
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 1,403,926	$ 740,490
Marketable investment securities	515,306	1,203,296
Trade accounts receivable and contract assets, net	187,272	183,988
Other current assets, net	286,689	291,815
Total current assets	2,393,193	2,419,589
Non-current assets:
Property and equipment, net	1,631,221	1,691,523
Operating lease right-of-use assets	131,452	128,266
Goodwill	510,945	511,597
Regulatory authorizations, net	409,960	410,451
Other investments, net	102,163	103,924
Other non-current assets, net	302,416	307,677
Total non-current assets	3,104,403	3,171,778
Total assets	5,497,596	5,591,367
Current liabilities:
Trade accounts payable	104,683	118,568
Current portion of long-term debt, net	808,758	898,237
Contract liabilities	112,507	104,569
Accrued expenses and other current liabilities	328,316	325,587
Total current liabilities	1,354,264	1,446,961
Non-current liabilities:
Long-term debt, net	1,495,436	1,495,256
Deferred tax liabilities, net	376,366	369,940
Operating lease liabilities	118,452	114,877
Other non-current liabilities	86,642	87,957
Total non-current liabilities	2,076,896	2,068,030
Total liabilities	3,431,160	3,514,991
Commitments and contingencies
Shareholder's equity:
Preferred stock, $0.001 par value,1,000,000 shares authorized, none issued and outstanding at both March 31, 2021 and December 31, 2020	0	0
Common stock, $0.01 par value, 1,000,000 shares authorized, 1,078 shares issued and outstanding at both March 31, 2021 and December 31, 2020	0	0
Additional paid-in capital	1,487,590	1,486,730
Accumulated other comprehensive income (loss)	(175,060)	(146,840)
Accumulated earnings (losses)	690,147	671,570
Total Hughes Satellite Systems Corporation shareholder's equity	2,002,677	2,011,460
Non-controlling interests	63,759	64,916
Total shareholder's equity	2,066,436	2,076,376
Total liabilities and shareholder's equity	5,497,596	5,591,367
Regulatory authorization
Non-current assets:
Regulatory authorizations, net	409,960	410,451
Other intangible assets, net	9,960	10,451
Other Intangible Assets
Non-current assets:
Other intangible assets, net	$ 16,246	$ 18,340

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Shareholder's equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred Stock, shares issued (in shares)	0	0
Preferred Stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000,000	1,000,000
Common stock, shares issued (in shares)	1,078	1,078
Common stock, shares outstanding (in shares)	1,078	1,078

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue:
Total revenue	$ 485,230	$ 467,547
Costs and expenses:
Selling, general and administrative expenses	104,370	115,860
Research and development expenses	7,545	6,254
Depreciation and amortization	122,664	125,965
Impairment of long-lived assets	210	0
Total costs and expenses	411,341	437,872
Operating income (loss)	73,889	29,675
Other income (expense):
Interest income	2,394	8,892
Interest expense, net of amounts capitalized	(41,922)	(42,192)
Gains (losses) on investments, net	0	(164)
Equity in earnings (losses) of unconsolidated affiliates, net	(1,761)	(1,087)
Foreign currency transaction gains (losses), net	(3,360)	(7,528)
Other, net	(973)	(278)
Total other income (expense), net	(45,622)	(42,357)
Income (loss) before income taxes	28,267	(12,682)
Total income tax benefit (provision), net	(10,637)	(5,231)
Net income (loss)	17,630	(17,913)
Less: Net loss (income) attributable to non-controlling interests	947	3,442
Net income (loss) attributable to HSSC	18,577	(14,471)
Services and other revenue
Revenue:
Total revenue	432,991	410,238
Costs and expenses:
Cost of sales	131,412	143,885
Total equipment revenue
Revenue:
Total revenue	52,239	57,309
Costs and expenses:
Cost of sales	$ 45,140	$ 45,908

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 17,630	$ (17,913)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(33,742)	(82,836)
Unrealized gains (losses) on available-for-sale securities	(88)	(2,479)
Other	0	(405)
Total other comprehensive income (loss), net of tax	(33,830)	(85,720)
Comprehensive income (loss)	(16,200)	(103,633)
Less: Comprehensive loss (income) attributable to non-controlling interests	6,557	19,765
Comprehensive income (loss) attributable to HSSC	$ (9,643)	$ (83,868)

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjusted Balance	Additional Paid-In Capital	Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjusted Balance	Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) Cumulative Effect, Period of Adoption, Adjusted Balance	Accumulated Earnings (Losses)	Accumulated Earnings (Losses) Cumulative Effect, Period of Adoption, Adjustment	Accumulated Earnings (Losses) Cumulative Effect, Period of Adoption, Adjusted Balance	Non-controlling Interests	Non-controlling Interests Cumulative Effect, Period of Adoption, Adjustment	Non-controlling Interests Cumulative Effect, Period of Adoption, Adjusted Balance
Beginning balance at Dec. 31, 2019	$ 2,134,163	$ (2,409)	$ 2,131,754	$ 1,478,636	$ 1,478,636	$ (84,636)	$ (84,636)	$ 664,415	$ (2,169)	$ 662,246	$ 75,748	$ (240)	$ 75,508
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	1,457			1,457
Issuance of equity and contribution of assets pursuant to the Yahsat JV formation	2,824			4,338							(1,514)
Contribution by non-controlling interest holder	4,000										4,000
Other comprehensive income (loss)	(85,720)					(69,397)					(16,323)
Net income (loss)	(17,913)							(14,471)			(3,442)
Other, net	(684)			(684)
Ending balance at Mar. 31, 2020	2,035,718			1,483,747		(154,033)		647,775			58,229
Beginning balance at Dec. 31, 2020	2,076,376			1,486,730		(146,840)		671,570			64,916
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	860			860
Contribution by non-controlling interest holder	5,400										5,400
Other comprehensive income (loss)	(33,830)					(28,220)					(5,610)
Net income (loss)	17,630							18,577			(947)
Ending balance at Mar. 31, 2021	$ 2,066,436			$ 1,487,590		$ (175,060)		$ 690,147			$ 63,759

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net income (loss)	$ 17,630	$ (17,913)
Adjustments to reconcile net income (loss) to cash flows provided by (used for) operating activities:
Depreciation and amortization	122,664	125,965
Impairment of long-lived assets	210	0
Losses (gains) on investments, net	0	164
Equity in losses (earnings) of unconsolidated affiliates, net	1,761	1,087
Foreign currency transaction losses (gains), net	3,360	7,528
Deferred tax provision (benefit), net	6,584	1,526
Stock-based compensation	860	1,457
Amortization of debt issuance costs	1,118	1,050
Other, net	10,981	(810)
Changes in assets and liabilities, net:
Trade accounts receivable and contract assets, net	(6,078)	(8,162)
Other current assets, net	1,826	(21,268)
Trade accounts payable	(15,484)	(10,984)
Contract liabilities	7,938	(3,213)
Accrued expenses and other current liabilities	(33,091)	(5,007)
Non-current assets and non-current liabilities, net	1,170	(6,196)
Net cash provided by (used for) operating activities	121,449	65,224
Cash flows from investing activities:
Purchases of marketable investment securities	(310,528)	(365,877)
Sales and maturities of marketable investment securities	1,003,198	490,020
Expenditures for property and equipment	(82,196)	(91,517)
Expenditures for externally marketed software	(7,846)	(8,638)
Net cash provided by (used for) investing activities	602,628	23,988
Cash flows from financing activities:
Repurchase of the 2021 Senior Unsecured Notes	(62,588)	0
Payment of finance lease obligations	(329)	(215)
Payment of in-orbit incentive obligations	(1,104)	(203)
Contribution by non-controlling interest holder	5,400	4,000
Other, net	(292)	979
Net cash provided by (used for) financing activities	(58,913)	4,561
Effect of exchange rates on cash and cash equivalents	(1,700)	(4,618)
Net increase (decrease) in cash and cash equivalents	663,464	89,155
Cash and cash equivalents, including restricted amounts, beginning of period	741,297	1,140,322
Cash and cash equivalents, including restricted amounts, end of period	$ 1,404,761	$ 1,229,477

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Organization and Business Activities

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND BUSINESS ACTIVITIES

ORGANIZATION AND BUSINESS ACTIVITIES

Principal Business

Hughes Satellite Systems Corporation (which, together with its subsidiaries, is referred to as “HSSC,” the “Company,” “we,” “us” and “our”) is a holding company and a subsidiary of EchoStar Corporation (“EchoStar”). We are a global provider of broadband satellite technologies, broadband internet services for consumer customers, which include home and small to medium-sized businesses, and satellite services. We also deliver innovative network technologies, managed services and communications solutions for enterprise customers, which include aeronautical and government enterprises. We operate in the following two business segments:

•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.

Our operations also include various corporate departments (primarily Executive, Treasury, Strategic Development, Human Resources, Information Technology, Finance, Accounting, Real Estate and Legal) and other activities, such as costs incurred in certain satellite development programs and other business development activities, and gains or losses from certain of our investments, that have not been assigned to our business segments. These activities, costs and income, as well as eliminations of intersegment transactions, are accounted for in Corporate and Other in our segment reporting. We also divide our operations by primary geographic market as follows: (i) North America (the U.S. and its territories, Mexico, and Canada); (ii) South and Central America and (iii) Other (Asia, Africa, Australia, Europe, India, and the Middle East). Refer to Note 14. Segment Reporting for further detail.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These unaudited Consolidated Financial Statements and the accompanying notes (collectively, the “Consolidated Financial Statements”) are prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required for complete financial statements prepared in conformity with U.S. GAAP. In our opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. However, our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.

All amounts presented in these Consolidated Financial Statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted.

Refer to Note 2. Summary of Significant Accounting Policies to the consolidated financial statements in our Form 10-K for a summary and discussion of our significant accounting policies, except as updated below.

Use of Estimates

We are required to make certain estimates and assumptions that affect the amounts reported in these Consolidated Financial Statements. The most significant estimates and assumptions are used in determining: (i) inputs used to recognize revenue over time, including amortization periods for deferred contract acquisition costs; (ii) allowances

for doubtful accounts; (iii) deferred taxes and related valuation allowances, including uncertain tax positions; (iv) loss contingencies; (v) fair value of financial instruments; (vi) fair value of assets and liabilities acquired in business combinations; and (vii) asset impairment testing.

We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts and such differences may be material to our financial statements. Additionally, changing economic conditions may increase the inherent uncertainty in the estimates and assumptions indicated above. We review our estimates and assumptions periodically and the effects of revisions thereto are reflected in the period they occur or prospectively if the revised estimate affects future periods.

Principles of Consolidation

We consolidate all entities in which we have a controlling financial interest. We are deemed to have a controlling financial interest in variable interest entities in which we are the primary beneficiary and in other entities in which we own more than 50% of the outstanding voting shares and other shareholders do not have substantive rights to participate in management. For entities we control but do not wholly own, we record a non-controlling interest within shareholder’s equity for the portion of the entity’s equity attributed to the non-controlling ownership interests. All significant intercompany balances and transactions have been eliminated in consolidation.

Recently Adopted Accounting Pronouncements

On January 1, 2021, we adopted Accounting Standard Update (“ASU”) No. 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 is part of the Financial Accounting Standards Board (“FASB”) overall simplification initiative and seeks to simplify the accounting for income taxes by updating certain guidance and removing certain exceptions. Our adoption of this ASU did not have a material impact on our Consolidated Financial Statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. The guidance may be applied upon issuance of ASC 848 through December 31, 2022. We expect to utilize the optional expedients provided by the guidance for contracts amended solely to use an alternative reference rate. We have evaluated the impact of adopting this new guidance and do not expect it to have a material impact on our Consolidated Financial Statements.

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Revenue Recognition

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

Contract Balances

The following table presents the components of our contract balances:

	As of
	March 31, 2021		December 31, 2020
Trade accounts receivable and contract assets, net:
Sales and services	$	150,021	$	149,513
Leasing	4,648		4,553
Total trade accounts receivable	154,669		154,066
Contract assets	46,267		45,308
Allowance for doubtful accounts	(13,664)		(15,386)
Total trade accounts receivable and contract assets, net	$	187,272	$	183,988
Contract liabilities:
Current	$	112,507	$	104,569
Non-current	10,357		10,519
Total contract liabilities	$	122,864	$	115,088

The following table presents the revenue recognized in the Consolidated Statement of Operations that was previously included within contract liabilities:

	For the three months ended March 31,
	2021		2020
Revenue	$	63,081	$	52,172

Contract Acquisition Costs

The following table presents the activity in our contract acquisition costs, net:

	For the three months ended March 31,
	2021		2020
Balance at beginning of period	$	99,837	$	113,592
Additions	18,400		26,474
Amortization expense	(22,769)		(25,675)
Foreign currency translation	(875)		(3,994)
Balance at end of period	$	94,593	$	110,397

Performance Obligations

As of March 31, 2021, the remaining performance obligations for our customer contracts with original expected durations of more than one year was $939.7 million. Performance obligations expected to be satisfied within one year and greater than one year are 37% and 63%, respectively. This amount and percentages exclude agreements with consumer customers in our Hughes segment, our leasing arrangements and agreements with certain customers under which collectability of all amounts due through the term of contracts is uncertain.

Disaggregation of Revenue

Geographic Information

The following table presents our revenue from customer contracts disaggregated by primary geographic market and by segment:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended March 31, 2021
North America	$	398,759	$	4,089	$	(88)	$	402,760
South and Central America	43,030		—		—		43,030
Other	34,070		—		5,370		39,440
Total revenue	$	475,859	$	4,089	$	5,282	$	485,230
For the three months ended March 31, 2020
North America	$	382,715	$	4,652	$	(285)	$	387,082
South and Central America	33,956		—		—		33,956
Other	41,811		—		4,698		46,509
Total revenue	$	458,482	$	4,652	$	4,413	$	467,547

Nature of Products and Services

The following table presents our revenue disaggregated by the nature of products and services and by segment:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended March 31, 2021
Services and other revenue:
Services	$	413,519	$	2,690	$	—	$	416,209
Lease revenue	10,101		1,399		5,282		16,782
Total services and other revenue	423,620		4,089		5,282		432,991
Equipment revenue:
Equipment	28,521		—		—		28,521
Design, development and construction services	21,636		—		—		21,636
Lease revenue	2,082		—		—		2,082
Total equipment revenue	52,239		—		—		52,239
Total revenue	$	475,859	$	4,089	$	5,282	$	485,230
For the three months ended March 31, 2020
Services and other revenue:
Services	$	390,000	$	2,765	$	—	$	392,765
Lease revenue	11,173		1,887		4,413		17,473
Total services and other revenue	401,173		4,652		4,413		410,238
Equipment revenue:
Equipment	24,839		—		—		24,839
Design, development and construction services	31,557		—		—		31,557
Lease revenue	913		—		—		913
Total equipment revenue	57,309		—		—		57,309
Total revenue	$	458,482	$	4,652	$	4,413	$	467,547

Lease Revenue

The following table presents our lease revenue by type of lease:

	For the three months ended March 31,
	2021		2020
Sales-type lease revenue:
Revenue at lease commencement	$	2,082	$	913
Interest income	73		69
Total sales-type lease revenue	2,155		982
Operating lease revenue	16,709		17,404
Total lease revenue	$	18,864	$	18,386

Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $13.4 million and $13.0 million as of March 31, 2021 and December 31, 2020, respectively.

The following table presents future operating lease payments to be received as of March 31, 2021:

	Amounts
Year ending December 31,
2021 (remainder)	$	30,433
2022	34,082
2023	32,000
2024	29,740
2025	28,482
2026 and beyond	47,562
Total lease payments	$	202,299

The following table presents amounts for assets subject to operating leases, which are included in Property and equipment, net:

	As of
	March 31, 2021						December 31, 2020
	Cost		Accumulated Depreciation		Net		Cost		Accumulated Depreciation		Net
Customer premises equipment	$	1,737,049	$	(1,370,538)	$	366,511	$	1,706,328	$	(1,317,210)	$	389,118
Satellites	104,620		(40,078)		64,542		104,620		(38,335)		66,285
Total	$	1,841,669	$	(1,410,616)	$	431,053	$	1,810,948	$	(1,355,545)	$	455,403

The following table presents depreciation expense for assets subject to operating leases, which is included in Depreciation and amortization:

	For the three months ended March 31,
	2021		2020
Customer premises equipment	$	60,967	$	49,504
Satellites	1,744		1,744
Total	$	62,711	$	51,248

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Marketable Investment Securities

3 Months Ended

Mar. 31, 2021

Investments, Debt and Equity Securities [Abstract]

MARKETABLE INVESTMENT SECURITIES

MARKETABLE INVESTMENT SECURITIES

The following table presents our Marketable investment securities:

	As of
	March 31, 2021		December 31, 2020
Marketable investment securities:
Available-for-sale debt securities:
Corporate bonds	$	109,598	$	276,361
Commercial paper	327,648		823,173
Other debt securities	78,054		103,756
Total available-for-sale debt securities	515,300		1,203,290
Equity securities	6		6
Total marketable investment securities	$	515,306	$	1,203,296

Debt Securities

Available-for-Sale

The following table presents the components of our available-for-sale debt securities:

	Amortized		Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
As of March 31, 2021
Corporate bonds	$	109,600	$	10	$	(12)	$	109,598
Commercial paper	327,648		—		—		327,648
Other debt securities	78,108		2		(56)		78,054
Total available-for-sale debt securities	$	515,356	$	12	$	(68)	$	515,300
As of December 31, 2020
Corporate bonds	$	276,327	$	59	$	(25)	$	276,361
Commercial paper	823,173		—		—		823,173
Other debt securities	103,758		3		(5)		103,756
Total available-for-sale debt securities	$	1,203,258	$	62	$	(30)	$	1,203,290

The following table presents the activity on our available-for-sale debt securities:

	For the three months ended March 31,
	2021		2020
Proceeds from sales	$	95,765	$	10,000

As of March 31, 2021, we have $491.2 million of available-for-sale debt securities with contractual maturities of one year or less and $24.1 million with contractual maturities greater than one year. 

Equity Securities

The following table presents the activity of our equity securities:

	For the three months ended March 31,
	2021		2020
Gains (losses) on investments, net	$	—	$	(164)

Fair Value Measurements

The following table presents our marketable investment securities categorized by the fair value hierarchy, certain of which have historically experienced volatility:

	Level 1		Level 2		Total
As of March 31, 2021
Cash equivalents (including restricted)	$	508	$	1,317,529	$	1,318,037
Available-for-sale debt securities:
Corporate bonds	$	—	$	109,598	$	109,598
Commercial paper	—		327,648		327,648
Other debt securities	32,498		45,556		78,054
Total available-for-sale debt securities	32,498		482,802		515,300
Equity securities	6		—		6
Total marketable investment securities	$	32,504	$	482,802	$	515,306
As of December 31, 2020
Cash equivalents (including restricted)	$	128	$	654,853	$	654,981
Available-for-sale debt securities:
Corporate bonds	$	—	$	276,361	$	276,361
Commercial paper	—		823,173		823,173
Other debt securities	95,497		8,259		103,756
Total available-for-sale debt securities	95,497		1,107,793		1,203,290
Equity securities	6		—		6
Total marketable investment securities	$	95,503	$	1,107,793	$	1,203,296

As of March 31, 2021 and December 31, 2020, we did not have any investments that were categorized within Level 3 of the fair value hierarchy.

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Property and Equipment

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

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

	As of
	March 31, 2021		December 31, 2020
Property and equipment, net:
Satellites, net	$	919,813	$	954,559
Other property and equipment, net	711,408		736,964
Total property and equipment, net	$	1,631,221	$	1,691,523

Satellites

As of March 31, 2021, our operating satellite fleet consisted of eight satellites, five of which are owned and three of which are leased. They are all in geosynchronous orbit, approximately 22,300 miles above the equator.

The following table presents our operating satellite fleet as of March 31, 2021 which consists of both owned and leased satellites:

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
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 its acquisition of Hughes Communications, Inc. and its subsidiaries (the “Hughes Acquisition”).

(2) Upon consummation of our joint venture with 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.

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

	Depreciable Life (In Years)	As of
		March 31, 2021		December 31, 2020
Satellites, net:
Satellites - owned	7 to 15	$	1,500,070	$	1,503,596
Satellites - acquired under finance leases	15	352,261		352,245
Total satellites		1,852,331		1,855,841
Accumulated depreciation:
Satellites - owned		(855,104)		(827,274)
Satellites - acquired under finance leases		(77,414)		(74,008)
Total accumulated depreciation		(932,518)		(901,282)
Total satellites, net		$	919,813	$	954,559

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

	For the three months ended March 31,
	2021		2020
Depreciation expense:
Satellites - owned	$	27,068	$	27,068
Satellites - acquired under finance leases	7,201		6,013
Total depreciation expense	$	34,269	$	33,081

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

	For the three months ended March 31,
	2021		2020
Capitalized interest	$	1,246	$	637

Satellite-Related Commitments

As of March 31, 2021 and December 31, 2020 our satellite-related commitments were $215.1 million and $224.4 million, respectively. These primarily include payments pursuant to regulatory authorizations, non-lease costs associated with our finance lease satellites, in-orbit incentives relating to certain satellites and commitments for satellite service arrangements.

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

Satellite Anomalies and Impairments

We are not aware of any anomalies with respect to our owned or leased satellites or payloads that have had any significant adverse effect on their remaining useful lives, the commercial operation of the satellites or payloads or our operating results or financial position as of and for the three months ended March 31, 2021.

Fair Value of In-Orbit IncentivesAs of March 31, 2021 and December 31, 2020, the fair values of our in-orbit incentive obligations approximated their carrying amounts of $54.3 million and $55.4 million, respectively.

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Regulatory Authorizations

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

REGULATORY AUTHORIZATIONS

REGULATORY AUTHORIZATIONS

The following table presents our Regulatory authorizations, net:

	Finite lived
	Cost		Accumulated Amortization		Total		Indefinite lived		Total
Balance, December 31, 2019	$	12,524	$	(161)	$	12,363	$	400,000	$	412,363
Amortization expense	—		(100)		(100)		—		(100)
Currency translation adjustments	(1,020)		—		(1,020)		—		(1,020)
Balance, March 31, 2020	$	11,504	$	(261)	$	11,243	$	400,000	$	411,243
Balance, December 31, 2020	$	11,505	$	(1,054)	$	10,451	$	400,000	$	410,451
Amortization expense	—		(208)		(208)		—		(208)
Currency translation adjustments	(321)		38		(283)		—		(283)
Balance, March 31, 2021	$	11,184	$	(1,224)	$	9,960	$	400,000	$	409,960
Weighted-average useful life (in years)			14

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Other Investments

3 Months Ended

Mar. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

OTHER INVESTMENTS

OTHER INVESTMENTS

The following table presents our Other investments, net:

	As of
	March 31, 2021		December 31, 2020
Other investments, net:
Equity method investments	$	94,812	$	96,573
Other equity investments	7,351		7,351
Total other investments, net	$	102,163	$	103,924

Equity Method Investments

Deluxe/EchoStar LLC

We own 50% of Deluxe/EchoStar LLC (“Deluxe”), a joint venture that we entered into in 2010 to build an advanced digital cinema satellite distribution network targeting delivery to digitally equipped theaters in the U.S. and Canada.

Broadband Connectivity Solutions (Restricted) Limited

In August 2018, we entered into an agreement with Yahsat to establish a new entity, Broadband Connectivity Solutions (Restricted) Limited (together with its subsidiaries, “BCS”), to provide commercial Ka-band satellite broadband services across Africa, the Middle East and southwest Asia operating over Yahsat's Al Yah 2 and Al Yah 3 Ka-band satellites. The transaction was consummated in December 2018 when we invested $100.0 million in cash in exchange for a 20% interest in BCS. Under the terms of the agreement, we may also acquire, for further cash investments, additional ownership interests in BCS in the future provided certain conditions are met. We supply network operations and management services and equipment to BCS.

Financial Information for Our Equity Method Investments

The following table presents revenue recognized:

	For the three months ended March 31,
	2021		2020
Deluxe	$	1,631	$	1,255
BCS	$	1,348	$	1,669

The following table presents trade accounts receivable:

	As of
	March 31, 2021		December 31, 2020
Deluxe	$	1,318	$	716
BCS	$	5,043	$	9,347

Other Equity Investments

During the three months ended March 31, 2021 and 2020, we did not identify any observable price changes requiring an adjustment to our investments.

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Long-Term Debt

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

LONG-TERM DEBT

LONG-TERM DEBT

The following table presents the carrying amount and fair values of our Current portion of long-term debt, net and Long-term debt, net:

	Effective Interest Rate	As of
		March 31, 2021				December 31, 2020
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Secured Notes:
5 1/4% Senior Secured Notes due 2026	5.320%	$	750,000	$	830,933	$	750,000	$	834,045
Senior Unsecured Notes:
7 5/8% Senior Unsecured Notes due 2021	8.062%	809,486		821,555		900,000		924,003
6 5/8% Senior Unsecured Notes due 2026	6.688%	750,000		834,383		750,000		852,810
Less: Unamortized debt issuance costs		(5,292)		—		(6,507)		—
Total long-term debt		2,304,194		2,486,871		2,393,493		2,610,858
Less: Current portion, net		(808,758)		(821,555)		(898,237)		(924,003)
Long-term debt, net		$	1,495,436	$	1,665,316	$	1,495,256	$	1,686,855

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Income Taxes

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

Our interim income tax provision and our interim estimate of our annual effective tax rate are influenced by several factors, including foreign losses and capital gains and losses for which related deferred tax assets are partially offset by a valuation allowance, changes in tax laws and relative changes in unrecognized tax benefits. Additionally, our effective tax rate can be affected by the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income or loss is lower.

Our income tax provision was $10.6 million for the three months ended March 31, 2021 compared to $5.2 million for the three months ended March 31, 2020. Our estimated effective income tax rate was 37.6% and (41.2)% for the three months ended March 31, 2021 and 2020, respectively. The variations in our effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2021 were primarily due to excluded foreign losses where the company carries a full valuation allowance. The variations in our effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2020 were primarily due to the increase in our valuation allowance associated with certain foreign losses and the impact of state and local taxes, partially offset by the change in net unrealized losses that are capital in nature and research and experimentation credits.

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Related Party Transactions - Echostar

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS - ECHOSTAR

RELATED PARTY TRANSACTIONS - ECHOSTARThe following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations.

Services and Other Revenue — EchoStar

The following table presents our Services and other revenue from EchoStar:

	For the three months ended March 31,
	2021		2020
Services and other revenue - EchoStar	$	5,371	$	4,699

The following table presents the corresponding related party receivables:

	As of
	March 31, 2021		December 31, 2020
Related party receivables - EchoStar - current	$	114,225	$	116,220
Related party receivables - EchoStar - non-current	54,970		57,136
Total related party receivables - EchoStar	$	169,195	$	173,356

Receivables. EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current. No repayment schedule for these receivables has been determined.

EchoStar Mobile Limited Service Agreements. We provide services and lease equipment to support the business of EchoStar Mobile Limited, a subsidiary of EchoStar that is licensed by the European Union and its member states (“EU”) to provide mobile satellite services and complementary ground component services covering the entire EU using S-band spectrum. Generally, the amounts EchoStar’s other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded revenue in Services and other revenue of $5.4 million and $4.7 million for the three months ended March 31, 2021 and 2020, respectively, related to these services. Additionally, we have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5%, that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current.

Operating Expenses — EchoStar

The following table presents our operating expenses from EchoStar:

	For the three months ended March 31,
	2021		2020
Operating expenses - EchoStar	$	15,387	$	12,642

The following table presents the corresponding related party payables:

	As of
	March 31, 2021		December 31, 2020
Related party payables - EchoStar - current	$	51,396	$	51,420
Related party payables - EchoStar - non-current	24,533		25,114
Total related party payables - EchoStar	$	75,929	$	76,534

Payables. We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current. No repayment schedule for these payables has been determined.

Shared Corporate Services. We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall

each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. Effective March 2017, and as a result of the Share Exchange (as defined below), we implemented a new methodology for determining the cost of these shared corporate services. We and EchoStar, including EchoStar’s other subsidiaries, may each terminate a particular shared corporate service for any reason upon at least 30 days’ notice. We recorded these expenses within Operating expenses - EchoStar for shared corporate services received from EchoStar and its other subsidiaries of $0.4 million and $4.4 million for the three months ended March 31, 2021 and 2020, respectively.

Real Estate. We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy.

Cash Advances. EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our

foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2021 and 2022. Advances under these agreements bear interest at annual rates ranging from one to three percent, subject to periodic adjustment based on the one-year U.S. LIBOR rate. We report amounts payable under these agreements within Related party payables - EchoStar - non-current.

Construction Management Services for EchoStar XXIV satellite. In August 2017, a subsidiary of EchoStar entered into a contract with Maxar Space, LLC (formerly Space Systems/Loral, LLC), for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite, with an expected launch in the second half of 2022. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $0.3 million and $0.3 million for the three months ended March 31, 2021 and 2020, respectively.

Other Agreements

BSS Transaction. Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement (as defined below), and as part of the BSS Transaction (as defined below), we and our subsidiaries transferred certain of the BSS Business (as defined below) to BSS Corp. (as defined below), and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. See Note 1. Organization and Business Activities for further information.

Share Exchange Agreement. Prior to consummation of the Share Exchange, EchoStar was required to complete steps necessary for the transferring of certain assets and liabilities to DISH and certain of its subsidiaries. As part of these steps, subsidiaries of EchoStar that, prior to the consummation of the Share Exchange, owned EchoStar’s business of providing online video delivery and satellite video delivery for broadcasters and pay-TV operators, including satellite uplinking/downlinking, transmission services, signal processing and conditional access management, and other services and related assets and liabilities were contributed to one of our subsidiaries in consideration for additional shares of HSSC’s common stock that were then issued to a subsidiary of EchoStar.RELATED PARTY TRANSACTIONS - DISH NETWORK

Overview

EchoStar Corporation and DISH have operated as separate publicly-traded companies since 2008 (the “Spin-off”). A substantial majority of the voting power of the shares of each of EchoStar Corporation and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family.

In January 2017, EchoStar and certain of its subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries pursuant to which, in February 2017, we received all of the shares of preferred tracking stock previously issued by us and one of our subsidiaries (the “Tracking Stock”), representing an 80% economic interest in the residential retail satellite broadband business of our Hughes segment, in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of our EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). The Tracking Stock was retired in March 2017.

In September 2019, pursuant to a master transaction agreement (the “Master Transaction Agreement”) with DISH and a wholly-owned subsidiary of DISH (“Merger Sub”), (i) we transferred certain real property and the various businesses, products, licenses, technology, revenues, billings, operating activities, assets and liabilities primarily related to the former portion of our ESS segment that managed, marketed and provided (1) broadcast satellite services primarily to DISH and its subsidiaries (“DISH Network”) and our joint venture Dish Mexico, and (2) telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network and a portion of our other businesses (collectively, the “BSS Business”) to one of our former subsidiaries, EchoStar BSS Corporation (“BSS Corp.”), (ii) we distributed to each holder of shares of our Class A or Class B common stock entitled to receive consideration in the transaction an amount of shares of common stock of BSS Corp., par value $0.001 per share (“BSS Common Stock”), equal to one share of BSS Common Stock for each share of our Class A or Class B common stock owned by such stockholder (the “Distribution”); and (iii) immediately after the Distribution, (1) Merger Sub merged with and into BSS Corp. (the “Merger”), such that BSS Corp. became a wholly-owned subsidiary of DISH and with DISH then owning and operating the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”).

In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we, EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network, on the one hand, obtains certain products, services and rights from us, EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future.

The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations.

Services and Other Revenue — DISH Network

The following table presents our Services and other revenue - DISH Network:

	For the three months ended March 31,
	2021		2020
Services and other revenue - DISH Network	$	5,727	$	7,587

The following table presents the related trade accounts receivable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts receivable - DISH Network	$	4,449	$	4,706

Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. Subject to availability, DISH Network generally has the right to continue leasing satellite capacity from us on the EchoStar IX satellite on a month-to-month basis. Telesat Obligation Agreement. In September 2009, we entered into an agreement with Telesat Canada to lease satellite capacity from Telesat Canada on all 32 direct broadcast satellite (“DBS”) transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we entered into an agreement with DISH Network, pursuant to which DISH Network leased satellite capacity from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement (the “DISH Nimiq 5 Agreement”). Under the terms of the DISH Nimiq 5 Agreement, DISH Network made certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service. We transferred the Telesat Transponder Agreement to DISH Network in September 2019 as part of the BSS Transaction; however, we retained certain obligations related to DISH Network’s performance under that agreement and we entered into an agreement with DISH Network whereby DISH Network compensates us for retaining such obligations. TerreStar Agreement. In March 2012, DISH Network completed its acquisition of substantially all the assets of TerreStar Networks Inc. (“TerreStar”). Prior to DISH Network’s acquisition of substantially all the assets of TerreStar and EchoStar’s completion of the Hughes Acquisition, TerreStar and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services for TerreStar’s ground-based communications equipment (the “TerreStar Agreements”). In December 2017, we and DISH Network amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DISH Network generally has the right to continue to receive warranty services from us for our products on a month-to-month basis unless terminated by DISH Network upon at least 21 days’ written notice to us. DISH Network generally has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis unless these services are terminated by DISH Network upon at least 90 days’ written notice to us. The provision of hosting services will continue until May 2022. In addition, DISH Network generally may terminate any and all services for convenience subject to providing us with prior notice and/or payment of termination charges. In March 2020, we entered into an agreement with DISH Network pursuant to which we perform certain work and provide certain credits to amounts owed to us under the TerreStar Agreements in exchange for DISH Network’s granting us rights to use certain satellite capacity under the Amended and Restated Professional Services Agreement (as defined below). As a result, we and DISH Network amended the TerreStar Agreements to suspend our provision of warranty services to DISH Network from April 2020 through December 2020. Following the expiration of this suspension, we have recommenced providing warranty services to DISH Network. Hughes Broadband Distribution Agreement. Effective October 2012, we and DISH Network entered into a distribution agreement (the “Distribution Agreement”) pursuant to which DISH Network has the right, but not the obligation, to market, sell and distribute our Gen 4 HughesNet service. DISH Network pays us a monthly per subscriber wholesale service fee for our Gen 4 HughesNet service based upon a subscriber’s service level and based upon certain volume subscription thresholds. The Distribution Agreement also provides that DISH Network has the right, but not the obligation, to purchase certain broadband equipment from us to support the sale of the Gen 4 HughesNet service. The Distribution Agreement had an initial term of five years with automatic renewal for successive one-year terms unless terminated by either party with a written notice at least 180 days’ before the expiration of the then-current term. In February 2014, we and DISH Network entered into an amendment to the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement until March 2024. Upon expiration or termination of the Distribution Agreement, we and DISH Network will continue to provide our Gen 4 HughesNet service to the then-current DISH Network subscribers pursuant to the terms and conditions of the Distribution Agreement. DBSD North America Agreement. In March 2012, DISH Network completed its acquisition of all of the equity of DBSD North America, Inc. (“DBSD North America”). Prior to DISH Network’s acquisition of DBSD North America and EchoStar’s completion of the Hughes Acquisition, DBSD North America and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services of DBSD North America’s gateway and ground-based communications equipment. In December 2017, we and DBSD North America amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DBSD North America has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis, unless terminated by DBSD North America upon at least 120 days’ written notice to us. In February 2019, we further amended these agreements to provide DBSD North America with the right to continue to receive warranty services from us on a month-to-month basis until December 2023, unless terminated by DBSD North America upon at least 21 days’ written notice to us. The provision of hosting services will continue until February 2022 and will automatically renew for an additional five-year period until February 2027 unless terminated by DBSD North America upon at least 180 days’ written notice to us. In addition, DBSD North America generally may terminate any and all such services for convenience, subject to providing us with prior notice and/or payment of termination charges. Hughes Equipment and Services Agreement. In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days‘ written notice to us or by us with at least 365 days’ written notice to DISH Network.

Operating Expenses — DISH Network

The following table presents our operating expenses related to DISH Network:

	For the three months ended March 31,
	2021		2020
Operating expenses - DISH Network	$	1,099	$	1,137

The following table presents the related trade accounts payable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts payable - DISH Network	$	417	$	477

Amended and Restated Professional Services Agreement.   In connection with the Spin-off, EchoStar entered

into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”).  In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services.  Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the Share Exchange, including access to antennas owned by DISH Network for our use in performing TT&C services and maintenance and support services for our antennas (collectively, the “TT&C Antennas”). In September 2019, in connection with the BSS Transaction, EchoStar and DISH further amended the Professional Services Agreement (the “Amended and Restated Professional Services Agreement”) to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 10. Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 1, 2022 and renews automatically for successive one-year periods thereafter, unless the agreement is terminated earlier by either party upon at least 60 days’ notice.  However, either party may generally terminate the Amended and Restated Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice, unless the statement of work for particular services states otherwise. Certain services provided under the Amended and Restated Professional Services Agreement may survive the termination of the agreement.

Collocation and Antenna Space Agreements. We and DISH Network have entered into an agreement pursuant to which DISH Network provided us with collocation space in El Paso, Texas. This agreement was for an initial period ending in August 2015, and provided us with renewal options for two consecutive three-year terms. Effective August 2015, we exercised our first renewal option for a period ending in August 2018 and in April 2018 we exercised our second renewal option for a period ending in August 2021. In connection with the Share Exchange, effective March 2017, we also entered into certain agreements pursuant to which DISH Network provides collocation and antenna space to EchoStar through February 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; Spokane, Washington; and Englewood, Colorado. In October 2019, we provided a termination notice for our New Braunfels, Texas agreement to be effective May 2020. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. Generally, we may renew our collocation and antenna space agreements for three-year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 180 days’ prior written notice. In September 2019, in connection with the BSS Transaction, we entered into an agreement pursuant to which DISH Network provided us with certain additional collocation space in Cheyenne, Wyoming for a period that ended in September 2020. The fees for the services provided under these agreements depend on the number of racks located at the location.

Also in connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing in August 2020, with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. In March 2021, we entered into additional agreements pursuant to which DISH Network provides us with a gateway, including antenna space in Cheyenne, Wyoming and Gilbert, Arizona. Both agreements are for a period of five years with four three-year

renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term.Hughes Broadband Master Services Agreement.  In conjunction with the launch of our EchoStar XIX satellite, in March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our Gen 5 HughesNet service and related equipment and other telecommunication services and (ii) installs Gen 5 HughesNet service equipment with respect to activations generated by DISH Network.  Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The Hughes Broadband MSA has an initial term of five years through March 2022 with automatic renewal for successive one-year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our Gen 5 HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $1.9 million and $4.6 million for the three months ended March 31, 2021 and 2020, respectively.2019 TT&C Agreement.  In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). The fees for services provided under the 2019 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided.  Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months’ notice.

Other Receivables - DISH Network

Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off.  Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Code, because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar and its subsidiaries will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed.

In light of the Tax Sharing Agreement, among other things, and in connection with EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount of that includes the federal tax benefit DISH received as a result of our operations.

In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network.

Other AgreementsMaster Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) EchoStar completed the Distribution; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by the parties, including EchoStar’s representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities.  EchoStar and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively.BSS Transaction Intellectual Property and Technology License Agreement. Effective September 2019, in connection with the BSS Transaction, we, EchoStar and DISH Network entered into an intellectual property and technology license agreement (the “BSS IPTLA”) pursuant to which we, EchoStar and its other subsidiaries and DISH Network license to each other certain intellectual property and technology. The BSS IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the BSS IPTLA, we, EchoStar and its other subsidiaries granted to DISH Network a license to our and their intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the BSS Business acquired pursuant to the BSS Transaction, including a limited license to use the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks during a transition period.  EchoStar retains full ownership of the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks. In addition, DISH Network granted a license back to us, EchoStar and its other subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in our, EchoStar and its other subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the BSS Transaction.

BSS Transaction Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries’ with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction.

Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect.

BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except

that EchoStar is responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred to DISH Network in connection with the BSS Transaction.Share Exchange Agreement. In February 2017 EchoStar consummated the Share Exchange, following which EchoStar and certain of its and our subsidiaries no longer operate the transferred EchoStar Technologies businesses and the Tracking Stock was retired and is no longer outstanding and all agreements, arrangements and policy statements with respect to such Tracking Stock terminated and are of no further effect. Pursuant to the Share Exchange Agreement, EchoStar and certain of its and our subsidiaries transferred certain assets, investments in joint ventures, spectrum licenses and real estate properties and DISH Network assumed certain liabilities relating to the transferred assets and businesses. The Share Exchange Agreement contained customary representations and warranties by the parties, including representations by EchoStar related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. EchoStar and DISH Network also agreed to customary indemnification provisions whereby each party indemnifies the other against certain losses with respect to breaches of representations, warranties or covenants and certain liabilities and if certain actions undertaken by EchoStar or DISH causes the transaction to be taxable to the other party after closing. Share Exchange Intellectual Property and Technology License Agreement. Effective March 2017, in connection with the Share Exchange, EchoStar and one of its other subsidiaries and DISH Network entered into an intellectual property and technology license agreement (“IPTLA”) pursuant to which we, EchoStar and its other subsidiaries and DISH Network license to each other certain intellectual property and technology. The IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the IPTLA, we, EchoStar and its other subsidiaries granted to DISH Network a license to our and their intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the businesses acquired pursuant to the Share Exchange, including a limited license to use the “ECHOSTAR” trademark during a transition period.  EchoStar retains full ownership of the “ECHOSTAR” trademark. In addition, DISH Network granted a license back to us, EchoStar and its other subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in our, EchoStar and its other subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the Share Exchange.Share Exchange Tax Matters Agreement. Effective March 2017, in connection with the Share Exchange, EchoStar and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries with respect to taxes of the transferred businesses pursuant to the Share Exchange. Generally, EchoStar is responsible for all tax returns and tax liabilities for the transferred businesses and assets for periods prior to the Share Exchange and DISH Network is responsible for all tax returns and tax liabilities for the transferred businesses and assets from and after the Share Exchange. Both EchoStar and DISH Network made certain tax-related representations and are subject to various tax-related covenants after the consummation of the Share Exchange. Both EchoStar and DISH Network have agreed to indemnify each other if there is a breach of any such tax representation or violation of any such tax covenant and that breach or violation results in the Share Exchange not qualifying for tax free treatment for the other party. In addition, DISH Network has agreed to indemnify EchoStar if the transferred businesses are acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons and such acquisition results in the Share Exchange not qualifying for tax free treatment. The tax matters agreement supplements the Tax Sharing Agreement outlined above which continues in full force and effect.RELATED PARTY TRANSACTIONS - OTHER

Hughes Systique Corporation

We contract with Hughes Systique Corporation (“Hughes Systique”) for software development services. In addition to our approximately 43% ownership in Hughes Systique, Mr. Pradman Kaul, the President of our subsidiary Hughes Communications, Inc. and a member of our board of directors, and his brother, who is the Chief Executive Officer and President of Hughes Systique, own in the aggregate approximately 25%, on an undiluted basis, of Hughes Systique’s outstanding shares as of March 31, 2021. Furthermore, Mr. Pradman Kaul serves on the board of directors of Hughes Systique. Hughes Systique is a variable interest entity and we are considered the primary beneficiary of Hughes Systique due to, among other factors, our ability to direct the activities that most significantly impact the economic performance of Hughes Systique. As a result, we consolidate Hughes Systique’s financial

statements in these Consolidated Financial Statements. TerreStar SolutionsDISH Network owns more than 15% of TerreStar Solutions, Inc. (“TSI”). In May 2018, we and TSI entered into an equipment and services agreement pursuant to which we design, manufacture and install upgraded ground communications network equipment for TSI’s network and provide, among other things, warranty and support services. We recognized revenue of $0.4 million and $2.2 million for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and December 31, 2020, we had $1.5 million and $0.4 million trade accounts receivable from TSI.

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Related Party Transactions

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS - DISH NETWORK

RELATED PARTY TRANSACTIONS - ECHOSTARThe following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations.

Services and Other Revenue — EchoStar

The following table presents our Services and other revenue from EchoStar:

	For the three months ended March 31,
	2021		2020
Services and other revenue - EchoStar	$	5,371	$	4,699

The following table presents the corresponding related party receivables:

	As of
	March 31, 2021		December 31, 2020
Related party receivables - EchoStar - current	$	114,225	$	116,220
Related party receivables - EchoStar - non-current	54,970		57,136
Total related party receivables - EchoStar	$	169,195	$	173,356

Receivables. EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current. No repayment schedule for these receivables has been determined.

EchoStar Mobile Limited Service Agreements. We provide services and lease equipment to support the business of EchoStar Mobile Limited, a subsidiary of EchoStar that is licensed by the European Union and its member states (“EU”) to provide mobile satellite services and complementary ground component services covering the entire EU using S-band spectrum. Generally, the amounts EchoStar’s other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded revenue in Services and other revenue of $5.4 million and $4.7 million for the three months ended March 31, 2021 and 2020, respectively, related to these services. Additionally, we have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5%, that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current.

Operating Expenses — EchoStar

The following table presents our operating expenses from EchoStar:

	For the three months ended March 31,
	2021		2020
Operating expenses - EchoStar	$	15,387	$	12,642

The following table presents the corresponding related party payables:

	As of
	March 31, 2021		December 31, 2020
Related party payables - EchoStar - current	$	51,396	$	51,420
Related party payables - EchoStar - non-current	24,533		25,114
Total related party payables - EchoStar	$	75,929	$	76,534

Payables. We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current. No repayment schedule for these payables has been determined.

Shared Corporate Services. We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall

each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. Effective March 2017, and as a result of the Share Exchange (as defined below), we implemented a new methodology for determining the cost of these shared corporate services. We and EchoStar, including EchoStar’s other subsidiaries, may each terminate a particular shared corporate service for any reason upon at least 30 days’ notice. We recorded these expenses within Operating expenses - EchoStar for shared corporate services received from EchoStar and its other subsidiaries of $0.4 million and $4.4 million for the three months ended March 31, 2021 and 2020, respectively.

Real Estate. We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy.

Cash Advances. EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our

foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2021 and 2022. Advances under these agreements bear interest at annual rates ranging from one to three percent, subject to periodic adjustment based on the one-year U.S. LIBOR rate. We report amounts payable under these agreements within Related party payables - EchoStar - non-current.

Construction Management Services for EchoStar XXIV satellite. In August 2017, a subsidiary of EchoStar entered into a contract with Maxar Space, LLC (formerly Space Systems/Loral, LLC), for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite, with an expected launch in the second half of 2022. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $0.3 million and $0.3 million for the three months ended March 31, 2021 and 2020, respectively.

Other Agreements

BSS Transaction. Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement (as defined below), and as part of the BSS Transaction (as defined below), we and our subsidiaries transferred certain of the BSS Business (as defined below) to BSS Corp. (as defined below), and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. See Note 1. Organization and Business Activities for further information.

Share Exchange Agreement. Prior to consummation of the Share Exchange, EchoStar was required to complete steps necessary for the transferring of certain assets and liabilities to DISH and certain of its subsidiaries. As part of these steps, subsidiaries of EchoStar that, prior to the consummation of the Share Exchange, owned EchoStar’s business of providing online video delivery and satellite video delivery for broadcasters and pay-TV operators, including satellite uplinking/downlinking, transmission services, signal processing and conditional access management, and other services and related assets and liabilities were contributed to one of our subsidiaries in consideration for additional shares of HSSC’s common stock that were then issued to a subsidiary of EchoStar.RELATED PARTY TRANSACTIONS - DISH NETWORK

Overview

EchoStar Corporation and DISH have operated as separate publicly-traded companies since 2008 (the “Spin-off”). A substantial majority of the voting power of the shares of each of EchoStar Corporation and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family.

In January 2017, EchoStar and certain of its subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries pursuant to which, in February 2017, we received all of the shares of preferred tracking stock previously issued by us and one of our subsidiaries (the “Tracking Stock”), representing an 80% economic interest in the residential retail satellite broadband business of our Hughes segment, in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of our EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). The Tracking Stock was retired in March 2017.

In September 2019, pursuant to a master transaction agreement (the “Master Transaction Agreement”) with DISH and a wholly-owned subsidiary of DISH (“Merger Sub”), (i) we transferred certain real property and the various businesses, products, licenses, technology, revenues, billings, operating activities, assets and liabilities primarily related to the former portion of our ESS segment that managed, marketed and provided (1) broadcast satellite services primarily to DISH and its subsidiaries (“DISH Network”) and our joint venture Dish Mexico, and (2) telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network and a portion of our other businesses (collectively, the “BSS Business”) to one of our former subsidiaries, EchoStar BSS Corporation (“BSS Corp.”), (ii) we distributed to each holder of shares of our Class A or Class B common stock entitled to receive consideration in the transaction an amount of shares of common stock of BSS Corp., par value $0.001 per share (“BSS Common Stock”), equal to one share of BSS Common Stock for each share of our Class A or Class B common stock owned by such stockholder (the “Distribution”); and (iii) immediately after the Distribution, (1) Merger Sub merged with and into BSS Corp. (the “Merger”), such that BSS Corp. became a wholly-owned subsidiary of DISH and with DISH then owning and operating the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”).

In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we, EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network, on the one hand, obtains certain products, services and rights from us, EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future.

The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations.

Services and Other Revenue — DISH Network

The following table presents our Services and other revenue - DISH Network:

	For the three months ended March 31,
	2021		2020
Services and other revenue - DISH Network	$	5,727	$	7,587

The following table presents the related trade accounts receivable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts receivable - DISH Network	$	4,449	$	4,706

Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. Subject to availability, DISH Network generally has the right to continue leasing satellite capacity from us on the EchoStar IX satellite on a month-to-month basis. Telesat Obligation Agreement. In September 2009, we entered into an agreement with Telesat Canada to lease satellite capacity from Telesat Canada on all 32 direct broadcast satellite (“DBS”) transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we entered into an agreement with DISH Network, pursuant to which DISH Network leased satellite capacity from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement (the “DISH Nimiq 5 Agreement”). Under the terms of the DISH Nimiq 5 Agreement, DISH Network made certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service. We transferred the Telesat Transponder Agreement to DISH Network in September 2019 as part of the BSS Transaction; however, we retained certain obligations related to DISH Network’s performance under that agreement and we entered into an agreement with DISH Network whereby DISH Network compensates us for retaining such obligations. TerreStar Agreement. In March 2012, DISH Network completed its acquisition of substantially all the assets of TerreStar Networks Inc. (“TerreStar”). Prior to DISH Network’s acquisition of substantially all the assets of TerreStar and EchoStar’s completion of the Hughes Acquisition, TerreStar and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services for TerreStar’s ground-based communications equipment (the “TerreStar Agreements”). In December 2017, we and DISH Network amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DISH Network generally has the right to continue to receive warranty services from us for our products on a month-to-month basis unless terminated by DISH Network upon at least 21 days’ written notice to us. DISH Network generally has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis unless these services are terminated by DISH Network upon at least 90 days’ written notice to us. The provision of hosting services will continue until May 2022. In addition, DISH Network generally may terminate any and all services for convenience subject to providing us with prior notice and/or payment of termination charges. In March 2020, we entered into an agreement with DISH Network pursuant to which we perform certain work and provide certain credits to amounts owed to us under the TerreStar Agreements in exchange for DISH Network’s granting us rights to use certain satellite capacity under the Amended and Restated Professional Services Agreement (as defined below). As a result, we and DISH Network amended the TerreStar Agreements to suspend our provision of warranty services to DISH Network from April 2020 through December 2020. Following the expiration of this suspension, we have recommenced providing warranty services to DISH Network. Hughes Broadband Distribution Agreement. Effective October 2012, we and DISH Network entered into a distribution agreement (the “Distribution Agreement”) pursuant to which DISH Network has the right, but not the obligation, to market, sell and distribute our Gen 4 HughesNet service. DISH Network pays us a monthly per subscriber wholesale service fee for our Gen 4 HughesNet service based upon a subscriber’s service level and based upon certain volume subscription thresholds. The Distribution Agreement also provides that DISH Network has the right, but not the obligation, to purchase certain broadband equipment from us to support the sale of the Gen 4 HughesNet service. The Distribution Agreement had an initial term of five years with automatic renewal for successive one-year terms unless terminated by either party with a written notice at least 180 days’ before the expiration of the then-current term. In February 2014, we and DISH Network entered into an amendment to the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement until March 2024. Upon expiration or termination of the Distribution Agreement, we and DISH Network will continue to provide our Gen 4 HughesNet service to the then-current DISH Network subscribers pursuant to the terms and conditions of the Distribution Agreement. DBSD North America Agreement. In March 2012, DISH Network completed its acquisition of all of the equity of DBSD North America, Inc. (“DBSD North America”). Prior to DISH Network’s acquisition of DBSD North America and EchoStar’s completion of the Hughes Acquisition, DBSD North America and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services of DBSD North America’s gateway and ground-based communications equipment. In December 2017, we and DBSD North America amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DBSD North America has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis, unless terminated by DBSD North America upon at least 120 days’ written notice to us. In February 2019, we further amended these agreements to provide DBSD North America with the right to continue to receive warranty services from us on a month-to-month basis until December 2023, unless terminated by DBSD North America upon at least 21 days’ written notice to us. The provision of hosting services will continue until February 2022 and will automatically renew for an additional five-year period until February 2027 unless terminated by DBSD North America upon at least 180 days’ written notice to us. In addition, DBSD North America generally may terminate any and all such services for convenience, subject to providing us with prior notice and/or payment of termination charges. Hughes Equipment and Services Agreement. In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days‘ written notice to us or by us with at least 365 days’ written notice to DISH Network.

Operating Expenses — DISH Network

The following table presents our operating expenses related to DISH Network:

	For the three months ended March 31,
	2021		2020
Operating expenses - DISH Network	$	1,099	$	1,137

The following table presents the related trade accounts payable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts payable - DISH Network	$	417	$	477

Amended and Restated Professional Services Agreement.   In connection with the Spin-off, EchoStar entered

into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”).  In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services.  Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the Share Exchange, including access to antennas owned by DISH Network for our use in performing TT&C services and maintenance and support services for our antennas (collectively, the “TT&C Antennas”). In September 2019, in connection with the BSS Transaction, EchoStar and DISH further amended the Professional Services Agreement (the “Amended and Restated Professional Services Agreement”) to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 10. Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 1, 2022 and renews automatically for successive one-year periods thereafter, unless the agreement is terminated earlier by either party upon at least 60 days’ notice.  However, either party may generally terminate the Amended and Restated Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice, unless the statement of work for particular services states otherwise. Certain services provided under the Amended and Restated Professional Services Agreement may survive the termination of the agreement.

Collocation and Antenna Space Agreements. We and DISH Network have entered into an agreement pursuant to which DISH Network provided us with collocation space in El Paso, Texas. This agreement was for an initial period ending in August 2015, and provided us with renewal options for two consecutive three-year terms. Effective August 2015, we exercised our first renewal option for a period ending in August 2018 and in April 2018 we exercised our second renewal option for a period ending in August 2021. In connection with the Share Exchange, effective March 2017, we also entered into certain agreements pursuant to which DISH Network provides collocation and antenna space to EchoStar through February 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; Spokane, Washington; and Englewood, Colorado. In October 2019, we provided a termination notice for our New Braunfels, Texas agreement to be effective May 2020. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. Generally, we may renew our collocation and antenna space agreements for three-year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 180 days’ prior written notice. In September 2019, in connection with the BSS Transaction, we entered into an agreement pursuant to which DISH Network provided us with certain additional collocation space in Cheyenne, Wyoming for a period that ended in September 2020. The fees for the services provided under these agreements depend on the number of racks located at the location.

Also in connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing in August 2020, with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. In March 2021, we entered into additional agreements pursuant to which DISH Network provides us with a gateway, including antenna space in Cheyenne, Wyoming and Gilbert, Arizona. Both agreements are for a period of five years with four three-year

renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term.Hughes Broadband Master Services Agreement.  In conjunction with the launch of our EchoStar XIX satellite, in March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our Gen 5 HughesNet service and related equipment and other telecommunication services and (ii) installs Gen 5 HughesNet service equipment with respect to activations generated by DISH Network.  Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The Hughes Broadband MSA has an initial term of five years through March 2022 with automatic renewal for successive one-year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our Gen 5 HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $1.9 million and $4.6 million for the three months ended March 31, 2021 and 2020, respectively.2019 TT&C Agreement.  In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). The fees for services provided under the 2019 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided.  Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months’ notice.

Other Receivables - DISH Network

Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off.  Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Code, because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar and its subsidiaries will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed.

In light of the Tax Sharing Agreement, among other things, and in connection with EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount of that includes the federal tax benefit DISH received as a result of our operations.

In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network.

Other AgreementsMaster Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) EchoStar completed the Distribution; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by the parties, including EchoStar’s representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities.  EchoStar and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively.BSS Transaction Intellectual Property and Technology License Agreement. Effective September 2019, in connection with the BSS Transaction, we, EchoStar and DISH Network entered into an intellectual property and technology license agreement (the “BSS IPTLA”) pursuant to which we, EchoStar and its other subsidiaries and DISH Network license to each other certain intellectual property and technology. The BSS IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the BSS IPTLA, we, EchoStar and its other subsidiaries granted to DISH Network a license to our and their intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the BSS Business acquired pursuant to the BSS Transaction, including a limited license to use the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks during a transition period.  EchoStar retains full ownership of the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks. In addition, DISH Network granted a license back to us, EchoStar and its other subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in our, EchoStar and its other subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the BSS Transaction.

BSS Transaction Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries’ with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction.

Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect.

BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except

that EchoStar is responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred to DISH Network in connection with the BSS Transaction.Share Exchange Agreement. In February 2017 EchoStar consummated the Share Exchange, following which EchoStar and certain of its and our subsidiaries no longer operate the transferred EchoStar Technologies businesses and the Tracking Stock was retired and is no longer outstanding and all agreements, arrangements and policy statements with respect to such Tracking Stock terminated and are of no further effect. Pursuant to the Share Exchange Agreement, EchoStar and certain of its and our subsidiaries transferred certain assets, investments in joint ventures, spectrum licenses and real estate properties and DISH Network assumed certain liabilities relating to the transferred assets and businesses. The Share Exchange Agreement contained customary representations and warranties by the parties, including representations by EchoStar related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. EchoStar and DISH Network also agreed to customary indemnification provisions whereby each party indemnifies the other against certain losses with respect to breaches of representations, warranties or covenants and certain liabilities and if certain actions undertaken by EchoStar or DISH causes the transaction to be taxable to the other party after closing. Share Exchange Intellectual Property and Technology License Agreement. Effective March 2017, in connection with the Share Exchange, EchoStar and one of its other subsidiaries and DISH Network entered into an intellectual property and technology license agreement (“IPTLA”) pursuant to which we, EchoStar and its other subsidiaries and DISH Network license to each other certain intellectual property and technology. The IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the IPTLA, we, EchoStar and its other subsidiaries granted to DISH Network a license to our and their intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the businesses acquired pursuant to the Share Exchange, including a limited license to use the “ECHOSTAR” trademark during a transition period.  EchoStar retains full ownership of the “ECHOSTAR” trademark. In addition, DISH Network granted a license back to us, EchoStar and its other subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in our, EchoStar and its other subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the Share Exchange.Share Exchange Tax Matters Agreement. Effective March 2017, in connection with the Share Exchange, EchoStar and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries with respect to taxes of the transferred businesses pursuant to the Share Exchange. Generally, EchoStar is responsible for all tax returns and tax liabilities for the transferred businesses and assets for periods prior to the Share Exchange and DISH Network is responsible for all tax returns and tax liabilities for the transferred businesses and assets from and after the Share Exchange. Both EchoStar and DISH Network made certain tax-related representations and are subject to various tax-related covenants after the consummation of the Share Exchange. Both EchoStar and DISH Network have agreed to indemnify each other if there is a breach of any such tax representation or violation of any such tax covenant and that breach or violation results in the Share Exchange not qualifying for tax free treatment for the other party. In addition, DISH Network has agreed to indemnify EchoStar if the transferred businesses are acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons and such acquisition results in the Share Exchange not qualifying for tax free treatment. The tax matters agreement supplements the Tax Sharing Agreement outlined above which continues in full force and effect.RELATED PARTY TRANSACTIONS - OTHER

Hughes Systique Corporation

We contract with Hughes Systique Corporation (“Hughes Systique”) for software development services. In addition to our approximately 43% ownership in Hughes Systique, Mr. Pradman Kaul, the President of our subsidiary Hughes Communications, Inc. and a member of our board of directors, and his brother, who is the Chief Executive Officer and President of Hughes Systique, own in the aggregate approximately 25%, on an undiluted basis, of Hughes Systique’s outstanding shares as of March 31, 2021. Furthermore, Mr. Pradman Kaul serves on the board of directors of Hughes Systique. Hughes Systique is a variable interest entity and we are considered the primary beneficiary of Hughes Systique due to, among other factors, our ability to direct the activities that most significantly impact the economic performance of Hughes Systique. As a result, we consolidate Hughes Systique’s financial

statements in these Consolidated Financial Statements. TerreStar SolutionsDISH Network owns more than 15% of TerreStar Solutions, Inc. (“TSI”). In May 2018, we and TSI entered into an equipment and services agreement pursuant to which we design, manufacture and install upgraded ground communications network equipment for TSI’s network and provide, among other things, warranty and support services. We recognized revenue of $0.4 million and $2.2 million for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and December 31, 2020, we had $1.5 million and $0.4 million trade accounts receivable from TSI.

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Related Party Transactions - Other

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS - OTHER

RELATED PARTY TRANSACTIONS - ECHOSTARThe following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations.

Services and Other Revenue — EchoStar

The following table presents our Services and other revenue from EchoStar:

	For the three months ended March 31,
	2021		2020
Services and other revenue - EchoStar	$	5,371	$	4,699

The following table presents the corresponding related party receivables:

	As of
	March 31, 2021		December 31, 2020
Related party receivables - EchoStar - current	$	114,225	$	116,220
Related party receivables - EchoStar - non-current	54,970		57,136
Total related party receivables - EchoStar	$	169,195	$	173,356

Receivables. EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current. No repayment schedule for these receivables has been determined.

EchoStar Mobile Limited Service Agreements. We provide services and lease equipment to support the business of EchoStar Mobile Limited, a subsidiary of EchoStar that is licensed by the European Union and its member states (“EU”) to provide mobile satellite services and complementary ground component services covering the entire EU using S-band spectrum. Generally, the amounts EchoStar’s other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded revenue in Services and other revenue of $5.4 million and $4.7 million for the three months ended March 31, 2021 and 2020, respectively, related to these services. Additionally, we have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5%, that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current.

Operating Expenses — EchoStar

The following table presents our operating expenses from EchoStar:

	For the three months ended March 31,
	2021		2020
Operating expenses - EchoStar	$	15,387	$	12,642

The following table presents the corresponding related party payables:

	As of
	March 31, 2021		December 31, 2020
Related party payables - EchoStar - current	$	51,396	$	51,420
Related party payables - EchoStar - non-current	24,533		25,114
Total related party payables - EchoStar	$	75,929	$	76,534

Payables. We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current. No repayment schedule for these payables has been determined.

Shared Corporate Services. We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall

each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. Effective March 2017, and as a result of the Share Exchange (as defined below), we implemented a new methodology for determining the cost of these shared corporate services. We and EchoStar, including EchoStar’s other subsidiaries, may each terminate a particular shared corporate service for any reason upon at least 30 days’ notice. We recorded these expenses within Operating expenses - EchoStar for shared corporate services received from EchoStar and its other subsidiaries of $0.4 million and $4.4 million for the three months ended March 31, 2021 and 2020, respectively.

Real Estate. We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy.

Cash Advances. EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our

foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2021 and 2022. Advances under these agreements bear interest at annual rates ranging from one to three percent, subject to periodic adjustment based on the one-year U.S. LIBOR rate. We report amounts payable under these agreements within Related party payables - EchoStar - non-current.

Construction Management Services for EchoStar XXIV satellite. In August 2017, a subsidiary of EchoStar entered into a contract with Maxar Space, LLC (formerly Space Systems/Loral, LLC), for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite, with an expected launch in the second half of 2022. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $0.3 million and $0.3 million for the three months ended March 31, 2021 and 2020, respectively.

Other Agreements

BSS Transaction. Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement (as defined below), and as part of the BSS Transaction (as defined below), we and our subsidiaries transferred certain of the BSS Business (as defined below) to BSS Corp. (as defined below), and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. See Note 1. Organization and Business Activities for further information.

Share Exchange Agreement. Prior to consummation of the Share Exchange, EchoStar was required to complete steps necessary for the transferring of certain assets and liabilities to DISH and certain of its subsidiaries. As part of these steps, subsidiaries of EchoStar that, prior to the consummation of the Share Exchange, owned EchoStar’s business of providing online video delivery and satellite video delivery for broadcasters and pay-TV operators, including satellite uplinking/downlinking, transmission services, signal processing and conditional access management, and other services and related assets and liabilities were contributed to one of our subsidiaries in consideration for additional shares of HSSC’s common stock that were then issued to a subsidiary of EchoStar.RELATED PARTY TRANSACTIONS - DISH NETWORK

Overview

EchoStar Corporation and DISH have operated as separate publicly-traded companies since 2008 (the “Spin-off”). A substantial majority of the voting power of the shares of each of EchoStar Corporation and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family.

In January 2017, EchoStar and certain of its subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries pursuant to which, in February 2017, we received all of the shares of preferred tracking stock previously issued by us and one of our subsidiaries (the “Tracking Stock”), representing an 80% economic interest in the residential retail satellite broadband business of our Hughes segment, in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of our EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). The Tracking Stock was retired in March 2017.

In September 2019, pursuant to a master transaction agreement (the “Master Transaction Agreement”) with DISH and a wholly-owned subsidiary of DISH (“Merger Sub”), (i) we transferred certain real property and the various businesses, products, licenses, technology, revenues, billings, operating activities, assets and liabilities primarily related to the former portion of our ESS segment that managed, marketed and provided (1) broadcast satellite services primarily to DISH and its subsidiaries (“DISH Network”) and our joint venture Dish Mexico, and (2) telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network and a portion of our other businesses (collectively, the “BSS Business”) to one of our former subsidiaries, EchoStar BSS Corporation (“BSS Corp.”), (ii) we distributed to each holder of shares of our Class A or Class B common stock entitled to receive consideration in the transaction an amount of shares of common stock of BSS Corp., par value $0.001 per share (“BSS Common Stock”), equal to one share of BSS Common Stock for each share of our Class A or Class B common stock owned by such stockholder (the “Distribution”); and (iii) immediately after the Distribution, (1) Merger Sub merged with and into BSS Corp. (the “Merger”), such that BSS Corp. became a wholly-owned subsidiary of DISH and with DISH then owning and operating the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”).

In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we, EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network, on the one hand, obtains certain products, services and rights from us, EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future.

The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations.

Services and Other Revenue — DISH Network

The following table presents our Services and other revenue - DISH Network:

	For the three months ended March 31,
	2021		2020
Services and other revenue - DISH Network	$	5,727	$	7,587

The following table presents the related trade accounts receivable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts receivable - DISH Network	$	4,449	$	4,706

Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. Subject to availability, DISH Network generally has the right to continue leasing satellite capacity from us on the EchoStar IX satellite on a month-to-month basis. Telesat Obligation Agreement. In September 2009, we entered into an agreement with Telesat Canada to lease satellite capacity from Telesat Canada on all 32 direct broadcast satellite (“DBS”) transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we entered into an agreement with DISH Network, pursuant to which DISH Network leased satellite capacity from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement (the “DISH Nimiq 5 Agreement”). Under the terms of the DISH Nimiq 5 Agreement, DISH Network made certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service. We transferred the Telesat Transponder Agreement to DISH Network in September 2019 as part of the BSS Transaction; however, we retained certain obligations related to DISH Network’s performance under that agreement and we entered into an agreement with DISH Network whereby DISH Network compensates us for retaining such obligations. TerreStar Agreement. In March 2012, DISH Network completed its acquisition of substantially all the assets of TerreStar Networks Inc. (“TerreStar”). Prior to DISH Network’s acquisition of substantially all the assets of TerreStar and EchoStar’s completion of the Hughes Acquisition, TerreStar and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services for TerreStar’s ground-based communications equipment (the “TerreStar Agreements”). In December 2017, we and DISH Network amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DISH Network generally has the right to continue to receive warranty services from us for our products on a month-to-month basis unless terminated by DISH Network upon at least 21 days’ written notice to us. DISH Network generally has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis unless these services are terminated by DISH Network upon at least 90 days’ written notice to us. The provision of hosting services will continue until May 2022. In addition, DISH Network generally may terminate any and all services for convenience subject to providing us with prior notice and/or payment of termination charges. In March 2020, we entered into an agreement with DISH Network pursuant to which we perform certain work and provide certain credits to amounts owed to us under the TerreStar Agreements in exchange for DISH Network’s granting us rights to use certain satellite capacity under the Amended and Restated Professional Services Agreement (as defined below). As a result, we and DISH Network amended the TerreStar Agreements to suspend our provision of warranty services to DISH Network from April 2020 through December 2020. Following the expiration of this suspension, we have recommenced providing warranty services to DISH Network. Hughes Broadband Distribution Agreement. Effective October 2012, we and DISH Network entered into a distribution agreement (the “Distribution Agreement”) pursuant to which DISH Network has the right, but not the obligation, to market, sell and distribute our Gen 4 HughesNet service. DISH Network pays us a monthly per subscriber wholesale service fee for our Gen 4 HughesNet service based upon a subscriber’s service level and based upon certain volume subscription thresholds. The Distribution Agreement also provides that DISH Network has the right, but not the obligation, to purchase certain broadband equipment from us to support the sale of the Gen 4 HughesNet service. The Distribution Agreement had an initial term of five years with automatic renewal for successive one-year terms unless terminated by either party with a written notice at least 180 days’ before the expiration of the then-current term. In February 2014, we and DISH Network entered into an amendment to the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement until March 2024. Upon expiration or termination of the Distribution Agreement, we and DISH Network will continue to provide our Gen 4 HughesNet service to the then-current DISH Network subscribers pursuant to the terms and conditions of the Distribution Agreement. DBSD North America Agreement. In March 2012, DISH Network completed its acquisition of all of the equity of DBSD North America, Inc. (“DBSD North America”). Prior to DISH Network’s acquisition of DBSD North America and EchoStar’s completion of the Hughes Acquisition, DBSD North America and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services of DBSD North America’s gateway and ground-based communications equipment. In December 2017, we and DBSD North America amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DBSD North America has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis, unless terminated by DBSD North America upon at least 120 days’ written notice to us. In February 2019, we further amended these agreements to provide DBSD North America with the right to continue to receive warranty services from us on a month-to-month basis until December 2023, unless terminated by DBSD North America upon at least 21 days’ written notice to us. The provision of hosting services will continue until February 2022 and will automatically renew for an additional five-year period until February 2027 unless terminated by DBSD North America upon at least 180 days’ written notice to us. In addition, DBSD North America generally may terminate any and all such services for convenience, subject to providing us with prior notice and/or payment of termination charges. Hughes Equipment and Services Agreement. In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days‘ written notice to us or by us with at least 365 days’ written notice to DISH Network.

Operating Expenses — DISH Network

The following table presents our operating expenses related to DISH Network:

	For the three months ended March 31,
	2021		2020
Operating expenses - DISH Network	$	1,099	$	1,137

The following table presents the related trade accounts payable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts payable - DISH Network	$	417	$	477

Amended and Restated Professional Services Agreement.   In connection with the Spin-off, EchoStar entered

into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”).  In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services.  Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the Share Exchange, including access to antennas owned by DISH Network for our use in performing TT&C services and maintenance and support services for our antennas (collectively, the “TT&C Antennas”). In September 2019, in connection with the BSS Transaction, EchoStar and DISH further amended the Professional Services Agreement (the “Amended and Restated Professional Services Agreement”) to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 10. Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 1, 2022 and renews automatically for successive one-year periods thereafter, unless the agreement is terminated earlier by either party upon at least 60 days’ notice.  However, either party may generally terminate the Amended and Restated Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice, unless the statement of work for particular services states otherwise. Certain services provided under the Amended and Restated Professional Services Agreement may survive the termination of the agreement.

Collocation and Antenna Space Agreements. We and DISH Network have entered into an agreement pursuant to which DISH Network provided us with collocation space in El Paso, Texas. This agreement was for an initial period ending in August 2015, and provided us with renewal options for two consecutive three-year terms. Effective August 2015, we exercised our first renewal option for a period ending in August 2018 and in April 2018 we exercised our second renewal option for a period ending in August 2021. In connection with the Share Exchange, effective March 2017, we also entered into certain agreements pursuant to which DISH Network provides collocation and antenna space to EchoStar through February 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; Spokane, Washington; and Englewood, Colorado. In October 2019, we provided a termination notice for our New Braunfels, Texas agreement to be effective May 2020. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. Generally, we may renew our collocation and antenna space agreements for three-year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 180 days’ prior written notice. In September 2019, in connection with the BSS Transaction, we entered into an agreement pursuant to which DISH Network provided us with certain additional collocation space in Cheyenne, Wyoming for a period that ended in September 2020. The fees for the services provided under these agreements depend on the number of racks located at the location.

Also in connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing in August 2020, with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. In March 2021, we entered into additional agreements pursuant to which DISH Network provides us with a gateway, including antenna space in Cheyenne, Wyoming and Gilbert, Arizona. Both agreements are for a period of five years with four three-year

renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term.Hughes Broadband Master Services Agreement.  In conjunction with the launch of our EchoStar XIX satellite, in March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our Gen 5 HughesNet service and related equipment and other telecommunication services and (ii) installs Gen 5 HughesNet service equipment with respect to activations generated by DISH Network.  Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The Hughes Broadband MSA has an initial term of five years through March 2022 with automatic renewal for successive one-year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our Gen 5 HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $1.9 million and $4.6 million for the three months ended March 31, 2021 and 2020, respectively.2019 TT&C Agreement.  In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). The fees for services provided under the 2019 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided.  Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months’ notice.

Other Receivables - DISH Network

Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off.  Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Code, because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar and its subsidiaries will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed.

In light of the Tax Sharing Agreement, among other things, and in connection with EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount of that includes the federal tax benefit DISH received as a result of our operations.

In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network.

Other AgreementsMaster Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) EchoStar completed the Distribution; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by the parties, including EchoStar’s representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities.  EchoStar and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively.BSS Transaction Intellectual Property and Technology License Agreement. Effective September 2019, in connection with the BSS Transaction, we, EchoStar and DISH Network entered into an intellectual property and technology license agreement (the “BSS IPTLA”) pursuant to which we, EchoStar and its other subsidiaries and DISH Network license to each other certain intellectual property and technology. The BSS IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the BSS IPTLA, we, EchoStar and its other subsidiaries granted to DISH Network a license to our and their intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the BSS Business acquired pursuant to the BSS Transaction, including a limited license to use the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks during a transition period.  EchoStar retains full ownership of the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks. In addition, DISH Network granted a license back to us, EchoStar and its other subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in our, EchoStar and its other subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the BSS Transaction.

BSS Transaction Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries’ with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction.

Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect.

BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except

that EchoStar is responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred to DISH Network in connection with the BSS Transaction.Share Exchange Agreement. In February 2017 EchoStar consummated the Share Exchange, following which EchoStar and certain of its and our subsidiaries no longer operate the transferred EchoStar Technologies businesses and the Tracking Stock was retired and is no longer outstanding and all agreements, arrangements and policy statements with respect to such Tracking Stock terminated and are of no further effect. Pursuant to the Share Exchange Agreement, EchoStar and certain of its and our subsidiaries transferred certain assets, investments in joint ventures, spectrum licenses and real estate properties and DISH Network assumed certain liabilities relating to the transferred assets and businesses. The Share Exchange Agreement contained customary representations and warranties by the parties, including representations by EchoStar related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. EchoStar and DISH Network also agreed to customary indemnification provisions whereby each party indemnifies the other against certain losses with respect to breaches of representations, warranties or covenants and certain liabilities and if certain actions undertaken by EchoStar or DISH causes the transaction to be taxable to the other party after closing. Share Exchange Intellectual Property and Technology License Agreement. Effective March 2017, in connection with the Share Exchange, EchoStar and one of its other subsidiaries and DISH Network entered into an intellectual property and technology license agreement (“IPTLA”) pursuant to which we, EchoStar and its other subsidiaries and DISH Network license to each other certain intellectual property and technology. The IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the IPTLA, we, EchoStar and its other subsidiaries granted to DISH Network a license to our and their intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the businesses acquired pursuant to the Share Exchange, including a limited license to use the “ECHOSTAR” trademark during a transition period.  EchoStar retains full ownership of the “ECHOSTAR” trademark. In addition, DISH Network granted a license back to us, EchoStar and its other subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in our, EchoStar and its other subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the Share Exchange.Share Exchange Tax Matters Agreement. Effective March 2017, in connection with the Share Exchange, EchoStar and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries with respect to taxes of the transferred businesses pursuant to the Share Exchange. Generally, EchoStar is responsible for all tax returns and tax liabilities for the transferred businesses and assets for periods prior to the Share Exchange and DISH Network is responsible for all tax returns and tax liabilities for the transferred businesses and assets from and after the Share Exchange. Both EchoStar and DISH Network made certain tax-related representations and are subject to various tax-related covenants after the consummation of the Share Exchange. Both EchoStar and DISH Network have agreed to indemnify each other if there is a breach of any such tax representation or violation of any such tax covenant and that breach or violation results in the Share Exchange not qualifying for tax free treatment for the other party. In addition, DISH Network has agreed to indemnify EchoStar if the transferred businesses are acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons and such acquisition results in the Share Exchange not qualifying for tax free treatment. The tax matters agreement supplements the Tax Sharing Agreement outlined above which continues in full force and effect.RELATED PARTY TRANSACTIONS - OTHER

Hughes Systique Corporation

We contract with Hughes Systique Corporation (“Hughes Systique”) for software development services. In addition to our approximately 43% ownership in Hughes Systique, Mr. Pradman Kaul, the President of our subsidiary Hughes Communications, Inc. and a member of our board of directors, and his brother, who is the Chief Executive Officer and President of Hughes Systique, own in the aggregate approximately 25%, on an undiluted basis, of Hughes Systique’s outstanding shares as of March 31, 2021. Furthermore, Mr. Pradman Kaul serves on the board of directors of Hughes Systique. Hughes Systique is a variable interest entity and we are considered the primary beneficiary of Hughes Systique due to, among other factors, our ability to direct the activities that most significantly impact the economic performance of Hughes Systique. As a result, we consolidate Hughes Systique’s financial

statements in these Consolidated Financial Statements. TerreStar SolutionsDISH Network owns more than 15% of TerreStar Solutions, Inc. (“TSI”). In May 2018, we and TSI entered into an equipment and services agreement pursuant to which we design, manufacture and install upgraded ground communications network equipment for TSI’s network and provide, among other things, warranty and support services. We recognized revenue of $0.4 million and $2.2 million for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and December 31, 2020, we had $1.5 million and $0.4 million trade accounts receivable from TSI.

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Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

CONTINGENCIES

CONTINGENCIES

Patents and Intellectual Property

Many entities, including some of our competitors, have, or may have in the future, patents and other intellectual property rights that cover or affect products or services directly or indirectly related to those that we offer. We may not be aware of all patents and other intellectual property rights that our products and services may potentially infringe. Damages in patent infringement cases can be substantial, and in certain circumstances can be tripled. Further, we cannot estimate the extent to which we may be required in the future to obtain licenses with respect to intellectual property rights held by others and the availability and cost of any such licenses. Various parties have asserted patent and other intellectual property rights with respect to our products and services. We cannot be certain that these parties do not own the rights they claim, that these rights are not valid or that our products and services do not infringe on these rights. Further, we cannot be certain that we would be able to obtain licenses from these parties on commercially reasonable terms or, if we were unable to obtain such licenses, that we would be able to redesign our products and services to avoid infringement.

Certain Arrangements with DISH NetworkIn connection with EchoStar’s spin-off from DISH in 2008, EchoStar entered into a separation agreement with DISH Network that provides, among other things, for the division of certain liabilities, including liabilities resulting from litigation. Under the terms of the separation agreement, EchoStar assumed certain liabilities that relate to its and our business, including certain designated liabilities for acts or omissions that occurred prior to the Spin-off. Certain specific provisions govern intellectual property related claims under which EchoStar will generally only be liable for its and its subsidiaries’ acts or omissions following the Spin-off and DISH Network will indemnify EchoStar for any liabilities or damages resulting from intellectual property claims relating to the period prior to the Spin-off as well as DISH Network’s acts or omissions following the Spin-off. In connection with the Share Exchange and BSS Transaction, EchoStar and certain of its and our subsidiaries entered into the Share Exchange Agreement and the Master Transaction Agreement, respectively, and other agreements which provide, among other things, for the division of certain liabilities, including liabilities relating to taxes, intellectual property and employees and liabilities resulting from litigation and the assumption of certain liabilities that relate to the transferred businesses and assets. These agreements also contain additional indemnification provisions between EchoStar and us and DISH Network for, in the case of the Share Exchange, certain pre-existing liabilities and legal proceedings and, in the case of the BSS Transaction, certain losses with respect to breaches of certain representations and covenants and certain liabilities.

Litigation

We are involved in a number of legal proceedings concerning matters arising in connection with the conduct of our business activities. Many of these proceedings are at preliminary stages and/or seek an indeterminate amount of damages. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable and to determine if accruals are appropriate. We record an accrual for litigation and other loss contingencies when we determine that a loss is probable, and the amount of the loss can be reasonably estimated. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made. There can be no assurance that legal proceedings against us will be resolved in

amounts that will not differ from the amounts of our recorded accruals. Legal fees and other costs of defending legal proceedings are charged to expense as incurred.

For certain proceedings, management is unable to predict with any degree of certainty the outcome or provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons: (i) the proceedings are in various stages; (ii) damages have not been sought or specified; (iii) damages are unsupported, indeterminate and/or exaggerated in management’s opinion; (iv) there is uncertainty as to the outcome of pending trials, appeals, motions or other proceedings; (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties are involved (as with many patent-related cases). Except as described below, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material effect on our financial condition, operating results or cash flows, though there is no assurance that the resolution and outcomes of these proceedings, individually or in the aggregate, will not be material to our financial condition, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period.

We intend to vigorously defend the proceedings against us. In the event that a court, tribunal, other body or jury ultimately rules against us, we may be subject to adverse consequences, including, without limitation, substantial damages, which may include treble damages, fines, penalties, compensatory damages and/or other equitable or injunctive relief that could require us to materially modify our business operations or certain products or services that we offer to our consumers.

Shareholder Litigation

On July 2, 2019, the City of Hallandale Beach Police Officers’ and Firefighters’ Personnel Retirement Trust, purporting to sue on behalf of a class of EchoStar Corporation’s stockholders, filed a complaint in the District Court of Clark County, Nevada against EchoStar’s directors, Charles W. Ergen, R. Stanton Dodge, Anthony M. Federico, Pradman P. Kaul, C. Michael Schroeder, Jeffrey R. Tarr, William D. Wade, and Michael T. Dugan; our chief financial officer, David J. Rayner; EchoStar ; HSSC; our former subsidiary BSS Corp.; and DISH and its subsidiary Merger Sub. On September 5, 2019, the defendants filed motions to dismiss. On October 11, 2019, the plaintiffs filed an amended complaint removing Messrs. Dodge, Federico, Kaul, Schroeder, Tarr and Wade as defendants. The amended complaint alleges that Mr. Ergen, as our controlling stockholder, breached fiduciary duties to EchoStar’s minority stockholders by structuring the BSS Transaction with inadequate consideration and improperly influencing our and EchoStar’s boards of directors to approve the BSS Transaction. The amended complaint also alleges that the other defendants aided and abetted such alleged breaches. The plaintiffs seek equitable and monetary relief, including the issuance of additional DISH Common Stock, and other costs and disbursements, including attorneys’ fees on behalf of the purported class. On November 11, 2019, we and the other defendants filed separate motions to dismiss plaintiff’s amended complaint and during a hearing on January 13, 2020 the court denied these motions. On February 10, 2020, we and the other defendants filed answers to the amended complaint. The Court certified plaintiff’s class on January 11, 2021. We intend to vigorously defend this case. We cannot predict its outcome with any degree of certainty.

License Fee Dispute with Government of India, Department of Telecommunications

In 1994, the Government of India promulgated a “National Telecommunications Policy” under which the government liberalized the telecommunications sector and required telecommunications service providers to pay fixed license fees. Pursuant to this policy, our subsidiary Hughes Communications India Private Limited (“HCIPL”), formerly known as Hughes Escorts Communications Limited, obtained a license to operate a data network over satellite using VSAT systems. In 2002, HCIPL’s license was amended pursuant to a new government policy that was first established in 1999. The new policy eliminated the fixed license fees and instead required each telecommunications service provider to pay license fees based on its adjusted gross revenue (“AGR”). In March 2005, the Indian Department of Telecommunications (“DOT”) notified HCIPL that, based on its review of HCIPL’s audited accounts and AGR statements, HCIPL must pay additional license fees and penalties and interest on such fees and penalties. HCIPL responded that the DOT had improperly calculated its AGR by including revenue from licensed and unlicensed activities. The DOT rejected this explanation and in 2006, HCIPL filed a petition with an administrative tribunal (the “Tribunal”), challenging the DOT’s calculation of its AGR. The DOT also issued license fee assessments to other telecommunications service providers and a number of similar petitions were filed by several

other such providers with the Tribunal. These petitions were amended, consolidated, remanded and re-appealed several times. On April 23, 2015, the Tribunal issued a judgment affirming the DOT’s calculation of AGR for the telecommunications service providers but reversing the DOT’s imposition of interest, penalties and interest on such penalties as excessive. Over subsequent years, the DOT and HCIPL and other telecommunications service providers, respectively, filed several appeals of the Tribunal’s ruling. On October 24, 2019, the Supreme Court of India (“Supreme Court”) issued an order (the “October 2019 Order”) affirming the license fee assessments imposed by the DOT, including its imposition of interest, penalties and interest on the penalties, but without indicating the amount HCIPL is required to pay the DOT, and ordering payment by January 23, 2020. On November 23, 2019, HCIPL and other telecommunication service providers filed a petition asking the Supreme Court to reconsider the October 2019 Order. The petition was denied on January 20, 2020. On January 22, 2020, HCIPL and other telecommunication service providers filed an application requesting that the Supreme Court modify the October 2019 Order to permit the DOT to calculate the final amount due and extend HCIPL’s and the other telecommunication service providers’ payment deadline. On February 14, 2020, the Supreme Court directed HCIPL and the other telecommunication service providers to explain why the Supreme Court should not initiate contempt proceedings for failure to pay the amounts due. During a hearing on March 18, 2020, the Supreme Court ordered that all amounts that were due before the October 2019 Order must be paid, including interest, penalties and interest on the penalties. The Supreme Court also ordered that the parties appear for a further hearing addressing, potentially among other things, a proposal by the DOT to allow for extended or deferred payments of amounts due. On June 11, 2020, the Supreme Court ordered HCIPL and the other telecommunication service providers to submit affidavits addressing the proposal made by the DOT to extend the time frame for payment of the amounts owed and for HCIPL and the other telecommunication providers to provide security for such payments. On September 1, 2020, the Supreme Court issued a judgment permitting a 10-year payment schedule. Under this payment schedule, HCIPL is required to make an annual payment every March 31, through 2031. Following the Supreme Court of India’s October 2019 judgment, HCIPL made payments during the first quarter of 2020, and an additional payment on March 31, 2021.

The following table presents the components of the accrual:

	As of
	March 31, 2021		December 31, 2020
Additional license fees	$	3,867	$	3,890
Penalties	3,969		3,992
Interest and interest on penalties	77,774		76,871
Less: Payments	(8,574)		(2,975)
Total accrual	$	77,036	$	81,778

Any eventual payments made with respect to the ultimate outcome of this matter may be different from our accrual and such differences could be significant.

Other

In addition to the above actions, we are subject to various other legal proceedings and claims, which arise in the ordinary course of business. As part of our ongoing operations, we are subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as by governmental/regulatory authorities responsible for enforcing the laws and regulations to which we may be subject. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the federal government. Some states have adopted similar state whistleblower and false claims provisions. In addition, we from time to time receive inquiries from federal, state and foreign agencies regarding compliance with various laws and regulations.

In our opinion, the amount of ultimate liability with respect to any of these other actions is unlikely to materially affect our financial position, results of operations or cash flows, though the resolutions and outcomes, individually or in the aggregate, could be material to our financial position, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period.

We also indemnify our directors, officers and employees for certain liabilities that might arise from the performance of their responsibilities for us. Additionally, in the normal course of its business, we enter into contracts pursuant to which we may make a variety of representations and warranties and indemnify the counterparty for certain losses. Our possible exposure under these arrangements cannot be reasonably estimated as this involves the resolution of claims made, or future claims that may be made, against us or our officers, directors or employees, the outcomes of which are unknown and not currently predictable or estimable.

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Segment Reporting

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

Business segments are components of an enterprise for which separate financial information is available and regularly evaluated by our chief operating decision maker (“CODM”), who is our Chief Executive Officer. We operate in two business segments, Hughes and ESS, as described in Note 1. Organization and Business Activities.

The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, and net income (loss) attributable to non-controlling interests (“EBITDA”).

Total assets by segment have not been reported herein because the information is not provided to our CODM on a regular basis. 

The following table presents revenue, EBITDA and capital expenditures for each of our business segments:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended March 31, 2021
External revenue	$	475,859	$	4,001	$	5,370	$	485,230
Intersegment revenue	—		88		(88)		—
Total revenue	$	475,859	$	4,089	$	5,282	$	485,230
EBITDA	$	198,578	$	1,919	$	(9,091)	$	191,406
Capital expenditures	$	82,196	$	—	$	—	$	82,196
For the three months ended March 31, 2020
External revenue	$	458,482	$	4,367	$	4,698	$	467,547
Intersegment revenue	—		285		(285)		—
Total revenue	$	458,482	$	4,652	$	4,413	$	467,547
EBITDA	$	154,641	$	2,030	$	(6,646)	$	150,025
Capital expenditures	$	91,517	$	—	$	—	$	91,517

The following table reconciles Net income (loss) in the Consolidated Statements of Operations to EBITDA:

	For the three months ended March 31,
	2021		2020
Net income (loss)	$	17,630	$	(17,913)
Interest income, net	(2,394)		(8,892)
Interest expense, net of amounts capitalized	41,922		42,192
Income tax benefit (provision), net	10,637		5,231
Depreciation and amortization	122,664		125,965
Net loss (income) attributable to non-controlling interests	947		3,442
EBITDA	$	191,406	$	150,025

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Supplemental Financial Information

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

SUPPLEMENTAL FINANCIAL INFORMATION

SUPPLEMENTAL FINANCIAL INFORMATION

Other Current Assets, Net and Other Non-current Assets, Net

The following table presents the components of Other current assets, net, and Other non-current assets, net:

	As of
	March 31, 2021		December 31, 2020
Other current assets, net:
Trade accounts receivable - DISH Network	$	4,449	$	4,706
Inventory	95,439		97,831
Prepaids and deposits	43,812		42,243
Related party receivables - EchoStar	114,225		116,220
Other, net	28,764		30,815
Total other current assets	$	286,689	$	291,815
Other non-current assets, net:
Restricted cash	$	835	$	807
Deferred tax assets, net	1,520		1,679
Capitalized software, net	118,953		116,661
Contract acquisition costs, net	94,593		99,837
Contract fulfillment costs, net	1,916		2,580
Related party receivables - EchoStar	54,970		57,136
Other, net	29,629		28,977
Total other non-current assets, net	$	302,416	$	307,677

Accrued Expenses and Other Current Liabilities and Other Non-Current Liabilities

The following table presents the components of Accrued expenses and other current liabilities and Other non-current liabilities:

	As of
	March 31, 2021		December 31, 2020
Accrued expenses and other current liabilities:
Related party payables - EchoStar	$	51,396	$	51,421
Trade accounts payable - DISH Network	417		477
Accrued interest	34,514		42,388
Accrued compensation	44,489		52,231
Accrued taxes	11,937		11,780
Operating lease obligation	14,986		14,670
Other	170,577		152,620
Total accrued expenses and other current liabilities	$	328,316	$	325,587
Other non-current liabilities:
Related party payables - EchoStar	$	24,533	$	25,114
Other	62,109		62,843
Total other non-current liabilities	$	86,642	$	87,957

Inventory

The following table presents the components of inventory:

	As of
	March 31, 2021		December 31, 2020
Raw materials	$	5,308	$	4,564
Work-in-process	7,054		8,280
Finished goods	83,077		84,987
Total inventory	$	95,439	$	97,831

Supplemental and Non-cash Investing and Financing Activities

The following table presents the supplemental and non-cash investing and financing activities:

	For the three months ended March 31,
	2021		2020
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	$	45,329	$	49,563
Cash paid for income taxes	$	276	$	716
Non-cash investing and financing activities:
Increase (decrease) in capital expenditures included in accounts payable, net	$	(973)	$	(5,359)

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Supplemental Guarantor and Non-Guarantor Financial Information

3 Months Ended

Mar. 31, 2021

Supplemental Guarantor and Non-Guarantor Financial Information

SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

Certain of our wholly-owned subsidiaries (together, the “Guarantor Subsidiaries”) have fully and unconditionally guaranteed, on a joint and several basis, the obligations of our 5 1/4% Senior Secured Notes due August 1, 2026, 7 5/8% Senior Unsecured Notes due 2021 and 6 5/8% Senior Unsecured Notes due August 1, 2026 (collectively, the “Notes”).

The indentures governing the Notes contain restrictive covenants that, among other things, impose limitations on our ability and the ability of certain of our subsidiaries to pay dividends or make distributions, incur additional debt, make certain investments, create liens or enter into sale and leaseback transactions, merge or consolidate with another company, transfer and sell assets, enter into transactions with affiliates or allow to exist certain restrictions on the ability of certain of our subsidiaries to pay dividends, make distributions, make other payments, or transfer assets to us.

In lieu of separate financial statements of the Guarantor Subsidiaries, we have prepared the accompanying consolidating financial information in accordance with Rule 3-10(f) of Regulation S-X. This includes:

•the accompanying balance sheet;

•the accompanying statement of operations and comprehensive income (loss); and

•the accompanying statement of cash flows.

This also includes consolidating financial information as follows:

•the Guarantor Subsidiaries on a combined basis;

•the non-guarantor subsidiaries of HSSC on a combined basis; and

•the eliminations necessary to arrive at the corresponding information of HSSC on a consolidated basis.

This accompanying consolidating financial information should be read in conjunction with these Consolidated Financial Statements.

Consolidating Balance Sheet as of March 31, 2021

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Assets
Current assets:
Cash and cash equivalents	$	1,313,882	$	36,207	$	53,837	$	—	$	1,403,926
Marketable investment securities	515,306		—		—		—		515,306
Trade accounts receivable and contract assets, net	—		130,895		56,377		—		187,272
Other current assets, net	148,125		922,870		93,812		(878,118)		286,689
Total current assets	1,977,313		1,089,972		204,026		(878,118)		2,393,193
Non-current assets:
Property and equipment, net	—		1,277,785		353,436		—		1,631,221
Operating lease right-of-use assets	—		104,304		27,148		—		131,452
Goodwill	—		504,173		6,772		—		510,945
Regulatory authorizations, net	—		400,000		9,960		—		409,960
Other intangible assets, net	—		16,246		—		—		16,246
Other investments, net	—		15,455		86,708		—		102,163
Investment in subsidiaries	2,965,049		322,434		—		(3,287,483)		—
Other non-current assets, net	700		304,863		91,659		(94,806)		302,416
Total non-current assets	2,965,749		2,945,260		575,683		(3,382,289)		3,104,403
Total assets	$	4,943,062	$	4,035,232	$	779,709	$	(4,260,407)	$	5,497,596
Liabilities and Shareholder's Equity
Current liabilities:
Trade accounts payable	$	—	$	89,812	$	14,871	$	—	$	104,683
Current portion of long-term debt, net	808,758		—		—		—		808,758
Contract liabilities	—		107,467		5,040		—		112,507
Accrued expenses and other current liabilities	635,846		341,850		228,738		(878,118)		328,316
Total current liabilities	1,444,604		539,129		248,649		(878,118)		1,354,264
Non-current liabilities:
Long-term debt, net	1,495,436		—		—		—		1,495,436
Deferred tax liabilities, net	345		373,485		2,536		—		376,366
Operating lease liabilities	—		96,042		22,410		—		118,452
Other non-current liabilities	—		62,089		119,359		(94,806)		86,642
Total non-current liabilities	1,495,781		531,616		144,305		(94,806)		2,076,896
Total liabilities	2,940,385		1,070,745		392,954		(972,924)		3,431,160
Shareholder's equity:
Total Hughes Satellite Systems Corporation shareholder's equity	2,002,677		2,964,487		322,996		(3,287,483)		2,002,677
Non-controlling interests	—		—		63,759		—		63,759
Total shareholder's equity	2,002,677		2,964,487		386,755		(3,287,483)		2,066,436
Total liabilities and shareholder's equity	$	4,943,062	$	4,035,232	$	779,709	$	(4,260,407)	$	5,497,596

Consolidating Balance Sheet as of December 31, 2020

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Assets
Current assets:
Cash and cash equivalents	$	649,851	$	46,055	$	44,584	$	—	$	740,490
Marketable investment securities	1,203,296		—		—		—		1,203,296
Trade accounts receivable and contract assets, net	—		129,572		54,416		—		183,988
Other current assets, net	148,158		830,912		171,676		(858,931)		291,815
Total current assets	2,001,305		1,006,539		270,676		(858,931)		2,419,589
Non-current assets:
Property and equipment, net	—		1,312,673		378,850		—		1,691,523
Operating lease right-of-use assets	—		99,578		28,688		—		128,266
Goodwill	—		504,173		7,424		—		511,597
Regulatory authorizations, net	—		400,000		10,451		—		410,451
Other intangible assets, net	—		18,340		—		—		18,340
Other investments, net	—		103,924		—		—		103,924
Investment in subsidiaries	2,942,178		251,394		—		(3,193,572)		—
Other non-current assets, net	700		307,661		94,031		(94,715)		307,677
Total non-current assets	2,942,878		2,997,743		519,444		(3,288,287)		3,171,778
Total assets	$	4,944,183	$	4,004,282	$	790,120	$	(4,147,218)	$	5,591,367
Liabilities and Shareholder's Equity
Current liabilities:
Trade accounts payable	$	—	$	98,914	$	19,654	$	—	$	118,568
Current portion of long-term debt, net	898,237		—		—		—		898,237
Contract liabilities	—		99,838		4,731		—		104,569
Accrued expenses and other current liabilities	529,661		352,121		302,736		(858,931)		325,587
Total current liabilities	1,427,898		550,873		327,121		(858,931)		1,446,961
Non-current liabilities:
Long-term debt, net	1,495,256		—		—		—		1,495,256
Deferred tax liabilities, net	9,569		357,835		2,536		—		369,940
Operating lease liabilities	—		91,241		23,636		—		114,877
Other non-current liabilities	—		62,717		119,955		(94,715)		87,957
Total non-current liabilities	1,504,825		511,793		146,127		(94,715)		2,068,030
Total liabilities	2,932,723		1,062,666		473,248		(953,646)		3,514,991
Shareholder's equity:
Total Hughes Satellite Systems Corporation shareholder's equity	2,011,460		2,941,616		251,956		(3,193,572)		2,011,460
Non-controlling interests	—		—		64,916		—		64,916
Total shareholder's equity	2,011,460		2,941,616		316,872		(3,193,572)		2,076,376
Total liabilities and shareholder's equity	$	4,944,183	$	4,004,282	$	790,120	$	(4,147,218)	$	5,591,367

Consolidating Statement of Operations and Comprehensive Income (Loss)

For the Three Months Ended March 31, 2021

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Revenue:
Services and other revenue	$	—	$	363,697	$	77,703	$	(8,409)	$	432,991
Equipment revenue	—		61,037		8,046		(16,844)		52,239
Total revenue	—		424,734		85,749		(25,253)		485,230
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)	—		103,207		36,229		(8,024)		131,412
Cost of sales - equipment (exclusive of depreciation and amortization)	—		56,430		5,369		(16,659)		45,140
Selling, general and administrative expenses	—		83,543		21,397		(570)		104,370
Research and development expenses	—		7,358		187		—		7,545
Depreciation and amortization	—		94,252		28,412		—		122,664
Impairment of long-lived assets	—		210		—		—		210
Total costs and expenses	—		345,000		91,594		(25,253)		411,341
Operating income (loss)	—		79,734		(5,845)		—		73,889
Other income (expense):
Interest income	1,036		1,287		1,281		(1,210)		2,394
Interest expense, net of amounts capitalized	(40,244)		45		(2,933)		1,210		(41,922)
Equity in earnings (losses) of unconsolidated affiliates, net	—		219		(1,980)		—		(1,761)
Equity in earnings (losses) of subsidiaries, net	50,143		(12,617)		—		(37,526)		—
Foreign currency transaction gains (losses), net	—		(3)		(3,357)		—		(3,360)
Other, net	(1,582)		744		(135)		—		(973)
Total other income (expense), net	9,353		(10,325)		(7,124)		(37,526)		(45,622)
Income (loss) before income taxes	9,353		69,409		(12,969)		(37,526)		28,267
Income tax benefit (provision), net	9,224		(19,266)		(595)		—		(10,637)
Net income (loss)	18,577		50,143		(13,564)		(37,526)		17,630
Less: Net loss (income) attributable to non-controlling interests	—		—		947		—		947
Net income (loss) attributable to HSSC	$	18,577	$	50,143	$	(12,617)	$	(37,526)	$	18,577
Comprehensive income (loss):
Net income (loss)	$	18,577	$	50,143	$	(13,564)	$	(37,526)	$	17,630
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		—		(33,742)		—		(33,742)
Unrealized gains (losses) on available-for-sale securities	(88)		—		—		—		(88)
Amounts reclassified to net income (loss):
Equity in other comprehensive income (loss) of subsidiaries, net	(28,132)		(28,132)		—		56,264		—
Total other comprehensive income (loss), net of tax	(28,220)		(28,132)		(33,742)		56,264		(33,830)
Comprehensive income (loss)	(9,643)		22,011		(47,306)		18,738		(16,200)
Less: Comprehensive loss (income) attributable to non-controlling interests	—		—		6,557		—		6,557
Comprehensive income (loss) attributable to HSSC	$	(9,643)	$	22,011	$	(40,749)	$	18,738	$	(9,643)

Consolidating Statement of Operations and Comprehensive Income (Loss)

For the Three Months Ended March 31, 2020

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Revenue:
Services and other revenue	$	—	$	354,399	$	64,928	$	(9,089)	$	410,238
Equipment revenue	—		65,586		5,410		(13,687)		57,309
Total revenue	—		419,985		70,338		(22,776)		467,547
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)	—		110,471		42,063		(8,649)		143,885
Cost of sales - equipment (exclusive of depreciation and amortization)	—		55,374		4,221		(13,687)		45,908
Selling, general and administrative expenses	—		95,818		20,482		(440)		115,860
Research and development expenses	—		6,109		145		—		6,254
Depreciation and amortization	—		99,359		26,606		—		125,965
Total costs and expenses	—		367,131		93,517		(22,776)		437,872
Operating income (loss)	—		52,854		(23,179)		—		29,675
Other income (expense):
Interest income	7,953		971		891		(923)		8,892
Interest expense, net of amounts capitalized	(40,472)		(613)		(2,030)		923		(42,192)
Gains (losses) on investments, net	—		(164)		—		—		(164)
Equity in earnings (losses) of unconsolidated affiliates, net	—		(1,087)		—		—		(1,087)
Equity in earnings (losses) of subsidiaries, net	10,630		(29,167)		—		18,537		—
Foreign currency transaction gains (losses), net	—		(2)		(7,526)		—		(7,528)
Other, net	—		(275)		(3)		—		(278)
Total other income (expense), net	(21,889)		(30,337)		(8,668)		18,537		(42,357)
Income (loss) before income taxes	(21,889)		22,517		(31,847)		18,537		(12,682)
Income tax benefit (provision), net	7,418		(11,804)		(845)		—		(5,231)
Net income (loss)	(14,471)		10,713		(32,692)		18,537		(17,913)
Less: Net loss (income) attributable to non-controlling interests	—		—		3,442		—		3,442
Net income (loss) attributable to HSSC	$	(14,471)	$	10,713	$	(29,250)	$	18,537	$	(14,471)
Comprehensive income (loss):
Net income (loss)	$	(14,471)	$	10,713	$	(32,692)	$	18,537	$	(17,913)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		—		(82,836)		—		(82,836)
Unrealized gains (losses) on available-for-sale securities	(2,479)		—		—		—		(2,479)
Other	—		—		(405)		—		(405)
Equity in other comprehensive income (loss) of subsidiaries, net	(66,918)		(66,918)		—		133,836		—
Total other comprehensive income (loss), net of tax	(69,397)		(66,918)		(83,241)		133,836		(85,720)
Comprehensive income (loss)	(83,868)		(56,205)		(115,933)		152,373		(103,633)
Less: Comprehensive loss (income) attributable to non-controlling interests	—		—		19,765		—		19,765
Comprehensive income (loss) attributable to HSSC	$	(83,868)	$	(56,205)	$	(96,168)	$	152,373	$	(83,868)

Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2021

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Cash flows from operating activities:
Net income (loss)	$	18,577	$	50,143	$	(13,564)	$	(37,526)	$	17,630
Adjustments to reconcile net income (loss) to net cash flows from operating activities	(61,725)		102,402		25,616		37,526		103,819
Net cash provided by (used for) operating activities	(43,148)		152,545		12,052		—		121,449
Cash flows from investing activities:
Purchases of marketable investment securities	(310,528)		—		—		—		(310,528)
Sales and maturities of marketable investment securities	1,003,198		—		—		—		1,003,198
Expenditures for property and equipment	—		(52,246)		(29,950)		—		(82,196)
Expenditures for externally marketed software	—		(7,846)		—		—		(7,846)
Distributions (contributions) and advances from (to) subsidiaries, net	77,097		(24,100)		—		(52,997)		—
Net cash provided by (used for) investing activities	769,767		(84,192)		(29,950)		(52,997)		602,628
Cash flows from financing activities:
Repurchase of the 2021 Senior Unsecured Notes	(62,588)		—		—		—		(62,588)
Payment of finance lease obligations	—		—		(329)		—		(329)
Payment of in-orbit incentive obligations	—		(1,104)		—		—		(1,104)
Contribution by non-controlling interest holder	—		—		5,400		—		5,400
Other, net	—		—		(292)		—		(292)
Contribution (distributions) and advances (to) from parent, net	—		(77,097)		24,100		52,997		—
Net cash provided by (used for) financing activities	(62,588)		(78,201)		28,879		52,997		(58,913)
Effect of exchange rates on cash and cash equivalents	—		—		(1,700)		—		(1,700)
Net increase (decrease) in cash and cash equivalents	664,031		(9,848)		9,281		—		663,464
Cash and cash equivalents, including restricted amounts, beginning of period	649,851		46,055		45,391		—		741,297
Cash and cash equivalents, including restricted amounts, end of period	$	1,313,882	$	36,207	$	54,672	$	—	$	1,404,761

Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2020

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Cash flows from operating activities:
Net income (loss)	$	(14,471)	$	10,713	$	(32,692)	$	18,537	$	(17,913)
Adjustments to reconcile net income (loss) to net cash flows from operating activities	(22,215)		95,031		28,858		(18,537)		83,137
Net cash provided by (used for) operating activities	(36,686)		105,744		(3,834)		—		65,224
Cash flows from investing activities:
Purchases of marketable investment securities	(365,877)		—		—		—		(365,877)
Sales and maturities of marketable investment securities	490,020		—		—		—		490,020
Expenditures for property and equipment	—		(61,134)		(30,383)		—		(91,517)
Expenditures for externally marketed software	—		(8,638)		—		—		(8,638)
Distributions (contributions) and advances from (to) subsidiaries, net	29,290		(18,939)		—		(10,351)		—
Net cash provided by (used for) investing activities	153,433		(88,711)		(30,383)		(10,351)		23,988
Cash flows from financing activities:
Payment of finance lease obligations	—		—		(215)		—		(215)
Payment of in-orbit incentive obligations	—		(203)		—		—		(203)
Contribution by non-controlling interest holder	—		—		4,000		—		4,000
Other, net	—		—		979		—		979
Contribution (distributions) and advances (to) from parent, net	—		(29,290)		18,939		10,351		—
Net cash provided by (used for) financing activities	—		(29,493)		23,703		10,351		4,561
Effect of exchange rates on cash and cash equivalents	—		—		(4,618)		—		(4,618)
Net increase (decrease) in cash and cash equivalents	116,747		(12,460)		(15,132)		—		89,155
Cash and cash equivalents, including restricted amounts, beginning of period	1,057,903		32,338		50,081		—		1,140,322
Cash and cash equivalents, including restricted amounts, end of period	$	1,174,650	$	19,878	$	34,949	$	—	$	1,229,477

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Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

These unaudited Consolidated Financial Statements and the accompanying notes (collectively, the “Consolidated Financial Statements”) are prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required for complete financial statements prepared in conformity with U.S. GAAP. In our opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. However, our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.

All amounts presented in these Consolidated Financial Statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted.

Refer to Note 2. Summary of Significant Accounting Policies to the consolidated financial statements in our Form 10-K for a summary and discussion of our significant accounting policies, except as updated below.

Use of Estimates

Use of Estimates

We are required to make certain estimates and assumptions that affect the amounts reported in these Consolidated Financial Statements. The most significant estimates and assumptions are used in determining: (i) inputs used to recognize revenue over time, including amortization periods for deferred contract acquisition costs; (ii) allowances

for doubtful accounts; (iii) deferred taxes and related valuation allowances, including uncertain tax positions; (iv) loss contingencies; (v) fair value of financial instruments; (vi) fair value of assets and liabilities acquired in business combinations; and (vii) asset impairment testing.We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts and such differences may be material to our financial statements. Additionally, changing economic conditions may increase the inherent uncertainty in the estimates and assumptions indicated above. We review our estimates and assumptions periodically and the effects of revisions thereto are reflected in the period they occur or prospectively if the revised estimate affects future periods.

Principles of Consolidation

Principles of Consolidation

We consolidate all entities in which we have a controlling financial interest. We are deemed to have a controlling financial interest in variable interest entities in which we are the primary beneficiary and in other entities in which we own more than 50% of the outstanding voting shares and other shareholders do not have substantive rights to participate in management. For entities we control but do not wholly own, we record a non-controlling interest within shareholder’s equity for the portion of the entity’s equity attributed to the non-controlling ownership interests. All significant intercompany balances and transactions have been eliminated in consolidation.

Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncements

On January 1, 2021, we adopted Accounting Standard Update (“ASU”) No. 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 is part of the Financial Accounting Standards Board (“FASB”) overall simplification initiative and seeks to simplify the accounting for income taxes by updating certain guidance and removing certain exceptions. Our adoption of this ASU did not have a material impact on our Consolidated Financial Statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. The guidance may be applied upon issuance of ASC 848 through December 31, 2022. We expect to utilize the optional expedients provided by the guidance for contracts amended solely to use an alternative reference rate. We have evaluated the impact of adopting this new guidance and do not expect it to have a material impact on our Consolidated Financial Statements.

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Components of Contract Balances

The following table presents the components of our contract balances:

	As of
	March 31, 2021		December 31, 2020
Trade accounts receivable and contract assets, net:
Sales and services	$	150,021	$	149,513
Leasing	4,648		4,553
Total trade accounts receivable	154,669		154,066
Contract assets	46,267		45,308
Allowance for doubtful accounts	(13,664)		(15,386)
Total trade accounts receivable and contract assets, net	$	187,272	$	183,988
Contract liabilities:
Current	$	112,507	$	104,569
Non-current	10,357		10,519
Total contract liabilities	$	122,864	$	115,088

The following table presents the revenue recognized in the Consolidated Statement of Operations that was previously included within contract liabilities:

	For the three months ended March 31,
	2021		2020
Revenue	$	63,081	$	52,172

Schedule of Activity in Contract Acquisition Costs

The following table presents the activity in our contract acquisition costs, net:

	For the three months ended March 31,
	2021		2020
Balance at beginning of period	$	99,837	$	113,592
Additions	18,400		26,474
Amortization expense	(22,769)		(25,675)
Foreign currency translation	(875)		(3,994)
Balance at end of period	$	94,593	$	110,397

Schedule of Disaggregation of Revenue

The following table presents our revenue from customer contracts disaggregated by primary geographic market and by segment:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended March 31, 2021
North America	$	398,759	$	4,089	$	(88)	$	402,760
South and Central America	43,030		—		—		43,030
Other	34,070		—		5,370		39,440
Total revenue	$	475,859	$	4,089	$	5,282	$	485,230
For the three months ended March 31, 2020
North America	$	382,715	$	4,652	$	(285)	$	387,082
South and Central America	33,956		—		—		33,956
Other	41,811		—		4,698		46,509
Total revenue	$	458,482	$	4,652	$	4,413	$	467,547

The following table presents our revenue disaggregated by the nature of products and services and by segment:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended March 31, 2021
Services and other revenue:
Services	$	413,519	$	2,690	$	—	$	416,209
Lease revenue	10,101		1,399		5,282		16,782
Total services and other revenue	423,620		4,089		5,282		432,991
Equipment revenue:
Equipment	28,521		—		—		28,521
Design, development and construction services	21,636		—		—		21,636
Lease revenue	2,082		—		—		2,082
Total equipment revenue	52,239		—		—		52,239
Total revenue	$	475,859	$	4,089	$	5,282	$	485,230
For the three months ended March 31, 2020
Services and other revenue:
Services	$	390,000	$	2,765	$	—	$	392,765
Lease revenue	11,173		1,887		4,413		17,473
Total services and other revenue	401,173		4,652		4,413		410,238
Equipment revenue:
Equipment	24,839		—		—		24,839
Design, development and construction services	31,557		—		—		31,557
Lease revenue	913		—		—		913
Total equipment revenue	57,309		—		—		57,309
Total revenue	$	458,482	$	4,652	$	4,413	$	467,547

Schedule of Operating Lease Revenue

The following table presents our lease revenue by type of lease:

	For the three months ended March 31,
	2021		2020
Sales-type lease revenue:
Revenue at lease commencement	$	2,082	$	913
Interest income	73		69
Total sales-type lease revenue	2,155		982
Operating lease revenue	16,709		17,404
Total lease revenue	$	18,864	$	18,386

Schedule of Sales-type Lease Revenue

The following table presents our lease revenue by type of lease:

	For the three months ended March 31,
	2021		2020
Sales-type lease revenue:
Revenue at lease commencement	$	2,082	$	913
Interest income	73		69
Total sales-type lease revenue	2,155		982
Operating lease revenue	16,709		17,404
Total lease revenue	$	18,864	$	18,386

Schedule of Operating Lease Payments to be Received

The following table presents future operating lease payments to be received as of March 31, 2021:

	Amounts
Year ending December 31,
2021 (remainder)	$	30,433
2022	34,082
2023	32,000
2024	29,740
2025	28,482
2026 and beyond	47,562
Total lease payments	$	202,299

Schedule of Property and Equipment Subject to Operating Leases

The following table presents amounts for assets subject to operating leases, which are included in Property and equipment, net:

	As of
	March 31, 2021						December 31, 2020
	Cost		Accumulated Depreciation		Net		Cost		Accumulated Depreciation		Net
Customer premises equipment	$	1,737,049	$	(1,370,538)	$	366,511	$	1,706,328	$	(1,317,210)	$	389,118
Satellites	104,620		(40,078)		64,542		104,620		(38,335)		66,285
Total	$	1,841,669	$	(1,410,616)	$	431,053	$	1,810,948	$	(1,355,545)	$	455,403

The following table presents depreciation expense for assets subject to operating leases, which is included in Depreciation and amortization:

	For the three months ended March 31,
	2021		2020
Customer premises equipment	$	60,967	$	49,504
Satellites	1,744		1,744
Total	$	62,711	$	51,248

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Marketable Investment Securities (Tables)

3 Months Ended

Mar. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Schedule of Marketable Investment Securities

The following table presents our Marketable investment securities:

	As of
	March 31, 2021		December 31, 2020
Marketable investment securities:
Available-for-sale debt securities:
Corporate bonds	$	109,598	$	276,361
Commercial paper	327,648		823,173
Other debt securities	78,054		103,756
Total available-for-sale debt securities	515,300		1,203,290
Equity securities	6		6
Total marketable investment securities	$	515,306	$	1,203,296

Schedule of Available-for-sale Securities Reconciliation

The following table presents the components of our available-for-sale debt securities:

	Amortized		Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
As of March 31, 2021
Corporate bonds	$	109,600	$	10	$	(12)	$	109,598
Commercial paper	327,648		—		—		327,648
Other debt securities	78,108		2		(56)		78,054
Total available-for-sale debt securities	$	515,356	$	12	$	(68)	$	515,300
As of December 31, 2020
Corporate bonds	$	276,327	$	59	$	(25)	$	276,361
Commercial paper	823,173		—		—		823,173
Other debt securities	103,758		3		(5)		103,756
Total available-for-sale debt securities	$	1,203,258	$	62	$	(30)	$	1,203,290

Schedule of Activity on Available-for-sale Debt Securities

The following table presents the activity on our available-for-sale debt securities:

	For the three months ended March 31,
	2021		2020
Proceeds from sales	$	95,765	$	10,000

Schedule of Activity of Equity Securities

The following table presents the activity of our equity securities:

	For the three months ended March 31,
	2021		2020
Gains (losses) on investments, net	$	—	$	(164)

Schedule of Fair Value Measurements

The following table presents our marketable investment securities categorized by the fair value hierarchy, certain of which have historically experienced volatility:

	Level 1		Level 2		Total
As of March 31, 2021
Cash equivalents (including restricted)	$	508	$	1,317,529	$	1,318,037
Available-for-sale debt securities:
Corporate bonds	$	—	$	109,598	$	109,598
Commercial paper	—		327,648		327,648
Other debt securities	32,498		45,556		78,054
Total available-for-sale debt securities	32,498		482,802		515,300
Equity securities	6		—		6
Total marketable investment securities	$	32,504	$	482,802	$	515,306
As of December 31, 2020
Cash equivalents (including restricted)	$	128	$	654,853	$	654,981
Available-for-sale debt securities:
Corporate bonds	$	—	$	276,361	$	276,361
Commercial paper	—		823,173		823,173
Other debt securities	95,497		8,259		103,756
Total available-for-sale debt securities	95,497		1,107,793		1,203,290
Equity securities	6		—		6
Total marketable investment securities	$	95,503	$	1,107,793	$	1,203,296

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

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

	As of
	March 31, 2021		December 31, 2020
Property and equipment, net:
Satellites, net	$	919,813	$	954,559
Other property and equipment, net	711,408		736,964
Total property and equipment, net	$	1,631,221	$	1,691,523

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

	Depreciable Life (In Years)	As of
		March 31, 2021		December 31, 2020
Satellites, net:
Satellites - owned	7 to 15	$	1,500,070	$	1,503,596
Satellites - acquired under finance leases	15	352,261		352,245
Total satellites		1,852,331		1,855,841
Accumulated depreciation:
Satellites - owned		(855,104)		(827,274)
Satellites - acquired under finance leases		(77,414)		(74,008)
Total accumulated depreciation		(932,518)		(901,282)
Total satellites, net		$	919,813	$	954,559

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

	For the three months ended March 31,
	2021		2020
Depreciation expense:
Satellites - owned	$	27,068	$	27,068
Satellites - acquired under finance leases	7,201		6,013
Total depreciation expense	$	34,269	$	33,081

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

	For the three months ended March 31,
	2021		2020
Capitalized interest	$	1,246	$	637

Schedule of Satellites

The following table presents our operating satellite fleet as of March 31, 2021 which consists of both owned and leased satellites:

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
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 its acquisition of Hughes Communications, Inc. and its subsidiaries (the “Hughes Acquisition”).

(2) Upon consummation of our joint venture with 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.

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Regulatory Authorizations (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Regulatory Authorizations

The following table presents our Regulatory authorizations, net:

	Finite lived
	Cost		Accumulated Amortization		Total		Indefinite lived		Total
Balance, December 31, 2019	$	12,524	$	(161)	$	12,363	$	400,000	$	412,363
Amortization expense	—		(100)		(100)		—		(100)
Currency translation adjustments	(1,020)		—		(1,020)		—		(1,020)
Balance, March 31, 2020	$	11,504	$	(261)	$	11,243	$	400,000	$	411,243
Balance, December 31, 2020	$	11,505	$	(1,054)	$	10,451	$	400,000	$	410,451
Amortization expense	—		(208)		(208)		—		(208)
Currency translation adjustments	(321)		38		(283)		—		(283)
Balance, March 31, 2021	$	11,184	$	(1,224)	$	9,960	$	400,000	$	409,960
Weighted-average useful life (in years)			14

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Other Investments (Tables)

3 Months Ended

Mar. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Other Investments and Equity Method Investments

The following table presents our Other investments, net:

	As of
	March 31, 2021		December 31, 2020
Other investments, net:
Equity method investments	$	94,812	$	96,573
Other equity investments	7,351		7,351
Total other investments, net	$	102,163	$	103,924

The following table presents revenue recognized:

	For the three months ended March 31,
	2021		2020
Deluxe	$	1,631	$	1,255
BCS	$	1,348	$	1,669

The following table presents trade accounts receivable:

	As of
	March 31, 2021		December 31, 2020
Deluxe	$	1,318	$	716
BCS	$	5,043	$	9,347

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Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Carrying Amount and Fair Values of Long-term Debt

The following table presents the carrying amount and fair values of our Current portion of long-term debt, net and Long-term debt, net:

	Effective Interest Rate	As of
		March 31, 2021				December 31, 2020
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Secured Notes:
5 1/4% Senior Secured Notes due 2026	5.320%	$	750,000	$	830,933	$	750,000	$	834,045
Senior Unsecured Notes:
7 5/8% Senior Unsecured Notes due 2021	8.062%	809,486		821,555		900,000		924,003
6 5/8% Senior Unsecured Notes due 2026	6.688%	750,000		834,383		750,000		852,810
Less: Unamortized debt issuance costs		(5,292)		—		(6,507)		—
Total long-term debt		2,304,194		2,486,871		2,393,493		2,610,858
Less: Current portion, net		(808,758)		(821,555)		(898,237)		(924,003)
Long-term debt, net		$	1,495,436	$	1,665,316	$	1,495,256	$	1,686,855

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Related Party Transactions - Echostar (Tables)

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The following table presents our Services and other revenue from EchoStar:

	For the three months ended March 31,
	2021		2020
Services and other revenue - EchoStar	$	5,371	$	4,699

The following table presents the corresponding related party receivables:

	As of
	March 31, 2021		December 31, 2020
Related party receivables - EchoStar - current	$	114,225	$	116,220
Related party receivables - EchoStar - non-current	54,970		57,136
Total related party receivables - EchoStar	$	169,195	$	173,356

The following table presents our operating expenses from EchoStar:

	For the three months ended March 31,
	2021		2020
Operating expenses - EchoStar	$	15,387	$	12,642

The following table presents the corresponding related party payables:

	As of
	March 31, 2021		December 31, 2020
Related party payables - EchoStar - current	$	51,396	$	51,420
Related party payables - EchoStar - non-current	24,533		25,114
Total related party payables - EchoStar	$	75,929	$	76,534

The following table presents our Services and other revenue - DISH Network:

	For the three months ended March 31,
	2021		2020
Services and other revenue - DISH Network	$	5,727	$	7,587

The following table presents the related trade accounts receivable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts receivable - DISH Network	$	4,449	$	4,706

The following table presents our operating expenses related to DISH Network:

	For the three months ended March 31,
	2021		2020
Operating expenses - DISH Network	$	1,099	$	1,137

The following table presents the related trade accounts payable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts payable - DISH Network	$	417	$	477

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The following table presents our Services and other revenue from EchoStar:

	For the three months ended March 31,
	2021		2020
Services and other revenue - EchoStar	$	5,371	$	4,699

The following table presents the corresponding related party receivables:

	As of
	March 31, 2021		December 31, 2020
Related party receivables - EchoStar - current	$	114,225	$	116,220
Related party receivables - EchoStar - non-current	54,970		57,136
Total related party receivables - EchoStar	$	169,195	$	173,356

The following table presents our operating expenses from EchoStar:

	For the three months ended March 31,
	2021		2020
Operating expenses - EchoStar	$	15,387	$	12,642

The following table presents the corresponding related party payables:

	As of
	March 31, 2021		December 31, 2020
Related party payables - EchoStar - current	$	51,396	$	51,420
Related party payables - EchoStar - non-current	24,533		25,114
Total related party payables - EchoStar	$	75,929	$	76,534

The following table presents our Services and other revenue - DISH Network:

	For the three months ended March 31,
	2021		2020
Services and other revenue - DISH Network	$	5,727	$	7,587

The following table presents the related trade accounts receivable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts receivable - DISH Network	$	4,449	$	4,706

The following table presents our operating expenses related to DISH Network:

	For the three months ended March 31,
	2021		2020
Operating expenses - DISH Network	$	1,099	$	1,137

The following table presents the related trade accounts payable:

	As of
	March 31, 2021		December 31, 2020
Trade accounts payable - DISH Network	$	417	$	477

XML

Contingencies (Tables)

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of Accrual For License Fee Dispute

The following table presents the components of the accrual:

	As of
	March 31, 2021		December 31, 2020
Additional license fees	$	3,867	$	3,890
Penalties	3,969		3,992
Interest and interest on penalties	77,774		76,871
Less: Payments	(8,574)		(2,975)
Total accrual	$	77,036	$	81,778

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Schedule of Revenue, EBITDA, and Capital Expenditures by Operating Segments

The following table presents revenue, EBITDA and capital expenditures for each of our business segments:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended March 31, 2021
External revenue	$	475,859	$	4,001	$	5,370	$	485,230
Intersegment revenue	—		88		(88)		—
Total revenue	$	475,859	$	4,089	$	5,282	$	485,230
EBITDA	$	198,578	$	1,919	$	(9,091)	$	191,406
Capital expenditures	$	82,196	$	—	$	—	$	82,196
For the three months ended March 31, 2020
External revenue	$	458,482	$	4,367	$	4,698	$	467,547
Intersegment revenue	—		285		(285)		—
Total revenue	$	458,482	$	4,652	$	4,413	$	467,547
EBITDA	$	154,641	$	2,030	$	(6,646)	$	150,025
Capital expenditures	$	91,517	$	—	$	—	$	91,517

Schedule of Reconciliation of EBITDA to Reported Income (Loss) Before Income Taxes

The following table reconciles Net income (loss) in the Consolidated Statements of Operations to EBITDA:

	For the three months ended March 31,
	2021		2020
Net income (loss)	$	17,630	$	(17,913)
Interest income, net	(2,394)		(8,892)
Interest expense, net of amounts capitalized	41,922		42,192
Income tax benefit (provision), net	10,637		5,231
Depreciation and amortization	122,664		125,965
Net loss (income) attributable to non-controlling interests	947		3,442
EBITDA	$	191,406	$	150,025

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Supplemental Financial Information (Tables)

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Other Assets and Other Liabilities

The following table presents the components of Other current assets, net, and Other non-current assets, net:

	As of
	March 31, 2021		December 31, 2020
Other current assets, net:
Trade accounts receivable - DISH Network	$	4,449	$	4,706
Inventory	95,439		97,831
Prepaids and deposits	43,812		42,243
Related party receivables - EchoStar	114,225		116,220
Other, net	28,764		30,815
Total other current assets	$	286,689	$	291,815
Other non-current assets, net:
Restricted cash	$	835	$	807
Deferred tax assets, net	1,520		1,679
Capitalized software, net	118,953		116,661
Contract acquisition costs, net	94,593		99,837
Contract fulfillment costs, net	1,916		2,580
Related party receivables - EchoStar	54,970		57,136
Other, net	29,629		28,977
Total other non-current assets, net	$	302,416	$	307,677

The following table presents the components of Accrued expenses and other current liabilities and Other non-current liabilities:

	As of
	March 31, 2021		December 31, 2020
Accrued expenses and other current liabilities:
Related party payables - EchoStar	$	51,396	$	51,421
Trade accounts payable - DISH Network	417		477
Accrued interest	34,514		42,388
Accrued compensation	44,489		52,231
Accrued taxes	11,937		11,780
Operating lease obligation	14,986		14,670
Other	170,577		152,620
Total accrued expenses and other current liabilities	$	328,316	$	325,587
Other non-current liabilities:
Related party payables - EchoStar	$	24,533	$	25,114
Other	62,109		62,843
Total other non-current liabilities	$	86,642	$	87,957

Schedule of Inventory

The following table presents the components of inventory:

	As of
	March 31, 2021		December 31, 2020
Raw materials	$	5,308	$	4,564
Work-in-process	7,054		8,280
Finished goods	83,077		84,987
Total inventory	$	95,439	$	97,831

Schedule of Noncash Investing and Financing Activities

The following table presents the supplemental and non-cash investing and financing activities:

	For the three months ended March 31,
	2021		2020
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	$	45,329	$	49,563
Cash paid for income taxes	$	276	$	716
Non-cash investing and financing activities:
Increase (decrease) in capital expenditures included in accounts payable, net	$	(973)	$	(5,359)

XML

Supplemental Guarantor and Non-Guarantor Financial Information (Tables)

3 Months Ended

Mar. 31, 2021

Supplemental Guarantor and Non-Guarantor Financial Information

Schedule of consolidating balance sheet

Consolidating Balance Sheet as of March 31, 2021

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Assets
Current assets:
Cash and cash equivalents	$	1,313,882	$	36,207	$	53,837	$	—	$	1,403,926
Marketable investment securities	515,306		—		—		—		515,306
Trade accounts receivable and contract assets, net	—		130,895		56,377		—		187,272
Other current assets, net	148,125		922,870		93,812		(878,118)		286,689
Total current assets	1,977,313		1,089,972		204,026		(878,118)		2,393,193
Non-current assets:
Property and equipment, net	—		1,277,785		353,436		—		1,631,221
Operating lease right-of-use assets	—		104,304		27,148		—		131,452
Goodwill	—		504,173		6,772		—		510,945
Regulatory authorizations, net	—		400,000		9,960		—		409,960
Other intangible assets, net	—		16,246		—		—		16,246
Other investments, net	—		15,455		86,708		—		102,163
Investment in subsidiaries	2,965,049		322,434		—		(3,287,483)		—
Other non-current assets, net	700		304,863		91,659		(94,806)		302,416
Total non-current assets	2,965,749		2,945,260		575,683		(3,382,289)		3,104,403
Total assets	$	4,943,062	$	4,035,232	$	779,709	$	(4,260,407)	$	5,497,596
Liabilities and Shareholder's Equity
Current liabilities:
Trade accounts payable	$	—	$	89,812	$	14,871	$	—	$	104,683
Current portion of long-term debt, net	808,758		—		—		—		808,758
Contract liabilities	—		107,467		5,040		—		112,507
Accrued expenses and other current liabilities	635,846		341,850		228,738		(878,118)		328,316
Total current liabilities	1,444,604		539,129		248,649		(878,118)		1,354,264
Non-current liabilities:
Long-term debt, net	1,495,436		—		—		—		1,495,436
Deferred tax liabilities, net	345		373,485		2,536		—		376,366
Operating lease liabilities	—		96,042		22,410		—		118,452
Other non-current liabilities	—		62,089		119,359		(94,806)		86,642
Total non-current liabilities	1,495,781		531,616		144,305		(94,806)		2,076,896
Total liabilities	2,940,385		1,070,745		392,954		(972,924)		3,431,160
Shareholder's equity:
Total Hughes Satellite Systems Corporation shareholder's equity	2,002,677		2,964,487		322,996		(3,287,483)		2,002,677
Non-controlling interests	—		—		63,759		—		63,759
Total shareholder's equity	2,002,677		2,964,487		386,755		(3,287,483)		2,066,436
Total liabilities and shareholder's equity	$	4,943,062	$	4,035,232	$	779,709	$	(4,260,407)	$	5,497,596

Consolidating Balance Sheet as of December 31, 2020

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Assets
Current assets:
Cash and cash equivalents	$	649,851	$	46,055	$	44,584	$	—	$	740,490
Marketable investment securities	1,203,296		—		—		—		1,203,296
Trade accounts receivable and contract assets, net	—		129,572		54,416		—		183,988
Other current assets, net	148,158		830,912		171,676		(858,931)		291,815
Total current assets	2,001,305		1,006,539		270,676		(858,931)		2,419,589
Non-current assets:
Property and equipment, net	—		1,312,673		378,850		—		1,691,523
Operating lease right-of-use assets	—		99,578		28,688		—		128,266
Goodwill	—		504,173		7,424		—		511,597
Regulatory authorizations, net	—		400,000		10,451		—		410,451
Other intangible assets, net	—		18,340		—		—		18,340
Other investments, net	—		103,924		—		—		103,924
Investment in subsidiaries	2,942,178		251,394		—		(3,193,572)		—
Other non-current assets, net	700		307,661		94,031		(94,715)		307,677
Total non-current assets	2,942,878		2,997,743		519,444		(3,288,287)		3,171,778
Total assets	$	4,944,183	$	4,004,282	$	790,120	$	(4,147,218)	$	5,591,367
Liabilities and Shareholder's Equity
Current liabilities:
Trade accounts payable	$	—	$	98,914	$	19,654	$	—	$	118,568
Current portion of long-term debt, net	898,237		—		—		—		898,237
Contract liabilities	—		99,838		4,731		—		104,569
Accrued expenses and other current liabilities	529,661		352,121		302,736		(858,931)		325,587
Total current liabilities	1,427,898		550,873		327,121		(858,931)		1,446,961
Non-current liabilities:
Long-term debt, net	1,495,256		—		—		—		1,495,256
Deferred tax liabilities, net	9,569		357,835		2,536		—		369,940
Operating lease liabilities	—		91,241		23,636		—		114,877
Other non-current liabilities	—		62,717		119,955		(94,715)		87,957
Total non-current liabilities	1,504,825		511,793		146,127		(94,715)		2,068,030
Total liabilities	2,932,723		1,062,666		473,248		(953,646)		3,514,991
Shareholder's equity:
Total Hughes Satellite Systems Corporation shareholder's equity	2,011,460		2,941,616		251,956		(3,193,572)		2,011,460
Non-controlling interests	—		—		64,916		—		64,916
Total shareholder's equity	2,011,460		2,941,616		316,872		(3,193,572)		2,076,376
Total liabilities and shareholder's equity	$	4,944,183	$	4,004,282	$	790,120	$	(4,147,218)	$	5,591,367

Schedule of consolidating statement of operations and comprehensive income (loss)

Consolidating Statement of Operations and Comprehensive Income (Loss)

For the Three Months Ended March 31, 2021

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Revenue:
Services and other revenue	$	—	$	363,697	$	77,703	$	(8,409)	$	432,991
Equipment revenue	—		61,037		8,046		(16,844)		52,239
Total revenue	—		424,734		85,749		(25,253)		485,230
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)	—		103,207		36,229		(8,024)		131,412
Cost of sales - equipment (exclusive of depreciation and amortization)	—		56,430		5,369		(16,659)		45,140
Selling, general and administrative expenses	—		83,543		21,397		(570)		104,370
Research and development expenses	—		7,358		187		—		7,545
Depreciation and amortization	—		94,252		28,412		—		122,664
Impairment of long-lived assets	—		210		—		—		210
Total costs and expenses	—		345,000		91,594		(25,253)		411,341
Operating income (loss)	—		79,734		(5,845)		—		73,889
Other income (expense):
Interest income	1,036		1,287		1,281		(1,210)		2,394
Interest expense, net of amounts capitalized	(40,244)		45		(2,933)		1,210		(41,922)
Equity in earnings (losses) of unconsolidated affiliates, net	—		219		(1,980)		—		(1,761)
Equity in earnings (losses) of subsidiaries, net	50,143		(12,617)		—		(37,526)		—
Foreign currency transaction gains (losses), net	—		(3)		(3,357)		—		(3,360)
Other, net	(1,582)		744		(135)		—		(973)
Total other income (expense), net	9,353		(10,325)		(7,124)		(37,526)		(45,622)
Income (loss) before income taxes	9,353		69,409		(12,969)		(37,526)		28,267
Income tax benefit (provision), net	9,224		(19,266)		(595)		—		(10,637)
Net income (loss)	18,577		50,143		(13,564)		(37,526)		17,630
Less: Net loss (income) attributable to non-controlling interests	—		—		947		—		947
Net income (loss) attributable to HSSC	$	18,577	$	50,143	$	(12,617)	$	(37,526)	$	18,577
Comprehensive income (loss):
Net income (loss)	$	18,577	$	50,143	$	(13,564)	$	(37,526)	$	17,630
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		—		(33,742)		—		(33,742)
Unrealized gains (losses) on available-for-sale securities	(88)		—		—		—		(88)
Amounts reclassified to net income (loss):
Equity in other comprehensive income (loss) of subsidiaries, net	(28,132)		(28,132)		—		56,264		—
Total other comprehensive income (loss), net of tax	(28,220)		(28,132)		(33,742)		56,264		(33,830)
Comprehensive income (loss)	(9,643)		22,011		(47,306)		18,738		(16,200)
Less: Comprehensive loss (income) attributable to non-controlling interests	—		—		6,557		—		6,557
Comprehensive income (loss) attributable to HSSC	$	(9,643)	$	22,011	$	(40,749)	$	18,738	$	(9,643)

Consolidating Statement of Operations and Comprehensive Income (Loss)

For the Three Months Ended March 31, 2020

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Revenue:
Services and other revenue	$	—	$	354,399	$	64,928	$	(9,089)	$	410,238
Equipment revenue	—		65,586		5,410		(13,687)		57,309
Total revenue	—		419,985		70,338		(22,776)		467,547
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)	—		110,471		42,063		(8,649)		143,885
Cost of sales - equipment (exclusive of depreciation and amortization)	—		55,374		4,221		(13,687)		45,908
Selling, general and administrative expenses	—		95,818		20,482		(440)		115,860
Research and development expenses	—		6,109		145		—		6,254
Depreciation and amortization	—		99,359		26,606		—		125,965
Total costs and expenses	—		367,131		93,517		(22,776)		437,872
Operating income (loss)	—		52,854		(23,179)		—		29,675
Other income (expense):
Interest income	7,953		971		891		(923)		8,892
Interest expense, net of amounts capitalized	(40,472)		(613)		(2,030)		923		(42,192)
Gains (losses) on investments, net	—		(164)		—		—		(164)
Equity in earnings (losses) of unconsolidated affiliates, net	—		(1,087)		—		—		(1,087)
Equity in earnings (losses) of subsidiaries, net	10,630		(29,167)		—		18,537		—
Foreign currency transaction gains (losses), net	—		(2)		(7,526)		—		(7,528)
Other, net	—		(275)		(3)		—		(278)
Total other income (expense), net	(21,889)		(30,337)		(8,668)		18,537		(42,357)
Income (loss) before income taxes	(21,889)		22,517		(31,847)		18,537		(12,682)
Income tax benefit (provision), net	7,418		(11,804)		(845)		—		(5,231)
Net income (loss)	(14,471)		10,713		(32,692)		18,537		(17,913)
Less: Net loss (income) attributable to non-controlling interests	—		—		3,442		—		3,442
Net income (loss) attributable to HSSC	$	(14,471)	$	10,713	$	(29,250)	$	18,537	$	(14,471)
Comprehensive income (loss):
Net income (loss)	$	(14,471)	$	10,713	$	(32,692)	$	18,537	$	(17,913)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		—		(82,836)		—		(82,836)
Unrealized gains (losses) on available-for-sale securities	(2,479)		—		—		—		(2,479)
Other	—		—		(405)		—		(405)
Equity in other comprehensive income (loss) of subsidiaries, net	(66,918)		(66,918)		—		133,836		—
Total other comprehensive income (loss), net of tax	(69,397)		(66,918)		(83,241)		133,836		(85,720)
Comprehensive income (loss)	(83,868)		(56,205)		(115,933)		152,373		(103,633)
Less: Comprehensive loss (income) attributable to non-controlling interests	—		—		19,765		—		19,765
Comprehensive income (loss) attributable to HSSC	$	(83,868)	$	(56,205)	$	(96,168)	$	152,373	$	(83,868)

Schedule of consolidating statement of cash flows

Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2021

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Cash flows from operating activities:
Net income (loss)	$	18,577	$	50,143	$	(13,564)	$	(37,526)	$	17,630
Adjustments to reconcile net income (loss) to net cash flows from operating activities	(61,725)		102,402		25,616		37,526		103,819
Net cash provided by (used for) operating activities	(43,148)		152,545		12,052		—		121,449
Cash flows from investing activities:
Purchases of marketable investment securities	(310,528)		—		—		—		(310,528)
Sales and maturities of marketable investment securities	1,003,198		—		—		—		1,003,198
Expenditures for property and equipment	—		(52,246)		(29,950)		—		(82,196)
Expenditures for externally marketed software	—		(7,846)		—		—		(7,846)
Distributions (contributions) and advances from (to) subsidiaries, net	77,097		(24,100)		—		(52,997)		—
Net cash provided by (used for) investing activities	769,767		(84,192)		(29,950)		(52,997)		602,628
Cash flows from financing activities:
Repurchase of the 2021 Senior Unsecured Notes	(62,588)		—		—		—		(62,588)
Payment of finance lease obligations	—		—		(329)		—		(329)
Payment of in-orbit incentive obligations	—		(1,104)		—		—		(1,104)
Contribution by non-controlling interest holder	—		—		5,400		—		5,400
Other, net	—		—		(292)		—		(292)
Contribution (distributions) and advances (to) from parent, net	—		(77,097)		24,100		52,997		—
Net cash provided by (used for) financing activities	(62,588)		(78,201)		28,879		52,997		(58,913)
Effect of exchange rates on cash and cash equivalents	—		—		(1,700)		—		(1,700)
Net increase (decrease) in cash and cash equivalents	664,031		(9,848)		9,281		—		663,464
Cash and cash equivalents, including restricted amounts, beginning of period	649,851		46,055		45,391		—		741,297
Cash and cash equivalents, including restricted amounts, end of period	$	1,313,882	$	36,207	$	54,672	$	—	$	1,404,761

Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2020

	Hughes Satellite Systems Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Cash flows from operating activities:
Net income (loss)	$	(14,471)	$	10,713	$	(32,692)	$	18,537	$	(17,913)
Adjustments to reconcile net income (loss) to net cash flows from operating activities	(22,215)		95,031		28,858		(18,537)		83,137
Net cash provided by (used for) operating activities	(36,686)		105,744		(3,834)		—		65,224
Cash flows from investing activities:
Purchases of marketable investment securities	(365,877)		—		—		—		(365,877)
Sales and maturities of marketable investment securities	490,020		—		—		—		490,020
Expenditures for property and equipment	—		(61,134)		(30,383)		—		(91,517)
Expenditures for externally marketed software	—		(8,638)		—		—		(8,638)
Distributions (contributions) and advances from (to) subsidiaries, net	29,290		(18,939)		—		(10,351)		—
Net cash provided by (used for) investing activities	153,433		(88,711)		(30,383)		(10,351)		23,988
Cash flows from financing activities:
Payment of finance lease obligations	—		—		(215)		—		(215)
Payment of in-orbit incentive obligations	—		(203)		—		—		(203)
Contribution by non-controlling interest holder	—		—		4,000		—		4,000
Other, net	—		—		979		—		979
Contribution (distributions) and advances (to) from parent, net	—		(29,290)		18,939		10,351		—
Net cash provided by (used for) financing activities	—		(29,493)		23,703		10,351		4,561
Effect of exchange rates on cash and cash equivalents	—		—		(4,618)		—		(4,618)
Net increase (decrease) in cash and cash equivalents	116,747		(12,460)		(15,132)		—		89,155
Cash and cash equivalents, including restricted amounts, beginning of period	1,057,903		32,338		50,081		—		1,140,322
Cash and cash equivalents, including restricted amounts, end of period	$	1,174,650	$	19,878	$	34,949	$	—	$	1,229,477

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Organization and Business Activities (Details)	3 Months Ended
	Mar. 31, 2021 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of business segments	2

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Revenue Recognition - Schedule of Components of Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Trade accounts receivable and contract assets, net:
Trade accounts receivable	$ 154,669		$ 154,066
Contract assets	46,267		45,308
Allowance for doubtful accounts	(13,664)		(15,386)
Total trade accounts receivable and contract assets, net	187,272		183,988
Contract liabilities:
Current	112,507		104,569
Non-current	10,357		10,519
Total contract liabilities	122,864		115,088
Revenue recognized	63,081	$ 52,172
Sales and services
Trade accounts receivable and contract assets, net:
Trade accounts receivable	150,021		149,513
Leasing
Trade accounts receivable and contract assets, net:
Trade accounts receivable	$ 4,648		$ 4,553

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Revenue Recognition - Contract Acquisition Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Increase (Decrease) In Capitalized Contract Cost [Roll Forward]
Balance at beginning of period	$ 99,837	$ 113,592
Additions	18,400	26,474
Amortization expense	(22,769)	(25,675)
Foreign currency translation	(875)	(3,994)
Balance at end of period	$ 94,593	$ 110,397

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Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Remaining performance obligation	$ 939.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Sales-type lease receivable	$ 13.4	$ 13.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligation period	1 year
Remaining performance obligation, percentage	37.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligation period
Remaining performance obligation, percentage	63.00%

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Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Total revenue	$ 485,230	$ 467,547
North America
Disaggregation of Revenue [Line Items]
Total revenue	402,760	387,082
South and Central America
Disaggregation of Revenue [Line Items]
Total revenue	43,030	33,956
Other
Disaggregation of Revenue [Line Items]
Total revenue	39,440	46,509
Services and other revenue
Disaggregation of Revenue [Line Items]
Total revenue	432,991	410,238
Services
Disaggregation of Revenue [Line Items]
Total revenue	416,209	392,765
Lease revenue
Disaggregation of Revenue [Line Items]
Total revenue	16,782	17,473
Total equipment revenue
Disaggregation of Revenue [Line Items]
Total revenue	52,239	57,309
Equipment
Disaggregation of Revenue [Line Items]
Total revenue	28,521	24,839
Design, development and construction services
Disaggregation of Revenue [Line Items]
Total revenue	21,636	31,557
Lease revenue
Disaggregation of Revenue [Line Items]
Total revenue	2,082	913
Corporate and Other
Disaggregation of Revenue [Line Items]
Total revenue	5,282	4,413
Corporate and Other | North America
Disaggregation of Revenue [Line Items]
Total revenue	(88)	(285)
Corporate and Other | South and Central America
Disaggregation of Revenue [Line Items]
Total revenue	0	0
Corporate and Other | Other
Disaggregation of Revenue [Line Items]
Total revenue	5,370	4,698
Corporate and Other | Services and other revenue
Disaggregation of Revenue [Line Items]
Total revenue	5,282	4,413
Corporate and Other | Services
Disaggregation of Revenue [Line Items]
Total revenue	0	0
Corporate and Other | Lease revenue
Disaggregation of Revenue [Line Items]
Total revenue	5,282	4,413
Corporate and Other | Total equipment revenue
Disaggregation of Revenue [Line Items]
Total revenue	0	0
Corporate and Other | Equipment
Disaggregation of Revenue [Line Items]
Total revenue	0	0
Corporate and Other | Design, development and construction services
Disaggregation of Revenue [Line Items]
Total revenue	0	0
Corporate and Other | Lease revenue
Disaggregation of Revenue [Line Items]
Total revenue	0	0
Hughes
Disaggregation of Revenue [Line Items]
Total revenue	475,859	458,482
Hughes | Operating segments
Disaggregation of Revenue [Line Items]
Total revenue	475,859	458,482
Hughes | Operating segments | North America
Disaggregation of Revenue [Line Items]
Total revenue	398,759	382,715
Hughes | Operating segments | South and Central America
Disaggregation of Revenue [Line Items]
Total revenue	43,030	33,956
Hughes | Operating segments | Other
Disaggregation of Revenue [Line Items]
Total revenue	34,070	41,811
Hughes | Operating segments | Services and other revenue
Disaggregation of Revenue [Line Items]
Total revenue	423,620	401,173
Hughes | Operating segments | Services
Disaggregation of Revenue [Line Items]
Total revenue	413,519	390,000
Hughes | Operating segments | Lease revenue
Disaggregation of Revenue [Line Items]
Total revenue	10,101	11,173
Hughes | Operating segments | Total equipment revenue
Disaggregation of Revenue [Line Items]
Total revenue	52,239	57,309
Hughes | Operating segments | Equipment
Disaggregation of Revenue [Line Items]
Total revenue	28,521	24,839
Hughes | Operating segments | Design, development and construction services
Disaggregation of Revenue [Line Items]
Total revenue	21,636	31,557
Hughes | Operating segments | Lease revenue
Disaggregation of Revenue [Line Items]
Total revenue	2,082	913
ESS
Disaggregation of Revenue [Line Items]
Total revenue	4,001	4,367
ESS | Operating segments
Disaggregation of Revenue [Line Items]
Total revenue	4,089	4,652
ESS | Operating segments | North America
Disaggregation of Revenue [Line Items]
Total revenue	4,089	4,652
ESS | Operating segments | South and Central America
Disaggregation of Revenue [Line Items]
Total revenue	0	0
ESS | Operating segments | Other
Disaggregation of Revenue [Line Items]
Total revenue	0	0
ESS | Operating segments | Services and other revenue
Disaggregation of Revenue [Line Items]
Total revenue	4,089	4,652
ESS | Operating segments | Services
Disaggregation of Revenue [Line Items]
Total revenue	2,690	2,765
ESS | Operating segments | Lease revenue
Disaggregation of Revenue [Line Items]
Total revenue	1,399	1,887
ESS | Operating segments | Total equipment revenue
Disaggregation of Revenue [Line Items]
Total revenue	0	0
ESS | Operating segments | Equipment
Disaggregation of Revenue [Line Items]
Total revenue	0	0
ESS | Operating segments | Design, development and construction services
Disaggregation of Revenue [Line Items]
Total revenue	0	0
ESS | Operating segments | Lease revenue
Disaggregation of Revenue [Line Items]
Total revenue	$ 0	$ 0

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Revenue Recognition - Lease Income By Lease Type (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Sales-type lease revenue:
Revenue at lease commencement	$ 2,082	$ 913
Interest income	73	69
Total sales-type lease revenue	2,155	982
Operating lease revenue	16,709	17,404
Total lease revenue	$ 18,864	$ 18,386

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Revenue Recognition - Lease Income Maturity (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Amounts
2021 (remainder)	$ 30,433
2022	34,082
2023	32,000
2024	29,740
2025	28,482
2026 and beyond	47,562
Total lease payments	$ 202,299

XML

Revenue Recognition - Property and Equipment Subject to Operating Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Assets leased to others
Property, Plant and Equipment [Line Items]
Cost	$ 1,841,669		$ 1,810,948
Accumulated Depreciation	(1,410,616)		(1,355,545)
Net	431,053		455,403
Depreciation	62,711	$ 51,248
Customer premises equipment
Property, Plant and Equipment [Line Items]
Cost	1,737,049		1,706,328
Accumulated Depreciation	(1,370,538)		(1,317,210)
Net	366,511		389,118
Depreciation	60,967	49,504
Satellites
Property, Plant and Equipment [Line Items]
Cost	104,620		104,620
Accumulated Depreciation	(40,078)		(38,335)
Net	64,542		$ 66,285
Depreciation	$ 1,744	$ 1,744

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Marketable Investment Securities - Schedule of Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Available-for-sale debt securities:
Debt securities	$ 515,300	$ 1,203,290
Equity securities	6	6
Marketable investment securities	515,306	1,203,296
Corporate bonds
Available-for-sale debt securities:
Debt securities	109,598	276,361
Commercial paper
Available-for-sale debt securities:
Debt securities	327,648	823,173
Other debt securities
Available-for-sale debt securities:
Debt securities	$ 78,054	$ 103,756

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Marketable Investment Securities - Unrealized Gains (Losses) on Available-for-Sale (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Estimated Fair Value	$ 515,300	$ 1,203,290
Corporate bonds
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost	109,600	276,327
Unrealized Gains	10	59
Unrealized Losses	(12)	(25)
Estimated Fair Value	109,598	276,361
Commercial paper
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost	327,648	823,173
Unrealized Gains	0	0
Unrealized Losses	0	0
Estimated Fair Value	327,648	823,173
Other debt securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost	78,108	103,758
Unrealized Gains	2	3
Unrealized Losses	(56)	(5)
Estimated Fair Value	78,054	103,756
Total available-for-sale debt securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost	515,356	1,203,258
Unrealized Gains	12	62
Unrealized Losses	(68)	(30)
Estimated Fair Value	$ 515,300	$ 1,203,290

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Marketable Investment Securities - Activity on Available-for-sale Debt Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]
Proceeds from sales	$ 95,765	$ 10,000

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Marketable Investment Securities - Narrative (Details) $ in Millions	Mar. 31, 2021 USD ($)
Investments, Debt and Equity Securities [Abstract]
Debt securities with contractual maturities of one year or less	$ 491.2
Debt securities with contractual maturities exceeding one year	$ 24.1

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Marketable Investment Securities - Equity Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]
Gains (losses) on investments, net	$ 0	$ (164)

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Marketable Investment Securities - Schedule of Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Fair value of marketable securities
Cash equivalents (including restricted)	$ 1,318,037	$ 654,981
Available-for-sale debt securities:
Debt securities	515,300	1,203,290
Equity securities	6	6
Total marketable investment securities	515,306	1,203,296
Corporate bonds
Available-for-sale debt securities:
Debt securities	109,598	276,361
Other debt securities
Available-for-sale debt securities:
Debt securities	78,054	103,756
Commercial paper
Available-for-sale debt securities:
Debt securities	327,648	823,173
Level 1
Fair value of marketable securities
Cash equivalents (including restricted)	508	128
Available-for-sale debt securities:
Debt securities	32,498	95,497
Equity securities	6	6
Total marketable investment securities	32,504	95,503
Level 1 | Corporate bonds
Available-for-sale debt securities:
Debt securities	0	0
Level 1 | Other debt securities
Available-for-sale debt securities:
Debt securities	32,498	95,497
Level 1 | Commercial paper
Available-for-sale debt securities:
Debt securities	0	0
Level 2
Fair value of marketable securities
Cash equivalents (including restricted)	1,317,529	654,853
Available-for-sale debt securities:
Debt securities	482,802	1,107,793
Equity securities	0	0
Total marketable investment securities	482,802	1,107,793
Level 2 | Corporate bonds
Available-for-sale debt securities:
Debt securities	109,598	276,361
Level 2 | Other debt securities
Available-for-sale debt securities:
Debt securities	45,556	8,259
Level 2 | Commercial paper
Available-for-sale debt securities:
Debt securities	$ 327,648	$ 823,173

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Property and Equipment - Schedule of Major Asset Class (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Property and equipment, net:
Property and equipment, net	$ 1,631,221	$ 1,691,523
Satellites, net
Property and equipment, net:
Property and equipment, net	919,813	954,559
Other property and equipment, net
Property and equipment, net:
Property and equipment, net	$ 711,408	$ 736,964

XML

Property and Equipment - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($) satellite mi	Dec. 31, 2020 USD ($)
Satellite-related obligations
Property, Plant and Equipment [Line Items]
Satellite-related obligations | $	$ 215.1	$ 224.4
Satellites
Property, Plant and Equipment [Line Items]
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator	8
Satellites in geosynchronous orbit length above equator | mi	22,300
Satellites - owned
Property, Plant and Equipment [Line Items]
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator	5
Satellites, Leased
Property, Plant and Equipment [Line Items]
Number of satellites utilized under capital lease	3
Level 2
Property, Plant and Equipment [Line Items]
Obligations, fair value disclosure | $	$ 54.3	$ 55.4

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Property and Equipment - Schedule of Satellite Fleet (Details)	3 Months Ended
	Mar. 31, 2021
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	15 years
SPACEWAY 3
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	10 years
EchoStar XVII
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	15 years
EchoStar XIX
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	15 years
Al Yah 3
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	7 years
EchoStar IX
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	12 years
Eutelsat 65 West A
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	15 years
Telesat T19V
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	15 years
EchoStar 105/SES-11
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	15 years

XML

Property and Equipment - Schedule of Satellite Breakdown (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	15 years
Satellites, net:
Satellites - acquired under finance leases	$ 352,261	$ 352,245
Accumulated depreciation:
Total satellites, net	1,631,221	1,691,523
Satellites
Satellites, net:
Total satellites	1,852,331	1,855,841
Accumulated depreciation:
Accumulated depreciation:	(932,518)	(901,282)
Total satellites, net	919,813	954,559
Satellites - owned
Satellites, net:
Satellites - owned	1,500,070	1,503,596
Accumulated depreciation:
Accumulated depreciation:	(855,104)	(827,274)
Satellites - acquired under finance leases
Accumulated depreciation:
Accumulated depreciation:	$ (77,414)	$ (74,008)
Minimum
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	7 years
Maximum
Property, Plant and Equipment [Line Items]
Depreciable Life (In Years)	15 years

XML

Property and Equipment - Schedule of Depreciation Expense and Capitalized Interest (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Depreciation expense
Depreciation, Depletion and Amortization, Nonproduction, Total	$ 122,664	$ 125,965
Capitalized interest	1,246	637
Satellites
Depreciation expense
Depreciation, Depletion and Amortization, Nonproduction, Total	34,269	33,081
Satellites - owned
Depreciation expense
Total depreciation expense	27,068	27,068
Satellites - acquired under finance leases
Depreciation expense
Amortization of right-of-use assets	$ 7,201	$ 6,013

XML

Regulatory Authorizations - Schedule of Finite Lived and Indefinite Lived Intangible Assets by Major Class (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Accumulated Amortization
Amortization expense	$ (208)	$ (100)
Indefinite lived
Balance at the beginning of the period	400,000	400,000
Currency translation adjustments	0	0
Balance at the end of the period	400,000	400,000
Total
Balance at the beginning of the period	410,451	412,363
Currency translation adjustments	(283)	(1,020)
Balance at the end of the period	$ 409,960	411,243
Weighted-average useful life (in years)	14 years
Regulatory authorization
Cost
Balance at the beginning of the period	$ 11,505	12,524
Currency translation adjustments	(321)	(1,020)
Balance at the end of the period	11,184	11,504
Accumulated Amortization
Balance at beginning of the period	1,054	161
Amortization expense	(208)	(100)
Currency translation adjustments	38	0
Balance at end of the period	1,224	261
Total
Carrying Amount	9,960	11,243	$ 10,451	$ 12,363
Currency translation adjustments	(283)	(1,020)
Balance at the end of the period	9,960	$ 11,243
Total
Balance at the beginning of the period	410,451
Balance at the end of the period	$ 409,960

XML

Other Investments - Schedule of Other Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Other investments, net:
Equity method investments	$ 94,812	$ 96,573
Other equity investments	7,351	7,351
Total other investments, net	$ 102,163	$ 103,924

XML

Other Investments - Narrative (Details) - USD ($) $ in Millions	1 Months Ended
	Dec. 31, 2018	Mar. 31, 2021
Deluxe
Schedule of Equity Method Investments [Line Items]
Equity interest, percentage in joint venture		50.00%
Broadband Connectivity Solutions
Schedule of Equity Method Investments [Line Items]
Equity interest, percentage in joint venture	20.00%
Payments to acquire equity method investments	$ 100.0

XML

Other Investments - Schedule of Revenue Recognized (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Deluxe
Schedule of Equity Method Investments [Line Items]
Revenue from related parties	$ 1,631	$ 1,255
Broadband Connectivity Solutions
Schedule of Equity Method Investments [Line Items]
Revenue from related parties	$ 1,348	$ 1,669

XML

Other Investments - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Deluxe
Schedule of Equity Method Investments [Line Items]
Receivables from related parties	$ 1,318	$ 716
Broadband Connectivity Solutions
Schedule of Equity Method Investments [Line Items]
Receivables from related parties	$ 5,043	$ 9,347

XML

Long-Term Debt - Schedule of Debt and Finance Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Debt
Less: Unamortized debt issuance costs	$ (5,292)	$ (6,507)
Carrying amount, total long-term debt	2,304,194	2,393,493
Carrying amount, less: current portion, net	(808,758)	(898,237)
Carrying amount, long-term debt, net	1,495,436	1,495,256
Fair value, total long-term debt	2,486,871	2,610,858
Fair value, less: current portion, net	(821,555)	(924,003)
Fair value, long-term debt, net	$ 1,665,316	1,686,855
Senior Secured Notes | 5 1/4% Senior Secured Notes due 2026
Debt
Interest rate	5.25%
Effective Interest Rate	5.32%
Carrying amount, gross	$ 750,000	750,000
Fair value, total long-term debt	$ 830,933	834,045
Senior Unsecured Notes | 7 5/8% Senior Unsecured Notes due 2021
Debt
Interest rate	7.625%
Effective Interest Rate	8.062%
Carrying amount, gross	$ 809,486	900,000
Fair value, total long-term debt	$ 821,555	924,003
Senior Unsecured Notes | 6 5/8% Senior Unsecured Notes due 2026
Debt
Interest rate	6.625%
Effective Interest Rate	6.688%
Carrying amount, gross	$ 750,000	750,000
Fair value, total long-term debt	$ 834,383	$ 852,810

XML

Long-Term Debt - Narrative (Details) $ in Millions	Mar. 31, 2021 USD ($)
Senior Unsecured Notes | 7 5/8% Senior Unsecured Notes due 2021
Debt
Amount of debt repurchased	$ 90.5

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Income tax provision	$ 10,637	$ 5,231
Effective income tax rate	37.60%	(41.20%)

XML

Related Party Transactions - Echostar - Services and Other Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Related party transactions
Related party receivables - non-current	$ 54,970		$ 57,136
EchoStar
Related party transactions
Services and other revenue	5,371	$ 4,699
Related party receivable - current	114,225		116,220
Related party receivables - non-current	54,970		57,136
Total related party receivables	$ 169,195		$ 173,356

XML

Related Party Transactions - Echostar - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Minimum | Related-party advances | One-year LIBOR
Related party transactions
Annual rates	1.00%
Maximum | Related-party advances | One-year LIBOR
Related party transactions
Annual rates	3.00%
EchoStar Mobile Limited
Related party transactions
Revenue from related parties	$ 5,400	$ 4,700
Interest rate on converted receivables loan	5.00%
EchoStar
Related party transactions
Revenue from related parties	$ 5,371	4,699
Required minimum notice period for termination of agreement after lease extension	30 days
Expense recorded for services provided	$ 400	4,400
EOC | Construction Management Services
Related party transactions
Related party costs	$ 300	$ 300

XML

Related Party Transactions - Echostar - Operating Expenses (Details) - EchoStar - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Related party transactions
Operating expenses	$ 15,387	$ 12,642
Related party payables - current	51,396		$ 51,420
Related party payables - non-current	24,533		25,114
Total related party payables	$ 75,929		$ 76,534

XML

Related Party Transactions - Dish Network - Overview (Details)	1 Months Ended
	Sep. 30, 2019 $ / shares shares	May 31, 2019 shares	Feb. 28, 2017	Sep. 30, 2009 transponder	Mar. 31, 2021 $ / shares	Dec. 31, 2020 $ / shares
Related party transactions
Common stock, par value (in dollars per share)					$ 0.01	$ 0.01
Common Stock | BSS Corp.
Related party transactions
Common stock, par value (in dollars per share)	$ 0.001
Share of BSS common stock issued for each share of Echostar Class A or Class B common stock (in shares) | shares	1
Class A common stock | DISH Network
Related party transactions
Common stock, par value (in dollars per share)	$ 0.001
Entity shares issued per acquiree share (in shares) | shares	0.23523769	0.23523769
DISH Network | Share Exchange Agreement | EchoStar Technologies segment
Related party transactions
Ownership interest acquired by related party (as a percent)			100.00%
DISH Network | Hughes Retail Preferred Tracking Stock | Hughes Retail Group | Satellite and Tracking Stock Transaction
Related party transactions
Percentage of economic interest held			80.00%
Telesat Canada | Telesat Obligation Agreement
Related party transactions
Number of transponders | transponder				32

XML

Related Party Transactions - Dish Network - Services and Other Revenue - DISH Network (Details) - DISH Network - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Related party transactions
Revenue from related parties	$ 5,727	$ 7,587
Receivables from related parties	$ 4,449		$ 4,706

XML

Related Party Transactions - Dish Network - TerreStar Agreement (Details) - DISH Network - TerreStar Agreement	1 Months Ended
	Dec. 31, 2017
Related party transactions
Minimum termination notice period	21 days
Required minimum notice for termination of agreement	90 days

XML

Related Party Transactions - Dish Network - Hughes Broadband Distribution Agreement (Details) - Hughes Broadband Distribution Agreement	1 Months Ended
	Oct. 31, 2012
Related party transactions
Agreement term	5 years
Automatic renewal period	1 year
Required minimum notice for termination of agreement	180 days

XML

Related Party Transactions - Dish Network - DBSD North America Agreement (Details) - DISH Network - DBSD North America Agreement	1 Months Ended
	Feb. 28, 2022	Feb. 28, 2019	Dec. 31, 2017
Related party transactions
Required minimum notice for termination of agreement			120 days
Minimum termination notice period		21 days
Subsequent Event
Related party transactions
Minimum termination notice period	180 days
Scenario, Forecast
Related party transactions
Automatic renewal period	5 years

XML

Related Party Transactions - Dish Network - Hughes Equipment and Services Agreement (Details) - DISH Network - Hughes Equipment And Service Agreement	1 Months Ended
	Feb. 28, 2019
Related party transactions
Agreement term	5 years
Automatic renewal period	1 year
Required minimum notice for termination of agreement	180 days
Minimum termination notice period	365 days

XML

Related Party Transactions - DISH Network - Operating Expenses - DISH Network (Details) - DISH Network - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Related party transactions
Operating expenses - DISH Network	$ 1,099	$ 1,137
Related party payable	$ 417		$ 477

XML

Related Party Transactions - Dish Network - Amended and Restated Professional Services Agreement (Details) - DISH Network	1 Months Ended
	Jan. 31, 2010
Amended and Restated Professional Services Agreement
Related party transactions
Automatic renewal period	1 year
EchoStar Amended and Restated Professional Services Agreement
Related party transactions
Required minimum notice for termination of agreement	60 days
Required minimum notice for termination of individual service	30 days

XML

Related Party Transactions - Dish Network - Collocation and Antenna Space Agreement (Details) - DISH Network - Collocation and Antenna Space Agreements - renewal	1 Months Ended
	Mar. 31, 2021	Sep. 30, 2019	Aug. 31, 2017	Aug. 31, 2015
Related party transactions
Number of renewal terms				2
Term of renewal option			3 years	3 years
Termination notice required			180 days
Cheyenne, Wyoming
Related party transactions
Number of renewal terms		4
Term of renewal option		3 years
Agreement term		5 years
Cheyenne, Wyoming And Gilbert, Arizona
Related party transactions
Number of renewal terms	4
Term of renewal option	3 years
Agreement term	5 years
Maximum
Related party transactions
Required renewal notice			120 days
Maximum | Cheyenne, Wyoming
Related party transactions
Required renewal notice		120 days
Maximum | Cheyenne, Wyoming And Gilbert, Arizona
Related party transactions
Required renewal notice	120 days
Minimum
Related party transactions
Required renewal notice			90 days
Minimum | Cheyenne, Wyoming
Related party transactions
Required renewal notice		90 days
Minimum | Cheyenne, Wyoming And Gilbert, Arizona
Related party transactions
Required renewal notice	90 days

XML

Related Party Transactions - Dish Network - Hughes Broadband and Master Services Agreement (Details) - DISH Network - Hughes Broadband Master Services Agreement - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2021	Mar. 31, 2020
Related party transactions
Agreement term	5 years
Automatic renewal period	1 year
Required minimum notice for termination of agreement	90 days
Cost of sales		$ 1.9	$ 4.6

XML

Related Party Transactions - Dish Network - 2019 TT&C Agreement (Details) - DISH Network - TT&C Agreement	1 Months Ended
	Sep. 30, 2019
Related party transactions
Term of renewal option	1 year
Required renewal notice	90 days
Termination notice required	12 months

XML

Related Party Transactions - Dish Network - Other Agreements (Details) - shares	1 Months Ended
	Sep. 30, 2019	May 31, 2019
Class A common stock | DISH Network
Related party transactions
Entity shares issued per acquiree share (in shares)	0.23523769	0.23523769

XML

Related Party Transactions - Other (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Hughes Systique
Related party transactions
Ownership interest in related party (as a percent)	43.00%
Ownership interest percentage by related party	25.00%
TerreStar Solutions, Inc.
Related party transactions
Investment nonvoting interest ownership percentage(at least)	15.00%
Revenue from related parties	$ 0.4	$ 2.2
Receivables from related parties	$ 1.5		$ 0.4

XML

Contingencies - Narrative (Details)	Sep. 01, 2020
License Fee Dispute
Loss Contingencies [Line Items]
Payment schedule term	10 years

XML

Contingencies - Accrual For License Fees (Details) - License Fee Dispute - Hughes Network Systems - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Loss Contingencies [Line Items]
Total accrual	$ 77,036	$ 81,778
Less: Payments	(8,574)	(2,975)
Additional license fees
Loss Contingencies [Line Items]
Total accrual	3,867	3,890
Penalties
Loss Contingencies [Line Items]
Total accrual	3,969	3,992
Interest and Interest on Penalties
Loss Contingencies [Line Items]
Total accrual	$ 77,774	$ 76,871

XML

Segment Reporting - Revenue, Capital Expenditures, and EBITDA (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) segment	Mar. 31, 2020 USD ($)
Segment Reporting [Abstract]
Number of business segments | segment	2
Segment Reporting
Total revenue	$ 485,230	$ 467,547
EBITDA	191,406	150,025
Capital expenditures	82,196	91,517
Income (loss) before income taxes	28,267	(12,682)
Interest income, net	(2,394)	(8,892)
Interest expense, net of amounts capitalized	41,922	42,192
Income tax benefit (provision), net	10,637	5,231
Depreciation and amortization	122,664	125,965
Income (Loss) Attributable to Noncontrolling Interest, before Tax	947	3,442
Hughes
Segment Reporting
Total revenue	475,859	458,482
ESS
Segment Reporting
Total revenue	4,001	4,367
All Other Segments and Eliminations
Segment Reporting
Total revenue	5,370	4,698
Intersegment revenue
Segment Reporting
Total revenue	(88)	(285)
Intersegment revenue | Hughes
Segment Reporting
Total revenue	0	0
Intersegment revenue | ESS
Segment Reporting
Total revenue	88	285
Operating segments | Hughes
Segment Reporting
Total revenue	475,859	458,482
EBITDA	198,578	154,641
Capital expenditures	82,196	91,517
Operating segments | ESS
Segment Reporting
Total revenue	4,089	4,652
EBITDA	1,919	2,030
Capital expenditures	0	0
Corporate and Other
Segment Reporting
Total revenue	5,282	4,413
EBITDA	(9,091)	(6,646)
Capital expenditures	$ 0	$ 0

XML

Supplemental Financial Information - Schedule of Other Current Assets and Other Non-Current Assets, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Other current assets, net:
Inventory	$ 95,439	$ 97,831
Prepaids and deposits	43,812	42,243
Other, net	28,764	30,815
Total other current assets	286,689	291,815
Other non-current assets, net:
Restricted cash	835	807
Deferred tax assets, net	1,520	1,679
Capitalized software, net	118,953	116,661
Contract acquisition and fulfillment costs, net	94,593	99,837	$ 110,397	$ 113,592
Related party receivables	54,970	57,136
Other, net	29,629	28,977
Total other non-current assets, net	302,416	307,677
DISH Network
Other current assets, net:
Related party receivables	4,449	4,706
EchoStar
Other current assets, net:
Related party receivables	114,225	116,220
Contract Acquisition Costs
Other non-current assets, net:
Contract acquisition and fulfillment costs, net	94,593	99,837
Contract Fulfillment Costs
Other non-current assets, net:
Contract acquisition and fulfillment costs, net	$ 1,916	$ 2,580

XML

Supplemental Financial Information - Accrued Expenses and Other Current Liabilities and Other Non-current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Accrued expenses and other current liabilities:
Accrued interest	$ 34,514	$ 42,388
Accrued compensation	44,489	52,231
Accrued taxes	11,937	11,780
Operating lease obligation	14,986	14,670
Other	170,577	152,620
Accrued expenses and other current liabilities	328,316	325,587
Other non-current liabilities:
Other	62,109	62,843
Total other non-current liabilities	$ 86,642	$ 87,957
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued expenses and other current liabilities	Accrued expenses and other current liabilities
EchoStar
Accrued expenses and other current liabilities:
Related party payable	$ 51,396	$ 51,421
Other non-current liabilities:
Related party payables - EchoStar	24,533	25,114
DISH Network
Accrued expenses and other current liabilities:
Related party payable	$ 417	$ 477

XML

Supplemental Financial Information - Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Raw materials	$ 5,308	$ 4,564
Work-in-process	7,054	8,280
Finished goods	83,077	84,987
Total inventory	$ 95,439	$ 97,831

XML

Supplemental Financial Information - Schedule of Noncash Investing and Financing Activities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	$ 45,329	$ 49,563
Cash paid for income taxes	276	716
Non-cash investing and financing activities:
Increase (decrease) in capital expenditures included in accounts payable, net	$ (973)	$ (5,359)

XML

Supplemental Guarantor and Non-Guarantor Financial Information - Narrative (Details)	Mar. 31, 2021
7 5/8% Senior Unsecured Notes due 2021 | Senior Unsecured Notes
Condensed Financial Statements, Captions [Line Items]
Interest rate	7.625%
5 1/4% Senior Secured Notes due 2026 | Senior Secured Notes
Condensed Financial Statements, Captions [Line Items]
Interest rate	5.25%
6 5/8% Senior Unsecured Notes due 2026 | Senior Unsecured Notes
Condensed Financial Statements, Captions [Line Items]
Interest rate	6.625%

XML

Supplemental Guarantor and Non-Guarantor Financial Information - Consolidating Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 1,403,926	$ 740,490
Marketable investment securities	515,306	1,203,296
Trade accounts receivable and contract assets, net	187,272	183,988
Other current assets, net	286,689	291,815
Total current assets	2,393,193	2,419,589
Non-current assets:
Property and equipment, net	1,631,221	1,691,523
Operating lease right-of-use assets	131,452	128,266
Goodwill	510,945	511,597
Regulatory authorizations, net	409,960	410,451	$ 411,243	$ 412,363
Other investments, net	102,163	103,924
Investment in subsidiaries	0	0
Other non-current assets, net	302,416	307,677
Total non-current assets	3,104,403	3,171,778
Total assets	5,497,596	5,591,367
Current liabilities:
Trade accounts payable	104,683	118,568
Current portion of long-term debt, net	808,758	898,237
Contract liabilities	112,507	104,569
Accrued expenses and other current liabilities	328,316	325,587
Total current liabilities	1,354,264	1,446,961
Non-current liabilities:
Long-term debt, net	1,495,436	1,495,256
Deferred tax liabilities, net	376,366	369,940
Operating lease liabilities	118,452	114,877
Other non-current liabilities	86,642	87,957
Total non-current liabilities	2,076,896	2,068,030
Total liabilities	3,431,160	3,514,991
Shareholder's equity:
Total Hughes Satellite Systems Corporation shareholder's equity	2,002,677	2,011,460
Non-controlling interests	63,759	64,916
Total shareholder's equity	2,066,436	2,076,376	2,035,718	2,134,163
Total liabilities and shareholder's equity	5,497,596	5,591,367
Regulatory authorization
Non-current assets:
Regulatory authorizations, net	409,960	410,451
Other intangible assets, net	9,960	10,451	$ 11,243	$ 12,363
Other Intangible Assets
Non-current assets:
Other intangible assets, net	16,246	18,340
Eliminations
Current assets:
Cash and cash equivalents	0	0
Marketable investment securities	0	0
Trade accounts receivable and contract assets, net	0	0
Other current assets, net	(878,118)	(858,931)
Total current assets	(878,118)	(858,931)
Non-current assets:
Property and equipment, net	0	0
Operating lease right-of-use assets	0	0
Goodwill	0	0
Other investments, net	0	0
Investment in subsidiaries	(3,287,483)	(3,193,572)
Other non-current assets, net	(94,806)	(94,715)
Total non-current assets	(3,382,289)	(3,288,287)
Total assets	(4,260,407)	(4,147,218)
Current liabilities:
Trade accounts payable	0	0
Current portion of long-term debt, net	0	0
Contract liabilities	0	0
Accrued expenses and other current liabilities	(878,118)	(858,931)
Total current liabilities	(878,118)	(858,931)
Non-current liabilities:
Long-term debt, net	0	0
Deferred tax liabilities, net	0	0
Operating lease liabilities	0	0
Other non-current liabilities	(94,806)	(94,715)
Total non-current liabilities	(94,806)	(94,715)
Total liabilities	(972,924)	(953,646)
Shareholder's equity:
Total Hughes Satellite Systems Corporation shareholder's equity	(3,287,483)	(3,193,572)
Non-controlling interests	0	0
Total shareholder's equity	(3,287,483)	(3,193,572)
Total liabilities and shareholder's equity	(4,260,407)	(4,147,218)
Eliminations | Regulatory authorization
Non-current assets:
Regulatory authorizations, net	0	0
Eliminations | Other Intangible Assets
Non-current assets:
Other intangible assets, net	0	0
HSS | Reportable Legal Entities
Current assets:
Cash and cash equivalents	1,313,882	649,851
Marketable investment securities	515,306	1,203,296
Trade accounts receivable and contract assets, net	0	0
Other current assets, net	148,125	148,158
Total current assets	1,977,313	2,001,305
Non-current assets:
Property and equipment, net	0	0
Operating lease right-of-use assets	0	0
Goodwill	0	0
Other investments, net	0	0
Investment in subsidiaries	2,965,049	2,942,178
Other non-current assets, net	700	700
Total non-current assets	2,965,749	2,942,878
Total assets	4,943,062	4,944,183
Current liabilities:
Trade accounts payable	0	0
Current portion of long-term debt, net	808,758	898,237
Contract liabilities	0	0
Accrued expenses and other current liabilities	635,846	529,661
Total current liabilities	1,444,604	1,427,898
Non-current liabilities:
Long-term debt, net	1,495,436	1,495,256
Deferred tax liabilities, net	345	9,569
Operating lease liabilities	0	0
Other non-current liabilities	0	0
Total non-current liabilities	1,495,781	1,504,825
Total liabilities	2,940,385	2,932,723
Shareholder's equity:
Total Hughes Satellite Systems Corporation shareholder's equity	2,002,677	2,011,460
Non-controlling interests	0	0
Total shareholder's equity	2,002,677	2,011,460
Total liabilities and shareholder's equity	4,943,062	4,944,183
HSS | Reportable Legal Entities | Regulatory authorization
Non-current assets:
Regulatory authorizations, net	0	0
HSS | Reportable Legal Entities | Other Intangible Assets
Non-current assets:
Other intangible assets, net	0	0
Guarantor Subsidiaries | Reportable Legal Entities
Current assets:
Cash and cash equivalents	36,207	46,055
Marketable investment securities	0	0
Trade accounts receivable and contract assets, net	130,895	129,572
Other current assets, net	922,870	830,912
Total current assets	1,089,972	1,006,539
Non-current assets:
Property and equipment, net	1,277,785	1,312,673
Operating lease right-of-use assets	104,304	99,578
Goodwill	504,173	504,173
Other investments, net	15,455	103,924
Investment in subsidiaries	322,434	251,394
Other non-current assets, net	304,863	307,661
Total non-current assets	2,945,260	2,997,743
Total assets	4,035,232	4,004,282
Current liabilities:
Trade accounts payable	89,812	98,914
Current portion of long-term debt, net	0	0
Contract liabilities	107,467	99,838
Accrued expenses and other current liabilities	341,850	352,121
Total current liabilities	539,129	550,873
Non-current liabilities:
Long-term debt, net	0	0
Deferred tax liabilities, net	373,485	357,835
Operating lease liabilities	96,042	91,241
Other non-current liabilities	62,089	62,717
Total non-current liabilities	531,616	511,793
Total liabilities	1,070,745	1,062,666
Shareholder's equity:
Total Hughes Satellite Systems Corporation shareholder's equity	2,964,487	2,941,616
Non-controlling interests	0	0
Total shareholder's equity	2,964,487	2,941,616
Total liabilities and shareholder's equity	4,035,232	4,004,282
Guarantor Subsidiaries | Reportable Legal Entities | Regulatory authorization
Non-current assets:
Regulatory authorizations, net	400,000	400,000
Guarantor Subsidiaries | Reportable Legal Entities | Other Intangible Assets
Non-current assets:
Other intangible assets, net	16,246	18,340
Non-Guarantor Subsidiaries | Reportable Legal Entities
Current assets:
Cash and cash equivalents	53,837	44,584
Marketable investment securities	0	0
Trade accounts receivable and contract assets, net	56,377	54,416
Other current assets, net	93,812	171,676
Total current assets	204,026	270,676
Non-current assets:
Property and equipment, net	353,436	378,850
Operating lease right-of-use assets	27,148	28,688
Goodwill	6,772	7,424
Other investments, net	86,708	0
Investment in subsidiaries	0	0
Other non-current assets, net	91,659	94,031
Total non-current assets	575,683	519,444
Total assets	779,709	790,120
Current liabilities:
Trade accounts payable	14,871	19,654
Current portion of long-term debt, net	0	0
Contract liabilities	5,040	4,731
Accrued expenses and other current liabilities	228,738	302,736
Total current liabilities	248,649	327,121
Non-current liabilities:
Long-term debt, net	0	0
Deferred tax liabilities, net	2,536	2,536
Operating lease liabilities	22,410	23,636
Other non-current liabilities	119,359	119,955
Total non-current liabilities	144,305	146,127
Total liabilities	392,954	473,248
Shareholder's equity:
Total Hughes Satellite Systems Corporation shareholder's equity	322,996	251,956
Non-controlling interests	63,759	64,916
Total shareholder's equity	386,755	316,872
Total liabilities and shareholder's equity	779,709	790,120
Non-Guarantor Subsidiaries | Reportable Legal Entities | Regulatory authorization
Non-current assets:
Regulatory authorizations, net	9,960	10,451
Non-Guarantor Subsidiaries | Reportable Legal Entities | Other Intangible Assets
Non-current assets:
Other intangible assets, net	$ 0	$ 0

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Supplemental Guarantor and Non-Guarantor Financial Information - Consolidating Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue:
Total revenue	$ 485,230	$ 467,547
Costs and expenses:
Selling, general and administrative expenses	104,370	115,860
Research and development expenses	7,545	6,254
Depreciation and amortization	122,664	125,965
Impairment of long-lived assets	210	0
Total costs and expenses	411,341	437,872
Operating income (loss)	73,889	29,675
Other income (expense):
Interest income	2,394	8,892
Interest expense, net of amounts capitalized	(41,922)	(42,192)
Gains (losses) on investments, net	0	(164)
Equity in earnings (losses) of unconsolidated affiliates, net	(1,761)	(1,087)
Equity in earnings (losses) of subsidiaries, net	0	0
Foreign currency transaction gains (losses), net	(3,360)	(7,528)
Other, net	(973)	(278)
Total other income (expense), net	(45,622)	(42,357)
Income (loss) before income taxes	28,267	(12,682)
Income tax benefit (provision), net	(10,637)	(5,231)
Net income (loss)	17,630	(17,913)
Less: Net loss (income) attributable to non-controlling interests	947	3,442
Net income (loss) attributable to HSSC	18,577	(14,471)
Comprehensive income (loss):
Net income (loss)	17,630	(17,913)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(33,742)	(82,836)
Unrealized gains (losses) on available-for-sale securities	(88)	(2,479)
Other		(405)
Amounts reclassified to net income (loss):
Equity in other comprehensive income (loss) of subsidiaries, net	0	0
Total other comprehensive income (loss), net of tax	(33,830)	(85,720)
Comprehensive income (loss)	(16,200)	(103,633)
Less: Comprehensive loss (income) attributable to non-controlling interests	6,557	19,765
Comprehensive income (loss) attributable to HSSC	(9,643)	(83,868)
Eliminations
Revenue:
Total revenue	(25,253)	(22,776)
Costs and expenses:
Selling, general and administrative expenses	(570)	(440)
Research and development expenses	0	0
Depreciation and amortization	0	0
Impairment of long-lived assets	0
Total costs and expenses	(25,253)	(22,776)
Operating income (loss)	0	0
Other income (expense):
Interest income	(1,210)	(923)
Interest expense, net of amounts capitalized	1,210	923
Gains (losses) on investments, net		0
Equity in earnings (losses) of unconsolidated affiliates, net	0	0
Equity in earnings (losses) of subsidiaries, net	(37,526)	18,537
Foreign currency transaction gains (losses), net	0	0
Other, net	0	0
Total other income (expense), net	(37,526)	18,537
Income (loss) before income taxes	(37,526)	18,537
Income tax benefit (provision), net	0	0
Net income (loss)	(37,526)	18,537
Less: Net loss (income) attributable to non-controlling interests	0	0
Net income (loss) attributable to HSSC	(37,526)	18,537
Comprehensive income (loss):
Net income (loss)	(37,526)	18,537
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	0	0
Unrealized gains (losses) on available-for-sale securities	0	0
Other		0
Amounts reclassified to net income (loss):
Equity in other comprehensive income (loss) of subsidiaries, net	56,264	133,836
Total other comprehensive income (loss), net of tax	56,264	133,836
Comprehensive income (loss)	18,738	152,373
Less: Comprehensive loss (income) attributable to non-controlling interests	0	0
Comprehensive income (loss) attributable to HSSC	18,738	152,373
HSS | Reportable Legal Entities
Revenue:
Total revenue	0	0
Costs and expenses:
Selling, general and administrative expenses	0	0
Research and development expenses	0	0
Depreciation and amortization	0	0
Impairment of long-lived assets	0
Total costs and expenses	0	0
Operating income (loss)	0	0
Other income (expense):
Interest income	1,036	7,953
Interest expense, net of amounts capitalized	(40,244)	(40,472)
Gains (losses) on investments, net		0
Equity in earnings (losses) of unconsolidated affiliates, net	0	0
Equity in earnings (losses) of subsidiaries, net	50,143	10,630
Foreign currency transaction gains (losses), net	0	0
Other, net	(1,582)	0
Total other income (expense), net	9,353	(21,889)
Income (loss) before income taxes	9,353	(21,889)
Income tax benefit (provision), net	9,224	7,418
Net income (loss)	18,577	(14,471)
Less: Net loss (income) attributable to non-controlling interests	0	0
Net income (loss) attributable to HSSC	18,577	(14,471)
Comprehensive income (loss):
Net income (loss)	18,577	(14,471)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	0	0
Unrealized gains (losses) on available-for-sale securities	(88)	(2,479)
Other		0
Amounts reclassified to net income (loss):
Equity in other comprehensive income (loss) of subsidiaries, net	(28,132)	(66,918)
Total other comprehensive income (loss), net of tax	(28,220)	(69,397)
Comprehensive income (loss)	(9,643)	(83,868)
Less: Comprehensive loss (income) attributable to non-controlling interests	0	0
Comprehensive income (loss) attributable to HSSC	(9,643)	(83,868)
Guarantor Subsidiaries | Reportable Legal Entities
Revenue:
Total revenue	424,734	419,985
Costs and expenses:
Selling, general and administrative expenses	83,543	95,818
Research and development expenses	7,358	6,109
Depreciation and amortization	94,252	99,359
Impairment of long-lived assets	210
Total costs and expenses	345,000	367,131
Operating income (loss)	79,734	52,854
Other income (expense):
Interest income	1,287	971
Interest expense, net of amounts capitalized	45	(613)
Gains (losses) on investments, net		(164)
Equity in earnings (losses) of unconsolidated affiliates, net	219	(1,087)
Equity in earnings (losses) of subsidiaries, net	(12,617)	(29,167)
Foreign currency transaction gains (losses), net	(3)	(2)
Other, net	744	(275)
Total other income (expense), net	(10,325)	(30,337)
Income (loss) before income taxes	69,409	22,517
Income tax benefit (provision), net	(19,266)	(11,804)
Net income (loss)	50,143	10,713
Less: Net loss (income) attributable to non-controlling interests	0	0
Net income (loss) attributable to HSSC	50,143	10,713
Comprehensive income (loss):
Net income (loss)	50,143	10,713
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	0	0
Unrealized gains (losses) on available-for-sale securities	0	0
Other		0
Amounts reclassified to net income (loss):
Equity in other comprehensive income (loss) of subsidiaries, net	(28,132)	(66,918)
Total other comprehensive income (loss), net of tax	(28,132)	(66,918)
Comprehensive income (loss)	22,011	(56,205)
Less: Comprehensive loss (income) attributable to non-controlling interests	0	0
Comprehensive income (loss) attributable to HSSC	22,011	(56,205)
Non-Guarantor Subsidiaries | Reportable Legal Entities
Revenue:
Total revenue	85,749	70,338
Costs and expenses:
Selling, general and administrative expenses	21,397	20,482
Research and development expenses	187	145
Depreciation and amortization	28,412	26,606
Impairment of long-lived assets	0
Total costs and expenses	91,594	93,517
Operating income (loss)	(5,845)	(23,179)
Other income (expense):
Interest income	1,281	891
Interest expense, net of amounts capitalized	(2,933)	(2,030)
Gains (losses) on investments, net		0
Equity in earnings (losses) of unconsolidated affiliates, net	(1,980)	0
Equity in earnings (losses) of subsidiaries, net	0	0
Foreign currency transaction gains (losses), net	(3,357)	(7,526)
Other, net	(135)	(3)
Total other income (expense), net	(7,124)	(8,668)
Income (loss) before income taxes	(12,969)	(31,847)
Income tax benefit (provision), net	(595)	(845)
Net income (loss)	(13,564)	(32,692)
Less: Net loss (income) attributable to non-controlling interests	947	3,442
Net income (loss) attributable to HSSC	(12,617)	(29,250)
Comprehensive income (loss):
Net income (loss)	(13,564)	(32,692)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(33,742)	(82,836)
Unrealized gains (losses) on available-for-sale securities	0	0
Other		(405)
Amounts reclassified to net income (loss):
Equity in other comprehensive income (loss) of subsidiaries, net	0	0
Total other comprehensive income (loss), net of tax	(33,742)	(83,241)
Comprehensive income (loss)	(47,306)	(115,933)
Less: Comprehensive loss (income) attributable to non-controlling interests	6,557	19,765
Comprehensive income (loss) attributable to HSSC	(40,749)	(96,168)
Services and other revenue
Revenue:
Total revenue	432,991	410,238
Costs and expenses:
Cost of sales	131,412	143,885
Services and other revenue | Eliminations
Revenue:
Total revenue	(8,409)	(9,089)
Costs and expenses:
Cost of sales	(8,024)	(8,649)
Services and other revenue | HSS | Reportable Legal Entities
Revenue:
Total revenue	0	0
Costs and expenses:
Cost of sales	0	0
Services and other revenue | Guarantor Subsidiaries | Reportable Legal Entities
Revenue:
Total revenue	363,697	354,399
Costs and expenses:
Cost of sales	103,207	110,471
Services and other revenue | Non-Guarantor Subsidiaries | Reportable Legal Entities
Revenue:
Total revenue	77,703	64,928
Costs and expenses:
Cost of sales	36,229	42,063
Equipment revenue
Revenue:
Total revenue	52,239	57,309
Costs and expenses:
Cost of sales	45,140	45,908
Equipment revenue | Eliminations
Revenue:
Total revenue	(16,844)	(13,687)
Costs and expenses:
Cost of sales	(16,659)	(13,687)
Equipment revenue | HSS | Reportable Legal Entities
Revenue:
Total revenue	0	0
Costs and expenses:
Cost of sales	0	0
Equipment revenue | Guarantor Subsidiaries | Reportable Legal Entities
Revenue:
Total revenue	61,037	65,586
Costs and expenses:
Cost of sales	56,430	55,374
Equipment revenue | Non-Guarantor Subsidiaries | Reportable Legal Entities
Revenue:
Total revenue	8,046	5,410
Costs and expenses:
Cost of sales	$ 5,369	$ 4,221

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Supplemental Guarantor and Non-Guarantor Financial Information - Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net income (loss)	$ 17,630	$ (17,913)
Adjustments to reconcile net income (loss) to net cash flows from operating activities	103,819	83,137
Net cash provided by (used for) operating activities	121,449	65,224
Cash flows from investing activities:
Purchases of marketable investment securities	(310,528)	(365,877)
Sales and maturities of marketable investment securities	1,003,198	490,020
Expenditures for property and equipment	(82,196)	(91,517)
Expenditures for externally marketed software	(7,846)	(8,638)
Distributions (contributions) and advances from (to) subsidiaries, net	0	0
Net cash provided by (used for) investing activities	602,628	23,988
Cash flows from financing activities:
Repurchase of the 2021 Senior Unsecured Notes	(62,588)	0
Payment of finance lease obligations	(329)	(215)
Payment of in-orbit incentive obligations	(1,104)	(203)
Contribution by non-controlling interest holder	5,400	4,000
Other, net	(292)	979
Contribution (distributions) and advances (to) from parent, net	0	0
Net cash provided by (used for) financing activities	(58,913)	4,561
Effect of exchange rates on cash and cash equivalents	(1,700)	(4,618)
Net increase (decrease) in cash and cash equivalents	663,464	89,155
Cash and cash equivalents, including restricted amounts, beginning of period	741,297	1,140,322
Cash and cash equivalents, including restricted amounts, end of period	1,404,761	1,229,477
Eliminations
Cash flows from operating activities:
Net income (loss)	(37,526)	18,537
Adjustments to reconcile net income (loss) to net cash flows from operating activities	37,526	(18,537)
Net cash provided by (used for) operating activities	0	0
Cash flows from investing activities:
Purchases of marketable investment securities	0	0
Sales and maturities of marketable investment securities	0	0
Expenditures for property and equipment	0	0
Expenditures for externally marketed software	0	0
Distributions (contributions) and advances from (to) subsidiaries, net	(52,997)	(10,351)
Net cash provided by (used for) investing activities	(52,997)	(10,351)
Cash flows from financing activities:
Repurchase of the 2021 Senior Unsecured Notes	0
Payment of finance lease obligations	0	0
Payment of in-orbit incentive obligations	0	0
Contribution by non-controlling interest holder	0	0
Other, net	0	0
Contribution (distributions) and advances (to) from parent, net	52,997	10,351
Net cash provided by (used for) financing activities	52,997	10,351
Effect of exchange rates on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	0	0
Cash and cash equivalents, including restricted amounts, beginning of period	0	0
Cash and cash equivalents, including restricted amounts, end of period	0	0
HSS | Reportable Legal Entities
Cash flows from operating activities:
Net income (loss)	18,577	(14,471)
Adjustments to reconcile net income (loss) to net cash flows from operating activities	(61,725)	(22,215)
Net cash provided by (used for) operating activities	(43,148)	(36,686)
Cash flows from investing activities:
Purchases of marketable investment securities	(310,528)	(365,877)
Sales and maturities of marketable investment securities	1,003,198	490,020
Expenditures for property and equipment	0	0
Expenditures for externally marketed software	0	0
Distributions (contributions) and advances from (to) subsidiaries, net	77,097	29,290
Net cash provided by (used for) investing activities	769,767	153,433
Cash flows from financing activities:
Repurchase of the 2021 Senior Unsecured Notes	(62,588)
Payment of finance lease obligations	0	0
Payment of in-orbit incentive obligations	0	0
Contribution by non-controlling interest holder	0	0
Other, net	0	0
Contribution (distributions) and advances (to) from parent, net	0	0
Net cash provided by (used for) financing activities	(62,588)	0
Effect of exchange rates on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	664,031	116,747
Cash and cash equivalents, including restricted amounts, beginning of period	649,851	1,057,903
Cash and cash equivalents, including restricted amounts, end of period	1,313,882	1,174,650
Guarantor Subsidiaries | Reportable Legal Entities
Cash flows from operating activities:
Net income (loss)	50,143	10,713
Adjustments to reconcile net income (loss) to net cash flows from operating activities	102,402	95,031
Net cash provided by (used for) operating activities	152,545	105,744
Cash flows from investing activities:
Purchases of marketable investment securities	0	0
Sales and maturities of marketable investment securities	0	0
Expenditures for property and equipment	(52,246)	(61,134)
Expenditures for externally marketed software	(7,846)	(8,638)
Distributions (contributions) and advances from (to) subsidiaries, net	(24,100)	(18,939)
Net cash provided by (used for) investing activities	(84,192)	(88,711)
Cash flows from financing activities:
Repurchase of the 2021 Senior Unsecured Notes	0
Payment of finance lease obligations	0	0
Payment of in-orbit incentive obligations	(1,104)	(203)
Contribution by non-controlling interest holder	0	0
Other, net	0	0
Contribution (distributions) and advances (to) from parent, net	(77,097)	(29,290)
Net cash provided by (used for) financing activities	(78,201)	(29,493)
Effect of exchange rates on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	(9,848)	(12,460)
Cash and cash equivalents, including restricted amounts, beginning of period	46,055	32,338
Cash and cash equivalents, including restricted amounts, end of period	36,207	19,878
Non-Guarantor Subsidiaries | Reportable Legal Entities
Cash flows from operating activities:
Net income (loss)	(13,564)	(32,692)
Adjustments to reconcile net income (loss) to net cash flows from operating activities	25,616	28,858
Net cash provided by (used for) operating activities	12,052	(3,834)
Cash flows from investing activities:
Purchases of marketable investment securities	0	0
Sales and maturities of marketable investment securities	0	0
Expenditures for property and equipment	(29,950)	(30,383)
Expenditures for externally marketed software	0	0
Distributions (contributions) and advances from (to) subsidiaries, net	0	0
Net cash provided by (used for) investing activities	(29,950)	(30,383)
Cash flows from financing activities:
Repurchase of the 2021 Senior Unsecured Notes	0
Payment of finance lease obligations	(329)	(215)
Payment of in-orbit incentive obligations	0	0
Contribution by non-controlling interest holder	5,400	4,000
Other, net	(292)	979
Contribution (distributions) and advances (to) from parent, net	24,100	18,939
Net cash provided by (used for) financing activities	28,879	23,703
Effect of exchange rates on cash and cash equivalents	(1,700)	(4,618)
Net increase (decrease) in cash and cash equivalents	9,281	(15,132)
Cash and cash equivalents, including restricted amounts, beginning of period	45,391	50,081
Cash and cash equivalents, including restricted amounts, end of period	$ 54,672	$ 34,949