Property and Equipment and Intangible Assets

9 Months Ended

Sep. 30, 2023

Property and Equipment and Intangible Assets

Property and Equipment and Intangible Assets

7.Property and Equipment and Intangible Assets

Property and Equipment

Property and equipment consisted of the following:

	Depreciable			As of
	Life			September 30,		December 31,
	(In Years)			2023		2022
				(In thousands)
Equipment leased to customers	2	-	5	$	1,229,396	$	1,318,272
Satellites	4	-	15		1,718,865		1,718,865
Satellites acquired under finance lease agreements		15			344,447		344,447
Furniture, fixtures, equipment and other	2	-	20		1,220,570		1,215,496
5G Network Deployment equipment (1)	3	-	15		2,854,590		770,153
Software	3	-	6		1,655,104		1,354,656
Buildings and improvements	5	-	40		381,768		380,519
Land		-			17,513		17,513
Construction in progress		-			2,921,462		3,170,623
Total property and equipment					12,343,715		10,290,544
Accumulated depreciation					(5,118,839)		(4,650,425)
Property and equipment, net				$	7,224,876	$	5,640,119

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

Depreciation and amortization expense consisted of the following:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(In thousands)
Equipment leased to customers	$	34,466	$	47,745	$	126,073	$	148,775
Satellites		32,956		36,083		101,993		111,970
Buildings, furniture, fixtures, equipment and other		24,780		10,552		52,099		34,927
5G Network Deployment equipment		94,204		6,665		231,085		14,989
Software		63,484		35,979		159,460		98,728
Intangible assets		44,907		37,712		135,794		109,911
Total depreciation and amortization	$	294,797	$	174,736	$	806,504	$	519,300

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

Satellites

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

As of September 30, 2023, our pay-TV satellite fleet consisted of the following:

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

Satellite Under Construction

EchoStar XXV. On March 20, 2023, we entered into a contract with Maxar Space LLC for the construction of EchoStar XXV, a DBS satellite that is capable of providing service to the continental United States (“CONUS”) and is intended to be used at the 110 degree orbital location. Subsequent to September 30, 2023, we entered into an agreement with Space Exploration Technologies Corp (“SpaceX”) for launch services for this satellite, which is expected to be launched during 2026.