Property and Equipment and Intangible Assets

12 Months Ended

Dec. 31, 2023

Property and Equipment and Intangible Assets

Property and Equipment and Intangible Assets

6.Property and Equipment and Intangible Assets

Property and Equipment

Property and equipment consisted of the following:

	Depreciable
	Life	As of December 31,
	(In Years)	2023		2022
		(In thousands)
Equipment leased to customers	2-5	$	1,175,734	$	1,309,737
EchoStar XV	15		277,658		277,658
EchoStar XVIII	15		411,255		411,255
Satellites acquired under finance lease agreements	5		174,685		174,685
Furniture, fixtures, equipment and other	2-10		755,163		753,138
Software and computer equipment	3-5		1,197,632		1,161,392
Buildings and improvements	5-40		294,890		295,375
Land	-		12,505		12,505
Construction in progress	-		45,413		35,326
Total property and equipment			4,344,935		4,431,071
Accumulated depreciation			(3,536,870)		(3,440,185)
Property and equipment, net		$	808,065	$	990,886

Depreciation and amortization expense consisted of the following:

	For the Years Ended December 31,
	2023		2022		2021
	(In thousands)
Equipment leased to customers	$	166,918	$	191,712	$	244,735
Satellites		80,292		84,016		95,187
Buildings, furniture, fixtures, equipment and other		68,450		78,633		99,082
Total depreciation and amortization	$	315,660	$	354,361	$	439,004

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

Satellites

We currently utilize nine satellites in geostationary orbit approximately 22,300 miles above the equator, two of which we own and depreciate over their estimated useful life. We currently utilize certain capacity on six satellites that we lease from DISH Network, which are accounted for as operating leases, except for Nimiq 5 which is accounted for as a finance lease and is depreciated over its economic life. We also lease one satellites from a third party: the Anik F3 satellite, which was accounted for as a finance lease until April 2022 and was fully depreciated. During April 2022, we extended the Anik F3 lease and as a result it is currently accounted for as an operating lease. As of July 2023, we no longer lease the Ciel II satellite.

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

		Degree
	Launch	Orbital	Lease
Satellites	Date	Location	Termination Date
Owned:
EchoStar XV	July 2010	61.5	N/A
EchoStar XVIII	June 2016	61.5	N/A
Under Construction:
EchoStar XXV	2026	110	N/A
Leased from DISH Network (1):
EchoStar X	February 2006	110	February 2025
EchoStar XI	July 2008	110	February 2025
EchoStar XIV	March 2010	119	February 2025
EchoStar XVI	November 2012	61.5	January 2025
EchoStar XXIII	March 2017	110	Month to Month
Nimiq 5	September 2009	72.7	September 2024
Leased from Other Third-Party:
Anik F3	April 2007	118.7	April 2025

(1) See Note 17 for further information on our Related Party Transactions with DISH Network.

Satellites Under Construction

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

Satellite Anomalies

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

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

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

Intangible Assets

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

	As of December 31,
	2023				2022
	Intangible		Accumulated		Intangible		Accumulated
	Assets		Amortization		Assets		Amortization
	(In thousands)
Technology-based	$	58,162	$	(55,623)	$	58,162	$	(55,079)
Trademarks		18,251		(17,160)		18,251		(17,050)
Contract-based		4,500		(4,500)		4,500		(4,500)
Customer relationships		23,632		(23,632)		23,632		(23,632)
Total	$	104,545	$	(100,915)	$	104,545	$	(100,261)

These identifiable intangibles are included in “Other noncurrent assets, net” on our Consolidated Balance Sheets. Amortization of these intangible assets is recorded on a straight-line basis over an average finite useful life primarily ranging from approximately 13 to 20 years. Amortization was $1 million, $1 million and $1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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

For the Years Ended December 31,
2024	$	654
2025		654
2026		654
2027		654
2028		473
Thereafter		541
Total	$	3,630

Goodwill

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

During the year ended December 31, 2023, we recorded a noncash impairment charge for goodwill of $6 million in “Impairment of long-lived assets and goodwill” on our Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 2 for further information. The non-recurring measurement of fair value of goodwill is classified as Level 3 in the fair value hierarchy.

As of December 31, 2023 and 2022, we had goodwill of zero and $6 million, which is included in “Other noncurrent assets, net” on our Consolidated Balance Sheets.

Regulatory Authorizations

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

	As of December 31,
	2023		2022
	(In thousands)
DBS Licenses	$	611,794	$	611,794
Total	$	611,794	$	611,794