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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, 2022.

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
https://cdn.kscope.io/b5ac3b6e37c3d84cf28956766a8d5c10-hssc-20220331_g1.jpg
 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 28, 2022, 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. 


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TABLE OF CONTENTS
 
   
 
Item 3.Quantitative and Qualitative Disclosures about Market Risk*
   
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds*
Item 3.Defaults Upon Major Securities*
 
*This item has been omitted pursuant to the reduced disclosure format as set forth in General Instructions (H)(2) of Form 10-Q.



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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.
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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, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$770,639 $429,168 
Marketable investment securities442,552 854,502 
Trade accounts receivable and contract assets, net199,306 182,063 
Other current assets, net281,748 276,844 
Total current assets1,694,245 1,742,577 
Non-current assets:
Property and equipment, net1,518,892 1,523,447 
Operating lease right-of-use assets150,025 148,221 
Goodwill535,394 511,086 
Regulatory authorizations, net409,410 408,959 
Other intangible assets, net17,792 13,984 
Other investments, net89,511 91,226 
Other non-current assets, net300,500 302,840 
Total non-current assets3,021,524 2,999,763 
Total assets$4,715,769 $4,742,340 
Liabilities and Shareholder's Equity
Current liabilities:
Trade accounts payable$107,953 $105,477 
Contract liabilities138,201 141,343 
Accrued expenses and other current liabilities276,234 308,879 
Total current liabilities522,388 555,699 
Non-current liabilities:
Long-term debt, net1,496,185 1,495,994 
Deferred tax liabilities, net343,173 334,406 
Operating lease liabilities135,848 134,001 
Other non-current liabilities141,075 153,251 
Total non-current liabilities2,116,281 2,117,652 
Total liabilities2,638,669 2,673,351 
Commitments and contingencies

The accompanying notes are an integral part of these Consolidated Financial Statements.
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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, 2022 and 2021
  
Common stock, $0.01 par value, 1,000,000 shares authorized, 1,078 shares issued and outstanding at both March 31, 2022 and 2021
  
Additional paid-in capital1,476,465 1,489,776 
Accumulated other comprehensive income (loss)(136,721)(173,381)
Accumulated earnings (losses)625,642 692,341 
Total Hughes Satellite Systems Corporation shareholder's equity1,965,386 2,008,736 
Non-controlling interests111,714 60,253 
Total shareholder's equity2,077,100 2,068,989 
Total liabilities and shareholder's equity$4,715,769 $4,742,340 





































The accompanying notes are an integral part of these Consolidated Financial Statements.
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HUGHES SATELLITE SYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands)
(Unaudited)

For the three months ended March 31,
20222021
Revenue:
Services and other revenue $420,941 $432,991 
Equipment revenue82,717 52,239 
Total revenue503,658 485,230 
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)139,354 131,412 
Cost of sales - equipment (exclusive of depreciation and amortization)69,105 45,140 
Selling, general and administrative expenses111,618 104,370 
Research and development expenses7,616 7,545 
Depreciation and amortization113,678 122,664 
Impairment of long-lived assets 210 
Total costs and expenses441,371 411,341 
Operating income (loss)62,287 73,889 
Other income (expense):
Interest income, net2,280 2,394 
Interest expense, net of amounts capitalized(23,378)(41,922)
Equity in earnings (losses) of unconsolidated affiliates, net(1,714)(1,761)
Foreign currency transaction gains (losses), net6,655 (3,360)
Other, net(189)(973)
Total other income (expense), net(16,346)(45,622)
Income (loss) before income taxes45,941 28,267 
Income tax benefit (provision), net(15,128)(10,637)
Net income (loss)30,813 17,630 
Less: Net loss (income) attributable to non-controlling interests2,488 947 
Net income (loss) attributable to HSSC$33,301 $18,577 








The accompanying notes are an integral part of these Consolidated Financial Statements.
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HUGHES SATELLITE SYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands)
(Unaudited)

For the three months ended March 31,
 20222021
Net income (loss)$30,813 $17,630 
Other comprehensive income (loss), net of tax:  
Foreign currency translation adjustments46,686 (33,742)
Unrealized gains (losses) on available-for-sale securities (470)(88)
Total other comprehensive income (loss), net of tax46,216 (33,830)
Comprehensive income (loss)77,029 (16,200)
Less: Comprehensive loss (income) attributable to non-controlling interests(7,068)6,557 
Comprehensive income (loss) attributable to HSSC$69,961 $(9,643)































The accompanying notes are an integral part of these Consolidated Financial Statements.
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HUGHES SATELLITE SYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
(Amounts in thousands)
(Unaudited)

Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Earnings (Losses)
Non-controlling
Interests
Total
Balance, December 31, 2020$1,486,730 $(146,840)$671,570 $64,916 $2,076,376 
Stock-based compensation860 — — — 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 
Balance, December 31, 2021$1,489,776 $(173,381)$692,341 $60,253 $2,068,989 
Stock-based compensation779 — — — 779 
Issuance of equity and contribution of assets pursuant to the India JV formation(14,090)— — 44,393 30,303 
Dividend paid to EchoStar— — (100,000)— (100,000)
Other comprehensive income (loss)— 36,660 — 9,556 46,216 
Net income (loss)— — 33,301 (2,488)30,813 
Balance, March 31, 2022$1,476,465 $(136,721)$625,642 $111,714 $2,077,100 
 













The accompanying notes are an integral part of these Consolidated Financial Statements.
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HUGHES SATELLITE SYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

For the three months ended March 31,
20222021
Cash flows from operating activities:  
Net income (loss)$30,813 $17,630 
Adjustments to reconcile net income (loss) to cash flows provided by (used for) operating activities:  
Depreciation and amortization113,678 122,664 
Impairment of long-lived assets 210 
Equity in losses (earnings) of unconsolidated affiliates, net1,714 1,761 
Foreign currency transaction losses (gains), net(6,655)3,360 
Deferred tax provision (benefit), net7,575 6,584 
Stock-based compensation779 860 
Amortization of debt issuance costs191 1,118 
Other, net(1,627)10,981 
Changes in assets and liabilities, net:
Trade accounts receivable and contract assets, net(8,526)(6,078)
Other current assets, net3,181 1,826 
Trade accounts payable8,284 (15,484)
Contract liabilities(3,142)7,938 
Accrued expenses and other current liabilities(31,511)(33,091)
Non-current assets and non-current liabilities, net(9,570)1,170 
Net cash provided by (used for) operating activities105,184 121,449 
Cash flows from investing activities:  
Purchases of marketable investment securities(76,228)(310,528)
Sales and maturities of marketable investment securities485,730 1,003,198 
Expenditures for property and equipment(61,021)(82,196)
Expenditures for externally marketed software(5,093)(7,846)
India JV formation(7,892) 
Net cash provided by (used for) investing activities335,496 602,628 
Cash flows from financing activities:
Repurchase and maturity of the 2021 Senior Unsecured Notes (62,588)
Payment of finance lease obligations(85)(329)
Payment of in-orbit incentive obligations(1,444)(1,104)
Contribution by non-controlling interest holder 5,400 
Dividend paid to EchoStar(100,000) 
Other, net (292)
Net cash provided by (used for) financing activities(101,529)(58,913)
Effect of exchange rates on cash and cash equivalents3,490 (1,700)
Net increase (decrease) in cash and cash equivalents342,641 663,464 
Cash and cash equivalents, including restricted amounts, beginning of period430,148 741,297 
Cash and cash equivalents, including restricted amounts, end of period$772,789 $1,404,761 
The accompanying notes are an integral part of these Consolidated Financial Statements.
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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” and “parent”).  We are an industry leader in both networking technologies and services, innovating to deliver the global solutions that power a connected future for people, enterprises and things everywhere. We provide 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 segment — 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.
Echostar Satellite Services segment (“ESS segment”) — 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 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 segment 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 15. 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.

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HUGHES SATELLITE SYSTEMS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)


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.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which requires business entities (except for not-for-profit entities and employee benefit plans) to disclose information about certain government assistance they receive. The Topic 832 disclosure requirements include: (i) the nature of the transactions and the related accounting policy used; (ii) the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item; and (iii) significant terms and conditions of the transactions. 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.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue contracts acquired in a business
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HUGHES SATELLITE SYSTEMS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)


combination. The ASU requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU is effective for the Company for annual and interim periods in fiscal years beginning after December 15, 2023. Early adoption is permitted. The ASU is applied to business combinations occurring on or after the effective date.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in this update eliminate the accounting guidance for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The amendments also require disclosure of current-period gross write-offs by year of origination for financing receivables. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this new guidance on our Consolidated Financial Statements.

NOTE 3.     REVENUE RECOGNITION

Contract Balances

The following table presents the components of our contract balances:
 As of
March 31, 2022December 31, 2021
Trade accounts receivable and contract assets, net:
Sales and services$160,325 $154,676 
Leasing5,722 5,668 
Total trade accounts receivable166,047 160,344 
Contract assets49,783 36,307 
Allowance for doubtful accounts(16,524)(14,588)
Total trade accounts receivable and contract assets, net$199,306 $182,063 
Contract liabilities:
Current$138,201 $141,343 
Non-current10,292 10,669 
Total contract liabilities$148,493 $152,012 

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

For the three months ended March 31,
20222021
Revenue$88,947 $63,081 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)


Contract Acquisition Costs

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

For the three months ended March 31,
20222021
Balance at beginning of period$82,986 $99,837 
Additions15,788 18,400 
Amortization expense(20,197)(22,769)
Foreign currency translation1,995 (875)
Balance at end of period$80,572 $94,593 

Performance Obligations

As of March 31, 2022, the remaining performance obligations for our customer contracts with original expected durations of more than one year was $890.4 million. Performance obligations expected to be satisfied within one year and greater than one year are 48.0% and 52.0%, 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 tables present our revenue from customer contracts disaggregated by primary geographic market and by segment:
HughesESSCorporate and OtherConsolidated
Total
For the three months ended March 31, 2022
North America$399,422 $4,474 $(198)$403,698 
South and Central America42,872   42,872 
Other51,812  5,276 57,088 
Total revenue$494,106 $4,474 $5,078 $503,658 
For the three months ended March 31, 2021
North America$398,759 $4,089 $(88)$402,760 
South and Central America43,030   43,030 
Other34,070  5,370 39,440 
Total revenue$475,859 $4,089 $5,282 $485,230 

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HUGHES SATELLITE SYSTEMS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)


Nature of Products and Services

The following tables present our revenue disaggregated by the nature of products and services and by segment:
HughesESSCorporate and OtherConsolidated
Total
For the three months ended March 31, 2022
Services and other revenue:
Services$400,402 $2,935 $ $403,337 
Lease revenue10,987 1,539 5,078 17,604 
Total services and other revenue411,389 4,474 5,078 420,941 
Equipment revenue:
Equipment25,885   25,885 
Design, development and construction services55,905   55,905 
Lease revenue927   927 
Total equipment revenue82,717   82,717 
Total revenue$494,106 $4,474 $5,078 $503,658 
 
For the three months ended March 31, 2021
Services and other revenue:
Services$413,519 $2,690 $ $416,209 
Lease revenue10,101 1,399 5,282 16,782 
Total services and other revenue423,620 4,089 5,282 432,991 
Equipment revenue:
Equipment28,521   28,521 
Design, development and construction services21,636   21,636 
Lease revenue2,082   2,082 
Total equipment revenue52,239   52,239 
Total revenue$475,859 $4,089 $5,282 $485,230 

Lease Revenue

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

For the three months ended March 31,
20222021
Sales-type lease revenue:
Revenue at lease commencement$638 $2,082 
Interest income289 73 
Total sales-type lease revenue927 2,155 
Operating lease revenue17,604 16,709 
Total lease revenue$18,531 $18,864 

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HUGHES SATELLITE SYSTEMS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)


NOTE 4.    BUSINESS COMBINATIONS

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 agreed to contribute its very small aperture terminal (“VSAT”) telecommunications services and hardware business in India to Hughes Communications India Private Limited (“HCIPL”) and its subsidiaries, our less than wholly owned Indian subsidiaries, that conduct our VSAT services and hardware business in India. On January 4, 2022, this joint venture was formed (the “India JV”) and subsequent to the formation of the India JV, we hold a 67% ownership interest and Bharti holds a 33% ownership interest in HCIPL. The India JV combines the VSAT businesses of both companies to offer flexible and scalable enterprise networking solutions using satellite connectivity for primary transport, back-up and hybrid implementation in India. The results of operations related to the India JV have been included in these Consolidated Financial Statements from the date of formation. The costs associated with the closing of the India JV were not material and were expensed as incurred.

The fair value of the consideration transferred was $38.2 million. Net cash paid was $7.9 million, inclusive of amounts paid for the acquisition of, or of HCIPL shares from, entities that were shareholders of HCIPL prior to closing the India JV.

All assets and liabilities acquired in the India JV formation have been recorded at fair value. The following table presents our preliminary allocation of the purchase price:
Amounts
Assets:
Trade accounts receivable and contract assets, net$6,160 
Other current assets2,085 
Property and equipment4,669 
Goodwill23,086 
Other intangible assets4,428 
Total assets$40,428 
Liabilities:
Trade accounts payable$133 
Accrued expenses and other current liabilities986 
Deferred tax liabilities 1,114 
Total liabilities$2,233 
Total purchase price $38,195 


The preliminary valuation of assets acquired and liabilities assumed in the India JV were derived using primarily unobservable Level 3 inputs, which require significant management judgment and estimation, and resulted in a customer relationship intangible of $4.4 million with an estimated life of 5 years and is reported in Other intangible assets, net.
Goodwill associated with the India JV is attributable to expected synergies, the projected long-term business growth in current and new markets and an assembled workforce. Goodwill has been allocated entirely to our Hughes segment.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)


NOTE 5.    MARKETABLE INVESTMENT SECURITIES

The following table presents our Marketable investment securities:
As of
March 31, 2022December 31, 2021
Marketable investment securities:
Available-for-sale debt securities:
Corporate bonds$189,084 $284,787 
Commercial paper221,670 491,360 
Other debt securities31,798 78,355 
Total available-for-sale debt securities442,552 854,502 
Equity securities  
Total marketable investment securities$442,552 $854,502 


Debt Securities

Available-for-Sale

The following table presents the components of our available-for-sale debt securities:
AmortizedUnrealizedEstimated
CostGainsLossesFair Value
As of March 31, 2022
Corporate bonds$189,878 $ $(794)$189,084 
Commercial paper221,670   221,670 
Other debt securities31,896  (98)31,798 
Total available-for-sale debt securities$443,444 $ $(892)$442,552 
As of December 31, 2021
Corporate bonds$285,169 $ $(382)$284,787 
Commercial paper491,360   491,360 
Other debt securities78,395  (40)78,355 
Total available-for-sale debt securities$854,924 $ $(422)$854,502 

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

For the three months ended March 31,
20222021
Proceeds from sales$29,018 $95,765 

As of March 31, 2022, we have $433.7 million of available-for-sale debt securities with contractual maturities of one year or less and $8.9 million with contractual maturities greater than one year. 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)


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 1Level 2Total
As of March 31, 2022
Cash equivalents (including restricted)$20,192 $651,679 $671,871 
Available-for-sale debt securities:
Corporate bonds$ $189,084 $189,084 
Commercial paper 221,670 221,670 
Other debt securities 31,798 31,798 
Total available-for-sale debt securities 442,552 442,552 
Equity securities   
Total marketable investment securities$ $442,552 $442,552 
As of December 31, 2021
Cash equivalents (including restricted)$4,032 $320,732 $324,764 
Available-for-sale debt securities:
Corporate bonds$ $284,787 $284,787 
Commercial paper 491,360 491,360 
Other debt securities 78,355 78,355 
Total available-for-sale debt securities 854,502 854,502 
Equity securities   
Total marketable investment securities$ $854,502 $854,502 

As of March 31, 2022 and December 31, 2021, we did not have any investments that were categorized within Level 3 of the fair value hierarchy.

NOTE 6.    PROPERTY AND EQUIPMENT
 
The following table presents the components of Property and equipment, net:
As of
March 31, 2022December 31, 2021
Property and equipment, net:
Satellites, net$838,054 $847,613 
Other property and equipment, net680,838 675,834 
Total property and equipment, net$1,518,892 $1,523,447 
Satellites
 
As of March 31, 2022, our satellite fleet consisted of eight geosynchronous (“GEO”) 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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(Unaudited)


The following table presents our GEO satellite fleet as of March 31, 2022:
GEO SatelliteSegmentLaunch DateNominal Degree Orbital Location (Longitude)Depreciable Life (In Years)
Owned:    
SPACEWAY 3 (1)
HughesAugust 200795 W10
EchoStar XVIIHughesJuly 2012107 W15
EchoStar XIXHughesDecember 201697.1 W15
Al Yah 3 (2)
HughesJanuary 201820 W7
EchoStar IX (3) (4)
ESSAugust 2003121 W12
     
Finance leases:    
Eutelsat 65 West AHughesMarch 201665 W15
Telesat T19VHughesJuly 201863 W15
EchoStar 105/SES-11ESSOctober 2017105 W15
(1)    Depreciable life represents the remaining useful life as of June 8, 2011, the date EchoStar completed the acquisition of Hughes Communications, Inc. (“Hughes Communications”) and its subsidiaries (the “Hughes Acquisition”).
(2) Upon consummation of our joint venture with Al Yah Satellite Communications Company PrJSC (“Yahsat”) in Brazil in November 2019, we acquired the Brazilian Ka-band payload on this satellite. Depreciable life represents the remaining useful life as of November 2019.
(3)    We own the Ka-band and Ku-band payloads on this satellite.
(4)    EchoStar IX is approaching its end of station-kept life. The Company expects to place the satellite in an inclined-orbit in the fourth quarter of 2022 or first quarter of 2023, but this ability is dependent upon events beyond our control and may not occur on schedule if at all. Inclined-orbit will extend its life but impact revenue generating capabilities.

The following table presents the components of our satellites, net:
 Depreciable Life (In Years)As of
 March 31, 2022December 31, 2021
Satellites, net: 
Satellites - owned
7 to 15
$1,507,482 $1,500,836 
Satellites - acquired under finance leases
15
370,728 354,170 
Total satellites 1,878,210 1,855,006 
Accumulated depreciation:
Satellites - owned(932,762)