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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 FISCAL QUARTERLY PERIOD ENDED MARCH 31, 2023.
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: 001-33807

 https://cdn.kscope.io/57fce4bf523dd84f7541c7f8152cf01e-echostarcolorprint.gif
EchoStar Corporation
(Exact name of registrant as specified in its charter) 
Nevada
 
26-1232727
(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)
Securities registered pursuant to Section 12(b) of the Act:
Class A common stock
 $0.001 par value
The NASDAQ Stock Market LLC
(Title of each class)(Name of each exchange on which registered)
SATS
(Ticker symbol)
 

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 26, 2023, the registrant’s outstanding common stock consisted of 36,090,106 shares of Class A common stock and 47,687,039 shares of Class B common stock, each $0.001 par value.




Table of Contents
TABLE OF CONTENTS
 
i
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements
Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2023 and 2022 (unaudited)
Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (unaudited)
Item 4.
Controls and Procedures
PART II - OTHER INFORMATION
Item 5.
Other Information


Table of Contents
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, including supply chain disruptions and inflation;
risks related to cybersecurity incidents; 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 Discussion and Analysis of Financial Condition and 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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Table of Contents
PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
ECHOSTAR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)

 As of
 March 31, 2023December 31, 2022
(unaudited)
Assets  
Current assets:  
Cash and cash equivalents$920,105 $704,541 
Marketable investment securities755,169 973,915 
Trade accounts receivable and contract assets, net251,871 236,479 
Other current assets, net252,596 210,446 
Total current assets2,179,741 2,125,381 
Non-current assets:
Property and equipment, net2,175,861 2,237,617 
Operating lease right-of-use assets147,707 151,518 
Goodwill532,858 532,491 
Regulatory authorizations, net461,556 462,531 
Other intangible assets, net15,151 15,698 
Other investments, net364,954 356,705 
Other non-current assets, net315,960 317,062 
Total non-current assets4,014,047 4,073,622 
Total assets$6,193,788 $6,199,003 
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable$85,772 $101,239 
Contract liabilities129,292 121,739 
Accrued expenses and other current liabilities163,109 199,853 
Total current liabilities378,173 422,831 
Non-current liabilities:
Long-term debt, net1,496,981 1,496,777 
Deferred tax liabilities, net430,957 424,621 
Operating lease liabilities131,881 135,932 
Other non-current liabilities112,534 119,787 
Total non-current liabilities2,172,353 2,177,117 
Total liabilities2,550,526 2,599,948 
Commitments and contingencies







The accompanying notes are an integral part of these Consolidated Financial Statements.
1

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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, 2023 and December 31, 2022
  
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, 59,303,237 shares issued and 35,989,926 shares outstanding at March 31, 2023 and 58,604,927 shares issued and 35,291,616 shares outstanding at December 31, 2022
59 59 
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, 2023 and December 31, 2022
48 48 
Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both March 31, 2023 and December 31, 2022
  
Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both March 31, 2023 and December 31, 2022
  
Additional paid-in capital3,376,169 3,367,058 
Accumulated other comprehensive income (loss)(166,931)(172,239)
Accumulated earnings (losses)862,558 833,517 
Treasury shares, at cost, 23,313,311 shares at both March 31, 2023 and December 31, 2022
(525,824)(525,824)
Total EchoStar Corporation stockholders' equity3,546,079 3,502,619 
Non-controlling interests97,183 96,436 
Total stockholders' equity3,643,262 3,599,055 
Total liabilities and stockholders' equity$6,193,788 $6,199,003 
The accompanying notes are an integral part of these Consolidated Financial Statements.
2

Table of Contents


ECHOSTAR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
(Unaudited)

 For the three months ended March 31,
20232022
Revenue:
Services and other revenue$377,527 $418,811 
Equipment revenue62,070 82,723 
Total revenue439,597 501,534 
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)135,372 141,129 
Cost of sales - equipment (exclusive of depreciation and amortization)51,662 69,114 
Selling, general and administrative expenses110,061 118,170 
Research and development expenses8,255 7,617 
Depreciation and amortization102,858 120,436 
Impairment of long-lived assets3,142  
Total costs and expenses411,350 456,466 
Operating income (loss)28,247 45,068 
Other income (expense):
Interest income, net28,596 6,422 
Interest expense, net of amounts capitalized(13,286)(14,973)
Gains (losses) on investments, net(7,109)80,686 
Equity in earnings (losses) of unconsolidated affiliates, net(551)(1,714)
Foreign currency transaction gains (losses), net3,313 6,394 
Other, net70 (156)
Total other income (expense), net11,033 76,659 
Income (loss) before income taxes39,280 121,727 
Income tax benefit (provision), net(11,460)(32,782)
Net income (loss)27,820 88,945 
Less: Net loss (income) attributable to non-controlling interests1,221 2,488 
Net income (loss) attributable to EchoStar Corporation common stock$29,041 $91,433 
Earnings (losses) per share - Class A and B common stock:
Basic$0.35 $1.07 
Diluted$0.35 $1.06 

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

For the three months ended March 31,
 20232022
Net income (loss)$27,820 $88,945 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments7,491 48,945 
Unrealized gains (losses) on available-for-sale securities(215)(567)
Total other comprehensive income (loss), net of tax7,276 48,378 
Comprehensive income (loss)35,096 137,323 
Less: Comprehensive loss (income) attributable to non-controlling interests(747)(7,068)
Comprehensive income (loss) attributable to EchoStar Corporation$34,349 $130,255 






























The accompanying notes are an integral part of these Consolidated Financial Statements.
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ECHOSTAR CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Amounts in thousands)
(Unaudited)

Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated Earnings (Losses)Treasury Shares, at costNon-controlling InterestsTotal
Balance, December 31, 2021$106 $3,345,878 $(212,102)$656,466 $(436,521)$60,253 $3,414,080 
Issuance of Class A common stock:
Employee benefits7,0417,041 
Employee Stock Purchase Plan2,3672,367 
Stock-based compensation1,8601,860 
Issuance of equity and contribution of assets pursuant to the India JV formation(14,090)44,39330,303 
Other comprehensive income (loss)38,8229,55648,378 
Net income (loss)91,433(2,488)88,945 
Treasury share repurchase— — — — (35,061)— (35,061)
Balance, March 31, 2022$106 $3,343,056 $(173,280)$747,899 $(471,582)$111,714 $3,557,913 
Balance, December 31, 2022$107 $3,367,058 $(172,239)$833,517 $(525,824)$96,436 $3,599,055 
Issuance of Class A common stock:
Employee benefits5,4215,421 
Employee Stock Purchase Plan1,0981,098 
Stock-based compensation2,5922,592 
Other comprehensive income (loss)5,3081,9687,276 
Net income (loss)29,041(1,221)27,820 
Balance, Balance, March 31, 2023$107 $3,376,169 $(166,931)$862,558 $(525,824)$97,183 $3,643,262 

The accompanying notes are an integral part of these Consolidated Financial Statements.
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ECHOSTAR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
 For the three months ended March 31,
 20232022
Cash flows from operating activities:
Net income (loss)$27,820 $88,945 
Adjustments to reconcile net income (loss) to cash flows provided by (used for) operating activities:
Depreciation and amortization102,858 120,436 
Impairment of long-lived assets3,142  
Losses (gains) on investments, net7,109 (80,686)
Equity in losses (earnings) of unconsolidated affiliates, net551 1,714 
Foreign currency transaction losses (gains), net(3,313)(6,394)
Deferred tax provision (benefit), net6,521 25,538 
Stock-based compensation2,592 1,860 
Amortization of debt issuance costs204 191 
Other, net(24,078)(2,528)
Changes in assets and liabilities, net:
Trade accounts receivable and contract assets, net(14,041)(8,480)
Other current assets, net(27,153)(3,340)
Trade accounts payable(13,797)7,046 
Contract liabilities7,553 (3,142)
Accrued expenses and other current liabilities(28,257)(27,033)
Non-current assets and non-current liabilities, net(1,286)(9,774)
Net cash provided by (used for) operating activities46,425 104,353 
Cash flows from investing activities:
Purchases of marketable investment securities(238,585)(88,578)
Sales and maturities of marketable investment securities457,776 492,812 
Expenditures for property and equipment(59,071)(112,138)
Refunds and other receipts related to capital expenditures15,000  
Expenditures for externally marketed software(6,962)(5,093)
India JV formation (7,892)
Net cash provided by (used for) investing activities168,158 279,111 
Cash flows from financing activities:
Payment of finance lease obligations (85)
Payment of in-orbit incentive obligations(1,834)(1,444)
Proceeds from Class A common stock issued under the Employee Stock Purchase Plan1,098 2,367 
Treasury share repurchase (33,307)
Net cash provided by (used for) financing activities(736)(32,469)
Effect of exchange rates on cash and cash equivalents1,659 3,480 
Net increase (decrease) in cash and cash equivalents215,506 354,475 
Cash and cash equivalents, including restricted amounts, beginning of period705,883 536,874 
Cash and cash equivalents, including restricted amounts, end of period$921,389 $891,349 

The accompanying notes are an integral part of these Consolidated Financial Statements.
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ECHOSTAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1.    ORGANIZATION AND BUSINESS ACTIVITIES

Principal Business
 
EchoStar Corporation (which, together with its subsidiaries, is referred to as “EchoStar,” the “Company,” “we,” “us” and “our”) is a holding company that was organized in October 2007 as a corporation under the laws of the State of Nevada. Our Class A common stock is publicly traded on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “SATS.”

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 internet services to consumer customers, which include home and small to medium-sized businesses, and satellite and multi-transport technologies and managed network services to enterprise customers, telecommunications providers, aeronautical service providers and government entities, including the U.S. Department of Defense. We operate in the following two business segments:
 
Hughes segment — which provides broadband satellite technologies and broadband internet products and services to consumer customers. We provide broadband network technologies, managed services, equipment, hardware, satellite services and communications solutions to government and enterprise customers. We also design, provide and install gateway and terminal equipment to customers for other satellite systems. In addition, we design, develop, construct and provide telecommunication networks comprising satellite ground segment systems and terminals to mobile system operators and our enterprise customers.
EchoStar Satellite Services segment (“ESS segment”) — which 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. During the first quarter of 2023, we transitioned the EchoStar IX satellite into inclined operations to extend its usable life for our customers. With this inclined mode of operation, we are expecting to extend the life of the spacecraft into 2024.

Our operations also include various corporate functions (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 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 (“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 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.

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ECHOSTAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
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, and estimated credit losses on investments; (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) assets and goodwill 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
stockholders’ 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

Business Combinations

On January 1, 2023, we adopted Accounting Standards Update (“ASU”) No. 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 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 applied to business combinations occurring on or after the adoption date.

Government Assistance

On January 1, 2022, we adopted ASU No. 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.

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ECHOSTAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
Income Taxes

On January 1, 2021, we adopted 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

Leases - Common Control Arrangements

In March 2023, the FASB issued ASU No. 2023-01 - Leases (Topic 842): Common Control Arrangements. Among other things, this ASU requires all lessees to amortize leasehold improvements associated with common control leases over their useful life to the common control group and account for them as a transfer of assets between entities under common control at the end of the lease. Additional disclosures are required when the useful life of leasehold improvements to the common control group exceeds the related lease term. The guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this new guidance and we do not expect it to have a material impact on our Consolidated Financial Statements.

Reference Rate Reform

In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), and all subsequent amendments to the initial guidance, 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, 2024. 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 new guidance and we are in the process of implementing this ASU, and all subsequent amendments, and do not expect them to have a material impact 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, 2023December 31, 2022
Trade accounts receivable and contract assets, net:
Sales and services$193,348 $170,466 
Leasing9,396 7,936 
Total trade accounts receivable202,744 178,402 
Contract assets65,319 73,435 
Allowance for doubtful accounts(16,192)(15,358)
Total trade accounts receivable and contract assets, net$251,871 $236,479 
Contract liabilities:
Current$129,292 $121,739 
Non-current7,872 8,326 
Total contract liabilities$137,164 $130,065 
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ECHOSTAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

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,
20232022
Revenue$60,963 $88,947 

Contract Acquisition Costs

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

For the three months ended March 31,
20232022
Balance at beginning of period$64,447 $82,986 
Additions11,973 15,788 
Amortization expense(16,638)(20,197)
Foreign currency translation452 1,995 
Balance at end of period$60,234 $80,572 

Performance Obligations

As of March 31, 2023, the remaining performance obligations for our customer contracts with original expected durations of more than one year was approximately $1.0 billion. Performance obligations expected to be satisfied within one year and greater than one year are 26.8% and 73.2%, 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, 2023
North America$348,961 $5,997 $2,405 $357,363 
South and Central America38,373   38,373 
Other43,861   43,861 
Total revenue$431,195 $5,997 $2,405 $439,597 
For the three months ended March 31, 2022
North America$399,422 $4,474 $2,947 $406,843 
South and Central America42,872   42,872 
Other51,812  7 51,819 
Total revenue$494,106 $4,474 $2,954 $501,534 

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ECHOSTAR 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, 2023
Services and other revenue:
Services$359,440 $3,987 $1,287 $364,714 
Lease revenue9,685 2,010 1,118 12,813 
Total services and other revenue369,125 5,997 2,405 377,527 
Equipment revenue:
Equipment20,965   20,965 
Design, development and construction services36,904   36,904 
Lease revenue4,201   4,201 
Total equipment revenue62,070   62,070 
Total revenue$431,195 $5,997 $2,405 $439,597 
For the three months ended March 31, 2022
Services and other revenue:
Services$400,402 $2,935 $1,519 $404,856 
Lease revenue10,987 1,539 1,429 13,955 
Total services and other revenue411,389 4,474 2,948 418,811 
Equipment revenue:
Equipment25,885  6 25,891 
Design, development and construction services55,905   55,905 
Lease revenue927   927 
Total equipment revenue82,717  6 82,723 
Total revenue$494,106 $4,474 $2,954 $501,534 

Lease Revenue

The following table presents our lease revenue by type of lease:
For the three months ended March 31,
20232022
Sales-type lease revenue:
Revenue at lease commencement$3,754 $638 
Interest income447 289 
Total sales-type lease revenue4,201 927 
Operating lease revenue12,813 13,955 
Total lease revenue$17,014 $14,882 

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ECHOSTAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
NOTE 4.    EARNINGS PER SHARE 

The following table presents the calculation of basic and diluted EPS for our Class A and B common stock:
 For the three months ended March 31,
 20232022
Net income (loss) attributable to EchoStar Corporation common stock$29,041 $91,433 
Weighted-average common shares outstanding:
Basic83,333 85,846 
Dilutive impact of stock awards outstanding 33 
Diluted83,333 85,879 
Earnings (losses) per share:
Basic$0.35 $1.07 
Diluted$0.35 $1.06 

The following table presents the number of anti-dilutive options to purchase shares of our Class A common stock which have been excluded from the calculation of our weighted-average common shares outstanding:

For the three months ended March 31,
20232022
Number of shares5,526 4,650 

NOTE 5.    MARKETABLE INVESTMENT SECURITIES
 
The following table presents our Marketable investment securities:
 As of
 March 31, 2023December 31, 2022
Marketable investment securities:
Available-for-sale debt securities:
Corporate bonds$189,211 $160,559 
Commercial paper452,642 687,927 
Other debt securities15,126 17,695 
Total available-for-sale debt securities656,979 866,181 
Equity securities109,990 118,790 
Total marketable investment securities, including restricted amounts766,969 984,971 
Less: Restricted marketable investment securities(11,800)(11,056)
Total marketable investment securities$755,169 $973,915 

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ECHOSTAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
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, 2023    
Corporate bonds$189,454 $158 $(401)$189,211 
Commercial paper452,643  (1)452,642 
Other debt securities15,152 1 (27)15,126 
Total available-for-sale debt securities$657,249 $159 $(429)$656,979 
As of December 31, 2022    
Corporate bonds$160,494 $125 $(60)$160,559 
Commercial paper687,956  (29)687,927 
Other debt securities17,785  (90)17,695 
Total available-for-sale debt securities$866,235 $125 $(179)$866,181 

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

For the three months ended March 31,
20232022
Proceeds from sales$38,109 $29,018 
 
As of March 31, 2023, we have $573.8 million of available-for-sale debt securities with contractual maturities of one year or less and $83.2 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,
20232022
Gains (losses) on investments, net$(7,107)$31,015 
 
13


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, 2023
Cash equivalents (including restricted)$41,331 $772,068 $813,399 
Available-for-sale debt securities:
Corporate bonds$ $189,211 $189,211 
Commercial paper 452,642 452,642 
Other debt securities12,779 2,347 15,126 
Total available-for-sale debt securities12,779 644,200 656,979 
Equity securities100,287 9,703 109,990 
Total marketable investment securities, including restricted amounts