Edgar Filing: EchoStar CORP

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2018.

o 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

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

(Registrant’s telephone number, including area code)

Not Applicable

(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 ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

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 ý		Accelerated filer o
Non-accelerated filer o	(Do not check if a smaller reporting company)	Smaller reporting company o
		Emerging growth company o

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. o

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

As of April 30, 2018, the registrant’s outstanding common stock consisted of 48,400,504 shares of Class A common stock and 47,687,039 shares of Class B common stock, each $0.001 par value.

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TABLE OF CONTENTS



Disclosure Regarding Forward-Looking Statements		i

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 2018 (unaudited) and December 31, 2017 (audited)	1
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017 (unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2018 and 2017 (unaudited)	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2018 and 2017 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	58
Item 4.	Controls and Procedures	59

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 3.	Defaults Upon Senior Securities	61
Item 4.	Mine Safety Disclosures	61
Item 5.	Other Information	61
Item 6.	Exhibits	61
	Signatures	62

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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, plans, objectives, strategies, and 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,” “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. Forward-looking statements are not guarantees of future performance, events or results and involve potential known and unknown risks, uncertainties and other factors, many of which may be beyond our control and may pose a risk to our operating and financial condition. 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:


•	our reliance on DISH Network Corporation and its subsidiaries (“DISH Network”) for a significant portion of our revenue;

•

significant risks related to the construction, launch and operation of our satellites, such as the risk of material malfunction on one or more of our satellites, risks resulting from delays or failures of launches of our satellites and potentially missing our regulatory milestones, changes in the space weather environment that could interfere with the operation of our satellites, and our general lack of commercial insurance coverage on our satellites;


•	our ability to realize the anticipated benefits of our current satellites and any future satellite we may construct or acquire;


•	our ability to implement and realize benefits of our domestic and/or international investments, commercial alliances, partnerships, joint ventures, acquisitions and other strategic initiatives;


•	the failure of third-party providers of components, manufacturing, installation services and customer support services to appropriately deliver the contracted goods or services;


•	our ability to bring advanced technologies to market to keep pace with our customers and competitors; and


•	risk related to our foreign operations and other uncertainties associated with doing business internationally, including changes in foreign exchange rates between foreign currencies and the United States dollar, economic instability and political disturbances.

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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PART I — FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

ECHOSTAR CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)



	As of
	March 31, 2018			December 31, 2017
Assets	(unaudited)			(audited)
Current Assets:
Cash and cash equivalents	$	2,239,591		$	2,431,456
Marketable investment securities, at fair value	1,060,733			814,161
Trade accounts receivable and contract assets, net (Note 3)	166,182			196,840
Trade accounts receivable - DISH Network, net	56,861			43,295
Inventory	85,995			83,595
Prepaids and deposits	59,751			54,533
Other current assets	13,163			91,671
Total current assets	3,682,276			3,715,551
Noncurrent Assets:
Property and equipment, net	3,461,004			3,465,471
Regulatory authorizations, net	536,548			536,936
Goodwill	504,173			504,173
Other intangible assets, net	55,273			58,955
Investments in unconsolidated entities	173,601			161,427
Other receivables - DISH Network	93,287			92,687
Other noncurrent assets, net	255,582			214,814
Total noncurrent assets	5,079,468			5,034,463
Total assets	$	8,761,744		$	8,750,014
Liabilities and Stockholders’ Equity
Current Liabilities:
Trade accounts payable	$	103,785		$	108,406
Trade accounts payable - DISH Network	3,742			4,753
Current portion of long-term debt and capital lease obligations	41,424			40,631
Contract liabilities	65,333			65,959
Accrued interest	57,297			47,616
Accrued compensation	32,905			47,756
Accrued expenses and other	105,291			98,769
Total current liabilities	409,777			413,890
Noncurrent Liabilities:
Long-term debt and capital lease obligations, net	3,585,972			3,594,213
Deferred tax liabilities, net	433,174			436,023
Other noncurrent liabilities	127,306			128,503
Total noncurrent liabilities	4,146,452			4,158,739
Total liabilities	4,556,229			4,572,629
Commitments and contingencies (Note 15)
Stockholders’ Equity:
Preferred stock, $.001 par value, 20,000,000 shares authorized, none issued and outstanding at each of March 31, 2018 and December 31, 2017	—			—
Common stock, $.001 par value, 4,000,000,000 shares authorized:
Class A common stock, $.001 par value, 1,600,000,000 shares authorized, 53,932,336 shares issued and 48,400,018 shares outstanding at March 31, 2018 and 53,663,859 shares issued and 48,131,541 shares outstanding at December 31, 2017	54			54
Class B convertible common stock, $.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at each of March 31, 2018 and December 31, 2017	48			48
Class C convertible common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of March 31, 2018 and December 31, 2017	—			—
Class D common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of March 31, 2018 and December 31, 2017	—			—
Additional paid-in capital	3,685,577			3,669,461
Accumulated other comprehensive loss	(111,413		)	(130,154		)
Accumulated earnings	714,423			721,316
Treasury stock, at cost	(98,162		)	(98,162		)
Total EchoStar Corporation stockholders’ equity	4,190,527			4,162,563
Other noncontrolling interests	14,988			14,822
Total stockholders’ equity	4,205,515			4,177,385
Total liabilities and stockholders’ equity	$	8,761,744		$	8,750,014

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ECHOSTAR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)



	For the three months ended March 31,
	2018			2017
Revenue:
Services and other revenue - DISH Network	$	103,805		$	114,955
Services and other revenue - other	355,040			269,791
Equipment revenue	42,947			48,405
Total revenue	501,792			433,151
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)	143,793			131,783
Cost of sales - equipment (exclusive of depreciation and amortization)	44,023			43,938
Selling, general and administrative expenses	103,275			82,991
Research and development expenses	7,137			7,705
Depreciation and amortization	145,554			115,083
Total costs and expenses	443,782			381,500
Operating income	58,010			51,651

Other income (expense):
Interest income	15,635			8,291
Interest expense, net of amounts capitalized	(62,751		)	(45,396		)
Gains (losses) on investments, net	(36,663		)	12,035
Other-than-temporary impairment loss on available-for-sale securities	—			(3,298		)
Equity in earnings (losses) of unconsolidated affiliates, net	(1,009		)	6,408
Other, net	204			1,072
Total other expense, net	(84,584		)	(20,888		)
Income (loss) from continuing operations before income taxes	(26,574		)	30,763
Income tax benefit, net	5,403			12
Net income (loss) from continuing operations	(21,171		)	30,775
Net income from discontinued operations	—			6,577
Net income (loss)	(21,171		)	37,352
Less: Net loss attributable to noncontrolling interest in HSS Tracking Stock (Note 1)	—			(655		)
Less: Net income attributable to other noncontrolling interests	380			292
Net income (loss) attributable to EchoStar Corporation	(21,551		)	37,715
Less: Net loss attributable to Hughes Retail Preferred Tracking Stock (Note 1)	—			(1,209		)
Net income (loss) attributable to EchoStar Corporation common stock	$	(21,551	)	$	38,924

Amounts attributable to EchoStar Corporation common stock:
Net income (loss) from continuing operations	$	(21,551	)	$	32,347
Net income from discontinued operations	—			6,577
Net income (loss) attributable to EchoStar Corporation common stock	$	(21,551	)	$	38,924

Weighted-average common shares outstanding - Class A and B common stock:
Basic	95,888			94,745
Diluted	95,888			95,893

Earnings (losses) per share - Class A and B common stock:
Basic:
Continuing operations	$	(0.22	)	$	0.34
Discontinued operations	—			0.07
Total basic earnings (losses) per share	$	(0.22	)	$	0.41
Diluted:
Continuing operations	$	(0.22	)	$	0.34
Discontinued operations	—			0.07
Total diluted earnings (losses) per share	$	(0.22	)	$	0.41

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ECHOSTAR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

(Unaudited)



	For the three months ended March 31,
	2018			2017
Comprehensive income (loss):
Net income (loss)	$	(21,171	)	$	37,352
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	8,592			24,038
Unrealized gains (losses) on available-for-sale securities and other	(532		)	20,032
Recognition of realized gains on available-for-sale securities in net income (loss)	—			(2,756		)
Recognition of other-than-temporary impairment loss on available-for-sale securities in net income (loss)	—			3,298
Total other comprehensive income, net of tax	8,060			44,612
Comprehensive income (loss)	(13,111		)	81,964
Less: Comprehensive loss attributable to noncontrolling interest in HSS Tracking Stock	—			(655		)
Less: Comprehensive income attributable to other noncontrolling interests	166			292
Comprehensive income (loss) attributable to EchoStar Corporation	$	(13,277	)	$	82,327

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ECHOSTAR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)



	Class A and B Common Stock		Hughes Retail Preferred Tracking Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Earnings			Treasury Stock			Noncontrolling Interest in HSS Tracking Stock			Other Noncontrolling Interests			Total
Balance, December 31, 2016	$	100	$	6		$	3,828,677		$	(124,803	)	$	314,247		$	(98,162	)	$	73,910		$	12,830		$	4,006,805
Cumulative effect of adoption of ASU 2016-09 as of January 1, 2017	—		—			—			—			14,508			—			—			—			14,508
Balance, January 1, 2017	100		6			3,828,677			(124,803		)	328,755			(98,162		)	73,910			12,830			4,021,313
Issuances of Class A common stock:
Exercise of stock options	1		—			28,037			—			—			—			—			—			28,038
Employee benefits	—		—			11,199			—			—			—			—			—			11,199
Employee Stock Purchase Plan	—		—			2,409			—			—			—			—			—			2,409
Stock-based compensation	—		—			956			—			—			—			—			—			956
Reacquisition and retirement of Tracking Stock pursuant to Share Exchange Agreement (Note 1)	—		(6		)	(226,815		)	—			—			—			(73,255		)	—			(300,076		)
R&D tax credits utilized by DISH Network	—		—			(93		)	—			—			—			—			—			(93		)
Other	—		—			—			101			—			—			—			—			101
Net income (loss)	—		—			—			—			37,715			—			(655		)	292			37,352
Foreign currency translation adjustment	—		—			—			24,038			—			—			—			—			24,038
Unrealized gains and impairment on available-for-sale securities, net	—		—			—			20,473			—			—			—			—			20,473
Balance, March 31, 2017	$	101	$	—		$	3,644,370		$	(80,191	)	$	366,470		$	(98,162	)	$	—		$	13,122		$	3,845,710

Balance, December 31, 2017	$	102	$	—		$	3,669,461		$	(130,154	)	$	721,316		$	(98,162	)	$	—		$	14,822		$	4,177,385
Cumulative effect of adoption of ASU 2014-09 and ASU 2016-01 as of January 1, 2018 (Note 2)	—		—			—			10,467			14,658			—			—			—			25,125
Balance, January 1, 2018	102		—			3,669,461			(119,687		)	735,974			(98,162		)	—			14,822			4,202,510
Issuances of Class A common stock:
Exercise of stock options	—		—			3,456			—			—			—			—			—			3,456
Employee benefits	—		—			7,605			—			—			—			—			—			7,605
Employee Stock Purchase Plan	—		—			2,636			—			—			—			—			—			2,636
Stock-based compensation	—		—			2,765			—			—			—			—			—			2,765
R&D tax credits utilized by DISH Network	—		—			(218		)	—			—			—			—			—			(218		)
Other	—		—			(128		)	(100		)	—			—			—			—			(228		)
Net income (loss)	—		—			—			—			(21,551		)	—			—			380			(21,171		)
Foreign currency translation adjustment	—		—			—			8,806			—			—			—			(214		)	8,592
Unrealized losses on available-for-sale securities, net	—		—			—			(432		)	—			—			—			—			(432		)
Balance, March 31, 2018	$	102	$	—		$	3,685,577		$	(111,413	)	$	714,423		$	(98,162	)	$	—		$	14,988		$	4,205,515

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ECHOSTAR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



	For the three months ended March 31,
	2018			2017
Cash flows from operating activities:
Net income (loss)	$	(21,171	)	$	37,352
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization	145,554			126,742
Amortization of debt issuance costs	1,936			1,790
Equity in (earnings) losses of unconsolidated affiliates, net	1,009			(5,249		)
Loss (gain) and impairment on investments, net	36,673			(8,737		)
Stock-based compensation	2,765			956
Deferred tax (benefit) provision	(7,036		)	343
Dividend received from unconsolidated entity	—			7,500
Changes in current assets and current liabilities, net	(13,313		)	(13,857		)
Changes in noncurrent assets and noncurrent liabilities, net	(13,982		)	(6,003		)
Other, net	2,840			518
Net cash flows from operating activities	135,275			141,355
Cash flows from investing activities:
Purchases of marketable investment securities	(562,611		)	(45,905		)
Sales and maturities of marketable investment securities	298,596			209,923
Expenditures for property and equipment	(128,506		)	(102,463		)
Refunds and other receipts related to capital expenditures	77,524			—
Sale of investment in unconsolidated entity	—			17,781
Expenditures for externally marketed software	(7,148		)	(10,832		)
Net cash flows from investing activities	(322,145		)	68,504
Cash flows from financing activities:
Repayment of debt and capital lease obligations	(9,368		)	(8,736		)
Net proceeds from Class A common stock options exercised	3,481			26,325
Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan	2,636			2,409
Cash exchanged for Tracking Stock (Note 1)	—			(651		)
Other, net	(1,508		)	(1,475		)
Net cash flows from financing activities	(4,759		)	17,872
Effect of exchange rates on cash and cash equivalents	(242		)	715
Net increase (decrease) in cash and cash equivalents, including restricted amounts	(191,871		)	228,446
Cash and cash equivalents, including restricted amounts, beginning of period	2,432,249			2,571,866
Cash and cash equivalents, including restricted amounts, end of period	$	2,240,378		$	2,800,312

Supplemental disclosure of cash flow information:
Cash paid for interest (including capitalized interest)	$	55,172		$	54,053
Capitalized interest	$	4,099		$	21,824
Cash paid for income taxes	$	839		$	1,035
Employee benefits paid in Class A common stock	$	7,605		$	11,199
Property and equipment financed under capital lease obligations	$	38		$	7,485
Increase (decrease) in capital expenditures included in accounts payable, net	$	585		$	(6,315	)
Capitalized in-orbit incentive obligations	$	—		$	31,000
Non-cash net assets exchanged for Tracking Stock (Note 1)	$	—		$	299,425

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ECHOSTAR CORPORATION

NOTES TO CONDENSED 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/or “our”) is a holding company that was organized in October 2007 as a corporation under the laws of the State of Nevada. We are a global provider of satellite service operations, video delivery services, broadband satellite technologies and broadband internet services for home and small office customers. We also deliver innovative network technologies, managed services, and various communications solutions for aeronautical, enterprise and government customers. Our Class A common stock is publicly traded on the Nasdaq Global Select Market under the symbol “SATS.”

We primarily operate in the following two business segments:

•

Hughes — which provides broadband satellite technologies and broadband internet services to domestic and international home and small office customers and broadband network technologies, managed services, equipment, hardware, satellite services and communication solutions to domestic and international consumers and aeronautical, enterprise and government 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 (“ESS”) — which uses certain of our owned and leased in-orbit satellites and related licenses to provide satellite service operations and video delivery services on a full-time and occasional-use basis primarily to DISH Network, Dish Mexico, S. de R.L. de C.V., a joint venture we entered into in 2008 (“Dish Mexico”), United States (“U.S.”) government service providers, internet service providers, broadcast news organizations, programmers, and private enterprise customers. ESS also manages satellite operations for certain satellites owned by DISH Network.

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

EchoStar Corporation and DISH Network Corporation (“DISH”) have operated as separate publicly-traded companies since DISH Network completed its distribution to us in 2008 of its digital set-top box business, certain infrastructure, and other assets and related liabilities, including certain satellites, uplink and satellite transmission assets and real estate (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 trusts established by Mr. Ergen for the benefit of his family.

On January 31, 2017, EchoStar Corporation and certain of our subsidiaries entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries. Pursuant to the Share Exchange Agreement, on February 28, 2017, among other things, we received all of the shares of the Hughes Retail Preferred Tracking Stock issued by EchoStar Corporation (the “EchoStar Tracking Stock”) and the Hughes Retail Preferred Tracking Stock issued by our subsidiary Hughes Satellite Systems Corporation (“HSS”) (the “HSS Tracking Stock”, together with the EchoStar Tracking Stock, the “Tracking Stock”) in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of our former EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). The EchoStar Technologies businesses designed, developed and distributed secure end-to-end video technology solutions including digital set-top boxes and related products and technology, primarily for satellite TV service providers and telecommunication companies, and provided digital broadcast operations, including satellite uplinking/downlinking, transmission services, signal processing, conditional access management, and other services. The Tracking Stock tracked the economic performance of the residential retail satellite broadband business of our Hughes segment, including certain operations, assets and liabilities attributed to such business (collectively, the “Hughes Retail Group”), and represented an aggregate 80.0% economic interest in the Hughes Retail Group. Following the consummation of the Share Exchange, we no longer operate the EchoStar Technologies businesses, the Tracking Stock was retired and is no longer outstanding, and all

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ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

agreements, arrangements and policy statements with respect to the Tracking Stock terminated. As a result of the Share Exchange, the operating results of the EchoStar Technologies businesses have been presented as discontinued operations and as such, have been excluded from continuing operations and segment results for all periods presented in our accompanying condensed consolidated financial statements. See Note 4 for further discussion of our discontinued operations.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements 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. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2017.

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 where we are the primary beneficiary. We are deemed to have a controlling financial interest in other entities when we own more than 50 percent 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 noncontrolling interest within stockholders’ equity for the portion of the entity’s equity attributed to the noncontrolling ownership interests.

Prior to consummation of the Share Exchange, noncontrolling interests consisted primarily of the HSS Tracking Stock owned by DISH Network as described in Notes 1 and 4. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassification

Certain prior period amounts have been reclassified to conform with the current year presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheets, the reported amounts of revenue and expense for each reporting period, and certain information disclosed in the notes to our financial statements. Estimates are used in accounting for, among other things, (i) amortization periods for deferred contract acquisition costs, (ii) inputs used to recognize revenue over time, (iii) allowances for doubtful accounts, (iv) warranty obligations, (v) self-insurance obligations, (vi) deferred taxes and related valuation allowances, (vii) uncertain tax positions, (viii) loss contingencies, (ix) fair value of financial instruments, (x) fair value of stock-based compensation awards, (xi) fair value of assets and liabilities acquired in business combinations, (xii) lease classifications, (xiii) asset impairment testing, and (xiv) useful lives and methods for depreciation and amortization of long-lived assets. 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. 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 are reflected in the period they occur or prospectively if the revised estimate affects future periods.

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ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

Fair Value Measurements

We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We utilize the highest level of inputs available according to the following hierarchy in determining fair value:


•	Level 1, defined as observable inputs being quoted prices in active markets for identical assets;


•	Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and


•	Level 3, defined as unobservable inputs for which little or no market data exists, consistent with characteristics of the asset or liability that would be considered by market participants in a transaction to purchase or sell the asset or liability.

Transfers between levels in the fair value hierarchy are considered to occur at the beginning of the quarterly accounting period. There were no transfers between levels for each of the three months ended March 31, 2018 and 2017.

As of March 31, 2018 and December 31, 2017, the carrying amounts of our cash and cash equivalents, trade and other receivables, net of allowance for doubtful accounts, accounts payable and accrued liabilities were equal to or approximated their fair value due to their short-term nature or proximity to current market rates.

Fair values of our marketable investment securities are based on a variety of observable market inputs. For our investments in publicly traded equity securities and U.S. government securities, fair value ordinarily is determined based on a Level 1 measurement that reflects quoted prices for identical securities in active markets. Fair values of our investments in other marketable debt securities generally are based on Level 2 measurements, as the markets for such debt securities are less active. Trades of identical debt securities on or near the measurement date are considered a strong indication of fair value. Matrix pricing techniques that consider par value, coupon rate, credit quality, maturity and other relevant features also may be used to determine fair value of our investments in marketable debt securities. Fair values for our outstanding debt (see Note 12) are based on quoted market prices in less active markets and are categorized as Level 2 measurements. We use fair value measurements from time to time in connection with asset impairment testing and the assignment of purchase consideration to assets and liabilities of acquired companies. Those fair value measurements typically include significant unobservable inputs and are categorized within Level 3 of the fair value hierarchy.

As of March 31, 2018 and December 31, 2017, the fair values of our in-orbit incentive obligations, based on measurements categorized within Level 2 of the fair value hierarchy, approximated their carrying amounts of $110.9 million and $112.2 million, respectively.

Revenue Recognition

Overview

We account for our sales and services revenue in accordance with Accounting Standard Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“Topic 606”), which we adopted on January 1, 2018, using the modified retrospective approach to contracts not completed as of the adoption date. Topic 606 provides a five-step revenue recognition model that we apply to our contracts with customers. Under this model we (i) identify the contract with the customer, (ii) identify our performance obligations in the contract, (iii) determine the transaction price for the contract, (iv) allocate the transaction price to our performance obligations and (v) recognize revenue when or as we satisfy our performance obligations.

Revenue is recognized upon transfer of control of the promised goods or our performance of the services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We enter into contracts that may include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations.

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ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

Additionally, a significant portion of our revenue is derived from leases of property and equipment that is reported in “Services and other revenue - other” and “Services and other revenue - DISH Network” in our accompanying condensed consolidated statement of operations. Certain of our contracts with customers contain embedded equipment leases, which we separate from non-lease components of the contract based on the relative standalone selling prices of the lease and non-lease components.

Hughes

Our Hughes segment provides various communication and networking services to consumer and enterprise customers in domestic and international markets. Our services contracts typically obligate us to provide substantially the same services on a recurring basis in exchange for fixed recurring fees over the term of the contract. We satisfy such performance obligations over time and generally recognize revenue ratably as services are rendered over the service period. Certain of our contracts with service obligations provide for fees based on usage, capacity or volume. We satisfy these performance obligations and generally recognize the related revenue at the point in time or over the period when the services are rendered. Our Hughes segment also sells and leases communications equipment to its customers. Revenue from equipment sales generally is recognized upon shipment of the equipment. Our equipment sales contracts typically include standard product warranties, but generally do not provide for returns or refunds. Revenue for extended warranties is generally recognized ratably over the extended warranty period. For contracts with multiple performance obligations, we typically allocate the contract’s transaction price to each performance obligation based on their relative standalone selling prices. When the standalone selling price is not observable, our primary method used to estimate standalone selling price is the expected cost plus a margin. Our contracts generally require customer payments to be made at or shortly after the time we transfer control of goods or perform the services.

In addition to equipment and service offerings, our Hughes segment also enters into long-term contracts to design, develop, construct and install complex telecommunication networks to customers in its enterprise and mobile satellite systems markets. Revenue from such contracts is generally recognized over time at a measure of progress that depicts the transfer of control of the goods or services to the customer. Depending on the nature of the arrangement, we measure progress toward contract completion using an appropriate input method or output method. Under our input method, we recognize the transaction price as revenue based on the ratio of costs incurred to estimated total costs at completion. Under our output method, revenue and cost of sales are recognized as products are delivered based on the expected profit for the entire agreement. Profit margins on long-term contracts generally are based on estimates of revenue and costs at completion. We review and revise our estimates periodically and recognize related adjustments in the period in which the revisions are made. Estimated losses on contracts are recorded in the period in which they are identified. We generally receive interim payments as work progresses, although for some contracts, we may be entitled to receive an advance payment.

ESS

Our ESS segment primarily provides satellite service operations through leasing arrangements and video delivery services on a full-time and occasional-use basis to DISH Network and Dish Mexico, as well as government service providers, internet service providers, broadcast news organizations, programmers, and private enterprise customers. We also provide telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network. Our ESS segment also provides technical consulting services that are billed by the hour. Generally, our service contracts with customers contain a single performance obligation and therefore there is no need to allocate the transaction price. We transfer control and recognize revenue for satellite services at the point in time or over the period when the services are rendered.

Other

Sales and value added taxes, Universal Service Fees and other taxes that we collect concurrent with revenue producing activities are excluded from revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales at the time of shipment.

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ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

Contract Balances

Trade Accounts Receivable

Trade accounts receivable includes amounts billed and currently due from customers and represents our unconditional rights to consideration arising from our performance under contracts with customers. Trade accounts receivable also includes amounts due from customers under our leasing arrangements. We make ongoing estimates relating to the collectibility of our accounts receivable and maintain an allowance for estimated losses resulting from the inability of our customers to make required payments. In determining the amount of the allowance, we consider historical levels of credit losses and make judgments about the creditworthiness of our customers based on ongoing credit evaluations. Past-due trade accounts receivable balances are written off when our internal collection efforts have been unsuccessful.

Contract Assets and Contract Liabilities

Contract assets represent revenue that we have recognized in advance of billing the customer and are included in “Trade accounts receivable and contract assets, net” or “Other noncurrent assets, net” in our balance sheets based on the expected timing of customer payment. Our contract assets include amounts that we referred to as “contracts in process” in prior periods. Our contract assets typically relate to our long-term contracts where we recognize revenue using the cost-based input method and the revenue recognized exceeds the amount billed to the customer.

Contract liabilities consist of advance payments and billings in excess of revenue recognized under contracts with customers and is included in “Contract liabilities” or “Other noncurrent liabilities” in our balance sheets based on the timing of when we expect to recognize revenue. We recognize deferred revenue as revenue after we have transferred control of the goods or services to the customer and all revenue recognition criteria have been met.

Contract Acquisition and Fulfillment Costs

Contract Acquisition Costs

Our contract acquisition costs represent incremental direct costs of obtaining a contract and consist primarily of sales incentives paid to employees and third-party representatives. When we determine that our contract acquisition costs are recoverable, we defer and amortize the costs over the contract term, or over the estimated life of the customer relationship if anticipated renewals are expected and the incentives payable upon renewal are not commensurate with the initial incentive. We amortize contract acquisition costs in proportion to the revenue to which the costs relate. We expense sales incentives as incurred if the expected amortization period is one year or less. Unamortized contract acquisition costs are included in “Other noncurrent assets, net” in our accompanying condensed consolidated balance sheets and related amortization expense is included in “Selling, general and administrative expenses” in our accompanying condensed consolidated statements of operations. Unamortized contract acquisition costs totaled $103.6 million as of March 31, 2018 and related amortization expense totaled $20.0 million for the three months ended March 31, 2018.

Contract Fulfillment Costs

We recognize costs to fulfill a contract as an asset when the costs relate directly to a contract, the costs generate or enhance our resources that will be used in satisfying future performance obligations, and the costs are expected to be recovered. We may incur such costs on certain contracts that require initial setup activities in advance of the transfer of goods or services to the customer. We amortize these costs in proportion to the revenue to which the costs relate. Unamortized contract fulfillment costs are included in “Other noncurrent assets, net” in our accompanying condensed consolidated balance sheets and related amortization expense is included in “Cost of sales - services and other” in our accompanying condensed consolidated statements of operations. Unamortized contract fulfillment costs totaled $1.8 million as of March 31, 2018 and related amortization expense was de minimis for the three months ended March 31, 2018.

Research and Development

Costs incurred in research and development activities generally are expensed as incurred. A significant portion of our research and development costs are incurred in connection with the specific requirements of a customer’s order. In such instances, the amounts for these customer funded development efforts are included in cost of sales.

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ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

Cost of sales includes research and development costs incurred in connection with customers’ orders of approximately $6.6 million and $6.9 million for the three months ended March 31, 2018 and 2017, respectively. In addition, we incurred other research and development expenses of approximately $7.1 million and $7.7 million for the three months ended March 31, 2018 and 2017, respectively.

Capitalized Software Costs

Costs related to the procurement and development of software for internal-use and externally marketed software are capitalized and amortized using the straight-line method over the estimated useful life of the software, not in excess of five years. Capitalized costs of internal-use software are included in “Property and equipment, net” and capitalized costs of externally marketed software are included in “Other noncurrent assets, net” in our accompanying condensed consolidated balance sheets. Externally marketed software generally is installed in the equipment we sell to customers. We conduct software program reviews for externally marketed capitalized software costs at least annually, or as events and circumstances warrant such a review, to determine if capitalized software development costs are recoverable and to ensure that costs associated with programs that are no longer generating revenue are expensed.

As of March 31, 2018 and December 31, 2017, the net carrying amount of externally marketed software was $89.7 million and $88.1 million, respectively, of which $22.3 million and $19.6 million, respectively, is under development and not yet placed in service. We capitalized costs related to the development of externally marketed software of $7.1 million and $10.8 million for the three months ended March 31, 2018 and 2017, respectively. We recorded amortization expense relating to the development of externally marketed software of $5.5 million and $3.4 million for the three months ended March 31, 2018 and 2017, respectively. The weighted average useful life of our externally marketed software was approximately four years as of March 31, 2018.

Marketable Investment Securities

Our marketable investment securities portfolio consists of investments in debt and equity instruments with readily determinable fair values.

Debt Securities

We classify debt securities as available-for-sale based on our investment strategy for the securities, except for securities that we have elected to account for using the fair value option. We recognize periodic changes in the difference between fair value and amortized cost in “Unrealized gains (losses) on available-for-sale securities and other” in our accompanying condensed consolidated statements of comprehensive income (loss). Realized gains and losses upon sale of debt securities are reclassified from other comprehensive income (loss) and recognized on the trade date in “Gains (losses) on investments, net” in our accompanying condensed consolidated statements of operations. We use the first-in, first-out (“FIFO”) method to determine the cost basis on sales of debt securities. Interest income from debt securities is reported in “Interest income” in our accompanying condensed consolidated statements of operations.

We evaluate our available-for-sale debt securities portfolio periodically to determine whether declines in the fair value of these securities are other than temporary. Our evaluation considers, among other things, the length of time and the extent to which the fair value of such security has been lower than amortized cost, market and company-specific factors related to the security, and our intent and ability to hold the investment to maturity or recovery. We generally consider a decline to be other than temporary when: (i) we intend to sell the security, (ii) it is more likely than not that we will be required to sell the security before maturity or recovery, or (iii) we do not expect to recover the amortized cost of the security at maturity. Declines in the fair value of available-for-sale debt securities that are determined to be other than temporary are reclassified from other comprehensive income (loss) and recognized in net income, thus establishing a new cost basis for the investment.

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ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

Equity Securities

Prior to January 1, 2018, we classified our marketable equity securities as available-for-sale or trading securities, depending on our investment strategy for the securities. For available-for-sale securities, we recognized periodic changes in the difference between fair value and cost in “Unrealized gains (losses) on available-for-sale securities and other” in our accompanying condensed consolidated statements of comprehensive income (loss). Realized gains and losses upon sale of available-for-sale securities were reclassified from other comprehensive income (loss) and recognized on the trade date in “Gains (losses) on investments, net” in our accompanying condensed consolidated statements of operations. We used the FIFO method to determine the cost basis on sales of available-for-sale securities. For trading securities, we recognized periodic changes in the fair value of the securities in “Gains (losses) on investments, net” in our accompanying condensed consolidated statement of operations. Effective January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2016-01, Financial Instruments (the “New Investment Standard”), which established new requirements for investments in equity securities in ASC Topic 321, Investments - Equity Securities. Accordingly, beginning in 2018, we recognize periodic changes in the fair value of all of our equity securities with a readily determinable fair value that are not accounted for using the equity method in “Gains (losses) on investments, net” in our accompanying condensed consolidated statements of operations. We recognize dividend income on equity securities on the ex-dividend date and report such income in “Other, net” in our accompanying condensed consolidated statements of operations.

Investments in Unconsolidated Entities

Our investments in unconsolidated entities consist of investments in equity securities that are not publicly traded and do not have readily determinable fair values. We use the equity method to account for such investments when we have the ability to significantly influence the operating decisions of the investee. Prior to January 1, 2018, we accounted for other investments without a readily determinable fair value using the cost method. In connection with our adoption of the New Investment Standard as of January 1, 2018, we have elected to measure such investments at cost, adjusted for changes resulting from impairments and observable price changes in orderly transactions for identical or similar securities of the same issuer. We consider information in periodic financial statements and other documentation provided by our investees and we may make inquiries of investee management to determine whether observable price changes have occurred.

Our investments in unconsolidated entities that are accounted for using the equity method are initially recorded at cost and subsequently adjusted for our proportionate share of the net earnings or loss of the investee, which is reported in “Equity in earnings (losses) of unconsolidated affiliates, net” in our accompanying condensed consolidated statements of operations. The carrying amount of such investments may include a component of goodwill if the cost of our investment exceeds the fair value of the underlying identifiable assets and liabilities of the investee. Dividends received from equity method investees reduce the carrying amount of the investment. We defer, to the extent of our ownership interest in the investee, recognition of intra-entity profits on sales of equipment to the investee until the investee has charged the cost of the equipment to expense in a subsequent sale to a third party or through depreciation. In these circumstances, we report the gross amounts of revenue and cost of sales in the statement of operations and include the intra-entity profit eliminations within “Equity in earnings (losses) of unconsolidated affiliates, net.”

We evaluate all of our investments in unconsolidated entities periodically to determine whether events or changes in circumstances have occurred that may have a significant adverse effect on the fair value of the investment. As part of our evaluation, we review available information such as business plans and current financial statements of these companies for factors that may indicate an impairment of our investments. Such factors may include, but are not limited to, unprofitable operations, negative cash flow, material litigation, violations of debt covenants, bankruptcy and changes in business strategy. When we determine that an investment is impaired, we adjust the carrying amount of the investment to its estimated fair value and recognize the impairment loss in earnings.

Other Significant Accounting Policies

See Note 2, “Summary of Significant Accounting Policies” to our consolidated financial statements included in our Form 10-K for the year ended December 31, 2017 for a summary of our other significant accounting policies.

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ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

Recently Adopted Accounting Pronouncements

Revenue Recognition and Financial Instruments

On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers and related amendments (collectively, the “New Revenue Standard”). The New Revenue Standard established a comprehensive new model for revenue recognition, which is codified in Topic 606 (see Revenue Recognition above), and provided guidance for certain costs associated with contracts with customers. We adopted the New Revenue Standard using the modified retrospective method for contracts that were not completed as of January 1, 2018. Accordingly, comparative information for prior periods has not been restated and continues to be reported under the accounting standards in effect for those periods. Upon adoption of the New Revenue Standard, we recognized the cumulative effect of its initial application as a net increase to accumulated earnings of $25.1 million, net of related income taxes. The adoption of the New Revenue Standard also impacted the timing of recognition of certain fees charged to our customers in our consumer markets; however, the adoption has not had, and we do not expect it to have, a material impact on the overall timing or amount of revenue recognition.

The primary impacts of the New Revenue Standard on our operating results relate to how we account for sales incentive costs (See Contract Acquisition and Fulfillment Costs above). Historically, we charged sales incentives to expense as incurred, except for incentives related to the consumer business in our Hughes segment, which were initially deferred and subsequently amortized over the related service agreement term. Under the New Revenue Standard, we continue to defer incentives for our consumer business; however, we now amortize those incentives over the estimated customer life, which includes expected contract renewal periods. In addition, we now defer certain sales incentives related to other businesses in our Hughes segment and amortize those incentives over the related service agreement term. As a result of these changes, we have recognized additional deferred costs on our accompanying condensed consolidated balance sheet and the costs generally are recognized as expenses over a longer period of time in our accompanying condensed consolidated statements of operations. The adoption of the New Revenue Standard by one of our unconsolidated entities had a similar impact on our investment in the unconsolidated entity, which we account for using the equity method.

Additionally, on January 1, 2018, we prospectively adopted the applicable requirements of the New Investment Standard. The New Investment Standard substantially revises standards for the recognition, measurement and presentation of financial instruments, including requiring all equity investments, except for investments in consolidated subsidiaries and investments accounted for using the equity method, to be measured at fair value with changes in the fair value recognized through earnings. The New Investment Standard permits an entity to elect to measure an equity security without a readily determinable fair value at its cost, adjusted for changes resulting from impairments and observable price changes in orderly transactions for identical or similar securities of the same issuer. It also amends certain disclosure requirements associated with equity investments and the fair value of financial instruments. Upon adoption of the New Investment Standard on January 1, 2018, we recorded a $10.5 million charge to accumulated earnings to include net unrealized losses on our marketable equity securities then designated as available for sale, which previously were recorded in “Accumulated other comprehensive loss” in our accompanying condensed consolidated balance sheet. For our equity investments without a readily determinable fair value that were previously accounted for using the cost method, we have elected to measure such securities at cost, adjusted for impairments and observable price changes. We expect our future net income or loss to be more volatile as a result of these changes in accounting for our investments in equity securities that were previously accounted for as available for sale or using the cost method.

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ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

The cumulative effects of changes to our accompanying condensed consolidated balance sheet as of January 1, 2018 for the adoption of the New Revenue Standard and the New Investment Standard were as follows:



	Balance at December 31, 2017		Adjustments Due to the					Balance at January 1, 2018
	Balance at December 31, 2017		New Revenue Standard			New Investment Standard		Balance at January 1, 2018
	(In thousands)
Assets:
Trade accounts receivable and contract assets, net	$	196,840	$	(7,103	)	$	—	$	189,737
Other current assets	$	91,671	$	533		$	—	$	92,204
Investments in unconsolidated entities	$	161,427	$	6,917		$	—	$	168,344
Other noncurrent assets, net	$	214,814	$	22,545		$	—	$	237,359
Total assets	$	8,750,014	$	22,892		$	—	$	8,772,906
Liabilities:
Contract liabilities	$	65,959	$	(1,542	)	$	—	$	64,417
Accrued expenses and other	$	98,769	$	255		$	—	$	99,024