v3.20.2

Revenue Recognition | 9 Months Ended
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Sep. 30, 2020
Revenue from Contract with Customer [Abstract] |
REVENUE RECOGNITION | REVENUE RECOGNITION Contract Balances The following table presents the components of our contract balances:
|  | As of
|  | September 30, 2020 |  | December 31, 2019
Trade accounts receivable and contract assets, net: |  |  |  |
Sales and services |  | $ | 162,390 |  |  | $ | 152,632 |
Leasing |  | 4,065 |  |  | 4,016 |
Total trade accounts receivable |  | 166,455 |  |  | 156,648 |
Contract assets |  | 43,896 |  |  | 63,758 |
Allowance for doubtful accounts |  | (19,401) |  |  | (23,777) |
Total trade accounts receivable and contract assets, net |  | $ | 190,950 |  |  | $ | 196,629 |
Contract liabilities: |  |  |  |
Current |  | $ | 89,622 |  |  | $ | 101,060 |
Non-current |  | 11,663 |  |  | 10,572 |
Total contract liabilities |  | $ | 101,285 |  |  | $ | 111,632 |
The following table presents the revenue recognized in the Condensed Consolidated Statements of Operations that was previously included within contract liabilities:
|  | For the three months ended September 30, |  | For the nine months ended September 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Revenue |  | $ | 3,794 |  |  | $ | 19,490 |  |  | $ | 63,581 |  |  | $ | 67,263 |
The following table presents the activity in our allowance for doubtful accounts:
|  | For the nine months ended September 30,
|  | 2020 |  | 2019
Balance at beginning of period |  | $ | 23,777 |  |  | $ | 16,604 |
Credit losses (1) |  | 12,253 |  |  | 22,031 |
Deductions |  | (15,367) |  |  | (13,979) |
Foreign currency translation |  | (1,262) |  |  | 596 |
Balance at end of period |  | $ | 19,401 |  |  | $ | 25,252 |
(1) The impact of adopting ASC 326 on January 1, 2020 was a net decrease to our allowance for doubtful accounts largely driven by a $13.4 million reclassification to Other current assets, net and Other non-current assets, net, offset by a $2.9 million adjustment to Accumulated earnings (losses). Contract Acquisition Costs The following table presents the activity in our contract acquisition costs, net:
|  | For the nine months ended September 30,
|  | 2020 |  | 2019
Balance at beginning of period |  | $ | 113,592 |  |  | $ | 114,306 |
Additions |  | 68,589 |  |  | 71,651 |
Amortization expense |  | (75,429) |  |  | (72,412) |
Foreign currency translation |  | (2,984) |  |  | (1,012) |
Balance at end of period |  | $ | 103,768 |  |  | $ | 112,533 |
We recognized amortization expenses related to contract acquisition costs of $25.7 million and $24.7 million for the three months ended September 30, 2020 and 2019, respectively. Transaction Price Allocated to Remaining Performance Obligations As of September 30, 2020, the remaining performance obligations for our customer contracts with original expected durations of more than one year was $677.9 million. We expect to recognize 38.9% of our remaining performance obligations of these contracts as revenue in the next twelve months. This amount e xcludes 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 table presents our revenue from customer contracts disaggregated by primary geographic market and by segment:
|  | Hughes |  | ESS |  | Corporate and Other |  | Consolidated Total
For the three months ended September 30, 2020 |  |  |  |  |  |  |  |
North America |  | $ | 392,950 |  |  | $ | 4,402 |  |  | $ | 2,298 |  |  | $ | 399,650 |
South and Central America |  | 38,578 |  |  | — |  |  | 40 |  |  | 38,618 |
Other |  | 35,234 |  |  | — |  |  | — |  |  | 35,234 |
Total revenue |  | $ | 466,762 |  |  | $ | 4,402 |  |  | $ | 2,338 |  |  | $ | 473,502 |
For the three months ended September 30, 2019 |  |  |  |  |  |  |  |
North America |  | $ | 389,264 |  |  | $ | 4,098 |  |  | $ | 4,323 |  |  | $ | 397,685 |
South and Central America |  | 31,747 |  |  | — |  |  | 106 |  |  | 31,853 |
Other |  | 42,724 |  |  | — |  |  | — |  |  | 42,724 |
Total revenue |  | $ | 463,735 |  |  | $ | 4,098 |  |  | $ | 4,429 |  |  | $ | 472,262 |
For the nine months ended September 30, 2020 |  |  |  |  |  |  |  |
North America |  | $ | 1,160,288 |  |  | $ | 13,233 |  |  | $ | 6,753 |  |  | $ | 1,180,274 |
South and Central America |  | 106,495 |  |  | — |  |  | 232 |  |  | 106,727 |
Other |  | 111,633 |  |  | — |  |  | — |  |  | 111,633 |
Total revenue |  | $ | 1,378,416 |  |  | $ | 13,233 |  |  | $ | 6,985 |  |  | $ | 1,398,634 |
For the nine months ended September 30, 2019 |  |  |  |  |  |  |  |
North America |  | $ | 1,129,491 |  |  | $ | 11,873 |  |  | $ | 13,934 |  |  | $ | 1,155,298 |
South and Central America |  | 89,005 |  |  | — |  |  | 349 |  |  | 89,354 |
Other |  | 142,423 |  |  | — |  |  | — |  |  | 142,423 |
Total revenue |  | $ | 1,360,919 |  |  | $ | 11,873 |  |  | $ | 14,283 |  |  | $ | 1,387,075 |
Nature of Products and Services The following tables presents our revenue disaggregated by the nature of products and services and by segment for the three and nine months ended September 30, 2020 and 2019:
|  | Hughes |  | ESS |  | Corporate and Other |  | Consolidated Total
For the three months ended September 30, 2020 |  |  |  |  |  |  |  |
Services and other revenue: |  |  |  |  |  |  |  |
Services |  | $ | 409,119 |  |  | $ | 2,804 |  |  | $ | 1,037 |  |  | $ | 412,960 |
Lease revenue |  | 10,673 |  |  | 1,598 |  |  | 1,301 |  |  | 13,572 |
Total services and other revenue |  | 419,792 |  |  | 4,402 |  |  | 2,338 |  |  | 426,532 |
Equipment revenue: |  |  |  |  |  |  |  |
Equipment |  | 29,387 |  |  | — |  |  | — |  |  | 29,387 |
Design, development and construction services |  | 16,375 |  |  | — |  |  | — |  |  | 16,375 |
Lease revenue |  | 1,208 |  |  | — |  |  | — |  |  | 1,208 |
Total equipment revenue |  | 46,970 |  |  | — |  |  | — |  |  | 46,970 |
Total revenue |  | $ | 466,762 |  |  | $ | 4,402 |  |  | $ | 2,338 |  |  | $ | 473,502 |
For the three months ended September 30, 2019 |  |  |  |  |  |  |  |
Services and other revenue: |  |  |  |  |  |  |  |
Services |  | $ | 385,477 |  |  | $ | 2,736 |  |  | $ | 1,733 |  |  | $ | 389,946 |
Lease revenue |  | 12,533 |  |  | 1,362 |  |  | 2,696 |  |  | 16,591 |
Total services and other revenue |  | 398,010 |  |  | 4,098 |  |  | 4,429 |  |  | 406,537 |
Equipment revenue: |  |  |  |  |  |  |  |
Equipment |  | 21,106 |  |  | — |  |  | — |  |  | 21,106 |
Design, development and construction services |  | 42,328 |  |  | — |  |  | — |  |  | 42,328 |
Lease revenue |  | 2,291 |  |  | — |  |  | — |  |  | 2,291 |
Total equipment revenue |  | 65,725 |  |  | — |  |  | — |  |  | 65,725 |
Total revenue |  | $ | 463,735 |  |  | $ | 4,098 |  |  | $ | 4,429 |  |  | $ | 472,262 |
|  | Hughes |  | ESS |  | Corporate and Other |  | Consolidated Total
For the nine months ended September 30, 2020 |  |  |  |  |  |  |  |
Services and other revenue: |  |  |  |  |  |  |  |
Services |  | $ | 1,198,816 |  |  | $ | 8,133 |  |  | $ | 3,318 |  |  | $ | 1,210,267 |
Lease revenue |  | 32,898 |  |  | 5,100 |  |  | 3,667 |  |  | 41,665 |
Total services and other revenue |  | 1,231,714 |  |  | 13,233 |  |  | 6,985 |  |  | 1,251,932 |
Equipment revenue: |  |  |  |  |  |  |  |
Equipment |  | 72,744 |  |  | — |  |  | — |  |  | 72,744 |
Design, development and construction services |  | 70,600 |  |  | — |  |  | — |  |  | 70,600 |
Lease revenue |  | 3,358 |  |  | — |  |  | — |  |  | 3,358 |
Total equipment revenue |  | 146,702 |  |  | — |  |  | — |  |  | 146,702 |
Total revenue |  | $ | 1,378,416 |  |  | $ | 13,233 |  |  | $ | 6,985 |  |  | $ | 1,398,634 |
For the nine months ended September 30, 2019 |  |  |  |  |  |  |  |
Services and other revenue: |  |  |  |  |  |  |  |
Services |  | $ | 1,147,868 |  |  | $ | 7,953 |  |  | $ | 5,185 |  |  | $ | 1,161,006 |
Lease revenue |  | 37,967 |  |  | 3,920 |  |  | 9,098 |  |  | 50,985 |
Total services and other revenue |  | 1,185,835 |  |  | 11,873 |  |  | 14,283 |  |  | 1,211,991 |
Equipment revenue: |  |  |  |  |  |  |  |
Equipment |  | 77,663 |  |  | — |  |  | — |  |  | 77,663 |
Design, development and construction services |  | 93,254 |  |  | — |  |  | — |  |  | 93,254 |
Lease revenue |  | 4,167 |  |  | — |  |  | — |  |  | 4,167 |
Total equipment revenue |  | 175,084 |  |  | — |  |  | — |  |  | 175,084 |
Total revenue |  | $ | 1,360,919 |  |  | $ | 11,873 |  |  | $ | 14,283 |  |  | $ | 1,387,075 |
Lease Revenue The following table presents our lease revenue by type of lease:
|  | For the three months ended September 30, |  | For the nine months ended September 30, |
|  | 2020 |  | 2019 |  | 2020 |  | 2019 |
Sales-type lease revenue: |  |  |  |  |  |  |  |  |
Revenue at lease commencement |  | $ | 1,208 |  |  | $ | 2,291 |  |  | $ | 3,358 |  |  | $ | 4,167 |  |
Interest income |  | 14 |  |  | 206 |  |  | 178 |  |  | 716 |  |
Total sales-type lease revenue |  | 1,222 |  |  | 2,497 |  |  | 3,536 |  |  | 4,883 |  |
Operating lease revenue |  | 13,558 |  |  | 16,385 |  |  | 41,487 |  |  | 50,269 |  |
Total lease revenue |  | $ | 14,780 |  |  | $ | 18,882 |  |  | $ | 45,023 |  |  | $ | 55,152 |  |
Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $10.6 million and $6.5 million as of September 30, 2020 and December 31, 2019, respectively. The following table presents future operating lease payments to be received as of September 30, 2020:
|  | Amounts
Year ending December 31, |  |
2020 (remainder) |  | $ | 11,977 |
2021 |  | 37,729 |
2022 |  | 34,207 |
2023 |  | 32,100 |
2024 |  | 29,771 |
2025 and beyond |  | 127,485 |
Total lease payments |  | $ | 273,269 |
The following table presents amounts for assets subject to operating leases, which are included in Property and equipment, net:
|  | As of
|  | September 30, 2020 |  | December 31, 2019
|  | Cost |  | Accumulated Depreciation |  | Net |  | Cost |  | Accumulated Depreciation |  | Net
Customer premises equipment |  | $ | 1,537,274 |  |  | $ | (1,198,056) |  |  | $ | 339,218 |  |  | $ | 1,377,914 |  |  | $ | (1,043,431) |  |  | $ | 334,483 |
Satellites |  | 104,620 |  |  | (36,591) |  |  | 68,029 |  |  | 104,620 |  |  | (31,360) |  |  | 73,260 |
Real estate |  | 48,275 |  |  | (16,855) |  |  | 31,420 |  |  | 46,930 |  |  | (16,048) |  |  | 30,882 |
Total |  | $ | 1,690,169 |  |  | $ | (1,251,502) |  |  | $ | 438,667 |  |  | $ | 1,529,464 |  |  | $ | (1,090,839) |  |  | $ | 438,625 |
The following table presents depreciation expense for assets subject to operating leases, which is included in Depreciation and amortization:
|  | For the three months ended September 30, |  | For the nine months ended September 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Customer premises equipment |  | $ | 54,059 |  |  | $ | 45,546 |  |  | $ | 154,625 |  |  | $ | 138,197 |
Satellites |  | 1,744 |  |  | 1,802 |  |  | 5,231 |  |  | 5,277 |
Real estate |  | 245 |  |  | 232 |  |  | 710 |  |  | 697 |
Total |  | $ | 56,048 |  |  | $ | 47,580 |  |  | $ | 160,566 |  |  | $ | 144,171 |

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 + Details
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