EchoStar Announces Financial Results for Three and Nine Months Ended September 30, 2020 November 05, 2020 Englewood, CO, November 5, 2020—EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and nine months ended September 30, 2020. Three Months Ended September 30, 2020 Financial Highlights: Consolidated revenues of $473.5 million. Net income from continuing operations of $23.3 million, consolidated net income attributable to EchoStar common stock of $25.4 million, and diluted earnings per share of $0.26. Consolidated Adjusted EBITDA of $166.7 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below). Nine Months Ended September 30, 2020 Financial Highlights: Consolidated revenues of $1,398.6 million. Net loss from continuing operations of $49.3 million, consolidated net loss attributable to EchoStar common stock of $40.3 million, and diluted loss per share of $(0.41). Consolidated Adjusted EBITDA of $476.2 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below). “We had another outstanding quarter,” commented Michael Dugan, CEO and President of EchoStar. “We increased our consumer subscriber base by approximately 38,000, driven by our international markets, and grew our Net income and Adjusted EBITDA from the same period last year. The continued growth in demand for our service demonstrates the importance of our networks and services for businesses and families everywhere. We will continue to focus on the needs of our customers as connectivity becomes a more vital part of business, entertainment, and communications.” Three Months Ended September 30, 2020 - Additional Information: Consolidated revenue was up $1.2 million year over year including an estimated negative foreign exchange impact of $10.9 million. Adjusted EBITDA increased 9% or $14.3 million year over year. Hughes segment Adjusted EBITDA increased $13.2 million year over year. The increase was driven primarily by the higher margin associated with the growth in our consumer broadband service. ESS segment Adjusted EBITDA increased by $0.5 million year over year. Corporate and Other segment Adjusted EBITDA increased by $0.7 million. The increase was primarily driven by lower equity losses in unconsolidated affiliates of $1.3 million compared to the same period last year. Net income from continuing operations was $23.3 million, an increase of $46.4 million from last year. The change was primarily due to higher operating income of $10.9 million, improvement in foreign currency transactions, net, of $21.8 million, higher gains on investments, net, of $6.7 million, and lower income tax provision of $2.1 million. Hughes broadband subscribers are approximately 1,580,000 as of September 30, 2020 including approximately 364,000 subscribers in Latin America. For the three months ended September 30, 2020, approximately 71% of Hughes segment revenue was attributable to our consumer customers with approximately 29% attributable to our enterprise customers. Cash, cash equivalents and marketable investment securities were $2.5 billion as of September 30, 2020. Set forth below is a table highlighting certain of EchoStar’s segment results three and nine months ended September 30, 2020 and 2019 (amounts in thousands) from continuing operations (all US GAAP amounts reference results from continuing operations): For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Revenue Hughes $466,762 $463,735 $1,378,416 $1,360,919 EchoStar Satellite Services 4,402 4,098 13,233 11,873 Corporate and Other 2,338 4,429 6,985 14,283 Total revenue $473,502 $472,262 $1,398,634 $1,387,075 Adjusted EBITDA Hughes $186,458 $173,298 $534,955 $490,152 EchoStar Satellite Services 2,274 1,791 5,847 5,006 Corporate & Other: Corporate overhead, operating and other (21,572) (20,981) (63,948) (58,769) Equity in earnings (losses) of unconsolidated affiliates, net (504) (1,782) (660) (9,507) Total Corporate & Other (22,076) (22,763) (64,608) (68,276) Total Adjusted EBITDA $166,656 $152,326 $476,194 $426,882 Expenditures for property and equipment $98,137 $95,155 $295,041 $314,351 Reconciliation of GAAP to Non-GAAP Measurement (amounts in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Net income (loss) $23,273 $(21,106) (49,307) (11,158) Interest income, net (7,364) (17,175) (33,707) (64,817) Interest expense, net of amounts capitalized 37,967 49,865 112,458 156,813 Income tax provision (benefit), net 2,950 5,016 6,309 12,607 Depreciation and amortization 129,822 122,374 392,077 361,619 Net loss (income) from discontinued operations — (2,008) — (46,223) Net loss (income) attributable to non-controlling interests 2,167 2,797 9,040 1,359 EBITDA 188,815 139,763 436,870 410,200 (Gains) losses on investments, net (14,998) (8,295) 37,764 (28,087) Litigation Expense — 1,824 — 26,328 License fee dispute - India, net of non-controlling interests (480) 3,940 (1,043) 3,940 Foreign currency transaction (gains) losses, net (6,681) 15,094 2,603 14,501 Adjusted EBITDA $166,656 $152,326 $476,194 $426,882 Note on Use of Non-GAAP Financial Measures EBITDA is defined as “Net income (loss)” excluding “Interest income, net,” Interest expense, net of amounts capitalized,” “Income tax benefit (provision), net,” “Depreciation and amortization,” “Net income (loss) from discontinued operations,” and “Net income (loss) attributable to non-controlling interests.” Adjusted EBITDA is defined as EBITDA excluding “Gains and losses on investments, net,” “Foreign currency transaction gains (losses), net,” and other non-recurring or non-operational items. EBITDA and Adjusted EBITDA are not measures determined in accordance with US GAAP. EBITDA and Adjusted EBITDA are reconciled to “Net income (loss)” in the table above and should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with US GAAP. Our management uses EBITDA and Adjusted EBITDA as measures of our operating efficiency and overall financial performance for benchmarking against our peers and competitors. Management believes that these non-GAAP measures provide meaningful supplemental information regarding the underlying operating performance of our business and are appropriate to enhance an overall understanding of our financial performance. Management also believes that EBITDA and Adjusted EBITDA are useful to investors because they are frequently used by securities analysts, investors, and other interested parties to evaluate the performance of companies in our industry. The consolidated financial statements of EchoStar for the periods ended September 30, 2020 and 2019 are attached to this press release. Detailed financial data and other information are available in EchoStar’s Quarterly Report on Form 10-Q for the period ended September 30, 2020 filed today with the Securities and Exchange Commission. EchoStar will host a conference call and webcast to discuss its earnings on Thursday, November 5, 2020 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (US) and (716) 247-5178 (International), Conference ID 8263356. The webcast will be available on EchoStar’s investor relations website at www.echostar.com. About EchoStar Corporation EchoStar Corporation (NASDAQ: SATS) is a premier global provider of satellite communications solutions. Headquartered in Englewood, Colo., and conducting business around the globe, EchoStar is a pioneer in secure communications technologies through its Hughes Network Systems and EchoStar Satellite Services business segments. Safe Harbor Statement under the US Private Securities Litigation Reform Act of 1995 This press release may contain statements that are forward looking, as that term is defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. When used in this release, the words “believe,” “anticipate,” “estimate,” “expect,” “intend,” “project,” “plans,” and similar expressions and the use of future dates are intended to identify forward‑looking statements. Although management believes that the expectations reflected in these forward‑looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. We assume no responsibility for the accuracy of forward-looking statements or information or for updating forward-looking information or statements. These statements are subject to certain risks, uncertainties, and assumptions. See “Risk Factors” in EchoStar’s Annual Report on Form 10-K for the period ended December 31, 2019 and Quarterly Report on Form 10-Q for the period ended September 30, 2020 as filed with the Securities and Exchange Commission and in the other documents EchoStar files with the Securities and Exchange Commission from time to time. ECHOSTAR CORPORATION Condensed Consolidated Balance Sheets (Amounts in thousands, except per share amounts) As of September 30, 2020 December 31, 2019 Assets Current assets: Cash and cash equivalents $555,550 $1,519,431 Marketable investment securities 1,950,804 940,623 Trade accounts receivable and contract assets, net 190,950 196,629 Other current assets, net 192,724 179,531 Total current assets 2,890,028 2,836,214 Non-current assets: Property and equipment, net 2,372,594 2,528,738 Operating lease right-of-use assets 129,073 114,042 Goodwill 508,660 506,953 Regulatory authorizations, net 475,824 478,598 Other intangible assets, net 20,550 29,507 Other investments, net 284,238 325,405 Other non-current assets, net 344,569 334,841 Total non-current assets 4,135,508 4,318,084 Total assets $7,025,536 $7,154,298 Liabilities and Stockholders’ Equity Current liabilities: Trade accounts payable $111,099 $124,080 Current portion of long-term debt, net 897,303 — Contract liabilities 89,622 101,060 Accrued expenses and other current liabilities 276,703 270,879 Total current liabilities 1,374,727 496,019 Non-current liabilities: Long-term debt, net 1,495,078 2,389,168 Deferred tax liabilities, net 352,948 351,692 Operating lease liabilities 115,376 96,941 Other non-current liabilities 74,271 74,925 Total non-current liabilities 2,037,673 2,912,726 Total liabilities 3,412,400 3,408,745 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at both September 30, 2020 and December 31, 2019 — — 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, 57,140,432 shares issued and 50,458,512 shares outstanding at September 30, 2020 and 56,592,251 shares issued and 50,107,330 shares outstanding at December 31, 2019 57 57 Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at both September 30, 2020 and December 31, 2019 48 48 Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both September 30, 2020 and December 31, 2019 — — Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both September 30, 2020 and December 31, 2019 — — Additional paid-in capital 3,317,868 3,290,483 Accumulated other comprehensive income (loss) (209,538) (122,138) Accumulated earnings (losses) 583,474 632,809 Treasury stock, at cost (137,347) (131,454) Total EchoStar Corporation stockholders’ equity 3,554,562 3,669,805 Non-controlling interests 58,574 75,748 Total stockholders’ equity 3,613,136 3,745,553 Total liabilities and stockholders’ equity $7,025,536 $7,154,298 ECHOSTAR CORPORATION Condensed Consolidated Statements of Operations (Amounts in thousands, except per share amounts) For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Revenue: Services and other revenue $426,532 $406,537 $1,251,932 $1,211,991 Equipment revenue 46,970 65,725 146,702 175,084 Total revenue 473,502 472,262 1,398,634 1,387,075 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) 146,577 143,842 432,848 429,869 Cost of sales - equipment (exclusive of depreciation and amortization) 37,079 51,188 115,529 142,744 Selling, general and administrative expenses 115,358 122,629 354,437 383,952 Research and development expenses 7,676 6,136 21,378 19,411 Depreciation and amortization 129,822 122,374 392,077 361,619 Total costs and expenses 436,512 446,169 1,316,269 1,337,595 Operating income (loss) 36,990 26,093 82,365 49,480 Other income (expense): Interest income, net 7,364 17,175 33,707 64,817 Interest expense, net of amounts capitalized (37,967) (49,865) (112,458) (156,813) Gains (losses) on investments, net 14,998 8,295 (37,764) 28,087 Equity in earnings (losses) of unconsolidated affiliates, net (2,134) (3,209) (5,866) (14,317) Foreign currency transaction gains (losses), net 6,681 (15,094) (2,603) (14,501) Other, net 291 (1,493) (379) (1,527) Total other income (expense), net (10,767) (44,191) (125,363) (94,254) Income (loss) from continuing operations before income taxes 26,223 (18,098) (42,998) (44,774) Income tax benefit (provision), net (2,950) (5,016) (6,309) (12,607) Net income (loss) from continuing operations 23,273 (23,114) (49,307) (57,381) Net income (loss) from discontinued operations — 2,008 — 46,223 Net income (loss) 23,273 (21,106) (49,307) (11,158) Less: Net loss (income) attributable to non-controlling interests 2,167 2,797 9,040 1,359 Net income (loss) attributable to EchoStar Corporation common stock $25,440 $(18,309) $(40,267) (9,799) Earnings (losses) per share - Class A and B common stock: Basic and diluted earnings (losses) from continuing operations per share $0.26 $(0.21) $(0.41) $(0.58) Total basic and diluted earnings (losses) per share $0.26 $(0.19) $(0.41) $(0.10) ECHOSTAR CORPORATION Condensed Consolidated Statements of Cash Flows (Amounts in thousands, except per share amounts) For the nine months ended September 30, 2020 2019 Cash flows from operating activities: Net income (loss) $(49,307) $(11,158) Adjustments to reconcile net income (loss) to net cash flows from operating activities: Depreciation and amortization 392,077 459,054 Losses (gains) on investments, net 37,764 (28,087) Equity in losses (earnings) of unconsolidated affiliates, net 5,866 14,317 Foreign currency transaction losses (gains), net 2,603 14,501 Deferred tax provision (benefit), net 4,474 22,949 Stock-based compensation 6,887 7,120 Amortization of debt issuance costs 3,212 4,882 Dividends received from unconsolidated affiliates — 2,716 Other, net (9,145) 9,617 Changes in assets and liabilities, net: Trade accounts receivable and contract assets, net (9,157) (5,439) Other current assets, net (21,090) (42,140) Trade accounts payable (17,824) 18,180 Contract liabilities (11,438) 37,273 Accrued expenses and other current liabilities 29,155 27,972 Non-current assets and non-current liabilities, net 1,325 1,303 Net cash flows from operating activities 365,402 533,060 Cash flows from investing activities: Purchases of marketable investment securities (2,234,671) (655,265) Sales and maturities of marketable investment securities 1,231,790 1,988,078 Expenditures for property and equipment (295,041) (314,861) Expenditures for externally marketed software (27,824) (21,364) Purchase of other investments (5,500) — Investments in unconsolidated affiliates — (7,503) Dividend received from unconsolidated affiliate — 2,284 Net cash flows from investing activities (1,331,246) 991,369 Cash flows from financing activities: Repurchase and maturity of the 2019 Senior Secured Notes — (920,923) Payment of finance lease obligations (606) (29,135) Payment of in-orbit incentive obligations (1,268) (5,269) Net proceeds from Class A common stock options exercised 983 64,143 Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan 8,066 7,724 Treasury share purchase (5,893) — Contribution by non-controlling interest holder 14,268 — Purchase of non-controlling interest — (7,313) Other, net 998 758 Net cash flows from financing activities 16,548 (890,015) Effect of exchange rates on cash and cash equivalents (8,348) (411) Net increase (decrease) in cash and cash equivalents (957,644) 634,003 Cash and cash equivalents, including restricted amounts, beginning of period 1,521,889 929,495 Cash and cash equivalents, including restricted amounts, end of period $564,245 $1,563,498 Popular Press Releases April 03, 2019 U.S. Army Selects Hughes for Cooperative R&D Effort to Recommend Network Upgrades for Next-Generation, Friendly Forces Monitoring SystemTwo-Year Study to Support Blue Force Tracking Upgrades as Part of Network Modernization Efforts Germantown, MD, April 03, 2019—Hughes Network...Read More April 02, 2019 Hughes Named “Top Performer” in 2019 SD-WAN Customer Success ReportFeaturedCustomers platform recognizes outstanding customer satisfaction with HughesON Managed SD-WAN Germantown, MD, April 2, 2019 – Hughes Network...Read More