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Hughes

EchoStar Announces Financial Results for Three and Six Months Ending June 30, 2017

Englewood, CO, August 9, 2017—EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and six months ending June 30, 2017.

Three Months Ending June 30, 2017 Financial Highlights:

  • Consolidated revenues of $465 million.
  • Consolidated net income from continuing operations of $6.6 million, consolidated net income attributable to EchoStar common stock of $6.9 million and diluted earnings per share of 0.07.
  • Consolidated net income from continuing operations declined compared to the three months ended June 30, 2016 primarily due to:
    • An increase of $22.3 million in interest expense from the issuance of bonds in July 2016;
    • A decrease of $13.1 million in capitalized interest relating to satellites placed into service in 2017; and
    • An increase of $24.0 million in depreciation expense primarily on those satellites;
    • Partially offset by a decrease in income tax expense of $20.7 million.
  • Consolidated EBITDA of $185 million (see reconciliation of this non-GAAP measure below).

Six Months Ended June 30, 2017 Financial Highlights:

  • Consolidated revenue of $898 million.
  • Consolidated net income from continuing operations of $37.4 million, consolidated net income attributable to EchoStar common stock of $45.9 million and diluted earnings per share of $0.48.
  • Consolidated EBITDA of $368 million (see reconciliation of this non-GAAP measure below).

Additional Highlights:

  • Approximately 1,085,000 Hughes broadband subscribers as of June 30, 2017.
  • Cash, cash equivalents and  current marketable investment securities of $3.27 billion as of June 30, 2017

Starting with the quarter that ended March 31, 2017, we changed the way we present our segments. Previously, our business segments reflected an allocation of the costs of our corporate functions. Under our new presentation, these costs are no longer allocated to the operating segments and are now reported as part of the Corporate and Other segment (previously “All Other and Eliminations”).

In addition, results of our EchoStar Technology segment, which was transferred to DISH Network Corporation in the Share Exchange transaction, are included in Discontinued Operations.

Set forth below is a table highlighting certain of EchoStar’s segment results for the three and six months ended June 30, 2017 and 2016:

 

 

For the Three Months
Ended June 30,

 

For the Six Months
Ended June 30,

 

 

2017

 

2016

 

2017

 

2016

 

 

(Dollars in thousands)

Revenue

 

 

 

 

 

 

 

 

Hughes

 

$

362,762

 

 

$

339,337

 

 

$

692,082

 

 

$

665,575

 

EchoStar Satellite Services

 

98,366

 

 

101,450

 

 

198,692

 

 

204,439

 

Corporate & Other

 

3,948

 

 

1,871

 

 

7,453

 

 

4,618

 

Total

 

$

465,076

 

 

$

442,658

 

 

$

898,227

 

 

$

874,632

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

 

 

 

 

 

 

Hughes

 

$

110,024

 

 

$

117,627

 

 

$

210,876

 

 

$

227,983

 

EchoStar Satellite Services

 

80,465

 

 

84,284

 

 

163,528

 

 

172,924

 

Corporate & Other

 

(5,626

)

 

(11,585

)

 

(6,227

)

 

(25,029

)

Total

 

$

184,863

 

 

$

190,326

 

 

$

368,177

 

 

$

375,878

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to EchoStar common stock

 

$

6,940

 

 

$

56,133

 

 

$

45,864

 

 

$

106,807

 

Diluted earnings per share (in dollars)

 

$

0.07

 

 

$

0.60

 

 

$

0.48

 

 

$

1.14

 

Net income from continuing operations

 

$

6,591

 

 

$

44,253

 

 

$

37,366

 

 

$

79,638

 

 

 

 

 

 

 

 

 

 

Expenditures for property and equipment from continuing operations

 

$

128,064

 

 

$

132,449

 

 

$

218,014

 

 

$

338,244

 

 

The following table reconciles total consolidated Net income to EBITDA.

 

 

 

For the Three Months
Ended June 30,

 

For the Six Months
Ended June 30,

 

 

2017

 

2016

 

2017

 

2016

 

 

(Dollars in thousands)

Net income

 

$

7,122

 

 

$

55,909

 

 

$

44,474

 

 

$

104,352

 

 

 

 

 

 

 

 

 

 

Interest income and expense, net

 

45,417

 

 

16,387

 

 

82,522

 

 

35,593

 

Income tax provision

 

3,003

 

 

23,692

 

 

2,991

 

 

43,864

 

Depreciation and amortization

 

130,034

 

 

106,117

 

 

245,117

 

 

216,194

 

Net income from discontinued operations

 

(531

)

 

(11,656

)

 

(7,108

)

 

(24,714

)

Net (income) loss attributable to noncontrolling interests

 

(182

)

 

(123

)

 

181

 

 

589

 

EBITDA

 

$

184,863

 

 

$

190,326

 

 

$

368,177

 

 

$

375,878

 

 

Note on Use of Non-GAAP Financial Measures

EBITDA is defined as “Net income” excluding “Interest expense, net of amounts capitalized,” “Interest income”, “Income tax provision” and “Depreciation and amortization.”  EBITDA is not a measure determined in accordance with US GAAP. This non-GAAP measure is reconciled to net income in the table above. EBITDA should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with GAAP. EBITDA is used by our management as a measure of operating efficiency and overall financial performance for benchmarking against our peers and competitors. Management believes EBITDA provides meaningful supplemental information regarding the underlying operating performance of our business. Management also believes that EBITDA is useful to investors because it is 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 June 30, 2017 and 2016 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 June 30, 2017 filed today with the Securities and Exchange Commission.

EchoStar will host its earnings conference call on Wednesday, August 9, 2017 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID # 63515337.

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, 2016 and Quarterly Report on Form 10-Q for the period ended June 30, 2017, each 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.