Looking for HughesNet U.S.? Click here.

Contact Us

CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

Hughes

EchoStar Announces Fourth Quarter and Full Year 2017 Results

Englewood, CO, February 22, 2018—EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the fourth quarter and full year ended December 31, 2017.

Fourth Quarter 2017 Financial Highlights:

  • Consolidated revenues of $506 million.
  • Consolidated net income from continuing operations of $311.8 million, consolidated net income attributable to EchoStar common stock of $313.2 million and diluted earnings per share of $3.23.
  • Consolidated EBITDA of $207 million (see reconciliation of this non-GAAP measure below).

Full Year Ended December 31, 2017 Financial Highlights:

  • Consolidated revenue of $1.89 billion.
  • Consolidated net income from continuing operations of $385.0 million, consolidated net income attributable to EchoStar common stock of $393.8 million and diluted earnings per share of $4.07.
  • Consolidated EBITDA of $795 million (see reconciliation of this non-GAAP measure below).

Additional Highlights:

  • Approximately 1,208,000 Hughes broadband subscribers as of December 31, 2017.
  • Cash, cash equivalents and current marketable investment securities of $3.25 billion as of December 31, 2017

The Tax Cuts and Jobs Act enacted in December 2017 includes a reduction of the federal corporate tax rate to 21%. As a result, we provisionally recorded a one-time tax benefit of $303.5 million from the re- measurement of our deferred tax assets and liabilities. The net income and earnings per share noted above include the impact of this benefit.

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 twelve months ended December 31, 2017 and 2016:

 

 

For the Three Months
Ended December 31,

 

For the Years
Ended December 31,

 

 

2017

 

2016

 

2017

 

2016

 

 

(Dollars in thousands)

Revenue

 

 

 

 

 

 

 

 

Hughes

 

$

405,775

 

 

$

370,910

 

 

$

1,477,918

 

 

$

1,392,361

 

EchoStar Satellite Services

 

96,459

 

 

101,741

 

 

392,244

 

 

407,660

 

Corporate & Other

 

3,814

 

 

3,137

 

 

15,346

 

 

10,445

 

Total

 

$

506,048

 

 

$

475,788

 

 

$

1,885,508

 

 

$

1,810,466

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

 

 

 

 

 

 

Hughes

 

$

132,529

 

 

$

123,660

 

 

$

475,222

 

 

$

477,165

 

EchoStar Satellite Services

 

73,412

 

 

84,335

 

 

315,285

 

 

341,516

 

Corporate & Other

 

598

 

 

(22,170

)

 

4,070

 

 

(67,676

)

Total

 

$

206,539

 

 

$

185,825

 

 

$

794,577

 

 

$

751,005

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to EchoStar common stock

 

$

313,237

 

 

$

38,222

 

 

$

393,770

 

 

$

181,673

 

Diluted earnings per share (in dollars)

 

$

3.23

 

 

$

0.40

 

 

$

4.07

 

 

$

1.92

 

Net income from continuing operations

 

$

311,759

 

 

$

23,823

 

 

$

384,980

 

 

$

136,372

 

 

 

 

 

 

 

 

 

 

Capital expenditures from continuing operations

 

$

156,239

 

 

$

150,692

 

 

$

566,384

 

 

$

628,510

 

 

 

The following table reconciles total consolidated Net income to EBITDA.

 

 

 

For the Three Months
Ended December 31,

 

For the Years
Ended December 31,

 

 

2017

 

2016

 

2017

 

2016

 

 

(In thousands)

Net income

 

$

313,814

 

 

$

38,930

 

 

$

393,489

 

 

$

180,692

 

 

 

 

 

 

 

 

 

 

Interest income and expense, net

 

46,465

 

 

35,587

 

 

172,621

 

 

102,237

 

Income tax (benefit) provision, net

 

(293,359

)

 

18,996

 

 

(284,286

)

 

80,254

 

Depreciation and amortization

 

142,251

 

 

108,161

 

 

522,190

 

 

432,904

 

Net income from discontinued operations

 

(2,055

)

 

(15,107

)

 

(8,509

)

 

(44,320

)

Net income attributable to noncontrolling interests

 

(577

)

 

(742

)

 

(928

)

 

(762

)

EBITDA

 

$

206,539

 

 

$

185,825

 

 

$

794,577

 

 

$

751,005

 

 

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 benefit (provision), net” 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 December 31, 2017 and 2016 are attached to this press release. Detailed financial data and other information are available in EchoStar’s Annual Report on Form 10-K for the period ended December 31, 2017 filed today with the Securities and Exchange Commission.

EchoStar will host its earnings conference call on Thursday, February 22, 2018 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID # 2186058.

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, 2017, filed today with the Securities and Exchange Commission and in the other documents EchoStar files with the Securities and Exchange Commission from time to time.

Contact Information

EchoStar Investor Relations

EchoStar Media Relations

Deepak V. Dutt

Phone: +1 301-428-1686

Email: deepak.dutt@echostar.com

 

Dan Brown

Phone: +1 301-601-7216

Email: dan.brown@echostar.com

 

ECHOSTAR CORPORATION

Consolidated Balance Sheets

 

 

 

As of December 31,

 

 

2017

 

2016

Assets

 

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents

 

$

2,431,456

 

 

$

2,570,365

 

Marketable investment securities, at fair value

 

814,161

 

 

522,516

 

Trade accounts receivable, net of allowance for doubtful accounts of $12,027 and $12,956, respectively

 

196,840

 

 

182,527

 

Trade accounts receivable - DISH Network, net of allowance for doubtful accounts of zero

 

43,295

 

 

19,417

 

Inventory

 

83,595

 

 

62,620

 

Prepaids and deposits

 

54,533

 

 

43,456

 

Other current assets

 

91,574

 

 

10,862

 

Current assets of discontinued operations

 

97

 

 

311,524

 

Total current assets

 

3,715,551

 

 

3,723,287

 

Noncurrent Assets:

 

 

 

 

Property and equipment, net of accumulated depreciation of $2,661,129 and $2,598,492, respectively

 

3,465,471

 

 

3,398,195

 

Regulatory authorizations, net

 

536,936

 

 

544,633

 

Goodwill

 

504,173

 

 

504,173

 

Other intangible assets, net

 

58,955

 

 

80,734

 

Investments in unconsolidated entities

 

161,427

 

 

171,016

 

Other receivable - DISH Network

 

92,687

 

 

90,586

 

Other noncurrent assets, net

 

214,814

 

 

179,311

 

Noncurrent assets of discontinued operations

 

 

 

316,924

 

Total noncurrent assets

 

5,034,463

 

 

5,285,572

 

Total assets

 

$

8,750,014

 

 

$

9,008,859

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current Liabilities:

 

 

 

 

Trade accounts payable

 

$

108,406

 

 

$

170,297

 

Trade accounts payable - DISH Network

 

4,753

 

 

1,072

 

Current portion of long-term debt and capital lease obligations

 

40,631

 

 

32,984

 

Deferred revenue and prepayments

 

65,959

 

 

59,989

 

Accrued interest

 

47,616

 

 

46,487

 

Accrued compensation

 

47,756

 

 

53,454

 

Accrued expenses and other

 

98,227

 

 

95,726

 

Current liabilities of discontinued operations

 

542

 

 

71,429

 

Total current liabilities

 

413,890

 

 

531,438

 

Noncurrent Liabilities:

 

 

 

 

Long-term debt and capital lease obligations, net of unamortized debt issuance costs

 

3,594,213

 

 

3,622,463

 

Deferred tax liabilities, net

 

436,023

 

 

746,667

 

Other noncurrent liabilities

 

128,503

 

 

90,785

 

Noncurrent liabilities of discontinued operations

 

 

 

10,701

 

Total noncurrent liabilities

 

4,158,739

 

 

4,470,616

 

Total liabilities

 

4,572,629

 

 

5,002,054

 

Commitments and Contingencies (Note 16)

 

 

 

 

Stockholders’ Equity:

 

 

 

 

Preferred stock, $.001 par value, 20,000,000 shares authorized:

 

 

 

 

Hughes Retail Preferred Tracking Stock, $.001 par value, zero authorized, issued and outstanding at December 31, 2017 and 13,000,000 shares authorized and 6,290,499 issued and outstanding at December 31, 2016

 

 

 

6

 

Common stock, $.001 par value, 4,000,000,000 shares authorized:

 

 

 

 

Class A common stock, $.001 par value, 1,600,000,000 shares authorized, 53,663,859 shares issued and 48,131,541 shares outstanding at December 31, 2017 and 52,243,465 shares issued and 46,711,147 shares outstanding at December 31, 2016

 

54

 

 

52

 

Class B convertible common stock, $.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at each of December 31, 2017 and 2016

 

48

 

 

48

 

Class C convertible common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of December 31, 2017 and 2016

 

 

 

 

Class D common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of December 31, 2017 and 2016

 

 

 

 

Additional paid-in capital

 

3,669,461

 

 

3,828,677

 

Accumulated other comprehensive loss

 

(130,154

)

 

(124,803

)

Accumulated earnings

 

721,316

 

 

314,247

 

Treasury stock, at cost

 

(98,162

)

 

(98,162

)

Total EchoStar stockholders’ equity

 

4,162,563

 

 

3,920,065

 

Noncontrolling interest in HSS Tracking Stock

 

 

 

73,910

 

Other noncontrolling interests

 

14,822

 

 

12,830

 

Total stockholders’ equity

 

4,177,385

 

 

4,006,805

 

Total liabilities and stockholders’ equity

 

$

8,750,014

 

 

$

9,008,859

 

 

ECHOSTAR CORPORATION

Consolidated Statements of Operations

(In thousands)

 

 

 

For the Years Ended December 31,

 

 

2017

 

2016

 

2015

Revenue:

 

 

 

 

 

 

Services and other revenue - other

 

$

1,200,321

 

 

$

1,100,828

 

 

$

1,093,674

 

Services and other revenue - DISH Network

 

445,698

 

 

463,442

 

 

532,162

 

Equipment revenue - other

 

239,199

 

 

237,356

 

 

212,269

 

Equipment revenue - DISH Network

 

290

 

 

8,840

 

 

10,752

 

Total revenue

 

1,885,508

 

 

1,810,466

 

 

1,848,857

 

Costs and Expenses:

 

 

 

 

 

 

Cost of sales - services and other (exclusive of depreciation and amortization)

 

546,327

 

 

521,220

 

 

574,400

 

Cost of sales - equipment (exclusive of depreciation and amortization)

 

212,170

 

 

203,965

 

 

195,360

 

Selling, general and administrative expenses

 

366,007

 

 

325,044

 

 

318,136

 

Research and development expenses

 

31,745

 

 

31,170

 

 

26,377

 

Depreciation and amortization

 

522,190

 

 

432,904

 

 

460,819

 

Impairment of long-lived assets

 

10,762

 

 

 

 

 

Total costs and expenses

 

1,689,201

 

 

1,514,303

 

 

1,575,092

 

Operating income

 

196,307

 

 

296,163

 

 

273,765

 

Other Income (Expense):

 

 

 

 

 

 

Interest income

 

44,619

 

 

21,244

 

 

10,388

 

Interest expense, net of amounts capitalized

 

(217,240

)

 

(123,481

)

 

(121,995

)

Gains (losses) on investments, net

 

56,751

 

 

9,767

 

 

(6,443

)

Other-than-temporary impairment loss on available-for-sale securities

 

(3,298

)

 

 

 

(11,226

)

Equity in earnings (losses) of unconsolidated affiliates, net

 

16,973

 

 

10,802

 

 

(2,477

)

Other, net

 

6,582

 

 

2,131

 

 

(2,685

)

Total other expense, net

 

(95,613

)

 

(79,537

)

 

(134,438

)

Income from continuing operations before income taxes

 

100,694

 

 

216,626

 

 

139,327

 

Income tax benefit (provision), net

 

284,286

 

 

(80,254

)

 

(51,235

)

Net income from continuing operations

 

384,980

 

 

136,372

 

 

88,092

 

Net income from discontinued operations

 

8,509

 

 

44,320

 

 

61,279

 

Net income

 

393,489

 

 

180,692

 

 

149,371

 

Less: Net loss attributable to noncontrolling interest in HSS Tracking Stock

 

(655

)

 

(944

)

 

(5,603

)

Less: Net income attributable to other noncontrolling interests

 

1,583

 

 

1,706

 

 

1,617

 

Net income attributable to EchoStar

 

392,561

 

 

179,930

 

 

153,357

 

Less: Net loss attributable to Hughes Retail Preferred Tracking Stock

 

(1,209

)

 

(1,743

)

 

(10,343

)

Net income attributable to EchoStar common stock

 

$

393,770

 

 

$

181,673

 

 

$

163,700

 

 

 

 

 

 

 

 

Amounts attributable to EchoStar common stock:

 

 

 

 

 

 

Net income from continuing operations

 

$

385,261

 

 

$

137,353

 

 

$

102,421

 

Net income from discontinued operations

 

8,509

 

 

44,320

 

 

61,279

 

Net income attributable to EchoStar common stock

 

$

393,770

 

 

$

181,673

 

 

$

163,700

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding - Class A and B common stock:

 

 

 

 

 

 

Basic

 

95,425

 

 

93,795

 

 

92,397

 

Diluted

 

96,741

 

 

94,410

 

 

93,466

 

 

 

 

 

 

 

 

Earnings per share - Class A and B common stock:

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

Continuing operations

 

$

4.04

 

 

$

1.46

 

 

$

1.11

 

Discontinued operations

 

0.09

 

 

0.48

 

 

0.66

 

Total basic earnings per share

 

$

4.13

 

 

$

1.94

 

 

$

1.77

 

Diluted:

 

 

 

 

 

 

Continuing operations

 

$

3.98

 

 

$

1.45

 

 

$

1.10

 

Discontinued operations

 

0.09

 

 

0.47

 

 

0.65

 

Total diluted earnings per share

 

$

4.07

 

 

$

1.92

 

 

$

1.75

 

                           

 

ECHOSTAR CORPORATION

Consolidated Statements of Cash Flows

(In thousands)

 

 

 

For the Years Ended December 31,

 

 

2017

 

2016

 

2015

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net income

 

$

393,489

 

 

$

180,692

 

 

$

149,371

 

Adjustments to reconcile net income to net cash flows from operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

533,849

 

 

495,068

 

 

528,158

 

Impairment of long-lived assets

 

10,762

 

 

 

 

2,400

 

Equity in earnings of unconsolidated affiliates, net

 

(15,814

)

 

(13,310

)

 

(1,895

)

Losses (gains) and impairment on marketable investment securities, net

 

(53,453

)

 

(9,767

)

 

17,669

 

Loss from partial redemption of debt

 

 

 

 

 

5,044

 

Stock-based compensation

 

10,103

 

 

15,234

 

 

21,839

 

Deferred tax provision (benefit)

 

(288,577

)

 

98,148

 

 

56,132

 

Dividends received from unconsolidated entities

 

19,000

 

 

15,000

 

 

5,000

 

Proceeds from sale of trading securities

 

8,922

 

 

7,140

 

 

380

 

Changes in current assets and current liabilities, net:

 

 

 

 

 

 

Trade accounts receivable, net

 

421

 

 

(26,942

)

 

(38,452

)

Trade accounts receivable - DISH Network

 

235,227

 

 

(1,456

)

 

(25,490

)

Inventory

 

(19,291

)

 

(4,814

)

 

(4,906

)

Other current assets

 

(15,352

)

 

2,263

 

 

6,499

 

Trade accounts payable

 

(78,419

)

 

(24,571

)

 

37,228

 

Trade accounts payable - DISH Network

 

731

 

 

(19,650

)

 

(7,792

)

Accrued expenses and other

 

11,993

 

 

55,998

 

 

1,477

 

Changes in noncurrent assets and noncurrent liabilities, net

 

(36,975

)

 

9,459

 

 

1,616

 

Other, net

 

10,276

 

 

24,851

 

 

22,173

 

Net cash flows from operating activities

 

726,892

 

 

803,343

 

 

776,451

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

Purchases of marketable investment securities

 

(855,717

)

 

(921,247

)

 

(536,430

)

Sales and maturities of marketable investment securities

 

578,051

 

 

1,001,166

 

 

1,057,034

 

Expenditures for property and equipment

 

(583,211

)

 

(722,341

)

 

(809,270

)

Refunds and other receipts related to capital expenditures

 

4,311

 

 

24,087

 

 

105,750

 

Sale of investment in unconsolidated entity

 

17,781

 

 

 

 

 

Investments in unconsolidated entities

 

 

 

(1,636

)

 

(64,655

)

Expenditures for externally marketed software

 

(31,331

)

 

(23,252

)

 

(22,327

)

Other, net

 

2,114

 

 

10,956

 

 

(5,413

)

Net cash flows from investing activities

 

(868,002

)

 

(632,267

)

 

(275,311

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

Proceeds from issuance of long-term debt

 

 

 

1,500,000

 

 

 

Payments of debt issuance costs

 

(414

)

 

(7,097

)

 

 

Repayment of 6 1/2% Senior Secured Notes Due 2019 and related premium

 

 

 

 

 

(113,300

)

Repayment of debt and capital lease obligations

 

(37,670

)

 

(40,364

)

 

(44,804

)

Net proceeds from Class A common stock options exercised

 

35,536

 

 

13,065

 

 

24,841

 

Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan

 

8,758

 

 

14,367

 

 

13,888

 

Cash exchanged for Tracking Stock

 

(651

)

 

 

 

 

Other, net

 

(5,487

)

 

(4,282

)

 

(882

)

Net cash flows from financing activities

 

72

 

 

1,475,689

 

 

(120,257

)

Effect of exchange rates on cash and cash equivalents

 

1,351

 

 

138

 

 

(5,696

)

Net increase (decrease) in cash and cash equivalents

 

(139,687

)

 

1,646,903

 

 

375,187

 

Cash and cash equivalents, beginning of period

 

2,571,143

 

 

924,240

 

 

549,053

 

Cash and cash equivalents, end of period

 

$

2,431,456

 

 

$

2,571,143

 

 

$

924,240

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

 

Cash paid for interest (including capitalized interest)

 

$

259,632

 

 

$

172,707

 

 

$

179,114

 

Capitalized interest

 

$

52,015

 

 

$

94,395

 

 

$

63,808

 

Cash paid for income taxes

 

$

11,033

 

 

$

11,700

 

 

$

6,394

 

Employee benefits paid in Class A common stock

 

$

11,200

 

 

$

11,126

 

 

$

10,711

 

Property and equipment financed under capital lease obligations

 

$

8,484

 

 

$

7,652

 

 

$

8,604

 

Increase (decrease) in capital expenditures included in accounts payable, net

 

$

(3,831

)

 

$

3,054

 

 

$

(7,123

)

Transfer of EchoStar 105/SES-11 payloads to SES in exchange for receivable

 

$

77,524

 

 

$

 

 

$

 

Capitalized in-orbit incentive obligations

 

$

43,890

 

 

$

 

 

$

 

Noncash net assets exchanged for Tracking Stock

 

$

299,888

 

 

$

 

 

$