Attached files
| file | filename |
|---|---|
| EX-4.25 - EXHIBIT 4.25 - EchoStar CORP | exhibit425-xhsscxsecon.htm |
| 10-K - 10-K - EchoStar CORP | sats12311710kdocument.htm |
| EX-32.1 - EXHIBIT 32.1 - EchoStar CORP | ex12312017321.htm |
| EX-31.2 - EXHIBIT 31.2 - EchoStar CORP | ex12312017312.htm |
| EX-31.1 - EXHIBIT 31.1 - EchoStar CORP | ex123117311.htm |
| EX-24 - EXHIBIT 24 - EchoStar CORP | ex1231201724.htm |
| EX-23 - EXHIBIT 23 - EchoStar CORP | ex1231201723.htm |
| EX-21 - EXHIBIT 21 - EchoStar CORP | ex1231201721.htm |
| EX-4.28 - EXHIBIT 4.28 - EchoStar CORP | exhibit428-xhsscxfourt.htm |
| EX-4.27 - EXHIBIT 4.27 - EchoStar CORP | exhibit427-xhsscxfourt.htm |
| EX-4.26 - EXHIBIT 4.26 - EchoStar CORP | exhibit426-xhsscxsecon.htm |
| EX-4.24 - EXHIBIT 4.24 - EchoStar CORP | exhibit424-xjoinderagr.htm |
EXHIBIT 99.1
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.
1
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 | ||||||||
2
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 |
3
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 | ||||||
4
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 | |||||||||
5
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 | $ | — | $ | — | |||||||||
6