ENGLEWOOD, Colo., Feb. 24, 2017 /PRNewswire/ — EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the fourth quarter and full year ended December 31, 2016.

Fourth Quarter 2016 Financial Highlights:

  • Consolidated revenues of $740 million.
  • Consolidated net income of $39 million.
  • Consolidated net income attributable to EchoStar common stock of $38 million and diluted earnings per share of $0.40.
  • Consolidated EBITDA of $229 million (see reconciliation of this non-GAAP measure below).
  • Approximately 1,036,000 Hughes consumer broadband subscribers as of December 31, 2016.

Full Year Ended December 31, 2016 Financial Highlights:

  • Consolidated revenue of $3.06 billion.
  • Consolidated net income of $181 million.
  • Consolidated net income attributable to EchoStar common stock of $182 million and diluted earnings per share of $1.92.
  • Consolidated EBITDA of $884 million (see reconciliation of this non-GAAP measure below).
  • Strong liquidity with cash, cash equivalents and  current marketable investment securities of $3.09 billion as of December 31, 2016.

Set forth below is a table highlighting certain of EchoStar’s segment results for the three and twelve months ended December 31, 2016 and 2015:

For the Three Months
Ended December 31,

For the Years
Ended December 31,

2016

2015

2016

2015

(Dollars in thousands)

Revenue

Hughes

$

370,910

$

347,146

$

1,392,361

$

1,347,340

EchoStar Technologies Corp.

266,082

325,101

1,249,197

1,298,198

EchoStar Satellite Services

101,741

116,304

407,660

490,591

All Other & Eliminations

1,660

2,036

7,512

7,585

Total

$

740,393

$

790,587

$

3,056,730

$

3,143,714

EBITDA

Hughes

$

109,937

$

100,415

$

427,802

$

396,684

EchoStar Technologies Corp.

32,123

25,981

89,549

106,745

EchoStar Satellite Services

83,784

98,430

339,496

412,607

All Other & Eliminations

3,243

(2,084)

26,684

(50,683)

Total

$

229,087

$

222,742

$

883,531

$

865,353

Net income (loss) attributable to EchoStar common stock

$

38,222

$

66,296

$

181,673

$

163,700

Diluted earnings per share (in dollars)

$

0.40

$

0.71

$

1.92

$

1.75

Net income

$

38,930

$

62,402

$

180,692

$

149,371

Capital expenditures

$

188,672

$

223,368

$

698,254

$

703,520

 

The following table reconciles total consolidated net income to EBITDA.

For the Three Months
Ended December 31,

For the Years
Ended December 31,

2016

2015

2016

2015

(In thousands)

Net income

$

38,930

$

62,402

$

180,692

$

149,371

Interest income and expense, net

35,615

23,397

102,381

111,637

Income tax provision, net

31,088

6,360

106,152

72,201

Depreciation and amortization

124,196

129,611

495,068

528,158

Net (income) loss attributable to noncontrolling interest in HSS Tracking Stock and other noncontrolling interests

(742)

972

(762)

3,986

EBITDA

$

229,087

$

222,742

$

883,531

$

865,353

 

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 December 31, 2016 and 2015 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, 2016 filed today with the Securities and Exchange Commission.

EchoStar will host its earnings conference call on Friday, February 24, 2017 at 10:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID # 69523685.

About EchoStar Corporation

EchoStar Corporation (NASDAQ: SATS) is a premier global provider of satellite and video delivery solutions.  Headquartered in Englewood, Colo., and conducting business around the globe, EchoStar is a pioneer in secure communications technologies through its EchoStar Satellite Services, EchoStar Technologies Corporation, and Hughes Network Systems 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, 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.

 


ECHOSTAR CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

As of December 31,

2016

2015

Assets

Current Assets:

Cash and cash equivalents

$

2,571,143

$

924,240

Marketable investment securities, at fair value

522,516

612,338

Trade accounts receivable, net of allowance for doubtful accounts of $13,400 and $12,485, respectively

209,788

179,240

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

278,615

277,159

Inventory

72,444

67,010

Prepaids and deposits

57,919

56,949

Other current assets

10,862

16,723

Total current assets

3,723,287

2,133,659

Noncurrent Assets:

Restricted cash and marketable investment securities

12,926

21,002

Property and equipment, net of accumulated depreciation of $3,407,470 and $2,998,074, respectively

3,669,303

3,412,990

Regulatory authorizations, net

544,633

543,812

Goodwill

510,630

510,630

Other intangible assets, net

88,454

132,653

Investments in unconsolidated entities

197,219

209,264

Other receivable – DISH Network

90,586

90,966

Other noncurrent assets, net

171,821

154,510

Total noncurrent assets

5,285,572

5,075,827

Total assets

$

9,008,859

$

7,209,486

Liabilities and Stockholders’ Equity

Current Liabilities:

Trade accounts payable

$

189,815

$

213,671

Trade accounts payable – DISH Network

5,032

24,682

Current portion of long-term debt and capital lease obligations

37,307

35,698

Deferred revenue and prepayments

62,956

61,881

Accrued compensation

58,106

42,767

Accrued interest

46,504

8,596

Accrued royalties

23,199

22,531

Accrued expenses and other

108,519

117,005

Total current liabilities

531,438

526,831

Noncurrent Liabilities:

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

3,622,879

2,156,667

Deferred tax liabilities, net

754,020

650,392

Other noncurrent liabilities

93,717

93,954

Total noncurrent liabilities

4,470,616

2,901,013

Total liabilities

5,002,054

3,427,844

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, 13,000,000 shares authorized, 6,290,499 issued and outstanding at each of December 31, 2016 and 2015

6

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, 52,243,465 shares issued and 46,711,147 shares outstanding at December 31, 2016 and 51,087,839 shares issued and 45,555,521 shares outstanding at December 31, 2015

52

51

Class B common stock, $.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at each of December 31, 2016 and 2015

48

48

Class C common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of December 31, 2016 and 2015

Class D common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of December 31, 2016 and 2015

Additional paid-in capital

3,828,677

3,776,451

Accumulated other comprehensive loss

(124,803)

(117,233)

Accumulated earnings

314,247

134,317

Treasury stock, at cost

(98,162)

(98,162)

Total EchoStar stockholders’ equity

3,920,065

3,695,478

Noncontrolling interest in HSS Tracking Stock

73,910

74,854

Other noncontrolling interests

12,830

11,310

Total stockholders’ equity

4,006,805

3,781,642

Total liabilities and stockholders’ equity

$

9,008,859

$

7,209,486

 

ECHOSTAR CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

For the Years Ended December 31,

2016

2015

2014

Revenue:

Services and other revenue – DISH Network

$

888,603

$

918,301

$

828,612

Services and other revenue – other

1,109,597

1,103,928

1,096,938

Equipment revenue – DISH Network

711,289

763,184

1,145,979

Equipment revenue – other

347,241

358,301

374,049

Total revenue

3,056,730

3,143,714

3,445,578

Costs and Expenses:

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

844,498

856,065

838,918

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

891,108

948,655

1,288,998

Selling, general and administrative expenses

385,634

374,116

372,010

Research and development expenses

76,024

78,287

60,886

Depreciation and amortization

495,068

528,158

556,676

Impairment of long-lived assets

2,400

Total costs and expenses

2,692,332

2,787,681

3,117,488

Operating income

364,398

356,033

328,090

Other Income (Expense):

Interest income

21,249

10,429

9,102

Interest expense, net of amounts capitalized

(123,630)

(122,066)

(171,349)

Loss from partial redemption of debt

(5,044)

Gains (losses) on marketable investment securities, net

9,767

(6,443)

41

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

(11,226)

Equity in earnings of unconsolidated affiliates, net

13,310

1,895

8,198

Other, net

1,750

(2,006)

4,251

Total other expense, net

(77,554)

(134,461)

(149,757)

Income before income taxes

286,844

221,572

178,333

Income tax provision, net

(106,152)

(72,201)

(30,784)

Net income

180,692

149,371

147,549

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

(944)

(5,603)

(6,714)

Less: Net income attributable to other noncontrolling interests

1,706

1,617

1,389

Net income attributable to EchoStar

179,930

153,357

152,874

Less: Net loss attributable to Hughes Retail Preferred Tracking Stock (Note 4)

(1,743)

(10,343)

(12,394)

Net income attributable to EchoStar common stock

$

181,673

$

163,700

$

165,268

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

Basic

93,795

92,397

91,190

Diluted

94,410

93,466

92,616

Earnings per share – Class A and B common stock:

Basic

$

1.94

$

1.77

$

1.81

Diluted

$

1.92

$

1.75

$

1.78

Comprehensive Income (Loss)

Net income

$

180,692

$

149,371

$

147,549

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments

(11,315)

(62,731)

(31,935)

Recognition of foreign currency translation loss in net income

1,889

Unrealized gains (losses) on available-for-sale securities and other

9,149

(12,046)

(9,462)

Recognition of other-than-temporary loss on available-for-sale securities in net income

11,226

Recognition of realized gains on available-for-sale securities in net income

(5,590)

(35)

(41)

Total other comprehensive loss, net of tax

(7,756)

(61,697)

(41,438)

Comprehensive income

172,936

87,674

106,111

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

(944)

(5,603)

(6,714)

Less: Comprehensive income attributable to other noncontrolling interests

1,520

1,297

1,152

Comprehensive income attributable to EchoStar

$

172,360

$

91,980

$

111,673

 

ECHOSTAR CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For the Years Ended December 31,

2016

2015

2014

Cash Flows from Operating Activities:

Net income

$

180,692

$

149,371

$

147,549

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

Depreciation and amortization

495,068

528,158

556,676

Impairment of long-lived assets

2,400

Loss from partial redemption of debt

5,044

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

(9,767)

17,669

(41)

Equity in earnings of unconsolidated affiliates, net

(13,310)

(1,895)

(8,198)

Stock-based compensation

15,234

21,839

14,683

Deferred tax provision

98,148

56,132

31,742

Dividends received from unconsolidated entities

15,000

5,000

7,400

Proceeds from sale of trading securities

7,140

380

17,053

Changes in current assets and current liabilities, net:

Trade accounts receivable, net

(26,942)

(38,452)

(17,073)

Trade accounts receivable – DISH Network

(1,456)

(25,490)

104,051

Inventory

(4,814)

(4,906)

2,608

Other current assets

2,263

6,499

9,930

Trade accounts payable

(24,571)

37,228

(22,230)

Trade accounts payable – DISH Network

(19,650)

(7,792)

(26,508)

Accrued expenses and other

55,998

1,477

26,469

Changes in noncurrent assets and noncurrent liabilities, net

9,459

1,616

(8,305)

Other, net

24,851

22,173

4,325

Net cash flows from operating activities

803,343

776,451

840,131

Cash Flows from Investing Activities:

Purchases of marketable investment securities

(921,247)

(536,430)

(1,523,514)

Sales and maturities of marketable investment securities

1,001,166

1,057,034

1,353,157

Expenditures for property and equipment

(722,341)

(809,270)

(680,026)

Refunds and other receipts related to capital expenditures

24,087

105,750

Changes in restricted cash and marketable investment securities

8,076

(2,057)

(2,808)

Investments in unconsolidated entities

(1,636)

(64,655)

(18,569)

Acquisition of regulatory authorization

(3,428)

Expenditures for externally marketed software

(23,252)

(22,327)

(22,955)

Other, net

2,880

72

7,125

Net cash flows from investing activities

(632,267)

(275,311)

(887,590)

Cash Flows from Financing Activities:

Proceeds from issuance of long-term debt

1,500,000

Payments of debt issuance costs

(7,097)

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

(113,300)

Repayment of debt and capital lease obligations

(40,364)

(44,804)

(63,122)

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

27,432

38,729

28,857

Net proceeds from issuance of Tracking Stock (Note 4)

7,526

Excess tax benefit from stock option exercises

848

3,929

(7,252)

Other, net

(5,130)

(4,811)

(1,105)

Net cash flows from financing activities

1,475,689

(120,257)

(35,096)

Effect of exchange rates on cash and cash equivalents

138

(5,696)

(2,511)

Net increase (decrease) in cash and cash equivalents

1,646,903

375,187

(85,066)

Cash and cash equivalents, beginning of period

924,240

549,053

634,119

Cash and cash equivalents, end of period

$

2,571,143

$

924,240

$

549,053

Supplemental Disclosure of Cash Flow Information:

Cash paid for interest (including capitalized interest)

$

172,707

$

179,114

$

188,087

Capitalized interest

$

94,395

$

63,808

$

23,774

Cash paid for income taxes

$

11,700

$

6,394

$

14,221

Employee benefits paid in Class A common stock

$

11,126

$

10,711

$

10,316

Property and equipment financed under capital lease obligations

$

7,652

$

8,604

$

3,312

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

$

3,054

$

(7,123)

$

11,436

Noncash assets contributed to SmarDTV (Note 6)

$

$

6,651

$

Net noncash assets transferred from DISH Network in exchange for Tracking Stock (Note 4)

$

$

$

386,691

Noncash assets received from Sling TV Holding (Note 6)

$

$

$

34,075

Reduction of capital lease obligation for AMC-15 and AMC-16 satellites

 

 

$

$

4,500

$

 

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SOURCE EchoStar Corporation