EchoStar Announces Fourth Quarter and Full Year 2017 Results


February 22, 2018


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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.