Segment Reporting

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Operating segments are business components of an enterprise for which separate financial information is available and regularly evaluated by the chief operating decision maker (“CODM”), who for EchoStar is the Company’s Chief Executive Officer. Prior to March 2017, we operated in three primary business segments, Hughes, EchoStar Technologies and ESS. Following consummation of the Share Exchange described in Note 3 of these condensed consolidated financial statements, we no longer operate the EchoStar Technologies business segment. The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, or EBITDA. Effective in March 2017, we have also changed our overhead allocation methodology to reflect how the CODM evaluates our segments. Historically, the costs of all corporate functions were included on an allocated basis in each of the business segments’ EBITDA. Under the revised allocation methodology, these costs are now reported and analyzed as part of “Corporate and Other” (previously “All Other and Eliminations”). Our prior period segment EBITDA disclosures have been restated to reflect this change.

As of March 2017, our two primary business segments are Hughes and ESS, as described in Note 1 of these condensed consolidated financial statements.

Our operations also include various corporate departments (primarily Executive, Strategic Development, Human Resources, IT, Finance, Real Estate and Legal) as well as other activities that have not been assigned to our operating segments, including costs incurred in certain satellite development programs and other business development activities, our centralized treasury operations, and gains (losses) from certain of our investments. Costs and income associated with these departments and activities are accounted for in the “Corporate and Other” column in the table below or in the reconciliation of EBITDA below.

Transactions between segments were not significant for the three months ended March 31, 2017 or 2016. Total assets by segment have not been reported herein because the information is not provided to our CODM on a regular basis.

The following table presents revenue, EBITDA, and capital expenditures for each of our operating segments.

	Hughes		EchoStar Satellite Services		Corporate and Other			Consolidated Total
	(In thousands)
For the Three Months Ended March 31, 2017
External revenue	$	328,610	$	100,151	$	4,390		$	433,151
Intersegment revenue	$	710	$	175	$	(885	)	$	—
Total revenue	$	329,320	$	100,326	$	3,505		$	433,151
EBITDA	$	100,852	$	83,063	$	(601	)	$	183,314
Capital expenditures	$	65,667	$	8,508	$	15,775		$	89,950
For the Three Months Ended March 31, 2016
External revenue	$	325,539	$	102,815	$	3,620		$	431,974
Intersegment revenue	$	699	$	174	$	(873	)	$	—
Total revenue	$	326,238	$	102,989	$	2,747		$	431,974
EBITDA	$	110,356	$	88,640	$	(13,444	)	$	185,552
Capital expenditures	$	104,237	$	24,720	$	76,838		$	205,795

The following table reconciles total consolidated EBITDA to reported “Income from continuing operations before income taxes” in our condensed consolidated statements of operations and comprehensive income (loss):

	For the Three Months Ended March 31,
	2017			2016
	(In thousands)
EBITDA	$	183,314		$	185,552
Interest income and expense, net	(37,105		)	(19,206		)
Depreciation and amortization	(115,083		)	(110,077		)
Net income (loss) attributable to noncontrolling interest in HSS Tracking Stock and other noncontrolling interests	(363		)	(712		)
Income from continuing operations before income taxes	$	30,763		$	55,557