Segment Reporting

6 Months Ended

Jun. 30, 2018

SEGMENT REPORTING

Operating segments are business components of an enterprise for which separate financial information is available and regularly evaluated by our chief operating decision maker (“CODM”), who is our Chief Executive Officer. We primarily operate in two business segments, Hughes and ESS, as described in Note 1.

The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, or EBITDA. Our operations also include various corporate departments (primarily Executive, Treasury, Strategic Development, Human Resources, IT, Finance, Real Estate and Legal) and other activities that have not been assigned to our operating segments such as costs incurred in certain satellite development programs and other business development activities, and gains or 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 tables below or in the reconciliation of EBITDA below.

Eliminations of intersegment transactions are included in the Corporate and Other column in the tables below. 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. Capital expenditures are net of refunds and other receipts related to property and equipment and exclude capital expenditures from discontinued operations of $12.5 million for the six months ended June 30, 2017.



	Hughes		ESS			Corporate and Other			Consolidated Total
	(In thousands)
For the three months ended June 30, 2018
External revenue	$	426,306	$	94,904		$	4,747		$	525,957
Intersegment revenue	$	—	$	521		$	(521	)	$	—
Total revenue	$	426,306	$	95,425		$	4,226		$	525,957
EBITDA	$	152,134	$	82,483		$	51,137		$	285,754
Capital expenditures	$	87,511	$	356		$	31,725		$	119,592

For the three months ended June 30, 2017
External revenue	$	362,403	$	97,945		$	4,728		$	465,076
Intersegment revenue	$	359	$	421		$	(780	)	$	—
Total revenue	$	362,762	$	98,366		$	3,948		$	465,076
EBITDA	$	110,024	$	80,465		$	(5,626	)	$	184,863
Capital expenditures	$	96,529	$	4,640		$	26,895		$	128,064

For the six months ended June 30, 2018
External revenue	$	826,765	$	191,127		$	9,857		$	1,027,749
Intersegment revenue	$	359	$	1,051		$	(1,410	)	$	—
Total revenue	$	827,124	$	192,178		$	8,447		$	1,027,749
EBITDA	$	288,847	$	166,633		$	(4,010	)	$	451,470
Capital expenditures	$	174,802	$	(76,682	)	$	72,454		$	170,574

For the six months ended June 30, 2017
External revenue	$	691,013	$	198,096		$	9,118		$	898,227
Intersegment revenue	$	1,069	$	596		$	(1,665	)	$	—
Total revenue	$	692,082	$	198,692		$	7,453		$	898,227
EBITDA	$	210,876	$	163,528		$	(6,227	)	$	368,177
Capital expenditures	$	162,196	$	13,148		$	42,670		$	218,014

The following table reconciles total consolidated EBITDA to reported Income from continuing operations before income taxes in our Condensed Consolidated Statements of Operations:



	For the three months ended June 30,						For the six months ended June 30,
	2018			2017			2018			2017
	(In thousands)
EBITDA	$	285,754		$	184,863		$	451,470		$	368,177
Interest income and expense, net	(42,281		)	(45,417		)	(89,397		)	(82,522		)
Depreciation and amortization	(148,449		)	(130,034		)	(294,003		)	(245,117		)
Net income (loss) attributable to noncontrolling interests	462			182			842			(181		)
Income from continuing operations before income taxes	$	95,486		$	9,594		$	68,912		$	40,357

Disaggregation of Revenue

In the following tables, revenue is disaggregated by segment, primary geographic market and nature of the products and services.

Geographic Information

The following table disaggregates revenue from customer contracts attributed to North America and other foreign locations as well as by segment, based on the location where the goods or services are provided. All other revenue includes transactions with customers in Asia, Africa, Australia, Europe, South America and the Middle East.



	Hughes		ESS		Corporate and Other			Consolidated Total
	(In thousands)
For the three months ended June 30, 2018
North America:
U.S.	$	347,575	$	89,412	$	4,402		$	441,389
Canada and Mexico	15,132		5,837		—			20,969
All other	63,599		176		(176		)	63,599
Total revenue	$	426,306	$	95,425	$	4,226		$	525,957

For the six months ended June 30, 2018
North America:
U.S.	$	668,013	$	180,153	$	8,798		$	856,964
Canada and Mexico	30,714		11,674		—			42,388
All other	128,397		351		(351		)	128,397
Total revenue	$	827,124	$	192,178	$	8,447		$	1,027,749

Nature of Products and Services

The following table disaggregates revenue based on the nature of products and services and by segment.



	Hughes		ESS		Corporate and Other		Consolidated Total
	(In thousands)
For the three months ended June 30, 2018
Equipment	$	50,341	$	—	$	—	$	50,341
Services	310,225		6,890		1,435		318,550
Design, development and construction services	13,876		—		—		13,876
Revenue from sales and services	374,442		6,890		1,435		382,767
Leasing income	51,864		88,535		2,791		143,190
Total revenue	$	426,306	$	95,425	$	4,226	$	525,957

For the six months ended June 30, 2018
Equipment	$	93,288	$	—	$	—	$	93,288
Services	608,010		14,293		2,910		625,213
Design, development and construction services	30,052		—		—		30,052
Revenue from sales and services	731,350		14,293		2,910		748,553
Leasing income	95,774		177,885		5,537		279,196
Total revenue	$	827,124	$	192,178	$	8,447	$	1,027,749