Segment Reporting

9 Months Ended

Sep. 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, Accounting 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 nine months ended September 30, 2017.



	Hughes		ESS			Corporate and Other			Consolidated Total
	(In thousands)
For the three months ended September 30, 2018
External revenue	$	444,762	$	83,482		$	4,709		$	532,953
Intersegment revenue	$	—	$	525		$	(525	)	$	—
Total revenue	$	444,762	$	84,007		$	4,184		$	532,953
EBITDA	$	164,135	$	72,156		$	(16,111	)	$	220,180
Capital expenditures	$	110,550	$	29		$	56,576		$	167,155

For the three months ended September 30, 2017
External revenue	$	379,702	$	96,743		$	4,788		$	481,233
Intersegment revenue	$	359	$	350		$	(709	)	$	—
Total revenue	$	380,061	$	97,093		$	4,079		$	481,233
EBITDA	$	131,817	$	78,345		$	9,699		$	219,861
Capital expenditures	$	108,428	$	8,203		$	75,500		$	192,131

For the nine months ended September 30, 2018
External revenue	$	1,271,527	$	274,609		$	14,566		$	1,560,702
Intersegment revenue	$	359	$	1,576		$	(1,935	)	$	—
Total revenue	$	1,271,886	$	276,185		$	12,631		$	1,560,702
EBITDA	$	452,982	$	238,789		$	(20,121	)	$	671,650
Capital expenditures	$	285,352	$	(76,653	)	$	129,030		$	337,729

For the nine months ended September 30, 2017
External revenue	$	1,070,715	$	294,839		$	13,906		$	1,379,460
Intersegment revenue	$	1,428	$	946		$	(2,374	)	$	—
Total revenue	$	1,072,143	$	295,785		$	11,532		$	1,379,460
EBITDA	$	342,693	$	241,873		$	3,472		$	588,038
Capital expenditures	$	270,624	$	21,351		$	118,170		$	410,145

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 September 30,						For the nine months ended September 30,
	2018			2017			2018			2017
	(In thousands)
EBITDA	$	220,180		$	219,861		$	671,650		$	588,038
Interest income and expense, net	(40,737		)	(43,634		)	(130,134		)	(126,156		)
Depreciation and amortization	(150,555		)	(134,822		)	(444,558		)	(379,939		)
Net income attributable to noncontrolling interests	450			532			1,292			351
Income from continuing operations before income taxes	$	29,338		$	41,937		$	98,250		$	82,294

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 our 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 September 30, 2018
North America:
U.S.	$	355,263	$	77,995	$	4,359		$	437,617
Canada and Mexico	18,197		5,837		—			24,034
All other	71,302		175		(175		)	71,302
Total revenue	$	444,762	$	84,007	$	4,184		$	532,953

For the nine months ended September 30, 2018
North America:
U.S.	$	1,023,276	$	258,148	$	13,157		$	1,294,581
Canada and Mexico	48,911		17,511		—			66,422
All other	199,699		526		(526		)	199,699
Total revenue	$	1,271,886	$	276,185	$	12,631		$	1,560,702

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 September 30, 2018
Equipment	$	56,846	$	—	$	—	$	56,846
Services	320,961		6,669		1,382		329,012
Design, development and construction services	16,624		—		—		16,624
Revenue from sales and services	394,431		6,669		1,382		402,482
Leasing income	50,331		77,338		2,802		130,471
Total revenue	$	444,762	$	84,007	$	4,184	$	532,953

For the nine months ended September 30, 2018
Equipment	$	150,134	$	—	$	—	$	150,134
Services	928,971		20,962		4,292		954,225
Design, development and construction services	46,676		—		—		46,676
Revenue from sales and services	1,125,781		20,962		4,292		1,151,035
Leasing income	146,105		255,223		8,339		409,667
Total revenue	$	1,271,886	$	276,185	$	12,631	$	1,560,702