EX-99.1 6 hssc123118ex-991.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1

EchoStar Announces Financial Results for Three and Twelve Months Ended
December 31, 2018


Englewood, CO, February 21, 2019—EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and twelve months ended December 31, 2018.


Three Months Ended December 31, 2018 Financial Highlights:

•
Consolidated revenues of $531 million.
•
Consolidated net loss from continuing operations of $112 million, consolidated net loss attributable to EchoStar common stock of $112 million, and diluted loss per share of $1.17. Included in these amounts are net losses on investments of $46 million and a non-recurring impairment charge of $65 million. Excluding these items, diluted loss per share would have been $0.01.
•
Consolidated EBITDA of $85 million, including net losses on investments of $46 million and a non-recurring impairment charge of $65 million.  Excluding these items, EBITDA would have been $196 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

Twelve Months Ended December 31, 2018 Financial Highlights:

•
Consolidated revenues of $2.1 billion.
•
Consolidated net loss from continuing operations of $39 million, consolidated net loss attributable to EchoStar common stock of $40 million, and diluted loss per share of $0.42. Included in these amounts are net losses on investments of $12 million and a non-recurring impairment charge of $65 million. Excluding these items, diluted earnings per share would have been $0.38.
•
Consolidated EBITDA of $757 million, including net losses on investments of $12 million and a non-recurring impairment charge of $65 million.  Excluding these items, EBITDA would have been $834 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

Additional Highlights:

•
Cash, cash equivalents and current marketable investment securities of $3.2 billion as of December 31, 2018.
•
Approximately 1,361,000 Hughes broadband subscribers as of December 31, 2018.


1


Set forth below is a table highlighting certain of EchoStar’s segment results for the three and twelve months ended December 31, 2018 and 2017:
 
 
For the Three Months
Ended December 31,
 
For the Years
Ended December 31,
 
 
2018
 
2017
 
2018
 
2017
 
 
(In thousands)
Revenue
 
 
 
 
 
 
 
 
Hughes
 
$
444,642

 
$
405,775

 
$
1,716,528

 
$
1,477,918

EchoStar Satellite Services
 
81,873

 
96,459

 
358,058

 
392,244

Corporate and Other
 
4,146

 
3,814

 
16,777

 
15,346

Total
 
$
530,661

 
$
506,048

 
$
2,091,363

 
$
1,885,508

 
 
 
 
 
 
 
 
 
EBITDA
 
 
 
 
 
 
 
 
Hughes
 
$
148,337

 
$
132,529

 
$
601,319

 
$
475,222

EchoStar Satellite Services
 
69,269

 
73,412

 
308,058

 
315,285

Corporate and Other:
 
 
 
 
 
 
 
 
Corporate overhead, operating and other
 
(18,716
)
 
(18,782
)
 
(69,356
)
 
(63,168
)
Equity in earnings (losses) of unconsolidated affiliates, net
 
(3,303
)
 
1,353

 
(5,954
)
 
16,973

Gains (losses) on investments, net
 
(45,349
)
 
22,789

 
(12,178
)
 
55,027

 Impairment of long lived assets
 
(65,220
)
 
(4,762
)
 
(65,220
)
 
(4,762
)
Sub-total
 
(132,588
)
 
598

 
(152,708
)
 
4,070

Total
 
$
85,018

 
$
206,539

 
$
756,669

 
$
794,577

 
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
 
$
(111,648
)
 
$
311,759

 
$
(38,633
)
 
$
384,980

Net income from discontinued operations
 
—

 
2,055

 
—

 
8,509

Net income (loss)
 
$
(111,648
)
 
$
313,814

 
$
(38,633
)
 
$
393,489

 
 
 
 
 
 
 
 
 
Expenditures for property and equipment from continuing operations
 
$
139,888

 
$
156,239

 
$
477,617

 
$
566,384


The following table reconciles GAAP to non-GAAP measurements.
 
 
For the Three Months
Ended December 31,
 
For the Years
Ended December 31,
 
 
2018
 
2017
 
2018
 
2017
 
 
(In thousands)
Net income (loss)
 
$
(111,648
)
 
$
313,814

 
$
(38,633
)
 
$
393,489

 
 
 
 
 
 
 
 
 
Interest income and expense, net
 
38,158

 
46,465

 
168,293

 
172,621

Income tax (benefit) provision, net
 
5,438

 
(293,359
)
 
30,673

 
(284,286
)
Depreciation and amortization
 
153,620

 
142,251

 
598,178

 
522,190

Net income from discontinued operations
 
—

 
(2,055
)
 
—

 
(8,509
)
Net income attributable to noncontrolling interests
 
(550
)
 
(577
)
 
(1,842
)
 
(928
)
EBITDA
 
$
85,018

 
$
206,539

 
$
756,669

 
$
794,577



2


Note on Use of Non-GAAP Financial Measures

EBITDA is defined as “Net income (loss)” excluding “Interest income and expense, net,” “Income tax provision (benefit), net,” “Depreciation and amortization,” “Net income (loss) from discontinued operations,” and “Net income (loss) attributable to noncontrolling interests.” EBITDA is not a measure determined in accordance with U.S. GAAP. EBITDA is reconciled to “Net income (loss)” in the table above and should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with U.S. GAAP. Our management uses this non-GAAP measure as a measure of operating efficiency and overall financial performance for benchmarking against our peers and competitors. Management believes that this non-GAAP measure provides meaningful supplemental information regarding the underlying operating performance of our business and is appropriate to enhance an overall understanding of our financial performance. 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, 2018 and 2017 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, 2018 filed today with the Securities and Exchange Commission.

EchoStar will host its earnings conference call on Thursday, February 21, 2019 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID # 2185925.

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, 2018, as filed with the Securities and Exchange Commission and in the other documents EchoStar files with the Securities and Exchange Commission from time to time.

###
Contact Information

EchoStar Investor Relations
EchoStar Media Relations
Deepak V. Dutt
Phone: +1 301-428-1686
Email: deepak.dutt@echostar.com
Sharyn Nerenberg
Phone: +1 301-428-7124
Email: sharyn.nerenberg@echostar.com

3


ECHOSTAR CORPORATION
Consolidated Balance Sheets
(In thousands, except per share amounts)
 
 
As of December 31,
 
 
2018
 
2017
Assets
 
 

 
 

Current assets:
 
 

 
 

Cash and cash equivalents
 
$
928,306

 
$
2,431,456

Marketable investment securities, at fair value
 
2,282,152

 
814,161

Trade accounts receivable and contract assets, net
 
201,096

 
196,840

Trade accounts receivable - DISH Network
 
14,200

 
43,295

Inventory
 
75,379

 
83,595

Prepaids and deposits
 
61,177

 
54,533

Other current assets
 
18,539

 
91,671

Total current assets
 
3,580,849

 
3,715,551

Noncurrent assets:
 
 

 
 

Property and equipment, net
 
3,414,908

 
3,465,471

Regulatory authorizations, net
 
495,654

 
536,936

Goodwill
 
504,173

 
504,173

Other intangible assets, net
 
44,231

 
58,955

Investments in unconsolidated entities
 
262,473

 
161,427

Other receivables - DISH Network
 
95,114

 
92,687

Other noncurrent assets, net
 
263,892

 
214,814

Total noncurrent assets
 
5,080,445

 
5,034,463

Total assets
 
$
8,661,294

 
$
8,750,014

Liabilities and Stockholders’ Equity
 
 

 
 

Current liabilities:
 
 

 
 

Trade accounts payable
 
$
121,437

 
$
108,406

Trade accounts payable - DISH Network
 
1,698

 
4,753

Current portion of long-term debt and capital lease obligations
 
959,577

 
40,631

Contract liabilities
 
72,284

 
65,959

Accrued interest
 
47,416

 
47,616

Accrued compensation
 
54,242

 
47,756

Accrued taxes
 
16,013

 
16,122

Accrued expenses and other
 
72,470

 
82,647

Total current liabilities
 
1,345,137

 
413,890

Noncurrent liabilities:
 
 

 
 

Long-term debt and capital lease obligations, net
 
2,573,204

 
3,594,213

Deferred tax liabilities, net
 
465,933

 
436,023

Other noncurrent liabilities
 
121,546

 
128,503

Total noncurrent liabilities
 
3,160,683

 
4,158,739

Total liabilities
 
4,505,820

 
4,572,629

Commitments and contingencies
 
 
 
 
Stockholders’ equity:
 
 

 
 

Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at each of December 31, 2018 and 2017
 
—

 
—

Common stock, $0.001 par value, 4,000,000,000 shares authorized:
 
 

 
 

Class A common stock, $0.001 par value, 1,600,000,000 shares authorized, 54,142,566 shares issued and 47,657,645 shares outstanding at December 31, 2018 and 53,663,859 shares issued and 48,131,541 shares outstanding at December 31, 2017
 
54

 
54

Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at each of December 31, 2018 and 2017
 
48

 
48

Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of December 31, 2018 and 2017
 
—

 
—

Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of December 31, 2018 and 2017
 
—

 
—

Additional paid-in capital
 
3,702,522

 
3,669,461

Accumulated other comprehensive loss
 
(125,100
)
 
(130,154
)
Accumulated earnings
 
694,129

 
721,316

Treasury stock, at cost
 
(131,454
)
 
(98,162
)
Total EchoStar Corporation stockholders’ equity
 
4,140,199

 
4,162,563

Other noncontrolling interests
 
15,275

 
14,822

Total stockholders’ equity
 
4,155,474

 
4,177,385

Total liabilities and stockholders’ equity
 
$
8,661,294

 
$
8,750,014


4


ECHOSTAR CORPORATION
Consolidated Statements of Operations
(In thousands, except per share amounts)

 
 
For the years ended December 31,
 
 
2018
 
2017
 
2016
Revenue:
 
 

 
 

 
 

Services and other revenue - DISH Network
 
$
378,694

 
$
445,698

 
$
463,442

Services and other revenue - other
 
1,507,259

 
1,200,321

 
1,100,828

Equipment revenue
 
205,410

 
239,489

 
246,196

Total revenue
 
2,091,363

 
1,885,508

 
1,810,466

Costs and expenses:
 
 

 
 

 
 

Cost of sales - services and other (exclusive of depreciation and amortization)
 
604,305

 
563,346

 
536,568

Cost of sales - equipment (exclusive of depreciation and amortization)
 
176,600

 
195,151

 
188,617

Selling, general and administrative expenses
 
436,247

 
366,007

 
325,044

Research and development expenses
 
27,570

 
31,745

 
31,170

Depreciation and amortization
 
598,178

 
522,190

 
432,904

Impairment of long-lived assets
 
65,220

 
10,762

 
—

Total costs and expenses
 
1,908,120

 
1,689,201

 
1,514,303

Operating income
 
183,243

 
196,307

 
296,163

Other income (expense):
 
 

 
 

 
 

Interest income
 
80,275

 
44,619

 
21,244

Interest expense, net of amounts capitalized
 
(248,568
)
 
(217,240
)
 
(123,481
)
Gains (losses) on investments, net
 
(12,207
)
 
53,453

 
9,767

Equity in earnings (losses) of unconsolidated affiliates, net
 
(5,954
)
 
16,973

 
10,802

Other, net
 
(4,749
)
 
6,582

 
2,131

Total other income (expense), net
 
(191,203
)
 
(95,613
)
 
(79,537
)
Income (loss) from continuing operations before income taxes
 
(7,960
)
 
100,694

 
216,626

Income tax benefit (provision), net
 
(30,673
)
 
284,286

 
(80,254
)
Net income (loss) from continuing operations
 
(38,633
)
 
384,980

 
136,372

Net income from discontinued operations
 
—

 
8,509

 
44,320

Net income (loss)
 
(38,633
)
 
393,489

 
180,692

Less: Net income attributable to noncontrolling interests
 
1,842

 
928

 
762

Net income (loss) attributable to EchoStar Corporation
 
(40,475
)
 
392,561

 
179,930

Less: Net loss attributable to Hughes Retail Preferred Tracking Stock
 
—

 
(1,209
)
 
(1,743
)
Net income (loss) attributable to EchoStar Corporation common stock
 
$
(40,475
)
 
$
393,770

 
$
181,673

 
 
 
 
 
 
 
Earnings per share - Class A and B common stock:
 
 

 
 

 
 

Basic earnings (loss) from continuing operations per share
 
$
(0.42
)
 
$
4.04

 
$
1.46

Total basic earnings (loss) per share
 
$
(0.42
)
 
$
4.13

 
$
1.94

Diluted earnings (loss) from continuing operations per share
 
$
(0.42
)
 
$
3.98

 
$
1.45

Total diluted earnings (loss) per share
 
$
(0.42
)
 
$
4.07

 
$
1.92


5


ECHOSTAR CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
 
 
For the years ended December 31,
 
 
2018
 
2017
 
2016
Cash flows from operating activities:
 
 

 
 

 
 

Net income (loss)
 
$
(38,633
)
 
$
393,489

 
$
180,692

Adjustments to reconcile net income (loss) to net cash flows from operating activities:
 
 

 
 

 
 

Depreciation and amortization
 
598,178

 
533,849

 
495,068

Impairment of long-lived assets
 
65,220

 
10,762

 
—

Equity in earnings of unconsolidated affiliates, net
 
6,037

 
(15,814
)
 
(13,310
)
Amortization of debt issuance costs
 
7,923

 
7,378

 
6,551

Gains and losses on investments, net
 
12,109

 
(53,453
)
 
(9,767
)
Stock-based compensation
 
9,990

 
10,103

 
15,234

Deferred tax provision (benefit)
 
26,327

 
(288,577
)
 
98,148

Dividends received from unconsolidated entities
 
10,000

 
19,000

 
15,000

Proceeds from sale of trading securities
 
—

 
8,922

 
7,140

Changes in current assets and current liabilities, net:
 
 

 
 

 
 

Trade accounts receivable, net
 
(17,842
)
 
421

 
(26,942
)
Trade accounts receivable - DISH Network
 
29,188

 
235,227

 
(1,456
)
Inventory
 
5,650

 
(19,291
)
 
(4,814
)
Other current assets
 
(16,261
)
 
(15,352
)
 
2,263

Trade accounts payable
 
9,562

 
(78,419
)
 
(24,571
)
Trade accounts payable - DISH Network
 
(3,055
)
 
731

 
(19,650
)
Accrued expenses and other
 
23,105

 
11,993

 
55,998

Changes in noncurrent assets and noncurrent liabilities, net
 
(5,070
)
 
(36,975
)
 
9,459

Other, net
 
12,094

 
2,898

 
18,300

Net cash flows from operating activities
 
734,522

 
726,892

 
803,343

Cash flows from investing activities:
 
 

 
 

 
 

Purchases of marketable investment securities
 
(2,973,254
)
 
(855,717
)
 
(921,247
)
Sales and maturities of marketable investment securities
 
1,498,463

 
580,235

 
1,009,310

Expenditures for property and equipment
 
(555,141
)
 
(583,211
)
 
(722,341
)
Refunds and other receipts related to property and equipment
 
77,524

 
4,311

 
24,087

Sale of investment in unconsolidated entity
 
1,558

 
17,781

 
—

Expenditures for externally marketed software
 
(31,639
)
 
(31,331
)
 
(23,252
)
Investments in unconsolidated entities
 
(115,991
)
 
—

 
(1,636
)
Other, net
 
—

 
—

 
2,880

Net cash flows from investing activities
 
(2,098,480
)
 
(867,932
)
 
(632,199
)
Cash flows from financing activities:
 
 

 
 

 
 

Proceeds from issuance of long-term debt
 
—

 
—

 
1,500,000

Payments of debt issuance costs
 
—

 
(414
)
 
(7,097
)
Repurchase of the 2019 Senior Secured Notes (Note 12)
 
(70,173
)
 
—

 
—

Purchase of treasury shares (Note 14)
 
(33,292
)
 
—

 
—

Repayment of debt and capital lease obligations
 
(41,019
)
 
(37,670
)
 
(40,364
)
Net proceeds from Class A common stock options exercised
 
4,424

 
35,536

 
13,065

Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan
 
9,368

 
8,758

 
14,367

Repayment of in-orbit incentive obligations
 
(5,350
)
 
(5,487
)
 
(5,499
)
Cash exchanged for Tracking Stock (Note 1)
 
—

 
(651
)
 
—

Other, net
 
(521
)
 
—

 
1,217

Net cash flows from financing activities
 
(136,563
)
 
72

 
1,475,689

Effect of exchange rates on cash and cash equivalents
 
(2,233
)
 
1,351

 
138

Net increase (decrease) in cash and cash equivalents
 
(1,502,754
)
 
(139,617
)
 
1,646,971

Cash and cash equivalents, including restricted amounts, beginning of period
 
2,432,249

 
2,571,866

 
924,895

Cash and cash equivalents, including restricted amounts, end of period
 
$
929,495

 
$
2,432,249

 
$
2,571,866

 
 
 
 
 
 
 
Supplemental disclosure of cash flow information:
 
 

 
 

 
 

Cash paid for interest, net of amounts capitalized
 
$
240,596

 
$
207,617

 
$
78,312

Cash paid for income taxes
 
$
5,209

 
$
11,033

 
$
11,700



6