EchoStar Announces Fourth Quarter and Full Year 2015 Results

Feb 24, 2016, 08:00 ET from EchoStar Corporation

ENGLEWOOD, Colo., Feb. 24, 2016 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the fourth quarter and full year ended December 31, 2015.

Fourth Quarter 2015 Financial Highlights:

  • Consolidated revenues of $791 million.
  • Consolidated EBITDA of $223 million.
  • Consolidated net income attributable to EchoStar common stock of $66.3 million and diluted earnings per share of $0.71.
  • Hughes net subscriber additions of approximately 9,000. Approximately 1,035,000 subscribers as of December 31, 2015.
  • Record enterprise contract awards of $479 million at Hughes.

Full Year Ended December 31, 2015 Financial Highlights:

  • Consolidated revenue of $3.1 billion.
  • Consolidated EBITDA of $865 million.
  • Consolidated net income attributable to EchoStar common stock of $163.7 million and diluted earnings per share of $1.75.  
  • Strong liquidity with cash, cash equivalents and current marketable investment securities of $1.54 billion as of December 31, 2015.

Set forth below is a table highlighting certain of EchoStar's segment results for the three and twelve months ended December 31, 2015 and 2014:

Three Months

Twelve Months

 Ended December 31,

 Ended December 31,

2015

2014

2015

2014

(Dollars in thousands)

Revenue

Hughes

$ 347,146

$ 343,621

$ 1,347,340

$ 1,327,718

EchoStar Technologies Corp.

325,101

371,389

1,298,198

1,627,366

EchoStar Satellite Services

116,304

127,491

490,591

484,455

All Other & Eliminations

2,036

1,387

7,585

6,039

Total

$ 790,587

$ 843,888

$ 3,143,714

$ 3,445,578

EBITDA*

Hughes

$ 100,415

$   89,661

$    396,684

$    356,871

EchoStar Technologies Corp.

25,981

35,052

106,745

154,786

EchoStar Satellite Services

98,429

110,869

412,607

419,442

All Other & Eliminations

(2,084)

(5,775)

(50,683)

(28,518)

Total

$ 222,741

$ 229,807

$    865,353

$    902,581

Net income (loss) attributable to EchoStar common stock

$   66,296

$   54,766

$    163,700

$    165,268

Diluted earnings per share (in dollars)

$       0.71

$       0.59

$          1.75

$          1.78

Capital expenditures

$ 223,369

$ 245,599

$    703,520

$    680,026

 The following table reconciles total consolidated EBITDA to "Income/(loss) before income taxes".

Three Months

Twelve Months

 Ended December 31,

 Ended December 31,

2015

2014

2015

2014

(in thousands)

EBITDA

$ 222,741

$ 229,807

$ 865,353

$ 902,581

Interest income and expense, net

(23,396)

(36,843)

(111,637)

(162,247)

Depreciation and amortization

(129,610)

(140,509)

(528,158)

(556,676)

Net income (loss) attributable to noncontrolling interests

(972)

(2,379)

(3,986)

(5,325)

Income (loss) before income taxes

$   68,763

$   50,076

$ 221,572

$ 178,333

Note on Use of Non-GAAP Financial Measures

EBITDA is defined as "Net income (loss) attributable to EchoStar" 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 income (loss) before income taxes 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. Conceptually, EBITDA measures the amount of income generated each period that could be used to service debt, pay taxes and fund capital expenditures. 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 liquidity and 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, 2015 and 2014 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 year ended December 31, 2015 filed today with the Securities and Exchange Commission.

EchoStar will host its earnings conference call on Wednesday, February 24, 2016 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID # 93525715.

About EchoStar Corporation

EchoStar Corporation (NASDAQ: SATS) is a premier global provider of satellite and video delivery solutions. Headquartered in Englewood, Colo., and conducting business around the globe, EchoStar is a pioneer in secure communications technologies through its EchoStar Satellite Services, EchoStar Technologies and Hughes Network Systems business segments.

For more information, visit echostar.com. Follow @EchoStar on Twitter.

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. These statements are subject to certain risks, uncertainties, and assumptions. See "Risk Factors" in EchoStar's Annual Report on Form 10-K for the year ended December 31, 2015, 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.

ECHOSTAR CORPORATION

Consolidated Balance Sheets

(Dollars in thousands, except per-share amounts)

As of December 31,

2015

2014

Assets

Current Assets:

Cash and cash equivalents

$    924,240

$    549,053

Marketable investment securities, at fair value

612,338

1,139,103

Trade accounts receivable, net of allowance for doubtful accounts of $12,485 and $14,188, respectively

179,240

163,232

Trade accounts receivable - DISH Network, net of allowance for doubtful accounts of zero

277,159

251,669

Inventory

67,010

62,963

Prepaid expenses

56,949

67,164

Deferred tax assets

-

87,208

Other current assets

16,723

7,699

Total current assets

2,133,659

2,328,091

Noncurrent Assets:

Restricted cash and marketable investment securities

21,002

18,945

Property and equipment, net of accumulated depreciation of $2,998,074 and $2,899,353, respectively

3,412,990

3,194,793

Regulatory authorizations, net

543,812

568,378

Goodwill

510,630

510,630

Other intangible assets, net

132,653

195,662

Investments in unconsolidated entities

209,264

159,962

Other receivable - DISH Network

90,966

90,241

Other noncurrent assets, net

185,786

187,296

Total noncurrent assets

5,107,103

4,925,907

Total assets

$ 7,240,762

$ 7,253,998

Liabilities and Stockholders' Equity

Current Liabilities:

Trade accounts payable

$    213,671

$    188,282

Trade accounts payable - DISH Network

24,682

32,474

Current portion of long-term debt and capital lease obligations

35,698

41,912

Deferred revenue and prepayments

61,881

71,708

Accrued compensation

29,767

32,117

Accrued royalties

22,531

27,590

Accrued expenses and other

138,601

123,650

Total current liabilities

526,831

517,733

Noncurrent Liabilities:

Long-term debt and capital lease obligations, net of current portion

2,187,943

2,325,775

Deferred tax liabilities

650,392

679,524

Other noncurrent liabilities

93,954

107,328

Total noncurrent liabilities

2,932,289

3,112,627

Total liabilities

3,459,120

3,630,360

Commitments and Contingencies (Note 16)

Stockholders' Equity:

Preferred Stock, $.001 par value, 20,000,000 shares authorized:

Hughes Retail Preferred Tracking Stock, $.001 par value, 13,000,000 shares authorized, 6,290,499 issued and

outstanding at each of December 31, 2015 and 2014

6

6

Common stock, $.001 par value, 4,000,000,000 shares authorized:

Class A common stock, $.001 par value, 1,600,000,000 shares authorized, 51,087,839 shares issued and

45,555,521 shares outstanding at December 31, 2015 and 49,576,247 shares issued and 44,043,929 shares

outstanding at December 31, 2014

51

50

Class B common stock, $.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding

at each of December 31, 2015 and 2014

48

48

Class C common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of

December 31, 2015 and 2014

-

-

Class D common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of

December 31, 2015 and 2014

-

-

Additional paid-in capital

3,776,451

3,706,122

Accumulated other comprehensive loss

(117,233)

(55,856)

Accumulated earnings (deficit)

134,317

(19,040)

Treasury stock, at cost

(98,162)

(98,162)

Total EchoStar stockholders' equity

3,695,478

3,533,168

Noncontrolling interest in HSS Tracking Stock

74,854

80,457

Other noncontrolling interests

11,310

10,013

Total stockholders' equity

3,781,642

3,623,638

Total liabilities and stockholders' equity

$ 7,240,762

$ 7,253,998

ECHOSTAR CORPORATION

Consolidated Statements of Operations

(Dollars in thousands, except per-share amounts)

For the Years Ended December 31,

2015

2014

2013

Revenue:

Equipment revenue - DISH Network

$  763,184

$ 1,145,979

$ 1,311,446

Equipment revenue - other

358,301

374,049

347,910

Services and other revenue - DISH Network

918,301

828,612

620,189

Services and other revenue - other

1,103,928

1,096,938

1,002,907

Total revenue

3,143,714

3,445,578

3,282,452

Costs and Expenses:

Cost of sales - equipment (exclusive of depreciation and amortization)

948,655

1,288,998

1,430,777

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

856,065

838,918

776,121

Selling, general and administrative expenses

374,116

372,010

358,499

Research and development expenses

78,287

60,886

67,942

Depreciation and amortization

528,158

556,676

507,111

Impairment of long-lived assets

2,400

-

38,415

Total costs and expenses

2,787,681

3,117,488

3,178,865

Operating income

356,033

328,090

103,587

Other Income (Expense):

Interest income

10,429

9,102

14,656

Interest expense, net of amounts capitalized

(122,066)

(171,349)

(192,554)

Loss from partial redemption of debt

(5,044)

-

-

Gains (losses) on marketable investment securities, net

(6,443)

41

38,341

Other-than-temporary impairment loss on marketable investment securities

(11,226)

-

-

Equity in earnings (losses) of unconsolidated affiliates, net

1,895

8,198

(5,024)

Other, net

(2,006)

4,251

6,958

Total other expense, net

(134,461)

(149,757)

(137,623)

Income (loss) before income taxes

221,572

178,333

(34,036)

Income tax (provision) benefit, net

(72,201)

(30,784)

37,437

Net income

149,371

147,549

3,401

Less:  Net loss attributable to noncontrolling interest in HSS Tracking Stock

(5,603)

(6,714)

-

Less:  Net income attributable to other noncontrolling interests

1,617

1,389

876

Net income attributable to EchoStar

153,357

152,874

2,525

Less: Net loss attributable to Hughes Retail Preferred Tracking Stock (Note 4)

(10,343)

(12,394)

-

Net income attributable to EchoStar common stock

$  163,700

$    165,268

$        2,525

Weighted-average common shares outstanding - Class A and B common stock:

Basic

92,397

91,190

89,405

Diluted

93,466

92,616

90,952

Earnings per share - Class A and B common stock:

Basic

$        1.77

$          1.81

$          0.03

Diluted

$        1.75

$          1.78

$          0.03

Comprehensive Income (Loss)

Net income

$  149,371

$    147,549

$        3,401

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments

(62,731)

(31,935)

(16,394)

Recognition of foreign currency translation loss in net income

1,889

-

-

Unrealized gains (losses) on marketable investment securities and other

(12,046)

(9,462)

18,413

Recognition of other-than-temporary loss on marketable investment

securities in net income

11,226

-

-

Recognition of realized gains on marketable investment

securities in net income

(35)

(41)

(36,312)

Total other comprehensive loss, net of tax

(61,697)

(41,438)

(34,293)

Comprehensive income (loss)

87,674

106,111

(30,892)

Less: Comprehensive loss attributable to noncontrolling interest in

HSS Tracking Stock

(5,603)

(6,714)

-

Less: Comprehensive income (loss) attributable to other noncontrolling interests

1,297

1,152

(10)

Comprehensive income (loss) attributable to EchoStar

$   91,980

$    111,673

$    (30,882)

ECHOSTAR CORPORATION

Consolidated Statements of Cash Flows

(In thousands)

For the Years Ended December 31,

2015

2014

2013

Cash Flows from Operating Activities:

Net income

$  149,371

$   147,549

$       3,401

Adjustments to reconcile net income to net cash flows from operating activities:

Depreciation and amortization

528,158

556,676

507,111

Equity in losses (earnings) of unconsolidated affiliates, net

(1,895)

(8,198)

5,024

Loss from partial redemption of debt

5,044

-

-

Losses (gains) and other-than-temporary impairment on marketable investment securities, net

17,669

(41)

(38,341)

Impairment of long-lived assets

2,400

-

38,415

Stock-based compensation

21,839

14,683

18,353

Deferred tax provision (benefit)

56,132

31,742

(35,780)

Changes in current assets and current liabilities, net:

Trade accounts receivable

(36,749)

(18,023)

42,580

Allowance for doubtful accounts

(1,703)

950

(2,995)

Trade accounts receivable - DISH Network

(25,490)

104,051

(77,790)

Inventory

(4,906)

2,608

16,529

Other current assets

6,499

9,930

5,182

Trade accounts payable

37,228

(22,230)

(76,497)

Trade accounts payable - DISH Network

(7,792)

(26,508)

28,783

Accrued expenses and other

1,477

26,469

38,085

Changes in noncurrent assets and noncurrent liabilities, net

1,616

(8,305)

(41,650)

Other, net

27,553

28,778

20,097

Net cash flows from operating activities

776,451

840,131

450,507

Cash Flows from Investing Activities:

Purchases of marketable investment securities

(536,430)

(1,523,514)

(1,080,437)

Sales and maturities of marketable investment securities

1,057,034

1,353,157

912,030

Purchases of property and equipment

(809,270)

(680,026)

(391,873)

Refunds and other receipts related to capital expenditures

105,750

-

-

Changes in restricted cash and marketable investment securities

(2,057)

(2,808)

12,908

Investments in unconsolidated entities

(64,655)

-

-

Acquisition of regulatory authorization

(3,428)

-

(41,748)

Proceeds from asset transfers to DISH Network

-

-

40,398

Capital contribution to Sling TV Holding

-

(18,569)

(7,000)

Expenditures for externally marketed software

(22,327)

(22,955)

(17,215)

Other, net

72

7,125

2,648

Net cash flows from investing activities

(275,311)

(887,590)

(570,289)

Cash Flows from Financing Activities:

Repayment of 6 1/2% Senior Secured Notes due 2019 and related premium

(113,300)

-

-

Repayment of other long-term debt and capital lease obligations

(44,804)

(63,122)

(68,225)

Net proceeds from Class A common stock options exercised and stock issued under

the Employee Stock Purchase Plan

38,729

28,857

71,247

Net proceeds from issuance of Tracking Stock (Note 4)

-

7,526

-

Excess tax benefit from stock option exercises

3,929

(7,252)

12,663

Other, net

(4,811)

(1,105)

2,641

Net cash flows from financing activities

(120,257)

(35,096)

18,326

Effect of exchange rates on cash and cash equivalents

(5,696)

(2,511)

3,961

Net increase (decrease) in cash and cash equivalents

375,187

(85,066)

(97,495)

Cash and cash equivalents, beginning of period

549,053

634,119

731,614

Cash and cash equivalents, end of period

$  924,240

$   549,053

$   634,119

Supplemental Disclosure of Cash Flow Information:

Cash paid for interest (including capitalized interest)

$  179,114

$   188,087

$  188,331

Capitalized interest

$    63,808

$     23,774

$      3,968

Cash paid for income taxes

$      6,394

$     14,221

$    16,728

Employee benefits paid in Class A common stock

$    10,711

$     10,316

$      4,761

Satellites and other assets financed under capital lease obligations

$      8,604

$       3,312

$      5,316

Increase (decrease) in capital expenditures included in accounts payable, net

$    (7,123)

$     11,436

$    (8,921)

Noncash assets contributed to SmarDTV (Note 6)

$      6,651

$              -

$             -

Net noncash assets transferred from DISH Network in exchange for Tracking Stock (Note 4)

$             -

$  386,691

$             -

Noncash assets received from Sling TV Holding (Note 6)

$             -

$    34,075

$             -

Capitalized in-orbit incentive obligations

$             -

$             -

$    18,000

Reduction of capital lease obligation for AMC-15 and AMC-16

$     4,500

$             -

$      6,694

Liabilities assumed in regulatory authorization acquisition

$            -

$             -

$    10,304

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SOURCE EchoStar Corporation



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http://www.echostar.com