EchoStar Announces Fourth Quarter and Full Year 2015 Results
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
- 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 ofDecember 31, 2015 .
Set forth below is a table highlighting certain of
Three Months |
Twelve Months | ||||||
Ended |
Ended | ||||||
2015 |
2014 |
2015 |
2014 | ||||
(Dollars in thousands) | |||||||
Revenue |
|||||||
Hughes |
|
|
|
| |||
|
325,101 |
371,389 |
1,298,198 |
1,627,366 | |||
|
116,304 |
127,491 |
490,591 |
484,455 | |||
All Other & Eliminations |
2,036 |
1,387 |
7,585 |
6,039 | |||
Total |
|
|
|
| |||
EBITDA* |
|||||||
Hughes |
|
$ 89,661 |
$ 396,684 |
$ 356,871 | |||
|
25,981 |
35,052 |
106,745 |
154,786 | |||
|
98,429 |
110,869 |
412,607 |
419,442 | |||
All Other & Eliminations |
(2,084) |
(5,775) |
(50,683) |
(28,518) | |||
Total |
|
|
$ 865,353 |
$ 902,581 | |||
Net income (loss) attributable to |
$ 66,296 |
$ 54,766 |
$ 163,700 |
$ 165,268 | |||
Diluted earnings per share (in dollars) |
$ 0.71 |
$ 0.59 |
$ 1.75 |
$ 1.78 | |||
Capital expenditures |
|
|
$ 703,520 |
$ 680,026 | |||
The following table reconciles total consolidated EBITDA to "Income/(loss) before income taxes".
Three Months |
Twelve Months | ||||||
Ended |
Ended | ||||||
2015 |
2014 |
2015 |
2014 | ||||
(in thousands) | |||||||
EBITDA |
|
|
|
| |||
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 |
|
| |||
Note on Use of Non-GAAP Financial Measures
EBITDA is defined as "Net income (loss) attributable to
The consolidated financial statements of
About
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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
| |||
Consolidated Balance Sheets | |||
(Dollars in thousands, except per-share amounts) | |||
As of | |||
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 |
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 |
3,412,990 |
3,194,793 | |
Regulatory authorizations, net |
543,812 |
568,378 | |
|
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 |
|
| |
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, |
|||
Hughes Retail Preferred Tracking Stock, |
|||
outstanding at each of |
6 |
6 | |
Common stock, |
|||
Class A common stock, |
|||
45,555,521 shares outstanding at |
|||
outstanding at |
51 |
50 | |
Class B common stock, |
|||
at each of |
48 |
48 | |
Class C common stock, |
|||
|
- |
- | |
Class D common stock, |
|||
|
- |
- | |
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) | |
|
(98,162) |
(98,162) | |
Total |
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 |
|
|
| |||||
Consolidated Statements of Operations | |||||
(Dollars in thousands, except per-share amounts) | |||||
For the Years Ended | |||||
2015 |
2014 |
2013 | |||
Revenue: |
|||||
Equipment revenue - DISH Network |
$ 763,184 |
|
| ||
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 |
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 |
$ 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 |
$ 91,980 |
$ 111,673 |
$ (30,882) | ||
| |||||
Consolidated Statements of Cash Flows | |||||
(In thousands) | |||||
For the Years Ended | |||||
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 |
- |
(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 |
$ 6,651 |
$ - |
$ - | ||
Net noncash assets transferred from DISH Network in exchange for Tracking Stock (Note 4) |
$ - |
$ 386,691 |
$ - | ||
Noncash assets received from |
$ - |
$ 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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