UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 12, 2011
ECHOSTAR CORPORATION
(Exact name of registrant as specified in its charter)
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NEVADA
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001-33807
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26-1232727
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(State or other jurisdiction of
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(Commission File Number)
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(IRS Employer
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incorporation)
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Identification No.)
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100 INVERNESS TERRACE E.
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ENGLEWOOD, COLORADO
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80112
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(Address of principal executive offices)
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(Zip Code)
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(303) 706-4000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02. Results of Operations and Financial Condition.
EchoStar Corporation is hereby furnishing certain financial information regarding its wholly-owned subsidiary EH Holding Corporation (“EHHC”) as set forth on Exhibit 99.2 hereto, which is incorporated by reference herein.
The information contained in this Item 2.02 is being furnished and shall not be deemed “filed” with the Securities and Exchange Commission or otherwise incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Item 7.01. Regulation FD Disclosure.
On September 12, 2011, EHHC, a wholly-owned subsidiary of EchoStar Corporation and the parent company of newly acquired Hughes Communications, Inc., posted certain of its financial information on EchoStar Corporation’s investor relations website at http://sats.client.shareholder.com/financials.cfm.
Such information is set forth on Exhibit 99.2 hereto, which is incorporated by reference herein.
The information contained in this Item 7.01 is being furnished and shall not be deemed “filed” with the Securities and Exchange Commission or otherwise incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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Exhibit 99.1
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Press release dated September 12, 2011
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Exhibit 99.2
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Financial Information Regarding EHHC
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ECHOSTAR CORPORATION
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Date: September 12, 2011
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By:
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/s/ R. Stanton Dodge
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R. Stanton Dodge
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Executive Vice President,
General Counsel and Secretary
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Exhibit Index
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Exhibit No.
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Description
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Exhibit 99.1
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Press release dated September 12, 2011
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Exhibit 99.2
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Financial Information Regarding EHHC
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Exhibit 99.1
EchoStar Corporation Subsidiary, EH Holding Corporation, Releases Second Quarter 2011 Financial Statements
ENGLEWOOD, CO, Sept. 12, 2011―EH Holding Corporation, a wholly-owned subsidiary of EchoStar Corporation (NASDAQ: SATS) and the parent company of newly acquired Hughes Communications, Inc., today posted certain of its financial information on EchoStar Corporation’s investor relations website at http://sats.client.shareholder.com/financials.cfm.
About EchoStar
EchoStar Corporation (NASDAQ: SATS) is a premier global provider of satellite operations and digital TV solutions that enhance today’s home entertainment lifestyle. Its wholly owned subsidiary, Hughes, is the world’s leading provider of satellite broadband for home and office, delivering innovative network technologies and managed network services for enterprises and governments in more than 100 countries. Among the many offerings of this combined powerhouse in broadband data and video are HughesNet®, the market’s #1 high-speed satellite Internet service; Sling Media’s award-winning SlingLoaded® technology; and Move Networks’ adaptive bit-rate streaming technology.
Headquartered in Englewood, Colo. with more than 4,600 employees worldwide, EchoStar has more than 25 years of experience designing, developing and distributing award-winning television set-top boxes, services and related delivery products for television. EchoStar delivers satellite broadband and transport services for enterprises, governments, small businesses, and consumers using 10 satellites and related broadcast licenses around the globe. For more information, please visit www.EchoStar.com and www.Hughes.com.
EchoStar Investor Relations
Deepak Dutt
Phone: 301.428.1686
Deepak.Dutt@Hughes.com
EchoStar Media Relations
Phone: 303.706.4000
MediaRelations@EchoStar.com
Exhibit 99.2
EH Holding Corporation
Interim Condensed Consolidated Financial Statements
For the Quarter Ended June 30, 2011
Notice to Readers
The interim condensed consolidated financial statements for the quarter ended June 30, 2011 have been prepared by and are the responsibility of the management of EH Holding Corporation (the “Company”). These interim condensed consolidated financial statements have not been reviewed or audited by the Company’s independent registered public accounting firm, have not been subject to any audit procedures and without supporting notes, are inherently incomplete.
These interim condensed consolidated financial statements of the Company represent a combination of (i) the historical financial position and results of operations of certain entities within EchoStar Corporation (“EchoStar”) that generally represent EchoStar’s satellite service business prior to the Company’s formation in March 2011 (at which time the assets and liabilities presented in these financial statements prior to such formation were contributed by EchoStar to the Company as part of such formation) and (ii) the consolidated financial position and results of operations subsequent to the Company’s formation, which include Hughes Communications, Inc.
(“Hughes”) after June 8, 2011 as a result of the Company’s acquisition of Hughes.
TABLE OF CONTENTS
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Financial Statements
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Condensed Consolidated Balance Sheets –
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June 30, 2011 and December 31, 2010 (Unaudited)
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1 | |||
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Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
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for the Three and Six Months Ended June 30, 2011 and June 30, 2010 (Unaudited)
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2 | |||
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Condensed Consolidated Statements of Cash Flows for the
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Six Months Ended June 30, 2011 and 2010 (Unaudited)
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3 | |||
EH HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share amounts)
(Unaudited)
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June 30,
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December 31,
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2011
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2010
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Assets
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Current Assets:
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Cash and cash equivalents
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$ | 193,264 | $ | 106 | ||||
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Marketable investment securities
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237,555 | - | ||||||
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Trade accounts receivable, net of allowance for doubtful accounts of $5,387 and $4,725, respectively
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182,655 | 6,505 | ||||||
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Trade accounts receivable - DISH Network, net of allowance for doubtful accounts of zero
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34,900 | 32,455 | ||||||
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Advances to affiliate, net
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15,403 | - | ||||||
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Inventory
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55,739 | - | ||||||
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Deferred tax assets
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16,222 | 4,994 | ||||||
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Other current assets
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49,421 | 8,261 | ||||||
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Total current assets
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785,159 | 52,321 | ||||||
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Noncurrent Assets:
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Restricted cash and marketable investment securities
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21,712 | 16,575 | ||||||
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Property and equipment, net of accumulated depreciation of $1,153,704 and $1,096,705, respectively
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1,788,714 | 818,087 | ||||||
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FCC authorizations
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465,658 | 65,658 | ||||||
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Intangible assets, net of amortization of $5,945 and $7, respectively
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426,369 | 11 | ||||||
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Goodwill
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513,712 | - | ||||||
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Marketable and other investment securities
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26,804 | 724 | ||||||
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Other noncurrent assets, net
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133,550 | 43,300 | ||||||
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Total noncurrent assets
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3,376,519 | 944,355 | ||||||
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Total assets
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$ | 4,161,678 | $ | 996,676 | ||||
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Liabilities and Stockholder's Equity (Deficit)
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Current Liabilities:
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Trade accounts payable
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$ | 110,221 | $ | 9,273 | ||||
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Trade accounts payable - DISH Network
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6,923 | 8,703 | ||||||
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Deferred revenue and other
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63,261 | 3,403 | ||||||
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Accrued interest
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12,056 | 126 | ||||||
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Accrued expenses and other
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112,162 | 16,520 | ||||||
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Current portion of long-term debt and capital lease obligations
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57,910 | 52,213 | ||||||
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Total current liabilities
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362,533 | 90,238 | ||||||
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Long-Term Obligations, Net of Current Portion:
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Long-term debt and capital lease obligations, net of current portion
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2,346,402 | 359,550 | ||||||
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Deferred tax liabilities
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333,300 | 66,021 | ||||||
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Other long-term liabilities
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16,319 | 234 | ||||||
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Total long-term obligations, net of current portion
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2,696,021 | 425,805 | ||||||
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Total liabilities
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3,058,554 | 516,043 | ||||||
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Commitments and Contingencies
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Stockholder's Equity (Deficit):
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Common stock, $.01 par value, 1,000,000 shares authorized, 1,000 shares and
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and zero shares issued and outstanding, respectively
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- | - | ||||||
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Owner's net investment
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- | 480,633 | ||||||
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Additional paid-in capital
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1,223,861 | - | ||||||
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Accumulated other comprehensive income (loss)
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(1,367 | ) | - | |||||
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Accumulated earnings (deficit)
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(130,205 | ) | - | |||||
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Total EH Holding Corporation stockholder's equity (deficit)
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1,092,289 | 480,633 | ||||||
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Noncontrolling interest
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10,835 | - | ||||||
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Total stockholder's equity (deficit)
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1,103,124 | 480,633 | ||||||
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Total liabilities and stockholder's equity (deficit)
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$ | 4,161,678 | $ | 996,676 | ||||
1
EH HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
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Ended June 30,
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Ended June 30,
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2011
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2010
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2011
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2010
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Revenue:
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Services and other revenue
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$ | 73,312 | $ | 12,025 | $ | 88,206 | $ | 23,820 | ||||||||
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Services and other revenue - DISH Network
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52,982 | 53,884 | 106,028 | 105,423 | ||||||||||||
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Equipment revenue
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25,223 | 225 | 25,187 | 518 | ||||||||||||
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Total revenue
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151,517 | 66,134 | 219,421 | 129,761 | ||||||||||||
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Costs and Expenses:
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Cost of sales - services and other (exclusive of depreciation shown separately below)
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42,830 | 16,767 | 59,897 | 30,305 | ||||||||||||
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Cost of sales - equipment (exclusive of depreciation shown separately below)
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19,809 | 236 | 19,812 | 352 | ||||||||||||
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Selling, general and administrative expenses
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17,105 | 2,777 | 23,296 | 5,693 | ||||||||||||
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Depreciation and amortization
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39,460 | 23,512 | 62,928 | 48,653 | ||||||||||||
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Total costs and expenses
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119,204 | 43,292 | 165,933 | 85,003 | ||||||||||||
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Operating income (loss)
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32,313 | 22,842 | 53,488 | 44,758 | ||||||||||||
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Other Income (Expense):
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Interest income
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255 | 2 | 285 | 4 | ||||||||||||
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Interest expense, net of amounts capitalized
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(13,680 | ) | (6,067 | ) | (17,113 | ) | (15,323 | ) | ||||||||
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Hughes acquisition costs
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(34,500 | ) | - | (34,500 | ) | - | ||||||||||
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Other, net
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8,968 | 23 | 9,367 | 12 | ||||||||||||
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Total other income (expense)
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(38,957 | ) | (6,042 | ) | (41,961 | ) | (15,307 | ) | ||||||||
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Income (loss) before income taxes
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(6,644 | ) | 16,800 | 11,527 | 29,451 | |||||||||||
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Income tax (provision) benefit, net
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(749 | ) | (6,199 | ) | (7,437 | ) | (10,867 | ) | ||||||||
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Net income (loss)
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(7,393 | ) | 10,601 | 4,090 | 18,584 | |||||||||||
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Less: Net income (loss) attributable to noncontrolling interest
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87 | - | 87 | - | ||||||||||||
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Net income (loss) attributable to EH Holding Corporation common shareholder
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$ | (7,480 | ) | $ | 10,601 | $ | 4,003 | $ | 18,584 | |||||||
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Comprehensive Income (Loss):
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Net income
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$ | (7,393 | ) | $ | 10,601 | $ | 4,090 | $ | 18,584 | |||||||
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Foreign currency translation adjustments
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(170 | ) | - | (362 | ) | - | ||||||||||
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Unrealized holding gains (losses) on available-for-sale securities
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(7,776 | ) | - | (1,005 | ) | - | ||||||||||
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Comprehensive income (loss)
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(15,339 | ) | 10,601 | 2,723 | 18,584 | |||||||||||
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Less: Comprehensive income (loss) attributable to noncontrolling interest
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87 | - | 87 | - | ||||||||||||
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Comprehensive income (loss) attributable to EH Holding Corporation common shareholder
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$ | (15,426 | ) | $ | 10,601 | $ | 2,636 | $ | 18,584 | |||||||
2
EH HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Ended June 30,
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2011
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2010
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Cash Flows From Operating Activities:
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Net income (loss)
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$ | 4,090 | $ | 18,584 | ||||
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Adjustments to reconcile net income (loss) to net cash flows from operating activities:
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Depreciation and amortization
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62,928 | 48,653 | ||||||
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Equity in losses (earnings) of affiliates
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(579 | ) | - | |||||
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Non-cash, stock-based compensation
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104 | 443 | ||||||
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Deferred tax expense (benefit)
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8,190 | 10,867 | ||||||
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Other, net
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(6,410 | ) | (43 | ) | ||||
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Change in noncurrent assets
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(292 | ) | 1,868 | |||||
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Changes in current assets and current liabilities, net
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(30,715 | ) | 2,352 | |||||
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Net cash flows from operating activities
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37,316 | 82,724 | ||||||
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Cash Flows From Investing Activities:
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Purchases of marketable investment securities
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(120,951 | ) | - | |||||
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Sales and maturities of marketable investment securities
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349,216 | - | ||||||
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Purchases of property and equipment
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(66,877 | ) | (71,172 | ) | ||||
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Acquisition of Hughes, net of cash acquired of $84,768
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(2,090,165 | ) | - | |||||
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Change in restricted cash and cash equivalents
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52 | 787 | ||||||
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Other, net
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(1,837 | ) | - | |||||
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Net cash flows from investing activities
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(1,930,562 | ) | (70,385 | ) | ||||
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Cash Flows From Financing Activities:
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Proceeds from issuance of long-term debt
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2,000,000 | - | ||||||
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Repayment of long-term debt and capital lease obligations
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(24,318 | ) | (36,004 | ) | ||||
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Deferred debt issuance costs
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(55,845 | ) | - | |||||
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Contributions from (distributions to) parent
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166,379 | 23,665 | ||||||
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Other
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42 | - | ||||||
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Net cash flows from financing activities
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2,086,258 | (12,339 | ) | |||||
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Effect of exchange rates on cash and cash equivalents
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146 | - | ||||||
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Net increase (decrease) in cash and cash equivalents
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193,158 | - | ||||||
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Cash and cash equivalents, beginning of period
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106 | - | ||||||
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Cash and cash equivalents, end of period
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$ | 193,264 | $ | - | ||||
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Supplemental Disclosure of Cash Flow Information:
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Cash paid for interest (including capitalized interest)
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$ | 21,375 | $ | 21,191 | ||||
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Capitalized interest
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$ | 14,895 | $ | 6,838 | ||||
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Cash received for interest
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$ | 136 | $ | 3 | ||||
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Cash paid to parent for income taxes
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$ | 65 | $ | 53 | ||||
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Satellites and other assets financed under capital lease obligations
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$ | 17,351 | $ | 46,959 | ||||
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Reduction of capital lease obligations and associated asset value for AMC-16
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$ | 6,616 | $ | 34,693 | ||||
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Marketable investment securities contributed in connection
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with the Hughes Acquisition, excluding cash and cash equivalents
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$ | 442,473 | $ | - | ||||
3