Subject: ERN
EchoStar Announces Financial Results for the Three and Twelve Months Ended December 31, 2023
ENGLEWOOD, Colo., Feb. 29, 2024 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) announced its financial results for the three and twelve months ended December 31, 2023.
Twelve Months Ended December 31, 2023:
- EchoStar reported 2023 total revenue of $17.02 billion, compared to $18.63 billion in 2022. The net decrease in revenue primarily resulted from subscriber declines, most significantly in its Pay-TV segment.
- Net loss attributable to EchoStar in 2023 was $1.70 billion, compared to net income of $2.48 billion in 2022. The net loss in 2023 was primarily attributable to a noncash impairment to goodwill totaling approximately $758 million, and an adjustment to the carrying value of the 800 MHz purchase option totaling approximately $1.8 billion. Diluted loss per share was $6.28 in 2023, compared to earnings per share of $8.05 in 2022. Excluding the tax affected impact of the goodwill impairment and the 800 MHz adjustment, 2023 net income attributable to EchoStar would have been approximately $361 million.
- Consolidated OIBDA totaled $1.32 billion, compared to $3.41 billion in 2022. (See OBIDA definition and non-GAAP reconciliation below.) The decrease in OIBDA was primarily attributable to the noncash impairment to goodwill and the subscriber declines previously discussed.
"We closed the year with the completion of the merger with DISH Network. The transaction combined DISH Network's satellite technology, streaming services, engineering expertise, retail wireless business, and nationwide 5G network with EchoStar's premier satellite communications solutions, enterprise go-to-market capabilities, and U.S.-based manufacturing. Collectively, it creates a global leader in terrestrial and non-terrestrial wireless connectivity, and entertainment services," said Hamid Akhavan, president and CEO, EchoStar Corporation. "With the close of the merger, we will continue to integrate our business and realize savings and operational efficiencies. We also will increase our focus on identifying and targeting the best, most profitable customers in each of our addressable market segments ? Pay-TV, Retail Wireless, and Broadband and Satellite Services."
Three Months Ended December 31, 2023:
- Consolidated revenue totaled $4.16 billion for the fourth quarter, compared to $4.53 billion in the year-ago quarter. The net decrease in revenue primarily resulted from subscriber declines, most significantly in the Pay-TV segment.
- Net loss attributable to EchoStar totaled $2.03 billion for the fourth quarter, compared to net income attributable to EchoStar of $984 million in the year-ago quarter. The net loss in the fourth quarter of 2023 was primarily attributable to a noncash impairment to goodwill totaling approximately $758 million, and an adjustment to the carrying value of the 800 MHz purchase option totaling approximately $1.6 billion. Diluted loss per share was $7.48 for the quarter, compared to earnings of $3.21 per share in the year-ago quarter.
- Consolidated OIBDA totaled negative $370 million for the fourth quarter, compared to $735 million in the year-ago quarter. The decrease in OIBDA was primarily attributable to the noncash impairment to goodwill and the subscriber declines previously discussed.
- Net Pay-TV subscribers decreased approximately 314,000 in the fourth quarter, compared to a decrease of approximately 268,000 in the year-ago quarter. The company closed the quarter with 8.53 million Pay-TV subscribers including 6.47 million DISH TV subscribers and 2.06 million SLING TV subscribers. This increase in net Pay-TV losses resulted from the increase in net DISH TV subscriber losses due to lower gross new DISH TV subscriber activations and a higher DISH TV churn rate, offset by the decrease in net SLING TV subscriber losses due to lower subscriber disconnects in 2023 as a result of our emphasis on acquiring higher-quality subscribers.
- Retail Wireless net subscribers decreased by approximately 123,000 in the fourth quarter, compared to a net decrease of 25,000 in the year-ago quarter. The company closed the quarter with 7.38 million Retail Wireless subscribers. This increase in net Retail Wireless subscriber losses primarily resulted from lower gross new Retail Wireless subscriber activations, partially offset by a lower Retail Wireless churn rate due to our emphasis on acquiring and retaining higher-quality subscribers.
- Broadband net subscribers decreased by approximately 59,000 in the fourth quarter, compared to a decrease of 57,000 in the year-ago quarter. The company closed the quarter with 1.00 million Broadband subscribers. This increase in net Broadband subscriber losses primarily resulted from our capacity limitations, competitive pressure from satellite-based competitors and other technologies, and a more selective customer screening. The EchoStar XXIV satellite, also known as Jupiter 3, began service in December 2023, bringing additional broadband capacity and is expected to be an integral part of the Broadband and Satellite Services segment business.
Set forth below is a table highlighting certain of EchoStar's segment results for the three and twelve months ended December 31, 2023 and 2022 (all U.S. GAAP amounts reference results from operations):
For the three months ended | For the years ended | |||||||||
2023 | 2022 | 2023 | 2022 | |||||||
(in thousands) | ||||||||||
Revenue | ||||||||||
Pay-TV | $ 2,816,787 | $ 3,106,149 | $ 11,571,159 | $ 12,505,392 | ||||||
Retail Wireless | 898,284 | 928,095 | 3,692,372 | 4,135,129 | ||||||
5G Network Deployment | 24,027 | 17,406 | 91,928 | 65,768 | ||||||
Broadband and Satellite Services | 449,779 | 499,857 | 1,755,559 | 1,998,093 | ||||||
All Other & Eliminations | (26,281) | (18,490) | (95,420) | (70,136) | ||||||
Total | $ 4,162,596 | $ 4,533,017 | $ 17,015,598 | $ 18,634,246 | ||||||
Net Income (loss) attributable to EchoStar | $ (2,029,882) | $ 984,264 | $ (1,702,057) | $ 2,477,720 | ||||||
Purchases of property and equipment, net of refunds and other receipts (including capitalized interest related to regulatory authorizations) | ||||||||||
Pay-TV | $ 75,212 | $ 39,835 | $ 242,736 | $ 131,093 | ||||||
Retail Wireless | $ - | - | $ - | $ - | ||||||
5G Network Deployment | $ 841,522 | 1,084,441 | $ 3,748,624 | $ 3,580,518 | ||||||
Broadband and Satellite Services | $ 61,172 | 76,517 | $ 233,423 | $ 325,891 | ||||||
All Other & Eliminations | $ - | (560) | $ - | $ (2,721) | ||||||
Total | $ 977,906 | $ 1,200,233 | $ 4,224,783 | $ 4,034,781 | ||||||
Reconciliation of GAAP to Non-GAAP Measurement:
For the Year Ended December 31, 2023 | Pay-TV | Retail | 5G Network | Broadband |
| Consolidated | ||||||||||||
(In thousands) | ||||||||||||||||||
Segment operating income (loss) | $ | 2,699,810 | $ | (643,184) | $ | (1,881,369) | $ | (458,609) | $ | 5,443 | $ | (277,909) | ||||||
Depreciation and amortization | 381,292 | 221,968 | 620,685 | 419,262 | (45,284) | 1,597,923 | ||||||||||||
OIBDA | $ | 3,081,102 | $ | (421,216) | $ | (1,260,684) | $ | (39,347) | $ | (39,841) | $ | 1,320,014 | ||||||
For the Year Ended December 31, 2022 | Pay-TV | Retail | 5G Network | Broadband |
| Consolidated | ||||||||||||
(In thousands) | ||||||||||||||||||
Segment operating income (loss) | $ | 2,933,898 | $ | (77,264) | $ | (810,968) | $ | 181,615 | $ | 5,557 | $ | 2,232,838 | ||||||
Depreciation and amortization | 428,471 | 177,914 | 131,566 | 462,748 | (25,804) | 1,174,895 | ||||||||||||
OIBDA | $ | 3,362,369 | $ | 100,650 | $ | (679,402) | $ | 644,363 | $ | (20,247) | $ | 3,407,733 | ||||||
For the three months Ended December 31, 2023 | Pay-TV | Retail | 5G Network | Broadband |
| Consolidated | ||||||||||||
(In thousands) | ||||||||||||||||||
Segment operating income (loss) | $ | 714,319 | (344,312) | (682,701) | (540,152) | 720 | (852,127) | |||||||||||
Depreciation and amortization | 95,145 | 53,371 | 235,615 | 107,466 | (9,273) | 482,325 | ||||||||||||
OIBDA | $ | 809,464 | $ | (290,941) | $ | (447,087) | $ | (432,686) | $ | (8,553) | $ | (369,803) | ||||||
For the three months Ended December 31, 2022 | Pay-TV | Retail | 5G Network | Broadband |
| Consolidated | ||||||||||||
(In thousands) | ||||||||||||||||||
Segment operating income (loss) | $ | 748,729 | (118,424) | (254,963) | 50,418 | 1,753 | 427,513 | |||||||||||
Depreciation and amortization | 100,398 | 50,534 | 53,914 | 111,115 | (8,093) | 307,869 | ||||||||||||
OIBDA | $ | 849,127 | $ | (67,891) | $ | (201,048) | $ | 161,533 | $ | (6,339) | $ | 735,382 | ||||||
Note on Use of Non-GAAP Financial Measures
OIBDA is defined as "Operating income (loss)" plus "Depreciation and amortization."
OIBDA, which is presented by segment above, is a non-GAAP measure reconciled to "Operating income (loss)" and does not purport to be an alternative to operating income (loss) as a measure of operating performance. We believe this measure is useful to management, investors and other users of our financial information in evaluating operating profitability of our business segments on a more variable cost basis as it excludes the depreciation and amortization expenses related primarily to capital expenditures and acquisitions for those business segments, as well as in evaluating operating performance in relation to our competitors.
The consolidated financial statements of EchoStar for the periods ended December 31, 2023, 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, 2023, filed today with the Securities and Exchange Commission.
EchoStar will host a conference call to discuss its earnings on Friday, March 1, 2024, at noon Eastern Time. The conference call will be broadcast live in listen-only mode on EchoStar's investor relations website at ir.echostar.com. To attend the call, please dial: (877) 484-6065 (U.S.) or (201) 689-8846. When prompted on dial-in, please utilize the conference ID (13744790) or ask for the "EchoStar Corporation Q4 and Full Year 2023 Earnings Conference Call." Please dial in at least 10 minutes before the call to ensure timely participation.
About EchoStar Corporation
EchoStar Corporation (Nasdaq: SATS) is a premier provider of technology, networking services, television entertainment and connectivity, offering consumer, enterprise, operator and government solutions worldwide under its EchoStar®, Boost Mobile®, Boost Infinite, Sling TV, DISH TV, Hughes®, HughesNet®, HughesONtm, and JUPITERtm brands. In Europe, EchoStar operates under its EchoStar Mobile Limited subsidiary and in Australia, the company operates as EchoStar Global Australia. For more information, visit www.echostar.com and follow EchoStar on X (Twitter) and LinkedIn.
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," "goal," "seek," "estimate," "expect," "intend," "project," "continue," "future," "will," "would," "can," "may," "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, 2023 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.
ECHOSTAR CORPORATION | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Dollars in thousands, except share amounts) | ||||||
As of | ||||||
December 31, | December 31, | |||||
2023 | 2022 | |||||
Assets | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 1,821,376 | $ | 2,497,536 | ||
Marketable investment securities | 623,044 | 1,809,898 | ||||
Trade accounts receivable, net of allowance for credit losses of $74,390 | 1,122,139 | 1,182,597 | ||||
Inventory | 665,169 | 625,979 | ||||
Prepaids and other assets | 644,005 | 617,819 | ||||
Other current assets | 16,081 | 23,884 | ||||
Total current assets | 4,891,814 | 6,757,713 | ||||
Noncurrent Assets: | ||||||
Restricted cash, cash equivalents and marketable investment securities | 118,065 | 117,011 | ||||
Property and equipment, net | 9,561,834 | 7,904,957 | ||||
Regulatory authorizations, net | 38,572,980 | 37,395,604 | ||||
Other investments, net | 314,370 | 524,905 | ||||
Operating lease assets | 3,065,448 | 2,823,834 | ||||
Intangible assets, net | 172,892 | 1,113,298 | ||||
Other noncurrent assets, net | 411,491 | 2,110,959 | ||||
Total noncurrent assets | 52,217,080 | 51,990,568 | ||||
Total assets | $ | 57,108,894 | $ | 58,748,281 | ||
Liabilities and Stockholders' Equity (Deficit) | ||||||
Current Liabilities: | ||||||
Trade accounts payable | $ | 774,011 | $ | 1,023,537 | ||
Deferred revenue and other | 754,658 | 833,213 | ||||
Accrued programming | 1,427,762 | 1,298,777 | ||||
Accrued interest | 297,678 | 298,043 | ||||
Other accrued expenses and liabilities | 1,717,826 | 1,436,485 | ||||
Current portion of long-term debt and finance lease obligations | 3,046,654 | 1,552,559 | ||||
Total current liabilities | 8,018,589 | 6,442,614 | ||||
Long-Term Obligations, Net of Current Portion: | ||||||
Long-term debt and finance lease obligations, net of current portion | 19,717,266 | 21,343,561 | ||||
Deferred tax liabilities, net | 5,014,309 | 5,354,756 | ||||
Operating lease liabilities | 3,121,307 | 2,808,774 | ||||
Long-term deferred revenue and other long-term liabilities | 849,131 | 748,384 | ||||
Total long-term obligations, net of current portion | 28,702,013 | 30,255,475 | ||||
Total liabilities | 36,720,602 | 36,698,089 | ||||
Commitments and Contingencies | ||||||
Redeemable noncontrolling interests | 438,382 | 464,359 | ||||
Stockholders' Equity (Deficit): | ||||||
Class A common stock, $0.001 par value, 1,600,000,000 shares authorized, | 140 | 138 | ||||
Class B common stock, $0.001 par value, 800,000,000 shares authorized, | 131 | 131 | ||||
Additional paid-in capital | 8,301,979 | 8,222,599 | ||||
Accumulated other comprehensive income (loss) | (160,056) | (175,267) | ||||
Accumulated earnings (deficit) | 11,737,983 | 13,440,040 | ||||
Total EchoStar stockholders' equity (deficit) | 19,880,177 | 21,487,641 | ||||
Noncontrolling interests | 69,733 | 98,192 | ||||
Total stockholders' equity (deficit) | 19,949,910 | 21,585,833 | ||||
Total liabilities and stockholders' equity (deficit) | $ | 57,108,894 | $ | 58,748,281 | ||
ECHOSTAR CORPORATION | |||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(Dollars in thousands, except per share amounts) | |||||||||
For the Years Ended December 31, | |||||||||
2023 | 2022 | 2021 | |||||||
Revenue: | |||||||||
Service and other revenue | $ | 16,145,763 | $ | 17,596,265 | $ | 18,598,313 | |||
Equipment sales and other revenue | 869,835 | 1,037,981 | 1,220,365 | ||||||
Total revenue | 17,015,598 | 18,634,246 | 19,818,678 | ||||||
Costs and Expenses (exclusive of depreciation and amortization): | |||||||||
Cost of services | 9,510,427 | 10,111,341 | 10,717,333 | ||||||
Cost of sales - equipment and other | 2,434,904 | 2,099,136 | 1,778,471 | ||||||
Selling, general and administrative expenses | 2,989,154 | 3,015,325 | 2,686,279 | ||||||
Depreciation and amortization | 1,597,923 | 1,174,895 | 1,213,946 | ||||||
Impairment of long-lived assets and goodwill | 761,099 | 711 | 245 | ||||||
Total costs and expenses | 17,293,507 | 16,401,408 | 16,396,274 | ||||||
Operating income (loss) | (277,909) | 2,232,838 | 3,422,404 | ||||||
Other Income (Expense): | |||||||||
Interest income, net | 207,374 | 93,240 | 33,903 | ||||||
Interest expense, net of amounts capitalized | (90,357) | (79,217) | (111,151) | ||||||
Other, net | (1,770,792) | 1,088,441 | 4,716 | ||||||
Total other income (expense) | (1,653,775) | 1,102,464 | (72,532) | ||||||
Income (loss) before income taxes | (1,931,684) | 3,335,302 | 3,349,872 | ||||||
Income tax (provision) benefit, net | 296,860 | (798,410) | (828,437) | ||||||
Net income (loss) | (1,634,824) | 2,536,892 | 2,521,435 | ||||||
Less: Net income (loss) attributable to noncontrolling interests, net of tax | 67,233 | 59,172 | 35,150 | ||||||
Net income (loss) attributable to EchoStar | $ | (1,702,057) | $ | 2,477,720 | $ | 2,486,285 | |||
Weighted-average common shares outstanding - Class | |||||||||
Basic | 270,842 | 270,102 | 275,117 | ||||||
Diluted | 270,842 | 307,733 | 313,122 | ||||||
Earnings per share - Class A and B common stock: | |||||||||
Basic net income (loss) per share attributable to EchoStar | $ | (6.28) | $ | 9.17 | $ | 9.04 | |||
Diluted net income (loss) per share attributable to EchoStar | $ | (6.28) | $ | 8.05 | $ | 7.94 | |||
ECHOSTAR CORPORATION | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(In thousands) | |||||||||
For the Years Ended December 31, | |||||||||
2023 | 2022 | 2021 | |||||||
Cash Flows From Operating Activities: | |||||||||
Net income (loss) | $ | (1,634,824) | $ | 2,536,892 | $ | 2,521,435 | |||
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | |||||||||
Depreciation and amortization | 1,597,923 | 1,174,895 | 1,213,946 | ||||||
Impairment of long-lived assets and goodwill | 761,099 | 711 | 245 | ||||||
Realized and unrealized losses (gains) on investments, impairments and other | (46,888) | (72,371) | (7,541) | ||||||
Realized and unrealized losses (gains) on derivatives | 1,693,387 | (1,015,387) | 13,000 | ||||||
Non-cash, stock-based compensation | 51,514 | 82,994 | 59,379 | ||||||
Deferred tax expense (benefit) | (337,222) | 729,587 | 639,708 | ||||||
Changes in allowance for credit losses | 14,600 | 6,590 | (34,635) | ||||||
Change in long-term deferred revenue and other long-term liabilities | 15,825 | 83,453 | 65,943 | ||||||
Other, net | 166,383 | 253,784 | 135,871 | ||||||
Changes in current assets and current liabilities, net | |||||||||
Trade accounts receivable | 20,622 | (74,812) | 206,995 | ||||||
Prepaid and accrued income taxes | 15,836 | (36,115) | 81,197 | ||||||
Inventory | (37,981) | 16,200 | (175,918) | ||||||
Other current assets | (40,290) | 21,737 | (47,144) | ||||||
Trade accounts payable | 4,108 | 90,721 | 86,219 | ||||||
Deferred revenue and other | (78,555) | (71,709) | (62,034) | ||||||
Accrued programming and other accrued expenses | 267,110 | (105,980) | (41,293) | ||||||
Net cash flows from operating activities | 2,432,647 | 3,621,190 | 4,655,373 | ||||||
Cash Flows From Investing Activities: | |||||||||
Purchases of marketable investment securities | (2,407,546) | (1,965,859) | (6,338,641) | ||||||
Sales and maturities of marketable investment securities | 3,710,544 | 4,159,830 | 4,390,903 | ||||||
Purchases of property and equipment | (3,100,921) | (3,050,472) | (1,619,312) | ||||||
Refunds and other receipts of purchases of property and equipment | 38,611 | ? | ? | ||||||
Capitalized interest related to regulatory authorizations | (1,162,473) | (984,309) | (777,885) | ||||||
Proceeds from other debt investments | 148,448 | ? | ? | ||||||
Refund of regulatory authorizations deposit | ? | ? | 337,490 | ||||||
Purchases of regulatory authorizations, including deposits | (2,009) | (7,206,865) | (122,657) | ||||||
Other, net | (33,386) | (11,900) | (116,621) | ||||||
Net cash flows from investing activities | (2,808,732) | (9,059,575) | (4,246,723) | ||||||
Cash Flows From Financing Activities: | |||||||||
Repayment of long-term debt and finance lease obligations | (121,981) | (86,229) | (89,958) | ||||||
Redemption and repurchases of senior notes | (1,460,635) | (2,056,821) | (2,901,818) | ||||||
Proceeds from issuance of senior notes | 1,500,000 | 2,000,000 | 6,750,000 | ||||||
Repurchases of convertible notes | (182,834) | ? | ? | ||||||
Early debt extinguishment gains (losses) | 73,024 | ? | ? | ||||||
Net proceeds from Class A common stock options exercised and stock issued under the | 10,598 | 27,438 | 68,182 | ||||||
Purchase of Northstar Manager, LLC's ownership interest in Northstar Spectrum | (109,432) | ? | ? | ||||||
Treasury share repurchase | ? | (89,303) | (261,436) | ||||||
Debt issuance costs and debt (discount) premium | 21,635 | (51,121) | (34,459) | ||||||
Other, net | (7,496) | (18,413) | (15,507) | ||||||
Net cash flows from financing activities | (277,121) | (274,449) | 3,515,004 | ||||||
Effect of exchange rates on cash and cash equivalents | 3,004 | (2,306) | (3,749) | ||||||
Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents | (650,202) | (5,715,140) | 3,919,905 | ||||||
Cash, cash equivalents, restricted cash and cash equivalents, beginning of period | 2,561,803 | 8,276,943 | 4,357,038 | ||||||
Cash, cash equivalents, restricted cash and cash equivalents, end of period | $ | 1,911,601 | $ | 2,561,803 | $ | 8,276,943 | |||
SOURCE EchoStar Corporation
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