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.

EchoStar (PRNewsfoto/EchoStar Corporation)

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 December 31,		For the years ended December 31,
	For the three months ended December 31,		For the years ended December 31,
	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 Wireless		5G Network Deployment		Broadband and Satellite Services		Eliminations		Consolidated
For the Year Ended December 31, 2023	Pay-TV		Retail Wireless		5G Network Deployment		Broadband and Satellite Services				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 Wireless		5G Network Deployment		Broadband and Satellite Services		Eliminations		Consolidated
For the Year Ended December 31, 2022	Pay-TV		Retail Wireless		5G Network Deployment		Broadband and Satellite Services				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 Wireless		5G Network Deployment		Broadband and Satellite Services		Eliminations		Consolidated
For the three months Ended December 31, 2023	Pay-TV		Retail Wireless		5G Network Deployment		Broadband and Satellite Services				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 Wireless		5G Network Deployment		Broadband and Satellite Services		Eliminations		Consolidated
For the three months Ended December 31, 2022	Pay-TV		Retail Wireless		5G Network Deployment		Broadband and Satellite Services				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®, HughesON™, and JUPITER™ 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 and $59,790, respectively		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, 140,153,020 and 138,128,368 shares issued and outstanding, respectively		140		138
Class B common stock, $0.001 par value, 800,000,000 shares authorized, 131,348,468 shares issued and outstanding		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 A and B common stock:
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 Employee Stock Purchase Plan		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

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