v3.3.1.900
Segment Reporting
12 Months Ended
Dec. 31, 2015
Segment Reporting  
Segment Reporting

 

Note 17.Segment Reporting

 

Operating segments are business components of an enterprise for which separate financial information is available and regularly evaluated by the chief operating decision maker (“CODM”), who for EchoStar is the Company’s Chief Executive Officer.  Under this definition, we operate the following three primary business segments:

 

Hughes — which provides satellite broadband internet access to North American consumers and broadband network services and equipment to domestic and international enterprise markets.  The Hughes segment also provides managed services to large enterprises and solutions to customers for mobile satellite systems.

 

EchoStar Technologies (“ETC”) — which designs, develops and distributes secure end-to-end video technology solutions including digital set-top boxes and related products and technology, primarily for satellite TV service providers and telecommunication companies.  Our EchoStar Technologies segment also provides digital broadcast operations, including satellite uplinking/downlinking, transmission services, signal processing, conditional access management, and other services, primarily to DISH Network and Dish Mexico.  In addition, we provide our TV Anywhere technology through Slingbox® units directly to consumers via retail outlets and online, as well as to the pay-TV operator market.  Beginning in 2015, this segment also includes Move Networks, our over-the-top (“OTT”), Streaming Video on Demand (“SVOD”) platform business, which includes assets acquired from Sling TV Holding L.L.C. (formerly DISH Digital Holding L.L.C.), and primarily provides support services to DISH Network’s Sling TV operations.  In 2016, we plan to introduce a security and home automation solution provided directly to consumers.

 

EchoStar Satellite Services — which uses certain of our owned and leased in-orbit satellites and related licenses to provide satellite services on a full-time and occasional-use basis primarily to DISH Network, Dish Mexico, U.S. government service providers, internet service providers, broadcast news organizations, programmers, and private enterprise customers.

 

The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, or EBITDA.  Our segment operating results do not include real estate and other activities, costs incurred in certain satellite development programs and other business development activities, expenses of various corporate departments and our centralized treasury operations, including income from our investment portfolio and interest expense on our debt.  These activities are accounted for in the “All Other and Eliminations” column in the table below.  Total assets by segment have not been reported herein because the information is not provided to our CODM on a regular basis.  The Hughes Retail Group is included in our Hughes segment and our CODM reviews separate HRG financial information only to the extent such information is included in our periodic filings with the SEC.  Therefore, we do not consider HRG to be a separate operating segment.

 

Prior to 2015, our Move Networks business, including certain assets distributed to us in August 2014 in connection with the Exchange Agreement with Sling TV Holding (see Notes 6, 10 and 19), was managed separately from our existing operating segments and was reported within “All Other and Eliminations.”  In the first quarter of 2015, we assigned management responsibility for our Move Networks business to our EchoStar Technologies segment, where it continues to be managed and reported as a separate reporting unit.  All prior period amounts have been retrospectively adjusted to present operations of our Move Networks business in our EchoStar Technologies segment.

 

For the years ended December 31, 2015, 2014 and 2013, transactions between segments were not significant.

 

The following table presents revenue, EBITDA, and capital expenditures for each of our operating segments:

 

 

 

 

 

 

 

EchoStar

 

All

 

 

 

 

 

 

 

EchoStar

 

Satellite

 

Other and

 

Consolidated

 

 

 

Hughes

 

Technologies

 

Services

 

Eliminations

 

Total

 

 

 

(In thousands)

 

For the Year Ended December 31, 2015

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

1,344,945

 

$

1,297,510

 

$

489,842

 

$

11,417

 

$

3,143,714

 

Intersegment revenue

 

$

2,395

 

$

688

 

$

749

 

$

(3,832

)

$

 

Total revenue

 

$

1,347,340

 

$

1,298,198

 

$

490,591

 

$

7,585

 

$

3,143,714

 

EBITDA

 

$

396,684

 

$

106,745

 

$

412,607

 

$

(50,683

)

$

865,353

 

Capital expenditures

 

$

285,499

 

$

50,593

 

$

101,215

 

$

266,213

 

$

703,520

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Year Ended December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

1,325,887

 

$

1,626,826

 

$

481,579

 

$

11,286

 

$

3,445,578

 

Intersegment revenue

 

$

1,831

 

$

540

 

$

2,876

 

$

(5,247

)

$

 

Total revenue

 

$

1,327,718

 

$

1,627,366

 

$

484,455

 

$

6,039

 

$

3,445,578

 

EBITDA

 

$

356,871

 

$

154,786

 

$

419,442

 

$

(28,518

)

$

902,581

 

Capital expenditures

 

$

218,607

 

$

48,616

 

$

28,734

 

$

384,069

 

$

680,026

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Year Ended December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

1,215,783

 

$

1,730,433

 

$

326,828

 

$

9,408

 

$

3,282,452

 

Intersegment revenue

 

$

2,343

 

$

412

 

$

3,349

 

$

(6,104

)

$

 

Total revenue

 

$

1,218,126

 

$

1,730,845

 

$

330,177

 

$

3,304

 

$

3,282,452

 

EBITDA

 

$

281,513

 

$

136,537

 

$

235,993

 

$

(3,946

)

$

650,097

 

Capital expenditures

 

$

186,561

 

$

56,935

 

$

12,700

 

$

135,677

 

$

391,873

 

 

The following table reconciles total consolidated EBITDA to reported “Income (loss) before income taxes” in our consolidated statements of operations and comprehensive income (loss):

 

 

For the Years Ended December 31,

 

 

 

2015

 

2014

 

2013

 

 

 

(In thousands)

 

EBITDA

 

$

865,353

 

$

902,581

 

$

650,097

 

Interest income and expense, net

 

(111,637

)

(162,247

)

(177,898

)

Depreciation and amortization

 

(528,158

)

(556,676

)

(507,111

)

Net income (loss) attributable to noncontrolling interests

 

(3,986

)

(5,325

)

876

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

$

221,572

 

$

178,333

 

$

(34,036

)

 

 

 

 

 

 

 

 

 

 

 

 

Geographic Information and Transactions with Major Customers

 

Geographic Information.  Revenue is attributed to geographic regions based upon the location where the goods and services are provided.  North America revenue includes transactions with North America customers.  All other revenue includes transactions with customers in Asia, Africa, Australia, Europe, South America, and the Middle East.  The following table summarizes total long-lived assets and revenue attributed to the North America and other foreign locations.

 

 

As of December 31,

 

Long-lived assets:

 

2015

 

2014

 

 

 

(In thousands)

 

North America:

 

 

 

 

 

United States

 

$

4,440,590 

 

$

4,313,649 

 

Other

 

1,242 

 

585 

 

All other

 

158,253 

 

155,229 

 

 

 

 

 

 

 

Total

 

$

4,600,085 

 

$

4,469,463 

 

 

 

 

 

 

 

 

 

 

 

For the Years Ended December 31,

 

Revenue:

 

2015

 

2014

 

2013

 

 

 

(In thousands)

 

North America:

 

 

 

 

 

 

 

United States

 

$

2,685,665 

 

$

2,958,539 

 

$

2,819,968 

 

Other

 

203,813 

 

220,122 

 

215,787 

 

All other

 

254,236 

 

266,917 

 

246,697 

 

 

 

 

 

 

 

 

 

Total

 

$

3,143,714 

 

$

3,445,578 

 

$

3,282,452 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transactions with Major Customers.  For the years ended December 31, 2015, 2014 and 2013, our revenue included sales to one major customer.  The following table summarizes sales to this customer and its percentage of total revenue.

 

 

For the Years Ended December 31,

 

 

 

2015

 

2014

 

2013

 

 

 

(In thousands)

 

Total revenue:

 

 

 

DISH Network:

 

 

 

 

 

 

 

Hughes segment

 

$

105,181 

 

$

112,692 

 

$

113,869 

 

EchoStar Technologies segment

 

1,141,435 

 

1,443,419 

 

1,560,905 

 

EchoStar Satellite Services segment

 

423,465 

 

407,236 

 

247,174 

 

Other

 

11,404 

 

11,244 

 

9,687 

 

 

 

 

 

 

 

 

 

Total DISH Network

 

1,681,485 

 

1,974,591 

 

1,931,635 

 

All other

 

1,462,229 

 

1,470,987 

 

1,350,817 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

3,143,714 

 

$

3,445,578 

 

$

3,282,452 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of total revenue:

 

 

 

 

 

 

 

DISH Network

 

53.5 

%

57.3 

%

58.8 

%

 

 

 

 

 

 

 

 

All other

 

46.5 

%

42.7 

%

41.2 

%