This presentation 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 presentation, the words "believe," "anticipate," "estimate," "except," "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. 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 year ended December 31, 2019 and EchoStar's Annual Report on Form 10-Q for the quarter ended June 30, 2020 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.
Slide 2 ECHOSTAR PROPRIETARY
State of Our Business
TTM Revenue of $1.9b, Net
$
Loss of $112m, and
Adjusted EBITDA of $632m
Strong balance sheet
with no net debt
S-Band Licenses over
Europe and Mexico
with terrestrial access
Global NGSO
S-Band Rights
HTS satellite (Jupiter 3) under construction that will more than double sellable Ka-band capacity
1.6
Million HughesNet
subscribers
Offering
consumer service
in the US and Latin America
Diversified Enterprise
Business with
substantial backlog
Existing fleet of 7 owned and 3 leased Ka, Ku, and S-band payloads/satellites
Slide 3 ECHOSTAR PROPRIETARY
Our Global Presence
EchoStar Corporate: Englewood, Colorado
EchoStar Satellite Services: Englewood, Colorado
Hughes Network Systems: Germantown, Maryland
Worldwide Offices
G65675a P 09/16/20
~ 2,500 employees across theworld
Slide 4 ECHOSTAR PROPRIETARY
Our Goals
Connecting People, Enterprises, and Things
Deliver essential broadband services and solutions largest high-throughput satellite network over the the lowest cost per bit
Complement our GEO fleet with NGSO/LEO capacity technologies to extend coverage to our customers significantly increase the size of the market we
Continue as a trusted partner for technology
services globally that support ubiquitous connectivity
Develop and monetize our portfolio of spectrum variety of ways including full integration of S-band into 5G networks
Slide 5 ECHOSTAR PROPRIETARY
Our Business Segments
EchoStar Corporation
HSS Corp
Corporate and Other
Hughes
Consumer satellite broadband with 1.580m subscribers in the Americas
Leading provider of satellite broadband network solutions to enterprises and governments
#1 global VSAT provider with four decades of networking expertise
OneWeb (LEO) technology partner
Joint Venture equity investment with YahSat to provide broadband services in Africa, the Middle East, and SW Asia
EchoStar Satellite
Services (ESS)
E9 and E105 FSS satellites
Advanced satellite programs and spectrum management
EchoStar Global and EchoStar Mobile and associated S-Band spectrum
E24 / J3 satellite construction
Joint Venture Equity Investments
Other Strategic Investments
Slide 6 ECHOSTAR PROPRIETARY
Recent Highlights
Revenue of $474m in Q3-20 and $1,399m YTD
Net Income of $23m in Q3-20 and Net Loss of $49m YTD
Adjusted EBITDA of $167m in Q3-20 and $476m YTD
Free Cash Flow, defined as Adjusted EBITDA minus Capital Expenditures, of $69m in Q3-20 and $181m YTD-20
Q3-20net subscriber additions of 38,000 driven by LatAm markets
Strong balance sheet - Cash and Marketable securities of $2.5b with net debt of zero
Agreed in principle to invest in OneWeb (LEO) and continue as technology and distribution partner
Filed application to participate in Federal Communications Commission Rural Digital Opportunity Fund (RDOF)
Strategic collaboration with Inmarsat for inflight connectivity
Slide 7 ECHOSTAR PROPRIETARY
Revenue ($m)
$2,000
$1,900
$1,800
$1,700
$1,600
$1,500
$1,400
$1,300
$1,200
$1,100
$1,000
$1,886
$1,763
• 9% 3-Year CAGR (2016 - 2019)
for consolidated EchoStar
$1,525
$1,447
• 10% 3-Year CAGR for Hughes
segment (2016 - 2019)
• EchoStar 17/ Jupiter 2 in service Q2-17
2016
2017
2018
2019
Hughes
ESS
Corporate and Other
Slide 8 ECHOSTAR PROPRIETARY
Adjusted EBITDA ($m)
$800
$700
$555
$583
$600
$451
$438
$500
$400
$300
$200
$100
$-
$(100)
2016
2017
2018
2019
Hughes
ESS
Corporate and Other
10% 3-year CAGR (2016 - 2019) for consolidated EchoStar
12% 3-year CAGR for Hughes segment (2016 - 2019)
EchoStar 17/ Jupiter 2 in service Q1-17
Corporate and Other includes equity of unconsolidated affiliates which causes some variability
Slide 9 ECHOSTAR PROPRIETARY
Capital Expenditures ($m)
$800 $700
$600
$593
$566
$477
$500
$418
$400
$300
$200
$100
$-
2016
2017
2018
2019
• 2016 estimated for continuing operations post BSS transaction which was completed in 2019
Main categories of capital expenditures include consumer premise, new satellites and associated infrastructure, enterprise solutions, and other corporate needs
Slide 10 ECHOSTAR PROPRIETARY
Free Cash Flow ($m)
$400
• Free Cash Flow defined as
$300
Adjusted EBITDA less
capital expenditures
$200
$78
$165
$100
$-
$(100)
($115)
$(200)
($154)
2016
2017
2018
2019
Slide 11 ECHOSTAR PROPRIETARY
Liquidity and Leverage ($m)
HSS
Echo
Corp
Corp
Cash and Marketable Securites
$
1,862
$
2,506
Debt
Sr. Unsecured 7.625% Due 2021
$
900
$
900
Sr. Secured 5.25% Due 2026
$
750
$
750
Sr. Unsecured 6.625% Due 2026
$
750
$
750
In-Orbit Incentives, Cap Lease, Other *
$
33
$
57
$
2,433
$
2,457
Net Debt
$
571
$
(49)
Indebtedness to Cash Flow *
Gross - Secured
1.1x
Gross - Total
3.5x
Net
0.8x
* HSS Corp based on covenant definitions
All public debt resides at HSS Corporation
HSSC Covenants:
Secured is 3.5x
Total is 5.5x
Intent is to repay $900m of Sr. Unsecured 7.625% due June of 2021
Data as of 9/30/20
Slide 12 ECHOSTAR PROPRIETARY
Hughes Segment
Slide 13 ECHOSTAR PROPRIETARY
Hughes
Hughes
Consumer
~ 71% of revenues in Q3-20
1.216m US subscribers as of 9/30/20
364k subscribers in Brazil, Colombia, Peru, Ecuador, Chile, and Mexico
High incremental margins driven by owner economics on satellites
Community Wi-Fi with Facebook
US constrained until J3 launch but available LatAm capacity expected to drive growth
Brazil operations - 80% ownership of JV with YahSat
Enterprise
~ 29% of revenues in Q3-20
Backlog of $1.1 billion as of 9/30/20
Managed service provider for Enterprises and Governments on a global basis
Operating service entities in the US, Brazil (80%), Europe, and India (85%)
Equipment and Infrastructure sales in more than 100 countries
OneWeb LEO technology partner
Mobile Satellite services group focused on IOT and mobility applications
Other
JV with YahSat to provide satellite broadband services across Africa, the Middle East, and SW Asia. 20% ownership included in equity in unconsolidated affiliates
43% ownership in Hughes Systique, a provider of R&D software services, included in consolidated results
Slide 14 ECHOSTAR PROPRIETARY
Hughes Consumer - US Addressable Market
138m Households (H/H) in the United States: ~ 14.5m currently included in addressable market
By only requiring low cost CPE to be installed at the service location, Hughes provides broadband services to areas that are financially unattractive to other technologies
H/H (m)
21.0
18.0
15.0
12.0
9.0
6.0
3.0
-
H/H Count (m)
Expansion with J3 Service
Hughes - Incremental H/H's with speeds of < 25 Mbps
FCC - Speeds of < 25 Mbps
FCC 477 file represents 6.7m H/H have no access or access to speeds <25 Mbps
We estimate an additional 7.9m H/H that have access to speeds <25 Mbps based on internal estimates and third party research
We anticipate an expansion of our addressable market with the J3 launch due to the ability to better compete with 3m DSL H/H that have access to service between 25 and 50 Mbps
Slide 15 ECHOSTAR PROPRIETARY
Hughes Consumer - LatAm Addressable Market
~ 179m households (H/H) in the major Latin America countries by 2021
26m upper income households are in unserved and underserved areas
12.0
10.5
10.0
8.0
(m)
6.8
6.0
H/H
4.0
3.5
2.0
1.6
1.4
1.1
1.0
0.6
0.0
Brazil
Mexico
Argentina Columbia
Chile
Peru
Ecuador
Other
Existing Retail Markets
Addressed through VARs
Retail consumer services in Brazil, Mexico, Columbia, Chile, Peru, and Ecuador
Other markets addressed through VARs
Brazil accounts for 40% of addressable market of 26m
Satellite is not only rural. Sao Paulo, Brazil, with extensive infrastructure, is the largest source of HughesNet Brazil subscribers. Other countries have similar characteristics
US nationwide service with 25 Mbps download speeds (FCC recognized) plus voice
Supported by Jupiter 1 (E17), Jupiter 2 (E19), SPACEWAY 3, Al Yah 3, Eutelsat 65WA and Telesat T19V
Jupiter 3, once in service, will more than double our sellable Ka capacity
Slide 17 ECHOSTAR PROPRIETARY
Hughes Enterprise
Enterprise
Managed Service Provider
Leading provider to US large blue chip and medium/small enterprises as well internationally in Brazil, India, and across Europe
Diversified portfolio of customers across a range of industries including Lottery, Retail, Hospitality, Restaurant, Finance and Banking, and Oil and Gas
Utilize a variety of communication technologies including terrestrial
Equipment Sales
Leading global supplier of satellite ground infrastructure and terminals
#1 global VSAT provider with 50% VSAT market share
Scalable systems allowing growth from startup to massive consumer buildouts
Industry leading technology providing increased efficiency and profitability
Equipment in use on more than 1,100 aircraft worldwide
Other
OneWeb (LEO) technology partner
Support service to IFC providers
Government programs including Defense
MobileSat Solutions Group
Slide 18 ECHOSTAR PROPRIETARY
GEO versus LEO
GEO and LEO systems are expected to be complementary, and as new systems come on-line and mature, the optimal solution will be a hybrid of both
GEO provides targeted high capacity at a low cost per bit while LEO provides ubiquitous coverage and supports low latency applications
EchoStar agreed in principle to invest in OneWeb (LEO) and to continue as technology and distribution partner
GEO
LEO
• 100% of capacity in areas where there are
• Capacity is evenly distributed across the
customers
Earth's surface ~ 70% covered by water
• Provides speed and bandwidth at an
• Well suited for enterprise verticals including
attractive price
government and mobility applications like
• The #1 use of internet is video which is well
aeronautical and maritime
suited for GEO
• Cost of phased-array antenna not suited for
• Successful track record
consumer application
• Modern LEO systems in testing phase
• Regulatory / Orbital debris and collision risk
Slide 19 ECHOSTAR PROPRIETARY
Government Subsidies / Rural Digital Opportunity Fund (RDOF)
Program:
The FCC has established RDOF, a 10-year, $20.4 billon subsidy effort to help close the digital divide
Phase 1 of the program is $16 billion or $1.6 billion per year in subsidy funding
Phase 1 is focused on ~ 6m households
Build out requirements are 40% by end of Year 3, with 20% per year after that
EchoStar:
Filed an application to participate in Phase 1 bidding
Currently in auction quiet period
RDOF rules provide preference to fiber and to a lesser extent fixed wireless. Because of this, RDOF will cover far fewer H/H as the high cost to deploy fiber consumes the budget
We do not anticipate any negative material impact to our target market due to its size and the cost challenges of serving the low density areas where the majority of our subscribers reside
We see potential upside if we can ultimately secure funding
Slide 20 ECHOSTAR PROPRIETARY
EchoStar Satellite Services
Slide 21 ECHOSTAR PROPRIETARY
EchoStar Satellite Services (ESS)
Fixed Satellite Services (FSS)
Full and part-timeKu-band transponder capacity
Enterprise, broadcast, and government services applications
Fleet consists of two FSS Satellites:
EchoStar 105: Pre-paid lease with SES. Launched in 2017 and resides in the 105 degree west slot
EchoStar 9: Owned satellite. Launched in 2003 and resides in the 121 degree west slot
Advanced Satellite Programs and Spectrum Management
Slide 22 ECHOSTAR PROPRIETARY
Corporate and Other Segment
Slide 23 ECHOSTAR PROPRIETARY
Corporate and Other Segment
Corporate and Other
EchoStar Global
EchoStar
Mobile
Other
Portfolio of attractive global spectrum
Goal to deploy a hybrid GEO/NGSO satellite infrastructure that will support service provision on a global basis
Support future communication standards including 3GPP/5G and narrowband applications such as IOT
Launched two satellites in Q3-20 expected to bring rights into use
Slide 24 ECHOSTAR PROPRIETARY
Operates a mobile satellite network with complementary ground component providing connectivity services to businesses across Europe and the North and Mediterranean Seas
Target market is for applications in connected vehicle, industrial, fisheries, resource extraction, and environmental and Smart-Grid monitoring
Licenses for 30 MHz of 2GHz MSS spectrum with covering 500m POP's
Support provided by the EchoStar 21 satellite and Eutelsat 10A S-Band payload
Developing a unique portfolio of global S-band spectrum rights, including rights to develop hybrid next-gen mobile satellite services integrated with complementary terrestrial rights; developing similar rights in other attractive frequency bands
ITU priority to utilize up to 75 MHz of S-band globally for new 5G NGSO network; New networks will leverage/integrate in-orbit GEO assets and priority filings covering the Americas, Europe, Middle East and Africa
Planned network features include:
Global 5G connectivity with seamless terrestrial integration
Aero and UAV (urban air mobility and autonomous delivery)
Ubiquitous 5G automotive connectivity
Public protection and disaster Relief
Health monitoring
Slide 25 ECHOSTAR PROPRIETARY
Summary
Slide 26 ECHOSTAR PROPRIETARY
Outlook
Strong core business delivering essential broadband services and solutions
Jupiter 3 satellite, which will more than double capacity, expected to drive robust growth in markets as well as provide additional enterprise opportunities including cellular backhaul and Wi
Engineering expertise and technology innovator
Evolving complex hybrid networks anticipated to size of our addressable market significantly
Well positioned with S-band assets to participate evolution of 5G and IOT focused markets
Strong balance sheet; continue to seek opportunities deploy cash for both organic and inorganic growth
Slide 27 ECHOSTAR PROPRIETARY
Reconciliation of GAAP to Non-GAAP Measure
Slide 28 ECHOSTAR PROPRIETARY
Adjusted EBITDA Reconciliation ($m)
2016
2017
2018
2019
TTM
Net income (loss)
$
181
$
393
$
(39)
$
(74)
$
(112)
Interest income and expense, net
67
140
139
169
155
Income tax provision, net
33
(155)
7
20
14
Depreciation and amortization
304
386
457
491
521
Net income (loss) from discontinued operations
(136)
(271)
(94)
(39)
7
Net income (loss) attributable to noncontrolling interests
(1)
(1)
(2)
11
19
EBITDA
$
447
$
492
$
469
$
578
$
604
(Gains) losses on investments, net
(10)
(53)
13
(29)
37
Impairment of long-lived assets
-
11
65
-
-
Litigation expense
-
3
3
26
(1)
Foreign currency transaction (gains) losses, net
1
(1)
16
12
(0)
License fee dispute - India, net of noncontrolling interests
-
-
-
(3)
(8)
Vendor settlement
-
-
(10)
-
-
Adjusted EBITDA
$
438
$
451
$
555
$
583
$
632
Slide 29 ECHOSTAR PROPRIETARY
This is an excerpt of the original content. To continue reading it, access the original document here.
EchoStar Corporation published this content on 05 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 November 2020 17:54:05 UTC
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