Hughes Communications Announces Fourth Quarter and Full Year 2010 Results

Record New Consumer Activations

Record Adjusted EBITDA

News provided by

Hughes Communications, Inc.

Mar 03, 2011, 08:00 ET

GERMANTOWN, Md., March 3, 2011 /PRNewswire/ -- Hughes Communications, Inc. (Nasdaq: HUGH) ("Hughes"), the global leader in broadband satellite network solutions and services, today announced its financial results for the fourth quarter and full year ended December 31, 2010. Hughes' consolidated operations are classified into five reportable segments: North America Broadband, International Broadband, Telecom Systems, HTS Satellite, and Corporate and Other. The North America Broadband, International Broadband, Telecom Systems, and HTS Satellite segments represent all the operations of Hughes Network Systems, LLC ("HNS"), Hughes' principal operating subsidiary.

(Logo: http://photos.prnewswire.com/prnh/20110112/NE29456LOGO )

Fourth Quarter 2010 Financial Highlights:

  • Consolidated revenues of $281 million for growth of 7% over the fourth quarter of 2009.
  • Strong Consumer business growth:
    • Record subscriber gross adds of 59,000 and net adds of 20,000 for growth of 29% and 40% respectively over the fourth quarter of 2009.
    • Revenue increased by 13% and services revenue by 17% over the fourth quarter of 2009.
    • Consumer ARPU increased to $75 from $72 in the fourth quarter of 2009.
    • Churn of 2.27%.
  • Record Adjusted EBITDA of $71 million, an increase of 25% over the fourth quarter of 2009.
  • Operating income of $32 million for a 61% growth over the fourth quarter of 2009; Net Income attributable to stockholders of $16.9 million, compared to $2.4 million in the fourth quarter of 2009; earnings per share of $0.74 in the fourth quarter of 2010 compared to $0.11 in the fourth quarter of 2009, both on a fully diluted basis.
  • New orders of $307 million for a 13% growth over the fourth quarter of 2009, with major orders from CVS, Carter's, GTECH, Row 44, Footlocker, T.J.Maxx, Shell, Denny's, and Barrett Xplore in our North America broadband business; ADB, Avanti, BP, Camelot, Telespazio, Global Crossing, Telemar, Tecban, Central Bank of India, BEL India, and State Bank of India in our International broadband business; and Boeing and THURAYA in our Mobile Satellite business.

Full Year Ended December 31, 2010 Financial Highlights:

  • Consolidated total revenues of $1,043 million for a 3% growth over the full year ended December 31, 2009, or 6% growth excluding revenues from the discontinued contract with Telematics.
  • Consolidated services revenues of $791 million for a growth of 11% over the full year ended December 31, 2009, or 14% excluding revenue from the discontinued contract with Telematics.
  • Continued strong growth in consumer business over the full year ended December 31, 2009:
    • Revenue of $477 million, up 14%; service revenue up 19%.
    • Subscriber gross adds of 213,000 and net adds of 74,000.
    • Total subscriber base of 578,000 as of December 31, 2010, for a growth of 15% over the subscriber base as of December 31, 2009.
    • Churn of 2.1%.
  • Record Adjusted EBITDA of $227 million for a growth of 30% over the full year ended December 31, 2009.
  • Net Income attributable to stockholders of $22.8 million and earnings per share (fully diluted) of $1.00 compared to a net loss of $52.7 million and a loss of $2.46 per share in the full year ended December 31, 2009.
  • Strong liquidity with cash, cash equivalents, and marketable securities of $183 million as of December 31, 2010.
  • New orders of $1,297 million for a growth of 27% over the full year ended December 31, 2009, resulting in a record non-consumer backlog of $1,064 million, a 27% growth over the backlog at December 31, 2009.

Set forth below are tables highlighting certain of Hughes' and HNS' results for the three and twelvemonths ended December 31, 2010 and 2009.

Hughes Communications, Inc.



Three Months

Twelve Months



Ended December 31,

Ended December 31,

(Dollars in thousands)

2010

2009

2010

2009












Revenue









    North America Broadband

$          191,187

$     175,306

$          733,750

$          690,279

    International Broadband

62,520

60,961

205,607

203,886

    Telecom Systems

22,528

25,069

95,069

112,500

    HTS Satellite

3,317

-

3,317

-

    Corporate and Other

1,932

904

5,584

3,034

    Total

$          281,484

$     262,240

$       1,043,327

$       1,009,699












Operating income (loss)









    North America Broadband

$            24,347

$       16,400

$            67,884

$             (7,991)

    International Broadband

6,520

5,168

10,571

15,120

    Telecom Systems

2,149

3,485

14,183

14,227

    HTS Satellite

(573)

(37)

(3,350)

(37)

    Corporate and Other

(937)

(5,427)

(3,664)

(9,007)

    Total


$            31,506

$       19,589

$            85,624

$            12,312












Net income (loss) attributable to HCI stockholders

$            16,880

$         2,367

$            22,787

$           (52,693)












Adjusted EBITDA*

$            70,778

$       56,482

$          226,771

$          173,929












New Orders

$          307,462

$     271,470

$       1,296,604

$       1,022,922













Hughes Network Systems, LLC



Three Months

Twelve Months



Ended December 31,

Ended December 31,

(Dollars in thousands)

2010

2009

2010

2009












Revenue









    North America Broadband

$          191,187

$     175,306

$          733,750

$          690,279

    International Broadband

62,520

60,961

205,607

203,886

    Telecom Systems

22,528

25,069

95,069

112,500

    HTS Satellite

3,317

-

3,317

-

    Total

$          279,552

$     261,336

$       1,037,743

$       1,006,665












Operating income (loss)









    North America Broadband

$            24,347

$       16,400

$            67,884

$             (7,991)

    International Broadband

6,520

5,168

10,571

15,120

    Telecom Systems

2,149

3,485

14,183

14,227

    HTS Satellite

(573)

(37)

(3,350)

(37)

    Total


$            32,443

$       25,016

$            89,288

$            21,319












Net income (loss) attributable to HNS

$            17,361

$         7,229

$            25,393

$           (44,905)












Adjusted EBITDA*

$            71,095

$       55,922

$          228,645

$          174,647












New Orders

$          304,916

$     270,742

$       1,290,331

$       1,020,324











* For the definition of Adjusted EBITDA, see "Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures" below.

Recent Highlights:

  • EchoStar Corporation (Nasdaq: SATS) and Hughes announced an agreement pursuant to which EchoStar will acquire all of the outstanding equity of Hughes and its subsidiaries including its principal operating subsidiary, HNS, valued at approximately $2 billion, including debt.
  • HNS was awarded a contract valued at over US $27 million from Star Satellite Communications Company PJSC, a wholly owned subsidiary of Al Yah Satellite Communications Company PrJSC (Yahsat) based in the United Arab Emirates for the sale of satellite system equipment. 
  • HNS was selected by Boeing to provide the Ground Communications Network (GCN) for the MEXSAT Satellite Based Network (SBN) system. HNS will supply system design and development engineering, fabrication and development of gateways, factory integration, and test of all subsystems, as well as site installation and final delivery into service.
  • Leading children's apparel brand, Carter's, Inc., has agreed to a major network upgrade to deliver stronger security, better performance, and in-store wireless connectivity to be provided by HNS.  This major upgrade to all of the nearly 500 retail sites provides significant new functionality.
  • HNS announced its managed Voice-over-IP (VoIP) solution for the government market. Using the new Hughes ActiveQoS™ technology, Hughes can provide superior voice quality over affordable broadband, eliminating the need for agencies to invest in expensive, leased line Multiprotocol Label Switching (MPLS) networks.
  • HNS shipped more than 327,000 broadband satellite terminals in 2010, the most ever in one year, bringing its cumulative number shipped worldwide to more than 2.5 million.
  • HNS announced the launch of its new M2M (machine-to-machine) broadband service that enables the utility, energy, and other industries with remote unmanned equipment to extend faster network intelligence to their entire infrastructure, regardless of hard-to-reach locations or environmental conditions.
  • HNS placed fourth among the Global Top Twenty operators worldwide on the World Teleport Association's annual Top Teleport Operator Rankings for 2010.
  • HNS' HN9400 dual band satellite router received a 2010 Satellite Spotlight Product of the Year Award from Technology Marketing Corp. Spearheading the industry's move to high capacity Ka-band satellite systems, the Hughes HN9400 is the newest member of its market-leading family of routers, designed to deliver the maximum performance on today's Ku- or Ka-band platforms, while being future-proof for next generation, high-throughput systems.

To summarize, Pradman Kaul, president and CEO, said, "The highlight in the fourth quarter was the stand-out performance by our consumer business. We activated nearly 59,000 new subscribers in Q4, an all-time quarterly record, while also increasing ARPU. We added a net of 74,000 subscribers in 2010 and we recorded over $1 billion of new orders in 2010, as a result of which our non-consumer backlog was a healthy $1.1 billion at year end 2010. The construction of our Jupiter™ satellite is proceeding well and is on-time and on-budget; we are on track to launch Jupiter in the first half of 2012."

Commenting on Hughes' financial performance, Grant Barber, executive vice president and CFO, said, "The momentum from the third quarter of 2010 in delivering strong profitability continued in the fourth quarter of 2010. In FY 2010, Hughes' Adjusted EBITDA was an all-time high of $227 million, Net Income attributable to stockholders was $22.8 million, and we delivered EPS of $1.00 in 2010, a significant turnaround from the loss of $2.46 in 2009. This profitability expansion coupled with effective working capital management resulted once again in delivering an impressive $149 million of cash from operating activities in 2010 and we ended the year with strong consolidated cash, cash equivalents, and marketable securities of $183 million."

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

The following table reconciles the differences between Hughes' Net Income (Loss), as determined under United States of America Generally Accepted Accounting Principles (GAAP),and Adjusted EBITDA.

Hughes Communications, Inc.



Three Months

Twelve Months



Ended December 31,

Ended December 31,

(Dollars in thousands)

2010

2009

2010

2009












Net income (loss) attributable to HCI stockholders

$             16,880

$               2,367

$             22,787

$            (52,693)

Add:









   Equity incentive plan compensation

1,835

1,898

7,514

7,371

   Interest expense

13,216

16,994

59,345

64,119

   Income tax expense

1,380

1,656

5,716

2,446

   Depreciation and amortization

35,974

29,522

131,586

102,731

   Long-term incentive/retention cash plan

-

-

-

1,538

   Sea Launch impairment

-

-

-

44,400

   Data Synapse impairment

-

-

-

1,000

   HTI investment impairment

-

5,239

-

5,239

   Class action settlement

1,866

-

1,866

-

Less:









   Interest income

(373)

(1,194)

(2,043)

(2,222)

Adjusted EBITDA*

$             70,778

$             56,482

$           226,771

$           173,929

The following table reconciles the differences between HNS' Net Income (Loss),as determined under GAAP, and Adjusted EBITDA.

Hughes Network Systems, LLC



Three Months

Twelve Months



Ended December 31,

Ended December 31,

(Dollars in thousands)

2010

2009

2010

2009












Net income (loss) attributable to HNS

$             17,361

$              7,229

$             25,393

$           (44,905)

Add:









   Equity incentive plan compensation

1,754

1,816

7,187

6,933

   Interest expense

13,211

16,988

59,324

64,094

   Income tax expense

1,360

1,661

5,691

2,436

   Depreciation and amortization

35,827

29,351

130,954

102,139

   Long-term incentive/retention cash plan

-

-

-

1,538

   Sea Launch impairment

-

-

-

44,400

   Class action settlement

1,866

-

1,866

-

Less:









   Interest income

(284)

(1,123)

(1,770)

(1,988)

Adjusted EBITDA*

$             71,095

$            55,922

$          228,645

$          174,647

The condensed consolidated financial statements of Hughes and HNS for the periods ended December 31, 2010 and 2009 are attached to this press release.

Note on Use of Non-GAAP Financial Measures

Hughes provides non-GAAP financial data in addition to providing financial results in accordance with GAAP. This press release includes Adjusted EBITDA as a supplemental non-GAAP financial measure. Adjusted EBITDA is defined as earnings (loss) before interest, income taxes, depreciation, amortization, equity incentive plan compensation, long-term incentive/retention cash plan, and other adjustments permitted by the debt instruments of HNS. We believe this non-GAAP financial measure provides useful information to both management and investors by excluding specific expenses that we believe are not indicative of our core operating results. Internally, we use this non-GAAP measure in our review of the performance of management and in the performance of our business and operations. Management also uses Adjusted EBITDA of HNS for purposes of determining the payments to be made in connection with the long-term cash incentive retention program. Externally, we believe that investors may find this non-GAAP financial information useful in their assessment of our operating performance. In addition, we believe that this non-GAAP financial measure provides information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. Adjusted EBITDA of HNS is also used in calculating covenant compliance under HNS' credit agreements and the indenture governing HNS' 9½% Senior Notes due 2014, issued in 2006 and 2009.

Adjusted EBITDA is not a recognized term under GAAP. This non-GAAP measure does not represent net income or cash flows from operations, as these terms are defined under GAAP and should not be considered as an alternative to net income as an indicator of operating performance or to cash flows as a measure of liquidity. Additionally, this non-GAAP measure is not intended to be a measure of cash flow available to management for discretionary use, as such measure does not consider certain cash requirements, such as capital expenditures (including expenditures on VSAT operating lease hardware and capitalized software development costs), tax payments, debt service requirements(including VSAT operating lease hardware), and payments under the long-term cash incentive retention program. Adjusted EBITDA, as presented herein, is not necessarily comparable to similarly titled measures reported by other companies. Any analysis of non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.

About Hughes Communications, Inc.

Hughes Communications, Inc. (Nasdaq: HUGH) is the 100 percent owner of Hughes Network Systems, LLC. Hughes is the world's leading provider of satellite broadband for home and office, delivering innovative network technologies, managed services, and solutions for enterprises and governments globally. HughesNet® is the #1 high-speed satellite Internet service in the marketplace, with offerings to suit every budget. To date, Hughes has shipped more than 2.5 million systems to customers in over 100 countries, representing over 50 percent market share. Its products employ global standards approved by the TIA, ETSI, and ITU organizations, including IPoS/DVB-S2, RSM-A, and GMR-1.

Headquartered outside Washington, DC, in Germantown, Maryland, USA, Hughes maintains sales and support offices worldwide. For more information, please visit www.hughes.com.

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 statements include, but are not limited to, discussions regarding industry outlook and Hughes' expectations regarding the performance of its business, its future liquidity and capital resource needs, its strategic plans, and objectives. 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,""estimate,""expect,""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. These statements are subject to certain risks, uncertainties, and assumptions, including, but not limited to, the following: risks related to Hughes' substantial leverage and restrictions contained in its debt agreements, technological developments, its reliance on providers of satellite transponder capacity, changes in demand for Hughes' services and products, competition, industry trends, regulatory changes, foreign currency exchange rate fluctuations, and other risks identified and discussed under the caption "Risk Factors" in Hughes' Annual Report on Form 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission on March 3, 2010, and in the other documents Hughes files with the Securities and Exchange Commission from time to time.

Hughes, HughesNet, SPACEWAY, Jupiter, and ActiveQoS are trademarks of Hughes Network Systems, LLC.

HUGHES COMMUNICATIONS, INC.

Consolidated Balance Sheets

(Dollars in thousands, except per-share amounts)

(Unaudited)


December 31,



2010

2009

ASSETS



Current assets:



Cash and cash equivalents

$                   138,131

$                   261,038

Marketable securities

44,532

47,188

Receivables, net

186,692

163,816

Inventories

57,819

60,244

Prepaid expenses and other

26,127

22,476

Total current assets

453,301

554,762

Property, net

774,052

602,403

Capitalized software costs, net

46,092

49,776

Intangible assets, net

11,440

14,524

Goodwill

5,093

5,093

Other assets

73,197

75,836

Total assets

$                1,363,175

$                1,302,394

LIABILITIES AND EQUITY



Current liabilities:



Accounts payable

$                   120,202

$                   119,461

Short-term debt

6,285

6,750

Accrued liabilities and other

128,790

131,774

Total current liabilities

255,277

257,985

Long-term debt

740,576

714,957

Other long-term liabilities

27,308

16,356

Total liabilities

1,023,161

989,298

Commitments and contingencies



Equity:



Hughes Communications, Inc. ("HCI") stockholders' equity:



Preferred stock, $0.001 par value; 1,000,000 shares authorized and no



shares issued and outstanding as of December 31, 2010 and 2009

-

-

Common stock, $0.001 par value; 64,000,000 shares authorized;


21,834,787 shares and 21,633,539 shares issued and outstanding


as of December 31, 2010 and 2009, respectively

22

22

Additional paid in capital

735,233

730,809

Accumulated deficit

(387,756)

(410,543)

Accumulated other comprehensive loss

(18,449)

(16,247)

Total HCI stockholders' equity

329,050

304,041

Noncontrolling interests

10,964

9,055

Total equity

340,014

313,096

Total liabilities and equity

$                1,363,175

$                1,302,394






HUGHES COMMUNICATIONS, INC.

Consolidated Statements of Operations

(Dollars in thousands, except per-share amounts)

(Unaudited)


Year Ended December 31,


2010

2009

Revenues:



Services revenues

$               791,324

$           712,592

Hardware revenues

252,003

297,107

Total revenues

1,043,327

1,009,699

Operating costs and expenses:



Cost of services

493,023

448,804

Cost of hardware

234,805

289,516

Selling, general and administrative

206,512

180,675

Loss on impairments

-

50,639

Research and development

20,279

22,296

Amortization of intangible assets

3,084

5,457

Total operating costs and expenses

957,703

997,387

Operating income

85,624

12,312

Other income (expense):



Interest expense

(59,345)

(64,119)

Interest income

2,043

2,222

Other income, net

374

214

Income (loss) before income tax expense and





equity in earnings (losses) of unconsolidated affiliates

28,696

(49,371)

Income tax expense

(5,716)

(2,446)

Equity in earnings (losses) of unconsolidated affiliates

-

170

Net income (loss)

22,980

(51,647)

Net income attributable to the noncontrolling interests

(193)

(1,046)

Net income (loss) attributable to HCI stockholders

$                 22,787

$            (52,693)

Income (loss) per share:



Basic

$                     1.05

$                (2.46)

Diluted

$                     1.00

$                (2.46)

Shares used in computation of per share data:



Basic

21,606,162

21,393,151

Diluted

22,738,207

21,393,151

HUGHES COMMUNICATIONS, INC.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


Year Ended December 31,


2010

2009

Cash flows from operating activities:


Net income (loss)

$             22,980

$            (51,647)

Adjustments to reconcile net income (loss) to net cash flows





from operating  activities:



Depreciation and amortization

131,586

102,731

Amortization of debt issuance costs

2,818

2,025

Share-based compensation expense

7,514

7,371

Equity in (earnings) losses from unconsolidated affiliates

-

(170)

Loss on impairments

-

50,639

Other

(56)

535

Change in other operating assets and liabilities, net of acquisition:



Receivables, net

(22,371)

41,584

Inventories

1,697

6,438

Prepaid expenses and other

1,721

5,369

Accounts payable

20,098

13,954

Accrued liabilities and other

(17,266)

(27,447)

Net cash provided by operating activities  

148,721

151,382

Cash flows from investing activities:



Change in restricted cash


1,211

223

Purchases of marketable securities

(105,692)

(62,118)

Proceeds from sales of marketable securities

108,289

15,000

Expenditures for property


(282,819)

(150,764)

Expenditures for capitalized software


(13,073)

(12,772)

Proceeds from sale of property

205

397

Cash acquired, consolidation of Hughes Systique Corporation

-

828

Long-term loan receivable

-

(10,000)

Other, net

1,847

(830)

Net cash used in investing activities

(290,032)

(220,036)

Cash flows from financing activities:



Short-term revolver borrowings

4,761

6,791

Repayments of revolver borrowings

(5,347)

(7,861)

Proceeds from exercise of stock options

134

-

Long-term debt borrowings


31,602

147,849

Repayment of long-term debt


(6,252)

(12,377)

Debt issuance costs


(7,140)

(4,612)

Net cash provided by financing activities


17,758

129,790

Effect of exchange rate changes on cash and cash equivalents

646

(3,914)

Net increase (decrease) in cash and cash equivalents  

(122,907)

57,222

Cash and cash equivalents at beginning of the period


261,038

203,816

Cash and cash equivalents at end of the period


$           138,131

$           261,038





Supplemental cash flow information:



Cash paid for interest, net of amounts capitalized

$             53,205

$             60,410

Cash paid for income taxes


$               7,521

$               5,659

Supplemental non-cash disclosures related to:





Capitalized software and property acquired, not paid

$             26,954

$             26,946

COFACE Guaranteed Facility

$             22,871

Investment in Hughes Telematics, Inc.


$             13,000

Consolidation of Hughes Systique Corporation


$               5,328






HUGHES NETWORK SYSTEMS, LLC

Consolidated Balance Sheets

(In thousands, except per-share amounts)

(Unaudited)


December 31,


2010

2009

ASSETS



Current assets:



Cash and cash equivalents

$                     80,800

$                   183,733

Marketable securities

6,675

31,126

Receivables, net

184,869

162,806

Inventories

57,819

60,244

Prepaid expenses and other

24,600

20,976

Total current assets

354,763

458,885

Property, net

773,652

601,964

Capitalized software costs, net

46,092

49,776

Intangible assets, net

10,738

13,488

Goodwill

2,661

2,661

Other assets

67,459

68,524

Total assets

$                1,255,365

$                1,195,298

LIABILITIES AND EQUITY



Current liabilities:



Accounts payable

$                   117,763

$                   117,513

Short-term debt

6,196

6,750

Accrued liabilities and other

133,383

133,926

Total current liabilities

257,342

258,189

Long-term debt

740,487

714,957

Other long-term liabilities

27,308

16,191

Total liabilities

1,025,137

989,337

Commitments and contingencies



Equity:



Hughes Network Systems, LLC ("HNS") equity:



Class A membership interests

176,099

177,933

Class B membership interests

-

-

Retained earnings

61,487

36,094

Accumulated other comprehensive loss

(15,682)

(13,987)

Total HNS' equity

221,904

200,040

Noncontrolling interest

8,324

5,921

Total equity

230,228

205,961

Total liabilities and equity

$                1,255,365

$                1,195,298





HUGHES NETWORK SYSTEMS, LLC

Consolidated Statements of Operations

(In thousands)

(Unaudited)


Year Ended December 31,


2010

2009

Revenues:



Services revenues

$                   785,740

$                   709,558

Hardware revenues

252,003

297,107

Total revenues


1,037,743

1,006,665

Operating costs and expenses:



Cost of services

491,465

448,767

Cost of hardware

234,805

289,516

Selling, general and administrative

199,156

175,203

Loss on impairment

-

44,400

Research and development

20,279

22,296

Amortization of intangible assets

2,750

5,164

Total operating costs and expenses


948,455

985,346

Operating income

89,288

21,319

Other income (expense):



Interest expense

(59,324)

(64,094)

Interest income


1,770

1,988

Other income (loss), net

-

(334)

Income (loss) before income tax expense

31,734

(41,121)

Income tax expense

(5,691)

(2,436)

Net income (loss)

26,043

(43,557)

Net income attributable to the noncontrolling interest

(650)

(1,348)

Net income (loss) attributable to HNS

$                     25,393

$                   (44,905)











HUGHES NETWORK SYSTEMS, LLC

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


Year Ended December 31,


2010

2009

Cash flows from operating activities:



Net income (loss)

$                     26,043

$                   (43,557)

Adjustments to reconcile net income (loss) to net cash flows





from operating activities:



Depreciation and amortization

130,954

102,139

Amortization of debt issuance costs

2,818

2,025

Share-based compensation expense

839

899

Loss on impairment

-

44,400

Other

(67)

546

Change in other operating assets and liabilities, net of acquisition:


Receivables, net

(21,558)

52,538

Inventories

1,697

6,438

Prepaid expenses and other

1,065

4,721

Accounts payable

19,607

15,580

Accrued liabilities and other

(14,241)

(22,858)

Net cash provided by operating activities

147,157

162,871

Cash flows from investing activities:


Change in restricted cash

1,165

(108)

Purchases of marketable securities

(29,280)

(41,080)

Proceeds from sales of marketable securities

53,693

10,000

Expenditures for property

(282,589)

(150,702)

Expenditures for capitalized software

(13,073)

(12,772)

Proceeds from sale of property

206

397

Long-term loan receivable

-

(10,000)

Other, net

1,462

(755)

Net cash used in investing activities

(268,416)

(205,020)

Cash flows from financing activities:


Short-term revolver borrowings

4,761

6,791

Repayments of revolver borrowings

(5,347)

(7,861)

Long-term debt borrowings

31,548

147,849

Repayments of long-term debt

(6,244)

(12,375)

Debt issuance costs

(7,140)

(4,612)

Net cash provided by (used in) financing activities

17,578

129,792

Effect of exchange rate changes on cash and cash equivalents

748

(4,172)

Net increase (decrease) in cash and cash equivalents

(102,933)

83,471

Cash and cash equivalents at beginning of the period

183,733

100,262

Cash and cash equivalents at end of the period

$                     80,800

$                   183,733

Supplemental cash flow information:


Cash paid for interest, net of amounts capitalized

$                     53,184

$                     60,386

Cash paid for income taxes

$                       7,517

$                       5,619

Supplemental non-cash disclosures related to:





Capitalized software and property acquired, not paid

$                     26,954

$                     26,946

COFACE Guaranteed Facility

$                     22,871






SOURCE Hughes Communications, Inc.

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