Marlane Pereiro

Marlane Pereiro of Bank of America Merrill Lynch requested a high-level outlook on free cash flow for the remainder of the year, considering the revised EBITDA guidance, cost savings, and any potential tax benefits.

Answer

EVP & CFO Peter Thompson stated there were no material impacts from new tax legislation. He projected a year-end cash balance of approximately $95 million, assuming no further debt buybacks. This forecast suggests the company expects to generate additional cash in the second half of the year, even with the lower EBITDA guidance.

The analyst, identified by the operator as Marlane Pereiro, asked about the free cash flow outlook for 2025 based on the EBITDA guide, details on cost savings, and whether any parts of the business are considered non-core for potential asset sales.

Answer

The company projects approximately $25 million in free cash flow for 2025. The current $75 million EBITDA guide does not include any potential future cost savings, which would be additive. While there may be small non-core assets, the M&A market is currently inactive, and the company's focus is on deleveraging rather than holding out for a sale.

An analyst from Bank of America Securities inquired about the repurchase of Hughes secured bonds, asking if it was related to the new $150 million spectrum note issuance and why the company chose to buy back secured versus unsecured debt. She also requested an update on the DBS bondholder litigation.

Answer

CEO Hamid Akhavan explained that repurchasing their own undervalued debt was an attractive, low-risk use of cash. He stated the $150 million note issuance was to honor a pre-existing commitment and was unrelated to the buybacks, a point COO John Swieringa confirmed. Hamid Akhavan added there was no specific strategic reason for choosing secured over unsecured bonds. Executive Dean Manson declined to comment on the ongoing litigation.