Core Viewpoint - DISH Network and Hughes Network Systems have launched a bundled service offering that combines DISH satellite TV with Hughesnet satellite internet, aimed at enhancing connectivity and entertainment options for rural America [1][2][4] Group 1: Service Offering - The new bundle provides rural consumers with access to high-quality television programming and high-speed internet, addressing the limited options traditionally available in these areas [1][4] - The service utilizes the DISH Hopper whole-home DVR system and Hughesnet powered by the JUPITER 3 satellite, which is noted as the largest and most advanced commercial communications satellite [2][3] Group 2: Customer Benefits - Customers can enjoy internet speeds of up to 100 Mbps, unlimited data, and enhanced Wi-Fi capabilities, facilitating activities such as video streaming, music downloads, and gaming [3] - New customers who subscribe to both DISH TV and Hughesnet internet services will receive a $5 monthly discount on each service [4] Group 3: Company Strategy - The collaboration reflects a strategic alignment between DISH and Hughes, focusing on improving service delivery to rural households and enhancing customer value [4][7] - The initiative is part of DISH's broader mission to serve rural America and improve communication options for these communities [3]

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Disclosure Regarding Forward-Looking Statements](index=4&type=section&id=Disclosure%20Regarding%20Forward-Looking%20Statements) The report contains forward-looking statements subject to significant risks, including integration with EchoStar, intense competition, network dependence, substantial debt, and capital needs, which could cause actual results to differ materially - The company warns that forward-looking statements are not guarantees of future performance and are subject to known and unknown risks[9](index=9&type=chunk) - Key risks include potential failure to realize expected synergies from the merger with EchoStar[10](index=10&type=chunk) - Intense competition from video, broadband, and wireless providers, changing consumer behavior, and dependence on T-Mobile and AT&T networks pose significant competitive and economic risks[11](index=11&type=chunk) - Substantial outstanding debt, the need for additional capital to fund obligations and investments, and control by a principal stockholder present acquisition and capital structure risks[15](index=15&type=chunk)[18](index=18&type=chunk) - Dependence on third-party programming and vendors, limited satellite capacity, and vulnerability to cyber-attacks introduce operational and cybersecurity risks[13](index=13&type=chunk)[14](index=14&type=chunk) [Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) DISH Network reported a Q1 2024 revenue of **$3.64 billion**, a net loss of **$13.9 million**, and a **$8 billion** asset decrease, with a 'going concern' warning due to insufficient cash for operations and a **$1.983 billion** debt maturity [Condensed Consolidated Financial Statements](index=8&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements reveal a significant decline, with total assets falling to **$43.4 billion**, liabilities rising to **$41.9 billion**, revenue decreasing **8%** to **$3.64 billion**, and a swing from net income to a **$10.2 million** net loss Key Financial Data (Q1 2024 vs. Q1 2023) | Financial Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue** | $3,639,889 | $3,956,982 | -8.0% | | **Operating Income** | $25,979 | $323,423 | -92.0% | | **Net Income (Loss) Attributable to DISH** | $(13,879) | $222,705 | N/A | | **Total Assets (as of period end)** | $43,438,043 | $51,413,031 (as of 12/31/23) | -15.5% | | **Total Liabilities (as of period end)** | $41,869,667 | $34,182,475 (as of 12/31/23) | +22.5% | | **Net Cash from Operating Activities** | $360,686 | $737,374 | -51.1% | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the December 2023 EchoStar merger, Q1 2024 asset transfers, a critical 'going concern' warning due to insufficient cash and a **$1.983 billion** debt maturity, and segment operations including Pay-TV, Retail Wireless, and 5G Network Deployment - On December 31, 2023, EchoStar completed its acquisition of DISH Network, making DISH a wholly-owned subsidiary[37](index=37&type=chunk) - In Q1 2024, DISH transferred significant assets, including various wireless spectrum licenses, to its parent company, EchoStar, resulting in a **$12.003 billion** reduction in assets, recorded as a dividend[33](index=33&type=chunk)[35](index=35&type=chunk) - **Going Concern Warning:** The company states that substantial doubt exists about its ability to continue as a going concern, lacking necessary cash or projected future cash flows to fund Q4 2024 operations or the **$1.983 billion** debt maturing in November 2024[40](index=40&type=chunk)[41](index=41&type=chunk) - The company operates three primary business segments: Pay-TV (DISH and SLING brands), Retail Wireless (Boost Mobile and Gen Mobile brands), and 5G Network Deployment[44](index=44&type=chunk) Subscriber Counts as of March 31, 2024 | Segment | Subscribers (in millions) | | :--- | :--- | | Pay-TV | 8.178 | | - DISH TV | 6.258 | | - SLING TV | 1.920 | | Retail Wireless | 7.297 | [Management's Narrative Analysis of Results of Operations](index=69&type=section&id=Item%202.%20Management%27s%20Narrative%20Analysis%20of%20Results%20of%20Operations) Management attributes the **8.0%** consolidated revenue decline and **92.0%** operating income drop to subscriber losses and increased 5G network deployment costs, reiterating the critical need for additional capital due to 'going concern' doubts Consolidated Financial Summary (Q1 2024 vs Q1 2023) | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $3,640 | $3,957 | -8.0% | | Operating Income | $26 | $323 | -92.0% | | Net Loss Attributable to DISH | $(14) | $223 (Income) | N/A | - The company does not currently have the necessary cash and/or projected cash flows to fund Q4 operations or the November 2024 debt maturity and is in active discussions with funding sources to raise additional capital[267](index=267&type=chunk) - The company achieved its 5G network commitment of covering **70%** of the U.S. population with average download speeds of **35 Mbps** in March 2024, now having 5G VoNR service reaching approximately **200 million** Americans[265](index=265&type=chunk) [Pay-TV Segment Analysis](index=78&type=section&id=Pay-TV%20Segment%20Analysis) The Pay-TV segment's revenue declined **8.3%** to **$2.73 billion** due to a shrinking subscriber base of **8.178 million**, partially offset by a **4.5%** ARPU increase to **$107.38**, with operating income remaining stable at **$670 million** amid intense competition Pay-TV Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $2.727 billion | $2.972 billion | | Operating Income | $670.2 million | $675.2 million | | Net Subscriber Losses | 348,000 | 552,000 | | Ending Subscribers | 8.178 million | 9.198 million | | Pay-TV ARPU | $107.38 | $102.71 | | DISH TV Churn Rate | 1.53% | 1.98% | | DISH TV SAC | $1,054 | $1,055 | - The decrease in net subscriber losses was primarily due to a lower DISH TV churn rate, positively impacted by an emphasis on acquiring and retaining higher quality subscribers[322](index=322&type=chunk)[326](index=326&type=chunk) - Pay-TV ARPU increased by **4.5%** primarily due to programming price increases for both DISH TV and SLING TV in late 2023 and higher ad sales revenue[330](index=330&type=chunk) [Retail Wireless Segment Analysis](index=87&type=section&id=Retail%20Wireless%20Segment%20Analysis) The Retail Wireless segment's revenue declined **7.1%** to **$906 million**, with operating loss widening to **$74.4 million**, and subscriber base ending at **7.297 million**, while the impending end of the ACP poses a risk to approximately **600,000** subscribers Retail Wireless Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $905.9 million | $974.9 million | | Operating Loss | $(74.4) million | $(18.2) million | | Net Subscriber Losses | 81,000 | 81,000 | | Ending Subscribers | 7.297 million | 7.913 million | | Wireless ARPU | $36.69 | $36.43 | | Wireless Churn Rate | 3.05% | 4.24% | - The lower churn rate was positively impacted by an emphasis on acquiring higher-quality subscribers and was compared against a period in 2023 that was negatively impacted by a major customer system migration[354](index=354&type=chunk) - The Affordable Connectivity Program (ACP) was projected to end in April 2024, with DISH having approximately **600,000** ACP subscribers as of March 31, 2024, representing **8%** of its total wireless base[345](index=345&type=chunk)[346](index=346&type=chunk) [5G Network Deployment Segment Analysis](index=93&type=section&id=5G%20Network%20Deployment%20Segment%20Analysis) The 5G Network Deployment segment generated minimal revenue of **$29 million**, with operating loss expanding significantly to **$570 million** due to increased network operating costs and depreciation as assets were placed into service 5G Network Deployment Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | | :--- | :--- | :--- | | Revenue | $28.9 | $18.9 | | Operating Loss | $(570.0) | $(333.6) | | OIBDA | $(332.8) | $(236.0) | - The company achieved its June 2023 and March 2024 5G deployment commitments, including providing 5G broadband service to approximately **250 million** Americans[363](index=363&type=chunk) - The increase in operating loss was primarily due to higher costs for communication towers, transport, and cloud services as the network became operational, and a significant increase in depreciation expense as assets were placed in service[368](index=368&type=chunk)[370](index=370&type=chunk) [Controls and Procedures](index=79&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[383](index=383&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[384](index=384&type=chunk) [PART II — OTHER INFORMATION](index=79&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=79&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in numerous legal proceedings, including patent infringement, data breach and securities fraud class actions, and a new lawsuit alleging breach of debt indentures due to 2024 asset transfers - The company is involved in a number of legal proceedings, details of which are provided in Note 9 of the financial statements[386](index=386&type=chunk) - A new lawsuit was filed on April 26, 2024, by U.S. Bank Trust Company, alleging that intracompany asset transfers in January 2024 breached indentures for certain DISH DBS Corporation notes and constituted fraudulent transfers[204](index=204&type=chunk) - The company is defending against a securities fraud class action alleging concealment of problems related to the 5G network buildout[168](index=168&type=chunk) - Multiple patent infringement lawsuits are ongoing, including cases brought by ClearPlay, Digital Broadcasting Solutions, Entropic Communications, and TQ Delta, concerning features like AutoHop and various network technologies[147](index=147&type=chunk)[155](index=155&type=chunk)[158](index=158&type=chunk)[191](index=191&type=chunk) [Risk Factors](index=79&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the detailed discussion of risk factors presented in the company's Annual Report on Form 10-K for the year ended December 31, 2023 - The report directs readers to the Risk Factors section of the company's most recent Annual Report on Form 10-K for a detailed discussion of risks[387](index=387&type=chunk) [Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications required by Sarbanes-Oxley Act Sections 302 and 906, and iXBRL formatted financial statements - The exhibits filed with this report include certifications from the Chief Executive Officer and Chief Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act[390](index=390&type=chunk)

Shares in Dish Network parent EchoStar have fallen more than 11% after the company’s lackluster first-quarter earnings report and growing uneasiness about the company’s financial state. Hamid Akhavan, the head of EchoStar since March 2022 who added the CEO duties at Dish last November as the companies were getting set to close their merger, presided over a call with Wall Street analysts. Charlie Ergen, who founded and ran Dish and is now EchoStar’s executive chairman, was not present for the call. Akhavan ...

Acquisition and Merger - On December 31, 2023, EchoStar completed the acquisition of DISH Network, with DISH Network becoming a wholly owned subsidiary of EchoStar[29]. - Each share of DISH Network Class A and Class C common stock was converted into 0.350877 shares of EchoStar Class A common stock at the Effective Time[30]. - The merger with EchoStar was completed on December 31, 2023, resulting in all DISH Network Class A Common Stock being converted into EchoStar Common Stock[221]. Subscriber Metrics - As of December 31, 2023, DISH Network had 8.526 million Pay-TV subscribers, including 6.471 million DISH TV subscribers and 2.055 million SLING TV subscribers[38]. - The Retail Wireless segment had 7.378 million wireless subscribers as of December 31, 2023[40]. 5G Network Deployment - As of June 14, 2023, DISH Network provided 5G broadband service to over 73% of the U.S. population, reaching more than 246 million Americans[43]. - The company achieved the largest commercial deployment of 5G VoNR, reaching approximately 200 million Americans[43]. - The company aims to commercialize its wireless spectrum licenses through the completion of a cloud-native, Open Radio Access Network (O-RAN) based 5G network[52]. - The FCC confirmed that the company has met its June 14, 2023, 5G deployment commitments, including reaching approximately 200 million Americans with 5G VoNR and 250 million with 5G broadband service[54]. - The final build-out deadlines for 5G broadband service have been extended to June 14, 2025, to cover at least 70% of the population in each Economic Area for certain licenses[55]. - The company’s 5G Network Deployment utilizes an O-RAN architecture, which requires effective integration of components from various third-party suppliers[78]. - The company has invested over $30 billion to acquire certain Wireless spectrum licenses, with additional investments required to complete the 5G Network Deployment[154]. - The company may incur significant additional expenses related to research and development, wireless testing, and ongoing upgrades to the wireless network infrastructure as part of the 5G Network Deployment[154]. Financial Commitments and Investments - DISH Network has invested over $30 billion in wireless spectrum licenses, excluding $9 billion of capitalized interest[42]. - The company has committed to pay AT&T at least $5 billion over the 10-year term of the Network Services Agreement (NSA) and $3.3 billion to T-Mobile over the seven-year term of the Master Network Services Agreement (MNSA)[81][82]. - The company made over $10 billion in noncontrolling investments in AWS-3 wireless spectrum licenses through its subsidiaries[57]. - The company purchased Northstar Manager's ownership interests in Northstar Spectrum for approximately $109 million, eliminating all redeemable noncontrolling interest related to Northstar Spectrum[57]. - As of December 31, 2023, the total long-term debt and finance lease obligations of the company amounted to $21.220 billion[153]. - The company is in active discussions with funding sources to raise additional capital and refinance existing debt obligations to address capital needs[170]. Competition and Market Challenges - The company faces intense competition in the Pay-TV market, requiring increased spending on subscriber acquisition and retention[65]. - The maturation of the Pay-TV industry may limit future growth opportunities for the company's DISH TV business, potentially reducing margins[71]. - Changing consumer behavior and new technologies may lead to reduced subscriber activations and increased churn rates, adversely affecting revenue[72]. - The company anticipates continued competition from digital video service providers as broadband and wireless network quality improves[73]. - The company faces significant competition in the wireless services industry from established players like Verizon, AT&T, and T-Mobile, which have greater financial and operational resources[75]. - Subscriber growth rates in the wireless services industry are expected to moderate due to market saturation, leading to increased competition for new subscribers[75]. - The company’s ability to compete effectively depends on network quality, pricing, service quality, and the development of new products and services[75]. Operational Risks and Challenges - The company relies on third-party suppliers for critical infrastructure and services, and any failure in these relationships could adversely affect operations[78]. - The company’s wireless spectrum licenses are subject to renewal and regulatory scrutiny by the FCC, which could impact future business prospects[78]. - Economic weakness may lead to fewer subscriber activations and increased churn rates, particularly among lower-tier programming package subscribers[89]. - The company may face challenges in obtaining programming content due to competition from larger pay-TV providers that have direct relationships with programmers[79]. - Changes in how network operators handle data access could negatively impact the company's Pay-TV business and subscriber growth[86][87]. - The company is facing inflationary cost pressures, which could negatively impact operating expenses and cash flows if revenue does not increase correspondingly[91]. - The company is struggling with subscriber acquisition and retention costs, particularly in the Pay-TV segment, where stricter policies are impacting activations and churn rates[95]. - The transition from MVNO to MNO is affecting net Wireless subscriber additions and increasing acquisition costs due to differences in subscriber types[97]. - The company is vulnerable to extreme weather events that could damage infrastructure and disrupt operations, potentially leading to increased costs[112]. - The reliance on a limited number of vendors for key products and services poses a risk to the company's operations if these vendors fail to meet needs[116]. - The company may continue to experience shortages due to raw material availability, manufacturing capacity, and labor shortages, which could negatively impact operations[117]. - A significant percentage of new subscriber activations depend on independent third parties, which may favor competitors' products due to financial arrangements[119]. - The company relies on highly skilled personnel, and the loss of key executives could materially affect business operations and financial condition[120]. Cybersecurity and Information Security - The company has experienced cyber-security incidents, including a significant incident in February 2023, which resulted in certain data being compromised[148]. - The company may face increased liability associated with information-related risks due to the handling of personal subscriber data[147]. - The company’s protective measures against cyber threats may not be sufficient for all eventualities, potentially leading to operational disruptions and reputational damage[149]. - The company has an enterprise-wide information security program designed to manage cybersecurity risks and threats, with regular assessments and updates provided to senior management[201]. - The company plans to continue evaluating and addressing cybersecurity risk management in connection with the integration following the merger[209]. Financial Performance and Reporting - The internal control over financial reporting was deemed effective as of December 31, 2023, ensuring investor confidence in financial results[198]. - The Pay-TV business is experiencing increased programming costs, which are rising faster than inflation and could adversely affect financial results[99]. - Rising interest rates could increase the company's cost of capital and require a higher percentage of cash flow to be devoted to interest payments, adversely affecting financial results[172]. - The company may need to refinance or restructure debt obligations, which could materially adversely affect business and financial condition[176]. - A severe disruption in global financial markets could impact access to financing, making it difficult to forecast and plan future business activities[178]. Strategic Initiatives and Future Outlook - The company is investing in 5G Network Deployment and enhancing service offerings to adapt to technological changes, including artificial intelligence and machine learning[92]. - The company must continuously innovate and introduce competitive products to avoid obsolescence, which is a complex and uncertain process[113]. - The company may pursue acquisitions and strategic initiatives, but there are significant risks involved, including potential financial losses if objectives are not achieved[162]. - Changes in U.S. government spending, particularly regarding the Affordable Connectivity Program (ACP), could negatively impact net Wireless subscriber activations and overall financial condition[193]. - The discontinuation or amendment of the ACP could result in reduced reimbursements, materially affecting business operations and financial results[195]. - The company is controlled by a principal stockholder, Charles W. Ergen, who owns approximately 54% of total equity securities and 91.4% of voting power, impacting corporate governance[187].

The singular voice of Charlie Ergen, long an outspoken figure willing to voice unconventional views on the media business, fell silent Friday as he was absent for EchoStar‘s quarterly earnings call. The Dish Network parent, of which Ergen is executive chairman, reported a loss of 314,000 Dish subscribers in the quarter, leaving it with 8.53 million. The downturn in pay-TV was blamed for a slide in total revenue, to $4.16 billion from $4.53 billion in the prior-year period. Dish and EchoStar completed a mer ...

Financial Data and Key Metrics - The company expects CapEx to decline in Q4 2023 and into 2024, with an uptick in the first half of 2025 as the final build-out milestone is completed [23] - The company has $3 billion of debt maturing in 2024, with plans to address the March convertibles using equity, although the market conditions have made this more challenging [18][19] - The company reduced its MVNO bill by a third, which is expected to significantly impact the retail business trajectory [26] Business Line Data and Key Metrics - The company is seeing traction with the iPhone 15 promotion, particularly due to the $60 offer and the annual upgrade option [12] - By June 2024, the company expects to have 100% Android device compatibility and partial Apple device compatibility, with newer Apple models supporting 5G SA software [13][35] - The Boost Infinite and Boost Mobile businesses are expected to see improved economics as more devices become compatible with the company's network [26][27] Market Data and Key Metrics - The company is focused on achieving a 73% VoNR footprint, covering major cities and NFL markets, with 20,000 sites expected to be operational by the end of 2023 [51] - The company is working on integrating its network with EchoStar, which has a mature enterprise customer base, potentially accelerating growth in the enterprise sector [49][50] Company Strategy and Industry Competition - The company is building a 21st-century, data-centric network architecture, which is unique in the U.S. and positions it well for future technologies like AI [16] - The company is exploring partnerships and strategic options to address capital needs, including potential deals with TPG and AT&T [14][15] - The company is focused on reducing costs and improving operational efficiency, particularly in the Pay-TV business, where it is looking to optimize customer experience and capital allocation [65] Management Commentary on Operating Environment and Future Outlook - The company acknowledges the challenges of the current market environment, particularly with high-interest rates and the need for significant capital investments [10][30] - Management is optimistic about the long-term potential of the enterprise business, especially with the integration of EchoStar, which brings additional capabilities and customer relationships [49][50] - The company is cautious about fixed wireless access due to government subsidies and regulatory uncertainties, which could impact the competitive landscape [55][57] Other Important Information - The company is working on improving its online sales experience, particularly through partnerships with Amazon, to enhance customer acquisition and retention [125][127] - The company is focused on reducing marketing and commission costs, which were elevated in Q3 2023, with expected improvements in Q4 as new commission structures take effect [61][122] Q&A Session Summary Question: Capital needs and funding options beyond 2024 [9] - The company is focused on addressing near-term debt maturities and exploring both internal and external funding options, including potential partnerships [9][19] Question: Traction with iPhone 15 and Boost Infinite customer acquisition [138] - The company is seeing demand for the iPhone 15, particularly from customers switching from other carriers and through the Amazon partnership [12] - The company expects to reach two-thirds device compatibility by June 2024, driven by new device availability and network improvements [26][27] Question: 5G enterprise pipeline and private network opportunities [48] - The company is optimistic about the enterprise business, particularly with the integration of EchoStar, which has existing relationships with major airlines and other enterprises [49][50] Question: Pay-TV business optimization and cost management [63] - The company is looking to optimize its Pay-TV business by reducing costs and improving customer experience, aligning with industry trends highlighted by the Disney-Charter dispute [65] Question: CapEx and marketing spend flexibility [125] - The company has flexibility in adjusting marketing spend and CapEx, with a focus on improving the online sales experience and reducing costs [125][130]

[PART I — FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS](index=3&type=section&id=DISCLOSURE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines the nature of forward-looking statements and summarizes key risk factors that could cause actual results to differ - Forward-looking statements are based on current views and assumptions, but **actual performance, events, or results could differ materially** due to known and unknown risks[10](index=10&type=chunk) - Key risk categories include: **Competition and Economic Risks, Operational and Service Delivery Risks, Acquisition and Capital Structure Risks, Legal and Regulatory Risks, and Risks Related to the Merger with EchoStar**[11](index=11&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - The **COVID-19 pandemic** and its economic impact have adversely affected the business, and any worsening could have a material adverse effect[12](index=12&type=chunk) - The company faces **intense and increasing competition** from providers of video, broadband, and wireless services, potentially leading to increased subscriber acquisition/retention spending or higher churn[13](index=13&type=chunk) - **Significant debt outstanding** and the need for additional capital, which may not be available on favorable terms, pose risks to business investment and strategic transactions[17](index=17&type=chunk)[18](index=18&type=chunk) - The pending **merger with EchoStar** introduces business uncertainties and contractual restrictions, with no assurance of realizing anticipated benefits or within expected timeframes[21](index=21&type=chunk) [Item 1. Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, providing a snapshot of the company's financial position and performance [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) **Condensed Consolidated Balance Sheets** | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | |:---|:---|:---| | Total Assets | $53,744,674 | $52,606,562 | | Total Current Assets | $3,147,962 | $4,610,110 | | Cash and cash equivalents | $851,966 | $1,785,056 | | Marketable investment securities | $182,816 | $835,983 | | Property and equipment, net | $7,224,876 | $5,640,119 | | FCC authorizations | $37,817,941 | $36,933,073 | | Total Liabilities | $34,933,450 | $34,197,922 | | Total Current Liabilities | $5,789,263 | $6,024,248 | | Current portion of long-term debt and finance lease obligations | $1,065,447 | $1,547,190 | | Long-term debt and finance lease obligations, net of current portion | $20,178,564 | $19,801,948 | | Total Stockholders' Equity (Deficit) | $18,282,171 | $17,944,281 | - **Total assets increased by approximately $1.14 billion** from December 31, 2022, to September 30, 2023, primarily driven by an increase in Property and equipment, net, and FCC authorizations[23](index=23&type=chunk) - **Cash and cash equivalents significantly decreased by over $933 million**, and marketable investment securities decreased by over $653 million, indicating a reduction in liquid assets[23](index=23&type=chunk) - **Total liabilities increased by approximately $735 million**, with long-term debt and finance lease obligations (net of current portion) increasing by about $376 million[23](index=23&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) **Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)** | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | Total Revenue | $3,704,516 | $4,095,451 | $11,573,075 | $12,636,034 | | Total Costs and Expenses | $3,746,322 | $3,668,422 | $11,085,124 | $10,965,710 | | Operating Income (Loss) | $(41,806) | $427,029 | $487,951 | $1,670,324 | | Total Other Income (Expense) | $(143,021) | $60,725 | $(57,198) | $121,050 | | Income (Loss) before income taxes | $(184,827) | $487,754 | $430,753 | $1,791,374 | | Net Income (Loss) attributable to DISH Network | $(139,185) | $412,230 | $283,843 | $1,367,713 | | Basic Net Income (Loss) per share | $(0.26) | $0.78 | $0.53 | $2.58 | | Diluted Net Income (Loss) per share | $(0.26) | $0.65 | $0.44 | $2.15 | - For the three months ended September 30, 2023, the company reported a **net loss of $139.185 million**, a significant decline from a net income of $412.230 million in the same period of 2022[25](index=25&type=chunk) - **Total revenue decreased by 9.5%** for the three months ended September 30, 2023, and by 8.4% for the nine months ended September 30, 2023, compared to the respective prior periods[25](index=25&type=chunk) - **Operating income shifted to a loss of $41.806 million** for the three months ended September 30, 2023, from an income of $427.029 million in the prior year, primarily due to increased costs and expenses[25](index=25&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Deficit)) **Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)** | Metric (in thousands) | Balance, Dec 31, 2022 | Balance, Sep 30, 2023 | |:---|:---|:---| | Total DISH Network stockholders' equity (deficit) | $17,944,281 | $18,282,171 | | Accumulated earnings (deficit) | $13,088,850 | $13,372,693 | | Additional paid-in capital | $4,851,392 | $4,904,145 | - **Total stockholders' equity increased from $17.944 billion** at December 31, 2022, to $18.282 billion at September 30, 2023, primarily due to accumulated earnings and additional paid-in capital[31](index=31&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) **Condensed Consolidated Statements of Cash Flows** | Metric (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---| | Net cash flows from operating activities | $1,718,096 | $2,141,503 | | Net cash flows from investing activities | $(2,498,267) | $(6,929,986) | | Net cash flows from financing activities | $(131,725) | $(2,060,595) | | Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents | $(911,896) | $(6,849,078) | | Cash, cash equivalents, restricted cash and cash equivalents, end of period | $936,085 | $885,182 | - **Net cash flows from operating activities decreased by approximately $423 million** for the nine months ended September 30, 2023, compared to the same period in 2022[34](index=34&type=chunk) - **Net cash outflows from investing activities significantly decreased by approximately $4.43 billion**, primarily due to lower purchases of FCC authorizations in 2023[34](index=34&type=chunk) - **Net cash outflows from financing activities decreased by approximately $1.93 billion**, mainly due to proceeds from the issuance of senior notes in 2023[34](index=34&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization and Business Activities](index=14&type=section&id=1.%20Organization%20and%20Business%20Activities) DISH Network operates Pay-TV and Wireless segments, is transitioning to a 5G MNO model, and has a pending merger with EchoStar - DISH Network operates two primary business segments: **Pay-TV** (DISH® and SLING® brands) and **Wireless** (Boost Mobile®, Boost Infinite®, Gen Mobile® brands, and 5G Network Deployment)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) **Pay-TV Subscribers (as of September 30, 2023):** | Category | Subscribers (millions) | |:---|:---| | Total Pay-TV | 8.840 | | DISH TV | 6.720 | | SLING TV | 2.120 | - The Wireless business is transitioning from a Mobile Virtual Network Operator (MVNO) model, relying on T-Mobile and AT&T, to a **Mobile Network Operator (MNO) model** with its own 5G Network[38](index=38&type=chunk) **Wireless Subscribers (as of September 30, 2023):** | Category | Subscribers (millions) | |:---|:---| | Total Wireless | 7.500 | - DISH has invested **over $30 billion in Wireless spectrum licenses** and committed to deploying a facilities-based 5G broadband network, achieving over 73% U.S. population coverage by June 2023[40](index=40&type=chunk)[42](index=42&type=chunk) - A merger agreement with EchoStar was amended on October 2, 2023, where **DISH Network will become a wholly-owned subsidiary of EchoStar**, with DISH stockholders receiving EchoStar common stock at an exchange ratio of 0.350877[48](index=48&type=chunk)[49](index=49&type=chunk) - The company experienced a **cyber-security incident in February 2023**, which affected internal servers but not customer databases; approximately $30 million in related expenses were incurred in Q1 2023[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) [2. Summary of Significant Accounting Policies](index=19&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note details key accounting policies including consolidation, noncontrolling interests, interest capitalization, and fair value measurements - The company consolidates majority-owned subsidiaries, controlled entities, and **Variable Interest Entities (VIEs)** where it is the primary beneficiary[58](index=58&type=chunk) - **Redeemable noncontrolling interests**, such as Northstar Manager's and SNR Management's ownership in their respective entities, are recorded as temporary equity and increased by a fixed annual rate of return[59](index=59&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[66](index=66&type=chunk) - Subsequent to September 30, 2023, DISH completed the **purchase of Northstar Manager's ownership interests for approximately $109 million**, eliminating the related redeemable noncontrolling interest[60](index=60&type=chunk)[67](index=67&type=chunk) - Interest associated with the acquisition or construction of certain assets, including **Wireless spectrum licenses and 5G Network Deployment, is capitalized**[70](index=70&type=chunk)[71](index=71&type=chunk) - Assets for incremental costs of obtaining subscriber contracts are capitalized and amortized over the estimated subscriber life, totaling **$330 million net of amortization** as of September 30, 2023[76](index=76&type=chunk) [3. Basic and Diluted Net Income (Loss) Per Share](index=26&type=section&id=3.%20Basic%20and%20Diluted%20Net%20Income%20(Loss)%20Per%20Share) This note provides the calculation of basic and diluted EPS, detailing weighted-average shares and the impact of potential dilution **Earnings Per Share (EPS) - Class A and B Common Stock:** | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | Basic Net Income (Loss) per share | $(0.26) | $0.78 | $0.53 | $2.58 | | Diluted Net Income (Loss) per share | $(0.26) | $0.65 | $0.44 | $2.15 | **Weighted-Average Common Shares Outstanding (in thousands):** | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | Basic | 534,034 | 530,436 | 532,788 | 529,870 | | Diluted | 534,034 | 637,455 | 639,931 | 637,295 | - For the three months ended September 30, 2023, the dilutive impact of **107 million weighted-average shares of Class A common stock was excluded** due to the net loss, making the effect anti-dilutive[83](index=83&type=chunk) - In connection with the EchoStar merger, the terms of **Convertible Notes, convertible note hedge, and warrant transactions will be amended** to reflect conversion into EchoStar Class A Common Stock[81](index=81&type=chunk) [4. Supplemental Data - Statements of Cash Flows](index=27&type=section&id=4.%20Supplemental%20Data%20-%20Statements%20of%20Cash%20Flows) This note provides supplemental cash flow and non-cash data, including cash paid for interest and capitalized interest **Supplemental Cash Flow Data (in thousands):** | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---| | Cash paid for interest (including capitalized interest) | $851,275 | $798,773 | | Cash paid for income taxes | $22,440 | $49,746 | | Capitalized interest | $969,736 | $773,689 | | Accrued wireless equipment purchases | $281,444 | $537,977 | | Accrued Upfront Payment | $100,000 | — | - **Capitalized interest significantly increased by $196 million** for the nine months ended September 30, 2023, compared to the same period in 2022[88](index=88&type=chunk) - A **$100 million Upfront Payment was accrued** as of September 30, 2023, related to the extension of the T-Mobile 800 MHz spectrum license purchase option[88](index=88&type=chunk)[89](index=89&type=chunk) [5. Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities](index=28&type=section&id=5.%20Marketable%20Investment%20Securities%2C%20Restricted%20Cash%20and%20Cash%20Equivalents%2C%20and%20Other%20Investment%20Securities) This note details the composition of investment securities and highlights the derivative instrument for T-Mobile's 800 MHz spectrum **Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (in thousands):** | Category | Sep 30, 2023 | Dec 31, 2022 | |:---|:---|:---| | Total current marketable investment securities | $182,816 | $835,983 | | Restricted marketable investment securities | $23,232 | $41,689 | | Restricted cash and cash equivalents | $84,119 | $62,925 | | Other investment securities | $180,333 | $168,200 | | Total | $470,500 | $1,108,797 | - The total value of marketable investment securities, restricted cash, and other investment securities **decreased by approximately $638 million** from December 31, 2022, to September 30, 2023[90](index=90&type=chunk) - The company holds a derivative instrument, an **option to purchase T-Mobile's 800 MHz spectrum licenses, valued at $1.501 billion** as of September 30, 2023 (down from $1.693 billion at Dec 31, 2022)[103](index=103&type=chunk) - The deadline to purchase the 800 MHz spectrum licenses was **extended to April 1, 2024**, with an upfront payment of $100 million to T-Mobile, which is fully creditable against the purchase price[107](index=107&type=chunk)[109](index=109&type=chunk) **Other, net (Income/Expense) (in thousands):** | Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | Derivative instruments - net realized and/or unrealized gains (losses) | $(155,133) | $34,000 | $(192,107) | $92,000 | | Gains (losses) related to early redemption of debt | $4,480 | — | $72,566 | $(1,149) | - A significant decrease in the fair value of the T-Mobile 800 MHz spectrum option contributed to a **$155.133 million loss in 'Other, net'** for the three months ended September 30, 2023[112](index=112&type=chunk) [6. Inventory](index=34&type=section&id=6.%20Inventory) This note provides a breakdown of inventory, which increased due to a distribution agreement for Boost Infinite wireless devices **Inventory (in thousands):** | Category | Sep 30, 2023 | Dec 31, 2022 | |:---|:---|:---| | Finished goods | $484,270 | $447,322 | | Work-in-process and service repairs | $34,060 | $19,351 | | Consignment | $54,261 | $14,792 | | Raw materials | — | $20,908 | | Total inventory | $572,591 | $502,373 | - **Total inventory increased by approximately $70.2 million** from December 31, 2022, to September 30, 2023[113](index=113&type=chunk) - The increase in **consignment inventory** is primarily due to a distribution agreement related to Boost Infinite wireless devices[113](index=113&type=chunk) [7. Property and Equipment and Intangible Assets](index=35&type=section&id=7.%20Property%20and%20Equipment%20and%20Intangible%20Assets) This note details property and equipment, depreciation expenses, and the company's satellite fleet, including a new satellite under construction **Property and Equipment, Net (in thousands):** | Category | Sep 30, 2023 | Dec 31, 2022 | |:---|:---|:---| | Total property and equipment | $12,343,715 | $10,290,544 | | Accumulated depreciation | $(5,118,839) | $(4,650,425) | | Property and equipment, net | $7,224,876 | $5,640,119 | - **Property and equipment, net, increased by approximately $1.58 billion** from December 31, 2022, to September 30, 2023, primarily driven by a significant increase in 5G Network Deployment equipment[114](index=114&type=chunk) **Depreciation and Amortization Expense (in thousands):** | Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | 5G Network Deployment equipment | $94,204 | $6,665 | $231,085 | $14,989 | | Total depreciation and amortization | $294,797 | $174,736 | $806,504 | $519,300 | - **Depreciation and amortization expense for 5G Network Deployment equipment saw a substantial increase**, reflecting assets being placed into service[115](index=115&type=chunk) - DISH Network currently utilizes **nine geostationary satellites** for Pay-TV services, seven owned and two leased; a new DBS satellite, EchoStar XXV, is under construction and expected to launch in 2026[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) [8. Leases](index=36&type=section&id=8.%20Leases) This note outlines operating and finance leases, highlighting an increase in operating lease costs due to communication tower leases **Total Lease Costs (in thousands):** | Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | Operating lease cost | $130,288 | $91,447 | $364,622 | $229,359 | | Total lease costs | $149,811 | $104,702 | $437,149 | $270,652 | - **Operating lease costs increased significantly**, primarily due to communication tower leases[121](index=121&type=chunk) **Supplemental Balance Sheet Information Related to Leases (in thousands):** | Category | Sep 30, 2023 | Dec 31, 2022 | |:---|:---|:---| | Operating lease assets | $3,052,636 | $2,687,522 | | Operating lease liabilities | $3,096,308 | $2,687,883 | | Weighted Average Remaining Lease Term (Operating leases) | 11.1 years | 11.8 years | | Weighted Average Discount Rate (Operating leases) | 8.2% | 7.3% | - **Operating lease assets and liabilities increased**, reflecting ongoing lease commitments[122](index=122&type=chunk) [9. Long-Term Debt and Finance Lease Obligations](index=39&type=section&id=9.%20Long-Term%20Debt%20and%20Finance%20Lease%20Obligations) This note details long-term debt, highlighting future capital requirements for 5G deployment and upcoming debt maturities **Long-Term Debt and Finance Lease Obligations (in thousands):** | Debt Instrument | Sep 30, 2023 (Carrying Amount) | Dec 31, 2022 (Carrying Amount) | |:---|:---|:--- | | 2 3/8% Convertible Notes due 2024 | $951,168 | $1,000,000 | | 5 7/8% Senior Notes due 2024 | $1,989,139 | $2,000,000 | | 0% Convertible Notes due 2025 | $1,957,197 | $2,000,000 | | 3 3/8% Convertible Notes due 2026 | $2,908,801 | $3,000,000 | | 11 3/4% Senior Secured Notes due 2027 | $3,500,000 | $2,000,000 | | Total long-term debt and finance lease obligations (including current portion) | $21,244,011 | $21,349,138 | - The company **repurchased portions of its Convertible Notes and Senior Notes** during the nine months ended September 30, 2023[124](index=124&type=chunk) - An **additional $1.5 billion aggregate principal amount of 11 3/4% Senior Secured Notes due 2027** was issued on January 26, 2023[124](index=124&type=chunk) - DISH Network expects **significant expenditures for its 5G Network Deployment** in 2023 and 2024 and does not currently have sufficient cash or projected cash flows to fully fund its 2024 debt maturities[125](index=125&type=chunk) - The company plans to **raise additional capital**, complete the EchoStar merger, pursue strategic transactions, and/or implement cost reduction initiatives to address capital needs[126](index=126&type=chunk) - The **Intercompany Loan from DISH DBS to DISH Network, totaling $7.382 billion** as of September 30, 2023, is secured by wireless spectrum licenses and used to finance spectrum purchases and 5G Network Deployment[144](index=144&type=chunk) [10. Commitments and Contingencies](index=46&type=section&id=10.%20Commitments%20and%20Contingencies) This note details significant commitments, including 5G deployment costs, and provides a comprehensive overview of ongoing legal proceedings **Other Long-Term Obligations (in thousands) as of Sep 30, 2023:** | Year | Amount | |:---|:---| | 2023 (remaining three months) | $1,485,859 | | 2024 | $2,668,442 | | 2025 | $2,096,744 | | 2026 | $1,840,438 | | 2027 | $1,087,858 | | Thereafter | $4,955,117 | | Total | $14,134,458 | - Expected capital expenditures for **5G Network Deployment are approximately $10 billion**, with $1.858 billion included in other long-term obligations[148](index=148&type=chunk) - The option to purchase **T-Mobile's 800 MHz spectrum licenses was extended to April 1, 2024**, with a $100 million upfront payment, resolving prior disputes[150](index=150&type=chunk)[152](index=152&type=chunk) **Wireless Spectrum Licenses (Carrying Amount in thousands) as of Sep 30, 2023:** | License Type | Carrying Amount | |:---|:---| | Owned Licenses (Subtotal) | $19,699,971 | | Noncontrolling Investments (Northstar, SNR) | $9,890,389 | | Capitalized Interest | $8,227,581 | | Total | $37,817,941 | - DISH Network has met its **70% U.S. population coverage requirement for 5G broadband service** by June 2023, extending final build-out deadlines for certain licenses to June 14, 2025[160](index=160&type=chunk)[161](index=161&type=chunk) - The FCC confirmed DISH met two of three nationwide 5G commitments, with the remaining **35 Mbps download speed commitment** to be confirmed by drive test within six months from September 29, 2023[160](index=160&type=chunk) - Northstar Wireless and SNR Wireless AWS-3 licenses are subject to **accelerated build-out deadlines (October 2025)** due to not meeting interim requirements[179](index=179&type=chunk) - DISH Network is involved in **numerous legal proceedings**, including patent infringement lawsuits, a data breach class action, a 401(k) litigation, and a qui tam complaint seeking $10 billion related to AWS-3 bidding credits[208](index=208&type=chunk)[214](index=214&type=chunk)[216](index=216&type=chunk)[218](index=218&type=chunk)[223](index=223&type=chunk)[225](index=225&type=chunk)[227](index=227&type=chunk)[230](index=230&type=chunk)[232](index=232&type=chunk)[242](index=242&type=chunk)[244](index=244&type=chunk)[250](index=250&type=chunk)[252](index=252&type=chunk)[262](index=262&type=chunk)[267](index=267&type=chunk) - Management believes the outcomes of these legal proceedings are **unlikely to materially affect financial condition**, though they could be material to operating results for any particular period[207](index=207&type=chunk)[270](index=270&type=chunk) [11. Segment Reporting](index=82&type=section&id=11.%20Segment%20Reporting) This note provides disaggregated financial information for the Pay-TV and Wireless business segments **Total Assets by Segment (in thousands):** | Segment | Sep 30, 2023 | Dec 31, 2022 | |:---|:---|:---| | Pay-TV | $48,722,185 | $46,295,495 | | Wireless | $49,142,869 | $46,261,004 | | Eliminations | $(44,120,380) | $(39,949,937) | | Total assets | $53,744,674 | $52,606,562 | **Revenue by Segment (in thousands):** | Segment | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | Pay-TV | $2,807,101 | $3,078,418 | $8,754,372 | $9,399,244 | | Wireless | $900,302 | $1,018,132 | $2,824,550 | $3,241,590 | | Total revenue | $3,704,516 | $4,095,451 | $11,573,075 | $12,636,034 | **Operating Income (Loss) by Segment (in thousands):** | Segment | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | Pay-TV | $589,465 | $647,654 | $1,985,490 | $2,185,171 | | Wireless | $(631,271) | $(220,625) | $(1,497,539) | $(514,847) | | Total operating income (loss) | $(41,806) | $427,029 | $487,951 | $1,670,324 | - The **Wireless segment experienced a significant increase in operating loss** for both the three and nine months ended September 30, 2023, compared to the prior year[274](index=274&type=chunk) - All service revenue and substantially all long-lived assets are derived from or reside in the **United States**[274](index=274&type=chunk) [12. Contract Balances](index=85&type=section&id=12.%20Contract%20Balances) This note provides information on contract balances, including the allowance for credit losses and contract liabilities **Allowance for Credit Losses (in thousands):** | Metric | Balance at Beginning of Period | Provision for Expected Credit Losses | Write-offs Charged Against Allowance | Balance at End of Period | |:---|:---|:---|:---|:---| | Nine months ended Sep 30, 2023 | $44,431 | $54,655 | $(47,380) | $51,706 | **Contract Liabilities (in thousands):** | Metric | Sep 30, 2023 | Dec 31, 2022 | |:---|:---|:---| | Contract liabilities | $617,244 | $698,602 | - **Contract liabilities decreased by approximately $81.3 million** from December 31, 2022, to September 30, 2023[278](index=278&type=chunk) - The company applies a practical expedient and does not disclose the value of remaining performance obligations for contracts less than one year, which constitute a **substantial majority of its revenue**[279](index=279&type=chunk) [13. Related Party Transactions](index=86&type=section&id=13.%20Related%20Party%20Transactions) This note details transactions with related parties, primarily EchoStar and NagraStar, which are influenced by common ownership - DISH Network and EchoStar operate as separate public companies but share **common beneficial ownership and management** by Charles W. Ergen[280](index=280&type=chunk) **Related Party Transactions with EchoStar (in thousands):** | Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | Equipment sales and other revenue (from EchoStar) | $3 | $1 | $6 | $4 | | Cost of services (to EchoStar) | $2 | $3 | $6 | $9 | | Cost of sales – equipment and other (to EchoStar) | $1 | $1 | $4 | $4 | | Selling, general and administrative expenses (to EchoStar) | $3 | $3 | $9 | $10 | - DISH Network **leases real estate to and from EchoStar**, provides collocation and antenna space, and TT&C services to EchoStar[286](index=286&type=chunk)[287](index=287&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk)[301](index=301&type=chunk) - The companies have **tax sharing agreements and patent cross-license agreements** governing their respective rights and obligations[305](index=305&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk) **Transactions with NagraStar (in thousands):** | Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | Purchases from NagraStar | $8,972 | $10,285 | $28,012 | $32,713 | | Amounts payable to NagraStar (as of period end) | $7,235 | $7,422 | N/A | N/A | | Commitments to NagraStar (as of period end) | $2,504 | $3,272 | N/A | N/A | [14. Subsequent Events](index=96&type=section&id=14.%20Subsequent%20Events) This note discloses the subsequent sale of certain wireless assets in Puerto Rico and the US Virgin Islands to Liberty Latin America - On November 5, 2023, DISH Network agreed to **sell certain wireless assets in Puerto Rico and the US Virgin Islands to Liberty Latin America for $256 million**, payable over three years[318](index=318&type=chunk) - The transaction also includes a right for DISH to receive **preferential international roaming rates** and credits within Liberty's footprint[319](index=319&type=chunk) - The financial closing is **subject to regulatory approvals from the FCC and DOJ** and can be terminated if not completed within twelve months (with a potential three-month extension)[318](index=318&type=chunk)[319](index=319&type=chunk) [Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=97&type=section&id=Item%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on financial performance, detailing results across Pay-TV and Wireless segments and future outlook [Overview](index=97&type=section&id=Overview) DISH Network's strategy focuses on providing value in Pay-TV, expanding its Retail Wireless base, and commercializing its 5G Network - DISH Network's business segments are **Pay-TV** (DISH® and SLING® brands) and **Wireless** (Retail Wireless and 5G Network Deployment)[322](index=322&type=chunk) - The Pay-TV strategy is to be the **best provider of video services** through technology, customer service, and value, targeting both traditional and OTT streaming markets[323](index=323&type=chunk) - The Retail Wireless strategy aims to **profitably grow its subscriber base** by offering competitive prepaid and postpaid services, transitioning from an MVNO to an MNO model[324](index=324&type=chunk)[325](index=325&type=chunk) - The 5G Network Deployment strategy focuses on commercializing Wireless spectrum licenses through the nation's first cloud-native, O-RAN based 5G network, having achieved **over 73% U.S. population coverage** by June 2023[326](index=326&type=chunk)[327](index=327&type=chunk) - The company entered into an **Amended and Restated Agreement and Plan of Merger with EchoStar** on October 2, 2023, where DISH Network will merge into EchoStar[329](index=329&type=chunk) - A **cyber-security incident in February 2023** affected internal systems but not customer databases, incurring approximately $30 million in remediation costs during Q1 2023[334](index=334&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk) [EXPLANATION OF KEY METRICS AND OTHER ITEMS](index=102&type=section&id=EXPLANATION%20OF%20KEY%20METRICS%20AND%20OTHER%20ITEMS) This section defines key financial and operational metrics used to analyze the company's performance, including non-GAAP measures - Key revenue categories include **'Service revenue'** (Pay-TV and Wireless subscriber revenue) and **'Equipment sales and other revenue'** (wireless devices, non-subsidized Pay-TV equipment sales, intellectual property licensing)[339](index=339&type=chunk) - Key expense categories include **'Cost of services'** (Pay-TV programming, Wireless service costs), **'Cost of sales - equipment and other'** (wireless devices, network operations), and **'Selling, general and administrative expenses'** (sales, advertising, commissions, employee costs, installation)[340](index=340&type=chunk)[341](index=341&type=chunk)[342](index=342&type=chunk) - Non-GAAP measures like **EBITDA** (Net income (loss) attributable to DISH Network plus interest, taxes, depreciation, and amortization) and **OIBDA** (Operating income (loss) plus depreciation and amortization) are used to assess operating efficiency and financial performance[346](index=346&type=chunk)[347](index=347&type=chunk) - Subscriber metrics include **DISH TV subscribers, SLING TV subscribers, Pay-TV ARPU, DISH TV churn rate, Wireless subscribers, Wireless ARPU, and Wireless churn rate**[348](index=348&type=chunk)[349](index=349&type=chunk)[350](index=350&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk)[355](index=355&type=chunk)[356](index=356&type=chunk)[357](index=357&type=chunk)[358](index=358&type=chunk) - **Free cash flow** is defined as 'Net cash flows from operating activities' less 'Purchases of property and equipment' and 'Capitalized interest related to FCC authorizations'[359](index=359&type=chunk) [RESULTS OF OPERATIONS – Segments](index=107&type=section&id=RESULTS%20OF%20OPERATIONS%20%E2%80%93%20Segments) This section analyzes consolidated and segment-level financial performance, detailing revenue, operating income, and key operational metrics [Business Segments](index=107&type=section&id=Business%20Segments) Consolidated revenue and operating income declined, driven primarily by increased operating losses in the Wireless segment **Consolidated Revenue (in thousands):** | Period | 2023 | 2022 | Variance Amount | Variance % | |:---|:---|:---|:---|:---| | Three Months Ended Sep 30 | $3,704,516 | $4,095,451 | $(390,935) | (9.5)% | | Nine Months Ended Sep 30 | $11,573,075 | $12,636,034 | $(1,062,959) | (8.4)% | **Consolidated Operating Income (Loss) (in thousands):** | Period | 2023 | 2022 | Variance Amount | Variance % | |:---|:---|:---|:---|:---| | Three Months Ended Sep 30 | $(41,806) | $427,029 | $(468,835) | * | | Nine Months Ended Sep 30 | $487,951 | $1,670,324 | $(1,182,373) | (70.8)% | - The shift to an operating loss for the three months ended September 30, 2023, and the significant decrease in operating income for the nine months, were primarily due to **increased operating losses in the Wireless segment**[362](index=362&type=chunk)[366](index=366&type=chunk) [Pay-TV Segment](index=109&type=section&id=Pay-TV%20Segment) The Pay-TV segment experienced a decline in subscribers and revenue due to intense competition and changing consumer behavior **Pay-TV Subscribers (in millions):** | Metric | Sep 30, 2023 | Sep 30, 2022 | Change | |:---|:---|:---|:---| | Total Pay-TV subscribers | 8.840 | 10.018 | (1.178) | | DISH TV subscribers | 6.720 | 7.607 | (0.887) | | SLING TV subscribers | 2.120 | 2.411 | (0.291) | - **Net Pay-TV subscriber losses increased** for the nine months ended September 30, 2023, with both DISH TV and SLING TV experiencing higher net losses[405](index=405&type=chunk)[406](index=406&type=chunk) - **Gross new DISH TV subscriber activations decreased by 22.7%** for the nine months ended September 30, 2023, due to lack of demand, shifting consumer behavior, and increased competitive pressures[407](index=407&type=chunk) **Pay-TV ARPU:** | Period | 2023 | 2022 | Change | Change % | |:---|:---|:---|:---|:---| | Three Months Ended Sep 30 | $105.25 | $102.07 | $3.18 | 3.1% | | Nine Months Ended Sep 30 | $103.98 | $100.91 | $3.07 | 3.0% | - **Pay-TV ARPU increased** due to programming price increases for both DISH TV and SLING TV[393](index=393&type=chunk)[412](index=412&type=chunk) **DISH TV Churn Rate:** | Period | 2023 | 2022 | Change | Change % | |:---|:---|:---|:---|:---| | Three Months Ended Sep 30 | 1.58% | 1.53% | 0.05% | 3.3% | | Nine Months Ended Sep 30 | 1.69% | 1.55% | 0.14% | 9.0% | - **DISH TV churn rate increased**, adversely impacted by external factors like cord cutting, competitive pressures, and briefly by the cyber-security incident in Q1 2023[389](index=389&type=chunk)[408](index=408&type=chunk) **DISH TV SAC:** | Period | 2023 | 2022 | Change | Change % | |:---|:---|:---|:---|:---| | Three Months Ended Sep 30 | $1,065 | $1,029 | $36 | 3.5% | | Nine Months Ended Sep 30 | $1,095 | $1,033 | $62 | 6.0% | - **DISH TV SAC increased** due to higher installation costs, increased labor costs, and a lower percentage of remanufactured receivers[398](index=398&type=chunk)[416](index=416&type=chunk) - Equipment sales and other revenue for the nine months ended September 30, 2023, increased by $50 million, primarily due to a **non-recurring $75 million license agreement with Peloton** for Adaptive Bitrate Streaming patents[411](index=411&type=chunk) [Wireless Segment](index=120&type=section&id=Wireless%20Segment) The Wireless segment incurred significant operating losses due to 5G network build-out costs and a decline in Retail Wireless subscribers **Wireless Segment Operating Income (Loss) (in thousands):** | Period | 2023 | 2022 | Variance Amount | |:---|:---|:---|:---| | Three Months Ended Sep 30 | $(631,271) | $(220,625) | $(410,646) | | Nine Months Ended Sep 30 | $(1,497,539) | $(514,847) | $(982,692) | - Total purchases of property and equipment (excluding capitalized interest) for the Wireless segment increased to **$2.159 billion** for the nine months ended September 30, 2023, primarily for 5G Network Deployment[419](index=419&type=chunk) **Retail Wireless Subscribers (in millions):** | Metric | Sep 30, 2023 | Sep 30, 2022 | Change | |:---|:---|:---|:---| | Wireless subscribers, as of period end | 7.500 | 8.007 | (0.507) | | Wireless subscriber additions (losses), net | (0.494) | (0.552) | 0.058 | | Wireless ARPU | $36.19 | $37.75 | $(1.56) | | Wireless churn rate | 4.33% | 4.44% | (0.11)% | - Retail Wireless experienced a **net loss of 494,000 subscribers** for the nine months ended September 30, 2023, and a decrease in ARPU due to a shift to lower-priced service plans[453](index=453&type=chunk)[457](index=457&type=chunk) - **Wireless churn rate improved slightly**, positively impacted by an emphasis on acquiring higher quality subscribers, but negatively impacted by the migration off T-Mobile's TSA[455](index=455&type=chunk) - Cost of services in Retail Wireless decreased for the nine months ended September 30, 2023, primarily due to a **lower average subscriber base**, partially offset by higher monthly dealer incentive costs[459](index=459&type=chunk) - **5G Network Deployment operating loss significantly increased to $(1.198) billion** for the nine months ended September 30, 2023, driven by higher lease expenses, transport, cloud services, and increased depreciation[468](index=468&type=chunk)[469](index=469&type=chunk)[471](index=471&type=chunk) [OTHER CONSOLIDATED RESULTS](index=132&type=section&id=OTHER%20CONSOLIDATED%20RESULTS) This section summarizes other consolidated results, highlighting increased interest income and a significant expense from derivative fair value changes **Other Consolidated Results (in thousands):** | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | Interest income | $18,649 | $7,632 | $90,907 | $21,853 | | Interest expense, net of amounts capitalized | $(10,173) | $(4,848) | $(27,379) | $(15,067) | | Other, net | $(151,497) | $57,941 | $(120,726) | $114,264 | | Income tax (provision) benefit, net | $67,988 | $(58,169) | $(81,930) | $(372,936) | | Net income (loss) attributable to DISH Network | $(139,185) | $412,230 | $283,843 | $1,367,713 | - **Interest income significantly increased** for both periods due to higher returns on cash and marketable investment securities[475](index=475&type=chunk)[480](index=480&type=chunk) - **'Other, net' shifted from income to a substantial expense**, primarily driven by a $155 million decrease in the fair value of the T-Mobile 800 MHz spectrum option for the three months ended September 30, 2023[476](index=476&type=chunk)[481](index=481&type=chunk) - The **income tax provision decreased** for the nine months ended September 30, 2023, primarily due to a decrease in income before income taxes and a lower effective tax rate[482](index=482&type=chunk) [Non-GAAP Performance Measures and Reconciliation](index=134&type=section&id=Non-GAAP%20Performance%20Measures%20and%20Reconciliation) This section provides reconciliations of non-GAAP measures, Consolidated EBITDA and Segment OIBDA, to their comparable GAAP measures **Consolidated EBITDA (in thousands):** | Period | 2023 | 2022 | |:---|:---|:---| | Three Months Ended Sep 30 | $79,148 | $642,351 | | Nine Months Ended Sep 30 | $1,108,749 | $2,253,163 | - **Consolidated EBITDA significantly decreased** for both the three and nine months ended September 30, 2023, primarily due to changes in operating revenues and expenses[485](index=485&type=chunk) **Segment OIBDA (in thousands):** | Segment | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | |:---|:---|:---|:---|:---| | Pay-TV | $675,565 | $753,602 | $2,271,638 | $2,513,244 | | Wireless | $(105,617) | $35,372 | $(130,275) | $168,541 | | 5G Network Deployment | $(299,146) | $(181,345) | $(813,597) | $(478,355) | - **Wireless segment OIBDA shifted to a loss** for the three months ended September 30, 2023, and saw a significant increase in loss for the nine-month period, driven by the 5G Network Deployment business unit[487](index=487&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=135&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses liquidity, highlighting a decrease in cash, negative free cash flow, and the strategy to fund future capital needs **Cash, Cash Equivalents and Current Marketable Investment Securities (in thousands):** | Metric | Sep 30, 2023 | Dec 31, 2022 | Change | |:---|:---|:---|:---| | Total | $1,035,000 | $2,621,000 | $(1,586,000) | - **Cash, cash equivalents, and current marketable investment securities decreased by $1.586 billion**, primarily due to capital expenditures for 5G Network Deployment, debt repurchases, and redemptions[488](index=488&type=chunk) **Net Cash Flows (in thousands) for Nine Months Ended Sep 30, 2023:** | Activity | Amount | |:---|:---| | Operating Activities | $1,718,096 | | Investing Activities | $(2,498,267) | | Financing Activities | $(131,725) | **Free Cash Flow (in thousands):** | Period | 2023 | 2022 | |:---|:---|:---| | Nine Months Ended Sep 30 | $(1,356,530) | $(445,932) | - The company experienced **negative free cash flow of $(1.356) billion** for the nine months ended September 30, 2023, a significant increase in outflow compared to the prior year, and expects this trend to continue[496](index=496&type=chunk)[499](index=499&type=chunk) - DISH Network **does not currently have sufficient cash** or projected cash flows to fully fund its 2024 debt maturities and plans to raise additional capital, complete the EchoStar merger, or implement cost reduction initiatives[513](index=513&type=chunk)[517](index=517&type=chunk) - The company is subject to **restrictive covenants on its long-term debt**, which could trigger immediate repayment if not complied with[507](index=507&type=chunk) [PART II — OTHER INFORMATION](index=145&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=145&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 10 of the financial statements for detailed information regarding the company's legal proceedings - For information regarding legal proceedings, refer to **Note 10 'Commitments and Contingencies – Litigation'** in the Notes to Condensed Consolidated Financial Statements[523](index=523&type=chunk) [Item 1A. Risk Factors](index=145&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, focusing on cyber-attacks, potential impacts from government spending changes, and EchoStar merger risks - The company remains **vulnerable to cyber-attacks** and other malicious activities, which could disrupt business, lead to financial losses, and damage reputation, despite protective measures[525](index=525&type=chunk)[527](index=527&type=chunk)[528](index=528&type=chunk)[529](index=529&type=chunk)[530](index=530&type=chunk)[532](index=532&type=chunk) - Changes in U.S. government spending, such as discontinuation of the **Affordable Connectivity Program (ACP)**, could negatively impact Wireless subscriber activations, churn rate, and reimbursements[533](index=533&type=chunk)[534](index=534&type=chunk)[535](index=535&type=chunk) - Risks related to the **EchoStar merger** include business uncertainties, contractual restrictions, significant nonrecurring expenses, potential difficulties in integration, and the possibility that anticipated benefits may not be realized[536](index=536&type=chunk)[538](index=538&type=chunk)[559](index=559&type=chunk)[560](index=560&type=chunk)[561](index=561&type=chunk) - The merger is **subject to regulatory approvals**, and failure to complete it could adversely affect market prices, businesses, and financial conditions of both companies[547](index=547&type=chunk)[548](index=548&type=chunk)[549](index=549&type=chunk) - Following the merger, EchoStar will have **substantially higher leverage**, and the combined company will continue to be controlled by one principal stockholder, Charles W. Ergen[550](index=550&type=chunk)[552](index=552&type=chunk)[558](index=558&type=chunk)[565](index=565&type=chunk)[566](index=566&type=chunk)[567](index=567&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=157&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no stock repurchases during the quarter and notes the Board's authorization for future repurchases **Issuer Purchases of Equity Securities (July 1, 2023 - September 30, 2023):** | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs | Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Programs (1) | |:---|:---|:---|:---|:---| | July 1, 2023 - July 31, 2023 | — | $— | — | $1,000,000 | | August 1, 2023 - August 31, 2023 | — | $— | — | $1,000,000 | | September 1, 2023 - September 30, 2023 | — | $— | — | $1,000,000 | | Total | — | $— | — | $1,000,000 | - **No Class A common stock was repurchased** during the three months ended September 30, 2023[569](index=569&type=chunk) - On October 20, 2023, the Board of Directors authorized stock repurchases of **up to $1.0 billion of Class A common stock** through December 31, 2024[569](index=569&type=chunk) [Item 3. Defaults Upon Senior Securities](index=145&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported[8](index=8&type=chunk) [Item 4. Mine Safety Disclosures](index=145&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that there were no mine safety disclosures during the reporting period - No mine safety disclosures were reported[8](index=8&type=chunk) [Item 5. Other Information](index=159&type=section&id=Item%205.%20Other%20Information) This section confirms no directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement - No **Rule 10b5-1 or non-Rule 10b5-1 trading arrangements** were adopted, modified, or terminated by directors or Section 16 officers during the quarter ended September 30, 2023[570](index=570&type=chunk) [Item 6. Exhibits](index=159&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including merger agreements and officer certifications - Key exhibits include the **Amended and Restated Agreement and Plan of Merger** (October 2, 2023) and the Amended and Restated Support Agreement (October 2, 2023), both incorporated by reference from a Form 8-K filing[572](index=572&type=chunk) - The report also includes **Section 302 and 906 Certifications** from the Chief Executive Officer and Chief Financial Officer, and financial statements in iXBRL format[572](index=572&type=chunk) [SIGNATURES](index=160&type=section&id=SIGNATURES) This section contains the signatures of authorized officers certifying the report's submission - The report is signed by **W. Erik Carlson (President and CEO), Paul W. Orban (EVP and CFO), and James S. Allen (SVP and Chief Accounting Officer)** on November 6, 2023[575](index=575&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . Commission File Number: 001-39144 DISH Network Corporation (Exact name of registrant as specified in its charter) Nevada 88-0336997 (St ...

DISH Network Corporation (NASDAQ:DISH) Q1 2023 Earnings Conference Call May 8, 2023 12:00 PM ET Company Participants Tim Messner - EVP & General Counsel Erik Carlson - CEO Charles Ergen - Chairman Paul Orban - CFO Dave Mayo - EVP, Network Development John Swieringa - President & Chief Operating Officer, DISH Wireless Conference Call Participants David Barden - Bank of America Securities Ric Prentiss - Raymond James Michael Rollins - Citi Walter Piecyk - LightShed Doug Mitchelson - Credit Suisse Jonathan Cha ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) DISH Network Corporation (Exact name of registrant as specified in its charter) Nevada 88-0336997 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 9601 South Meridian Boulevard ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023. OR ☐ TRANSITION REPORT PURSUANT TO S ...