Core Viewpoint - DirecTV has decided to terminate its planned acquisition of EchoStar's video distribution service, DISH DBS, due to the rejection of a debt exchange offer by DISH bondholders [1][2]. Group 1: Acquisition Details - DirecTV announced in September that it would acquire DISH DBS for $1, which included assuming $9.75 billion of DISH's debt [2]. - A successful debt exchange was a condition for the acquisition, and the rejection of the offer has forced DirecTV to walk away from the deal by the deadline of November 22 [2][3]. Group 2: Market Context - The proposed merger was viewed as a strategic move in a declining pay-TV market, where both DirecTV and DISH are facing increased competition from streaming services [4]. - Streaming services have become more popular due to their on-demand nature and internet accessibility, leading to a decline in traditional satellite TV subscriptions [4]. Group 3: Financial Implications - The rejected debt exchange involved a "haircut" of $1.5 billion for DISH bondholders, which they did not accept [3]. - EchoStar, co-founded by Charlie Ergen, is currently burdened with over $20 billion in debt, making the merger critical for its financial health [5].

Core Viewpoint - The merger between DirecTV and Echostar's Video Distribution business, including Dish TV and Sling TV, is anticipated to create a stronger competitive force in the U.S. video industry, which is increasingly dominated by streaming services [1][2]. Group 1: Merger Details - DirecTV announced the acquisition of Dish/Sling for $1.00 while assuming Echostar's $9.75 billion debt [1]. - The merger will require government approval, with expectations that it will be approved by Q4 2025 [1][3]. - The combined entity will have over 18 million subscribers, making it the largest pay-TV provider, surpassing Comcast and Charter Communications [3]. Group 2: Industry Context - The pay-TV industry has seen a significant decline, with DirecTV and Dish losing 63% of their subscriber counts since 2016 [3]. - In 2023, DirecTV lost 1.8 million subscribers, while Dish lost 945,000 subscribers [3]. - The merger is expected to provide more negotiating power for carriage fee renewals with linear TV networks and SVOD providers [4]. Group 3: Financial Implications - The combined companies are projected to save at least $1 billion annually [5]. - EchoStar is expected to be in a stronger financial position to enhance its 5G network, benefiting its customers and stakeholders [6]. - TPG, a private equity partner, will acquire the remaining 70% of DirecTV from AT&T for $7.6 billion, marking AT&T's exit from the television industry [6][7]. Group 4: Historical Context - This merger follows a previous attempt in 2002 that was blocked by regulators due to competition concerns [1][8]. - The merger of satellite providers is not unprecedented, as seen in the 2008 merger of Sirius Satellite and XM Satellite Radio [8].

Group 1: Merger Considerations - EchoStar Corporation's subsidiary DISH TV is exploring a merger with AT&T's DirecTV, with discussions still in early stages and no agreement reached [1] - A merger between DirecTV and Dish could reshape the pay-TV market, potentially stabilizing subscriber bases in a streaming-dominated environment [2][3] - The combined subscriber base of the two companies could reach approximately 20 million, enhancing market strength [3] Group 2: Regulatory Environment - A merger of this scale is expected to face significant scrutiny from U.S. regulators, particularly concerning antitrust issues, as a previous merger attempt was blocked in 2002 [4] - There is speculation that the current industry changes may allow the deal to pass regulatory scrutiny this time [5] Group 3: Company Performance - EchoStar Corporation reported a 9% year-over-year decline in revenues to $3.96 billion, missing consensus estimates by 0.6% [6] - The company is experiencing net subscriber losses in its Pay-TV, Retail Wireless, and Broadband services, which are negatively impacting its top-line performance [6] - Currently, EchoStar has a Zacks Rank of 5 (Strong Sell), although its shares have increased by 44.2% over the past year, contrasting with a 13.8% decline in the sub-industry [7]

[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) Forward-looking statements are subject to risks and uncertainties, with actual results potentially differing materially due to factors like the EchoStar merger and competition - The company identifies key risk categories that could cause actual results to differ from forward-looking statements, including risks related to the **merger with EchoStar**, **intense competition** in Pay-TV and Wireless, **operational performance**, reliance on third-party providers, **cybersecurity threats**, **substantial debt**, and the **need for additional capital**[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) [Item 1. Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) The financial statements reveal a significant decline in financial position, with assets decreasing, liabilities increasing, and a net loss, raising substantial doubt about the company's going concern ability Condensed Consolidated Balance Sheet Summary (As of June 30, 2024 vs. Dec 31, 2023) | Balance Sheet Item | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $2,008,471 | $2,343,661 | | **Total Assets** | $43,286,892 | $51,413,031 | | **Total Current Liabilities** | $6,666,654 | $7,592,166 | | **Total Liabilities** | $41,782,948 | $34,182,475 | | **Total Stockholder's Equity (Deficit)** | $1,503,944 | $16,792,174 | Condensed Consolidated Statements of Operations Summary | Income Statement Item (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $3,568,270 | $3,911,577 | $7,208,159 | $7,868,559 | | **Operating Income (Loss)** | $(31,771) | $206,334 | $(5,792) | $529,757 | | **Net Income (Loss)** | $(211,824) | $222,424 | $(222,055) | $465,662 | | **Net Income (Loss) Attributable to DISH Network** | $(211,849) | $200,323 | $(225,728) | $423,028 | Condensed Consolidated Statements of Cash Flows Summary (Six Months Ended) | Cash Flow Item (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Net cash flows from operating activities** | $703,711 | $1,349,816 | | **Net cash flows from investing activities** | $161,532 | $(2,054,511) | | **Net cash flows from financing activities** | $(1,000,883) | $(42,072) | - The company states that **substantial doubt** exists about its ability to continue as a **going concern**, lacking cash for Q4 2024 operations or the **$1.983 billion debt maturing in November 2024**, and is actively discussing funding sources[32](index=32&type=chunk)[33](index=33&type=chunk) [Note 1: Organization and Business Activities](index=12&type=section&id=Note%201.%20Organization%20and%20Business%20Activities) DISH Network operates Pay-TV, Retail Wireless, and 5G Network Deployment segments, with significant early 2024 asset transfers to EchoStar, and management concluding **substantial doubt** about its **going concern** ability - On **January 10, 2024**, DISH transferred **significant assets** to its parent, EchoStar, including wireless spectrum licenses and the EchoStar XXV satellite, with a net carrying value of **$12.003 billion**, recorded as a dividend, and assigned a **$4.7 billion intercompany loan** to EchoStar[25](index=25&type=chunk)[26](index=26&type=chunk) - On **March 12, 2024**, DISH sold its **700 MHz spectrum** to EchoStar for approximately **$1.037 billion**, using the proceeds to repay the **$951 million** balance on its 2 3/8% Convertible Note[28](index=28&type=chunk) - As of **June 30, 2024**, the company had **8.074 million Pay-TV subscribers** (6.076 million DISH TV and 1.998 million SLING TV) and **7.281 million Wireless subscribers**[36](index=36&type=chunk)[38](index=38&type=chunk) [Note 8: Long-Term Debt and Finance Lease Obligations](index=34&type=section&id=Note%208.%20Long-Term%20Debt%20and%20Finance%20Lease%20Obligations) As of June 30, 2024, DISH reported approximately **$25.0 billion** in long-term debt, including a **$1.983 billion** maturity in November 2024 and a **$4.7 billion** intercompany loan to EchoStar, with fair values significantly below carrying amounts Long-Term Debt Summary (as of June 30, 2024) | Debt Instrument | Issuer | Carrying Amount (in thousands) | Fair Value (in thousands) | | :--- | :--- | :--- | :--- | | 5 7/8% Senior Notes due 2024 | DDBS | $1,982,544 | $1,885,796 | | 0% Convertible Notes due 2025 | DISH | $1,957,197 | $1,416,091 | | 3 3/8% Convertible Notes due 2026 | DISH | $2,908,799 | $1,827,540 | | Intercompany Loan 2026 Tranche | DISH | $4,767,289 | $4,767,289 | | **Total Long-Term Debt & Finance Lease Obligations** | | **$24,986,948** | **$19,624,639 (debt only)** | - In **January 2024**, a **$4.7 billion intercompany loan tranche** was assigned to parent company EchoStar, making it an **external obligation** of DISH Network to its parent[99](index=99&type=chunk)[114](index=114&type=chunk) [Note 9: Commitments and Contingencies](index=40&type=section&id=Note%209.%20Commitments%20and%20Contingencies) The company faces significant 5G network deployment commitments requiring additional capital for 2025, potential liabilities from the AWS-3 auction up to **$1.892 billion**, and ongoing litigation including patent infringement and a data breach class action - The company has **met its 2023/2024 5G deployment commitments**, covering **over 200 million Americans** with 5G VoNR, but will need to **raise additional capital** to meet its **June 14, 2025 final build-out requirements**[41](index=41&type=chunk)[119](index=119&type=chunk) - The company faces a **potential liability** from the **AWS-3 auction**, where Northstar Wireless could owe up to approximately **$1.892 billion** and SNR Wireless up to approximately **$1.029 billion** depending on re-auction outcomes[124](index=124&type=chunk)[126](index=126&type=chunk) - DISH is a defendant in **multiple patent infringement lawsuits** from entities like ClearPlay and TQ Delta, concerning features like AutoHop™ and satellite technologies, with many cases ongoing and **uncertain outcomes**[138](index=138&type=chunk)[145](index=145&type=chunk)[177](index=177&type=chunk) - A **class action lawsuit** was filed against the company related to a **February 2023 cybersecurity incident**, alleging deficient security and failure to protect customer data, with an **uncertain outcome and potential liability**[140](index=140&type=chunk)[149](index=149&type=chunk) [Note 10: Segment Reporting](index=61&type=section&id=Note%2010.%20Segment%20Reporting) For Q2 2024, Pay-TV generated **$668 million** operating income on **$2.68 billion** revenue, while Retail Wireless and 5G Network Deployment segments posted widening operating losses Segment Performance (Three Months Ended June 30, 2024 vs 2023) | Segment | Revenue 2024 (in thousands) | Revenue 2023 (in thousands) | Operating Income (Loss) 2024 (in thousands) | Operating Income (Loss) 2023 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Pay-TV | $2,676,284 | $2,975,140 | $667,797 | $720,792 | | Retail Wireless | $891,531 | $928,241 | $(121,362) | $(112,499) | | 5G Network Deployment | $34,892 | $19,079 | $(578,206) | $(401,959) | Segment Performance (Six Months Ended June 30, 2024 vs 2023) | Segment | Revenue 2024 (in thousands) | Revenue 2023 (in thousands) | Operating Income (Loss) 2024 (in thousands) | Operating Income (Loss) 2023 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Pay-TV | $5,402,862 | $5,947,271 | $1,338,040 | $1,396,025 | | Retail Wireless | $1,797,381 | $1,903,107 | $(195,779) | $(130,706) | | 5G Network Deployment | $63,820 | $37,986 | $(1,148,240) | $(735,562) | [Management's Narrative Analysis of Results of Operations](index=73&type=section&id=Item%202.%20Management%27s%20Narrative%20Analysis%20of%20Results%20of%20Operations) Management discusses declining consolidated revenue and operating losses driven by subscriber losses and 5G network investments, reiterating **substantial doubt** about the company's **going concern** ability and urgent need for capital - Management reiterates the **going concern issue**, stating the company lacks cash for Q4 2024 operations or the **$1.983 billion debt maturing in November 2024**, and is actively discussing options to **raise additional capital**[247](index=247&type=chunk)[255](index=255&type=chunk) - The company highlights **significant asset sales and transfers** to its parent, **EchoStar**, in **early 2024**, including wireless spectrum licenses and a satellite, executed to **manage capital and debt obligations**[233](index=233&type=chunk)[234](index=234&type=chunk)[236](index=236&type=chunk) - The company **achieved its 5G network deployment milestone**, covering **over 200 million Americans** with VoNR, but **capital expenditures are expected to increase** to meet 2025 build-out requirements[245](index=245&type=chunk)[253](index=253&type=chunk) [Pay-TV Segment Analysis](index=84&type=section&id=Pay-TV%20Segment%20Analysis) The Pay-TV segment faces intense competition, leading to subscriber decline, though Q2 2024 net losses improved to **104,000**, with revenue decreasing **10.0%** to **$2.68 billion** and operating income falling **7.4%** Pay-TV Key Metrics (Q2 2024 vs Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Net Subscriber Losses (in millions) | (0.104) | (0.294) | +64.6% | | DISH TV Net Losses (in millions) | (0.182) | (0.197) | +7.6% | | SLING TV Net Additions (Losses) (in millions) | 0.078 | (0.097) | N/A | | Pay-TV ARPU | $108.42 | $104.07 | +4.2% | | DISH TV Churn Rate | 1.39% | 1.51% | -0.12 pts | | DISH TV SAC | $938 | $1,169 | -19.8% | - Competition remains **intense** from established providers and direct-to-consumer streaming services, leading to **cord-cutting and cord-shaving**, with **programming costs expected to continue increasing**[285](index=285&type=chunk)[291](index=291&type=chunk) - The **decrease in gross new DISH TV subscriber activations (down 36.7% YoY)** was attributed to lack of demand, shifting consumer behavior, lower marketing spend, and emphasis on higher-quality subscribers[301](index=301&type=chunk) [Retail Wireless Segment Analysis](index=97&type=section&id=Retail%20Wireless%20Segment%20Analysis) The Retail Wireless segment improved Q2 2024 net subscriber losses to **16,000** due to a lower churn rate of **2.93%**, but faces challenges from a widening operating loss of **$121 million** and the conclusion of the ACP program Retail Wireless Key Metrics (Q2 2024 vs Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Net Subscriber Losses (in millions) | (0.016) | (0.188) | +91.5% | | Gross Subscriber Additions (in millions) | 0.606 | 0.711 | -14.8% | | Wireless Churn Rate | 2.93% | 4.54% | -1.61 pts | | Wireless ARPU | $35.91 | $36.37 | -1.3% | - The **federal Affordable Connectivity Program (ACP) funding concluded on June 1, 2024**, impacting approximately **387,000 ACP subscribers**, with a **risk of deactivation** in the second half of 2024 despite migration efforts[328](index=328&type=chunk) - The **significant drop in the wireless churn rate** was positively impacted by the **completion of a subscriber migration** off T-Mobile's TSA systems and a **strategic focus on acquiring and retaining higher-quality subscribers**[327](index=327&type=chunk)[338](index=338&type=chunk) [5G Network Deployment Segment Analysis](index=105&type=section&id=5G%20Network%20Deployment%20Segment%20Analysis) The 5G Network Deployment segment reported a Q2 2024 operating loss of **$578 million**, a **43.8%** increase, driven by higher operating costs and depreciation, requiring more capital for 2025 build-out 5G Network Deployment Financials (Q2 2024 vs Q2 2023) | Financial Item (in thousands) | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $34,892 | $19,079 | +82.9% | | Total Costs and Expenses | $613,098 | $421,038 | +45.6% | | Operating Loss | $(578,206) | $(401,959) | -43.8% | | OIBDA | $(312,286) | $(278,475) | -12.1% | - **Operating costs increased** primarily due to **higher lease expenses** for communication towers and other **network-related costs** as deployment expands, with certain personnel costs reclassified from SG&A to Cost of Services[361](index=361&type=chunk) - **Depreciation and amortization expense increased by $142 million YoY** as more 5G network assets were placed into service, and this expense is **expected to continue increasing** as the buildout progresses[362](index=362&type=chunk) [Controls and Procedures](index=114&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective as of June 30, 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[384](index=384&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[385](index=385&type=chunk) [PART II — OTHER INFORMATION](index=114&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=114&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 9 of the Condensed Consolidated Financial Statements for detailed information regarding the company's ongoing legal proceedings - For information regarding legal proceedings, the report directs readers to **Note 9, "Commitments and Contingencies – Contingencies – Litigation"** in the financial statements[386](index=386&type=chunk) [Risk Factors](index=114&type=section&id=Item%201A.%20Risk%20Factors) This section incorporates by reference the detailed discussion of risk factors from the company's most recent Annual Report on Form 10-K for the year ended December 31, 2023 - The report **incorporates by reference** the detailed discussion of risk factors from the company's most recent **Annual Report on Form 10-K**[387](index=387&type=chunk) [Exhibits](index=114&type=section&id=Item%206.%20Exhibits) The report lists filed exhibits, including Section 302 and 906 certifications by the CEO and CFO, and financial statements formatted in iXBRL - Filed exhibits include **CEO and CFO certifications** as required by **Sarbanes-Oxley Sections 302 and 906**, as well as **iXBRL data files** for the financial statements[388](index=388&type=chunk) [Signatures](index=115&type=section&id=Signatures) The report was duly authorized and signed on **August 13, 2024**, by the President and CEO, EVP and CFO, and SVP and Chief Accounting Officer - The Form 10-Q was signed on **August 13, 2024**, by the company's **CEO, CFO, and Chief Accounting Officer**[390](index=390&type=chunk)

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]