EchoStar CORP

Current report

DIRECTV Transaction

Current report

On September 29, 2024, we and DTV entered into the Purchase Agreement. Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, DTV agreed to acquire from us all of the issued and outstanding equity interests of DISH DBS, which operates our Pay-TV business.

Current report

Following written notice from DTV received on November 20, 2024, DTV terminated the Purchase Agreement effective at 11:59 pm ET on November 22, 2024 pursuant to Section 7.01(a)(iv) of the Purchase Agreement because the DISH DBS Exchange Offers were not consummated by the Exchange Offer Settlement Date (as defined in the Purchase Agreement). No termination fee or other payment was due from either party to the other as a result of the termination of the Purchase Agreement.

Current report

We currently operate three primary business segments: (1) Pay-TV; (2) Wireless; and (3)Broadband and Satellite Services. Historically, we reported four primary business segments: (1) Pay-TV; (2) Retail Wireless; (3) 5G Network Deployment; and (4) Broadband and Satellite Services. See Note 16 in the Notes to our Consolidated Financial Statementsin this Annual Report on Form 10-K for further information.

Current report

In September 2024, the FCC conditionally granted our requests to extend the 5G deployment deadlines for certain of our Wireless spectrum licenses based on several commitments andin a January 10, 2025 filing to the FCC, we certified to meeting the accelerated buildout (Commitments #2 and #3 of the Extension Request) and the nationwide 80% coverage obligations (Commitment #1 of the Extension Request)due by December 31, 2024. Thus, pursuant to the Extension Request, the final deployment deadlines for the licenses subject to the Extension Request (listed in Appendix G) shall be extended to December 14, 2026. In addition, the final deployment deadlines for the licenses subject to the Extension Request (listed in Appendix G) shall be further extended to June 14, 2028 as long as we satisfy the remaining Extension Request commitments. See Note 15 in the Notes to our Consolidated Financial Statementsin this Annual Report on Form 10-K for definitions and further details.

Current report

Government subsidized wireless subscribers and other wireless subscribers (“Government subsidized subscribers”). Our Government subsidized subscribers have different subscriber economics than our core Wireless subscribers, including a significantly higher churn rate and lower subscriber acquisition costs. Therefore, our Government subsidized subscriber additions are recorded net of disconnects. Our Government subsidized subscriber count includes Wireless subscribers that participate in government subsidized programs, including the ACP program and Lifeline program, defined below, and other subscribers acquired under the Gen Mobile brand. The Affordable Connectivity Program (“ACP”) was a federal program offering broadband services and devices discounts to help low-income individuals that meet certain eligibility criteria. The ACP program funding concluded on June 1, 2024. The Lifeline Program is a federal program offering broadband services discounts to help low-income individuals that meet certain eligibility criteria. Certain states also offer a separate Lifeline program.

Current report

We currently operate three primary business segments: (1) Pay-TV; (2) Wireless; and (3)Broadband and Satellite Services.

Current report

Year* Ended December 31, 2024 Compared to the Year Ended December 31, 2023.*

Current report

Year* Ended December 31, 2023 Compared to the Year Ended December 31, 2022.*

Current report

Pay-TV Segment

Current report

DISH TV subscribers*.*We lost approximately 785,000 net DISH TV subscribers during the year ended December 31, 2024 compared to the loss of approximately 945,000 net DISH TV subscribers during the same period in 2023. This decrease in net DISH TV subscriber losses primarily resulted from a lower DISH TV churn rate, partially offset by lower gross new DISH TV subscriber activations.

Current report

Wireless Segment

Current report

Our Wireless segment provides Wireless communication services and products. We currently offer our Wireless services for 5G VoNRto over 220 million Americans and for 5G broadband service to over 268 million Americans, as well as a competitive portfolio of wireless devices.

Current report

Boost Mobile postpaid. During 2023, we launched our nationwide expansion of our Boost Mobile postpaid Wireless service. At the end of the third quarter of 2023, we began offering premium wireless devices, including Apple products. We currently offer a broad range of premium wireless devices on our 5G Network, including the Apple iPhone 15 and newer generation iPhones.

Current report

*ACP Subscribers.*A portion of our Wireless subscriber base and revenue was comprised of subscribers who received benefits under the ACP program. Households enrolled in the ACP program continued to receive the benefit on their service through April 2024. In May 2024, households received a partial benefit and on June 1, 2024 the ACP program funding concluded and households no longer received their benefit. Although we implemented plans to retain and/or migrate these subscribers to lower priced service plans, these subscribers began deactivating in the second and third quarters of 2024. As of September 30, 2024, we had approximately 33,000 Wireless ACP subscribers, the majority of which migrated to other service plans in the fourth quarter of 2024. As of December 31, 2024, we have no Wireless ACP subscribers.

Current report

Generally, ACP subscribers have lower Wireless ARPU than other Wireless subscribers and as a result, any loss of ACP subscribers had a nominal impact on pre-tax net income.

Current report

In September 2024, the FCC conditionally granted our requests to extend the 5G deployment deadlines for certain of our Wireless spectrum licenses based on several commitments andin a January 10, 2025 filing to the FCC, we certified to meeting the accelerated buildout (Commitments #2 and #3 of the Extension Request) and the nationwide 80% coverage obligations (Commitment #1 of the Extension Request)due by December 31, 2024. Thus, pursuant to the Extension Request, the final deployment deadlines for the licenses subject to the Extension Request (listed in Appendix G) shall be extended to December 14, 2026. In addition, the final deployment deadlines for the licenses subject to the Extension Request (listed in Appendix G) shall be further extended to June 14, 2028 as long as we satisfy the remaining Extension Request commitments. See Note 15 in the Notes to our Consolidated Financial Statementsin this Annual Report on Form 10-K for definitions and further details.

Current report

RESULTS OF OPERATIONS –Wireless Segment

Current report

*Percentage is not meaningful.

Current report

Wireless subscribers*.*We lost approximately 304,000 net Wireless subscribers during the year ended December 31, 2024 compared to the loss of approximately 617,000 net Wireless subscribers during the same period in 2023. This decrease in net Wireless subscriber losses primarily resulted from a lower Wireless churn rate, partially offset by lower gross new Wireless subscriber activations for the year ended December 31, 2024 compared to the same period in 2023. In addition, we had net losses of Government subsidized subscribers during the year ended December 31, 2024 compared to net additions in the same period in 2023, primarily due to the ACP program funding concluding on June 1, 2024. See “Wireless Segment – ACP Subscribers” for further information. Excluding the impact of net losses of Government subsidized subscribers, we added approximately 170,000 net Wireless subscribers during the year ended December 31, 2024.

Current report

Service revenue.“Service revenue” totaled $3.157 billion for the year ended December 31, 2024, a decrease of $180 million or 5.4% compared to the same period in 2023. The decrease in “Service revenue” compared to the same period in 2023 was primarily related to a lower average Wireless subscriber base, partially offset by an increase in Wireless ARPU, discussed below.

Current report

Wireless ARPU. Wireless ARPU was $36.57 during the year ended December 31, 2024 versus $36.15 during the same period in 2023. The $0.42 or 1.2%increase in Wireless ARPUwas primarily attributable to a shift in subscriber plan mix to higher priced service plansand increased sales of value added services. This increase waspartially offset by providing ACP subscribers discounted or free services as a result of the conclusion of the ACP program funding.

Current report

Equipment sales and other revenue.“Equipment sales and other revenue” totaled $451 million for the year ended December 31, 2024, an increase of $56 million or 14.3% compared to the same period in 2023. The increase in “Equipment sales and other revenue” compared to the same period in 2023 was primarily related to wireless devices withh igher revenue per unit shipped due to unit mix, partially offsetby a decrease in units shipped and higher promotional subsidies. During the year ended December 31, 2024, we shipped a higher percentage of devices that are compatible with our 5G Network and other devices that have a higher revenue per unit. In addition, this increase was partially offset by lower leased spectrum revenue.

Current report

Cost of services.“Cost of services”totaled $3.100 billion for the year ended December 31, 2024, an increase of $1.088 billion compared to the same period in 2023. Beginning on January 1, 2024, “Cost of services” includes certain direct costs related to our 5G Network Deployment, including lease expense on communication towers, transport, cloud services and other costs which were previously reported in “Cost of sales – equipment and other” (the “Operational Presentation Change”), which totaled $977 million for the year ended December 31, 2023, as a significant portion of our 5G Network was placed into service. Excluding the impact of the Operational Presentation Change,“Cost of services”for the year ended December 31, 2024 increased $111 million compared to the same period in 2023. This change primarily resulted from an increase in lease expense on communication towers, transport and other related costs. In addition, beginning on January 1, 2024, as a significant portion of our 5G Network was placed into service, “Cost of services” includes certain personal costs which were previously reported in “Selling, general and administrative expenses.”

Current report

These increases were partially offset by a lower average Wireless subscriber base, lower network services costs per subscriber and operational efficiencies, partially offset by higher monthly dealer incentive costs. In the third quarter of 2023, we realigned our commission structure with current business objectives to acquire higher quality, long-term subscribers, which resulted in higher monthly dealer incentive costs. The year ended December 31, 2023 was negatively impacted by the migration of subscribers off the TSA with T-Mobile and onto our new billing and operational support systems. We incurred duplicative costs related to our TSA with T-Mobile and our own billing and operational support systems as we migrated subscribers off the TSA with T-Mobile.

Current report

Cost of sales – equipment and other.“Cost of sales – equipment and other” totaled $1.251 billion for the year ended December 31, 2024, a decrease of $860 million compared to the same period in 2023. Excluding the impact of the Operational Presentation Change, “Cost of sales – equipment and other” for the year ended December 31, 2024 increased $117 million compared to the same period in 2023. This increase primarily resulted from wireless devices with higher costs per unit shipped due to unit mix, partially offset by a decrease in units shipped and higher vendor rebates. During the year ended December 31, 2024, we shipped a higher percentage of devices that are compatible with our 5G Network and other devices that have a higher cost per unit.

Current report

Selling, general and administrative expenses.“Selling, general and administrative expenses” totaled $954 million during the year ended December 31, 2024, a $160 million or 14.4% decrease compared to the same period in 2023. This decrease was primarily driven by lower sales commissions and a decrease in costs to support the Wireless segment, partially offset by higher marketing expenditures. In the third quarter of 2023, we realigned our commission structure with current business objectives to acquire higher quality, long-term subscribers, which resulted in lower sales commissions. In addition, beginning on January 1, 2024, as a significant portion of our 5G Network was placed into service, “Cost of services” includes certain personal costs which were previously reported in “Selling, general and administrative expenses” partially driving this decrease. Furthermore, the year ended December 31, 2023 was negatively impacted by costs of migrating subscribers off the TSA with T-Mobile and onto our new billing and operational support systems.

Current report

Impairment of long-lived assets and goodwill.* “*Impairment of long-lived assets and goodwill” totaled $219 million for the year ended December 31, 2023. This impairment represents a noncash impairment charge for goodwill. See Note 2 to the Notes to our Consolidated Financial Statementsin this Annual Report on Form 10-K for further information.

Current report

Impairment of long-lived assets and goodwill.* “*Impairment of long-lived assets and goodwill” totaled $219 million for the year ended December 31, 2023. This impairment represents a noncash impairment charge for goodwill. See Note 2 in the Notes to our Consolidated Financial Statementsin this Annual Report on Form 10-K for further information.

Current report

Broadband and Satellite Services Segment

Current report

Broadband subscribers. We lost approximately 121,000 net Broadband subscribers for the year ended December 31, 2024 compared to the loss of approximately 224,000 net Broadband subscribers during the same period in 2023. The decrease in net Broadband subscriber losses was primarily due to lower subscriber disconnects as a result of the new EchoStar XXIV satellite service launch, which increased capacity and subscriber service satisfaction. We continue to operate in a highly competitive environment, with continued pressure from satellite-based competitors and other technologies.

Current report

Service revenue.“Service revenue” totaled $1.205 billion for the year ended December 31, 2024, a decrease of $239 million, or 16.5%, as compared to 2023. The decrease was primarily attributable to lower sales of broadband services to our North American and international consumer customers and our North American enterprise customers. In addition, theyear ended December 31, 2023 was positively impacted byrevenue from Hughes Systique which was deconsolidated from our Consolidated Financial Statements as of December 31, 2023.

Current report

Cost of services.“Cost of services” totaled $503 million for the year ended December 31, 2024, a decrease of $28 million, or 5.3%, as compared to 2023. The decrease was primarily attributable to lower costs of broadband services to our North American and international consumer customers. Our“Cost of services” represented 41.7% and 36.8% of “Service revenue” during the years ended December 31, 2024 and 2023, respectively. This increase primarily resulted from a change in service mix to lower margin services.

Current report

Selling, general and administrative expenses. “Selling, general and administrative expenses” totaled $423 million for the year ended December 31, 2024, a decrease of $64 million, or 13.1%, as compared to 2023. The decrease was primarily attributable to lower costs to support the Broadband and Satellite Services segment and lower marketing expenditures, partially offset by an increase in bad debt expense.

Current report

Depreciation and amortization. “Depreciation and amortization” expense totaled $460 million for the year ended December 31, 2024, an increase of $41 million, or 9.7%, as compared to 2023. The increase was primarily attributable to an increase in satellite depreciation driven by our EchoStar XXIV satellite, which was placed into service in December 2023.

Current report

Interest expense, net of amounts capitalized.“Interest expense, net of amounts capitalized” totaled $482 million during the year ended December 31, 2024, an increase of $391 million compared to the same period in 2023. During the year ended December 31, 2024, as the qualifying assets, including markets within certain bands of wireless spectrum licenses, have been placed into service with the deployment of our 5G Network, we no longer capitalize interest on those assets and as a result, capitalized interest was reduced by $230 million, and interest expense increased. See Note 2 to the Notes to our Consolidated Financial Statementsin this Annual Report on Form 10-K for further information. In addition, this increase resulted from the DISH DBS Financing and issuance of new senior secured and convertible notes, partially offset by the redemption of debt that matured in March and November 2024 and the extinguishment of our Existing DISH Convertible Notes in connection with the EchoStar Exchange Offers, as defined and detailed in Note 10 to the Notes to our Consolidated Financial Statementsin this Annual Report on Form 10-K.

Current report

Other, net.“Other, net” income totaled $593 million during the year ended December 31, 2024, compared to expense of $1.771 billion during the same period in 2023. The year ended December 31, 2024 was positively impacted by a gain on debt extinguishment of $689 million and a $50 million gain on the Liberty Puerto Rico Asset Sale. The year ended December 31, 2024 was also negatively impacted by a $73 million loss in equity in earnings, including $63 million from our portion of Invidi’s goodwill impairment, and $73 million in net losses and impairments on marketable and non-marketable investment securities. See Note 6, Note 10 and Note 15 to the Notes to our Consolidated Financial Statementsin this Annual Report on Form 10-K for further information. The year ended December 31, 2023 was negatively impacted by a $1.793 billion decrease in the fair value of our option to purchase certain of T-Mobile’s 800 MHz spectrum licenses and $26 million in net losses and impairments on marketable and non-marketable investment securities, partially offset by $73 million of early debt extinguishment gains from the repurchases ofour convertible notes.

Current report

GUARANTOR FINANCIAL INFORMATION

Current report

Our senior secured notes consisting of our 10 3/4% Senior Secured Notes due 2029 and 6 3/4 % Senior Secured Notes due 2030 and our 3 7/8% Convertible Secured Notes due 2030 (together, the “EchoStar Notes”) are jointly and severally guaranteed on a senior secured basis by certain of our wholly-owned subsidiaries (the “Guarantors”). Specifically, Northstar Wireless, LLC, SNR Wireless LicenseCo, LLC, DBSD Corporation and Gamma Acquisition L.L.C. the (“Spectrum Assets Guarantors”) and Northstar Spectrum, LLC, SNR Wireless HoldCo, LLC, DBSD Services Limited and Gamma Acquisition HoldCo, L.L.C. the (“Equity Pledge Guarantors”).

Current report

Certain of our wholly-owned subsidiaries are designated as “Unrestricted Subsidiaries” and do not guarantee any of our registered senior notes. The guarantee of the Guarantors will be discharged and released in accordance with the terms of the applicable indenture. The rights of holders of the registered senior notes against the Guarantors may be limited under the U.S. Bankruptcy Code or state fraudulent transfer or conveyance law.

Previous report

On December 31, 2023, we completed the Merger with DISH Network. On the terms and subject to the conditions set forth in the Amended Merger Agreement, on December 31, 2023 at the Effective Time each share of DISH Network Common Stock outstanding immediately prior to the Effective Time, was converted into the right to receive a number of validly issued, fully paid and non-assessable shares of EchoStar Common Stock equal to the Exchange Ratio. Any shares of DISH Network Common Stock that were held in DISH Network’s treasury or held directly by us or Merger Sub immediately prior to the Effective Time were cancelled and cease to exist and no consideration was paid in respect thereof. All shares of the DISH Network Class A Common Stock were delisted from NASDAQ and deregistered under the Securities Exchange Act of 1934, as amended.

Previous report

The EchoStar Common Stock issued to the Ergen DISH Stockholders (as defined in the Amended Merger Agreement) as Merger consideration was issued through a private placement exemption from registration under the Securities Act. At the Effective Time, each share of DISH Network Class A Common Stock owned by the Ergen DISH Stockholders immediately prior to the Effective Time was converted into the right to receive a number of shares of EchoStar Class A Common Stock equal to the Exchange Ratio, and (b) each share of DISH Network Class B Common Stock owned by the Ergen DISH Stockholders immediately prior to the Effective Time was converted into the right to receive a number of shares of EchoStar Class B Common Stock equal to the Exchange Ratio.

Previous report

Concurrently with the entry into the Amended Merger Agreement, the Ergen Stockholders, we and DISH Network entered into the Amended Support Agreement.

Previous report

In connection with the completion of the Merger, on December 31, 2023, we and the Ergen Stockholders entered into the Registration Rights Agreement. See Note 1 in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K for further information.

Previous report

For more information and a copy of the Amended Merger Agreement, the Amended Support Agreement and the Registration Rights Agreement, see the Form 8-K of EchoStar Corporation filed on October 3, 2023 and the Form 8-K of EchoStar Corporation filed on January 2, 2024.

Previous report

With the Merger complete, we are currently focused on the Integration.

Previous report

As a result of us providing 5G broadband service to over 50% of the U.S. population by June 14, 2023, the final build-out deadlines have been extended automatically to June 14, 2025 for us to offer 5G broadband service to at least 70% of the population in each Economic Area for the 700 MHz Licenses and AWS-4 Licenses and at least 75% of the population in each Economic Area for the H Block Licenses.

Previous report

Cybersecurity Incident

Previous report

On February 23, 2023, DISH Network experienced a network outage that affected its internal servers and IT telephony. We immediately activated our incident response and business continuity plans designed to contain, remediate and recover from the situation. We engaged the services of certain cyber-security experts and outside advisors to assist in the evaluation of the situation, and once we determined that the outage was due to a cybersecurity incident, we promptly notified appropriate law enforcement authorities.

Previous report

On February 28, 2023, we further disclosed that certain data had been extracted from the DISH Network IT systems. Our investigation into the extent of the incident is now completed. We determined that our customer databases were not accessed, however, we confirmed that certain employee-related records as well as a limited number of other records containing certain personal information were among the data extracted. We took steps to protect the affected records, received confirmation that the extracted data was deleted and notified individuals whose data was extracted.

Previous report

The DISH TV, SLING TV and Retail Wireless services, along with our wireless and data networks remained operational at all times during the incident. As of March 31, 2023, all significant systems had been restored.

Previous report

During the first quarter of 2023, we incurred substantially all of our cyber-security-related expenses for this matter, including, but not limited to, costs to remediate the incident and provide additional customer support. During the second, third and fourth quarters of 2023, we did not incur additional material expenses resulting from the cyber-security incident and do not expect to incur material expenses in future periods. During the year ended December 31, 2023, we incurred approximately $30 million in cyber-security-related expenses, which are recorded in “Cost of services” on our Consolidated Statements of Operations and Comprehensive Income (Loss).

Previous report

Earnings before interest, taxes, depreciation and amortization (“EBITDA”). EBITDA is defined as “Net income (loss) attributable to EchoStar” plus “Interest expense, net of amounts capitalized” and net of “Interest income,” “Income tax (provision) benefit, net” and “Depreciation and amortization.” This “non-GAAP measure” is reconciled to “Net income (loss) attributable to EchoStar” in our discussion of “Results of Operations” below.

Previous report

Affordable Connectivity Program/Gen Mobile subscribers (“ACP/Gen Mobile subscribers”). The Emergency Broadband Benefit Program (“EBBP”) was launched by the FCC in February of 2021 to support broadband services and devices to help low-income individuals that meet certain eligibility criteria. The Affordable Connectivity Program (“ACP”) replaced the EBBP on December 31, 2021. Our ACP/Gen Mobile subscribers have a significantly higher churn rate compared to our other Wireless subscribers and we incur lower costs to acquire these subscribers. Therefore, our ACP/Gen Mobile subscriber additions are recorded net of disconnects.

Previous report

Our net Pay-TV subscriber additions, gross new DISH TV subscriber activations, and DISH TV churn rate have been negatively impacted as a result of programming interruptions and threatened programming interruptions in connection with the scheduled expiration of programming carriage contracts with content providers. On October 6, 2021, Tegna removed its channels from our DISH TV programming lineup in 53 markets. On February 4, 2022, we and Tegna signed a new programming carriage contract which restored these channels to our DISH TV programming lineup. Although subscriber demand for local network stations has decreased in recent years as a result of, among other things, programming being available to subscribers through alternative methods, including over the air antennas, there can be no assurance that the removal of these or other channels will not have a material adverse effect on our business, results of operations and financial condition or otherwise disrupt our business. In addition, Disney removed its channels, including locals in eight markets, from our DISH TV and SLING TV programming lineup, from October 1, 2022 to October 3, 2022, after we were unable to reach a contract extension agreement prior to the expiration of the programming carriage contract. The channels were restored when we reached a tentative contract extension agreement with Disney and subsequently, we and Disney signed a new long-term programming carriage contract.

Previous report

Selling, general and administrative expenses.“Selling, general and administrative expenses” totaled $1.622 billion during the year ended December 31, 2022, a $148 million or 10.1% increase compared to the same period in 2021. This change was primarily driven by an increase in costs to support the Pay-TV segment and an increase in subscriber acquisition costs resulting from higher marketing expenditures.

Previous report

Boost postpaid. In the fourth quarter of 2022, we launched our Boost postpaid wireless service, to a limited number of customers who had signed up for early registration. During 2023, we launched our nationwide expansion of our Boost postpaid wireless service, and at the end of the third quarter of 2023, we began offering the iPhone 15 on our 5G Network and expanded our Boost postpaid offering through a distribution partnership with Amazon.

Previous report

Historically, a portion of our Wireless subscribers received services through T-Mobile’s CDMA Network. However, T-Mobile previously provided notice that it intended to shutdown the CDMA Network on March 31, 2022. The shutdown began on March 31, 2022 and was completed during the second quarter of 2022. While we worked to mitigate the harms of this shutdown, we incurred significant costs to migrate subscribers on this timeline. We implemented targeted efforts and promotions directed at impacted customers, which resulted in the successful migration of the vast majority of our CDMA subscribers. The CDMA shutdown negatively impacted our gross new Wireless subscriber activations, our Wireless churn rate, and our results of operations during the first and second quarters of 2022. During the second quarter of 2022, we removed approximately 126,000 subscribers from our ending Wireless subscriber count representing Wireless subscribers who did not migrate off the CDMA network prior to the shutdown. The effect of the removal of the 126,000 subscribers was excluded from the calculation of our net Wireless subscriber additions/losses and Wireless churn rate.

Previous report

On June 21, 2022, we and T-Mobile signed an amendment to the MNSA. In connection with this amendment, T-Mobile agreed to transfer to us (subject to required regulatory approvals) all Boost branded customers of former Sprint affiliates, Shentel and Swiftel, as well as Boost branded customers who were previously part of the California Public Utilities Commission CARE program (the “Boost Affiliate Subscribers”). We received regulatory approvals and on September 1, 2022 closed the transfer, upon which we received approximately 139,000 Boost Affiliate Subscribers. In addition, this amendment, among other things, settled all open disputes, including CDMA matters, with terms providing improved pricing and enhanced roaming solutions for our consumers. Prior to the signing of this agreement, the first and second quarters of 2022 were adversely impacted by, among other things, our CDMA migration costs and our ability to launch more competitive service plans in the marketplace. As a result, during the first and second quarters of 2022, we experienced lower gross new Wireless subscriber activations and higher Wireless churn.

Previous report

*ACP Subscribers.*A portion of our subscriber base and revenue is comprised of subscribers who receive benefits under ACP. The ACP programis expected to end unless Congress appropriates additional funding. As a result, the FCC has begun taking steps to wind down the ACP and has announced that ACP stopped accepting new applications and enrollments on February 7, 2024. The FCC projects that households enrolled in the ACP will continue to receive the benefit on their service through April 2024. This date is an estimate and may change. Without additional funding from Congress, the FCC anticipates that the current ACP funding is projected to run out in April 2024. Discontinuation, amendment or repeal of ACP, or replacement of ACP with one having different eligibility requirements and/or funding levels could negatively impact, among other things, our net Wireless subscriber activations and results of operations or impose additional costs on our business. If ACP funding is ultimately restored or replaced, there can be no assurance that the timing of the restoration or replacement will not lead to service interruptions and negatively impact, among other things, our net Wireless subscriber activations and results of operations. Generally, ACP subscribers have lower Wireless ARPU than other Wireless subscribers.

Previous report

We regularly evaluate ways to enhance our business. As part of this process, we are in regular dialogue with interested parties who may assist us in accomplishing our goals, including ongoing conversations with CONX Corp. (an entity partially owned by Charles W. Ergen, our Chairman) regarding a transaction involving our Retail Wireless segment. There can be no assurance that these discussions will lead to a transaction nor as to the structure or terms of any such transaction.

Previous report

RESULTS OF OPERATIONS – Retail Wireless Segment

Previous report

Impairment of long-lived assets and goodwill.* “*Impairment of long-lived assets and goodwill” totaled $99 million for the year ended December 31, 2023. This impairment represents a noncash impairment charge for goodwill. See Note 2 to the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K for further information.

Previous report

We entered the retail wireless business in 2020 as a result of the Boost Mobile Acquisition and the Ting Mobile Acquisition and we expanded the business in 2021 through the Republic Wireless Acquisition. During the second quarter of 2021, we acquired over 200,000 subscribers as a result of the Republic Wireless Acquisition. We are currently in the process of integrating our Retail Wireless operations and have made and continue to make targeted changes to our marketing, sales, and operations to further enhance our profitability.

Previous report

Wireless subscribers. We lost approximately 576,000 net Wireless subscribers during the year ended December 31, 2022 compared to the loss of approximately 728,000 net Wireless subscribers during the same period in 2021. This decrease in net Wireless subscriber losses primarily resulted from a lower Wireless churn rate on a lower average Wireless subscriber base, partially offset by the shutdown of the CDMA Network, the effectiveness of our promotions and competitive pressures. During the years ended December 31, 2022 and 2021, our CDMA migration efforts required significant focus and resources from management and our sales personnel, which adversely impacted our gross new Wireless subscriber activations. Furthermore, we have and continue to face increased competitive pressures, including aggressive competitor marketing, discounted service plans and deeper wireless device subsidies.

Previous report

Service revenue.“Service revenue” totaled $3.654 billion for the year ended December 31, 2022, a decrease of $489 million or 11.8% compared to the same period in 2021. The decrease in “Service revenue” compared to the same period in 2021 was primarily related to a lower average Wireless subscriber base and a decrease in Wireless ARPU, discussed below.

Previous report

Wireless ARPU. Wireless ARPU was $37.72 during the year ended December 31, 2022 versus $39.00 during the same period in 2021. The $1.28 or 3.3% decrease in Wireless ARPU was primarily attributable to, among other things, CDMA migration credits and subscriber plan mix to lower priced service plans.

Previous report

Equipment sales and other revenue.“Equipment sales and other revenue” totaled $481 million for the year ended December 31, 2022, a decrease of $273 million or 36.2% compared to the same period in 2021. The decrease in “Equipment sales and other revenue” compared to the same period in 2021 was primarily related to a decrease in units shipped.

Previous report

Cost of services.“Cost of services” totaled $2.135 billion for the year ended December 31, 2022, a decrease of $315 million or 12.9% compared to the same period in 2021. The decrease in “Cost of services” was primarily attributable to a lower average Wireless subscriber base and lower network services costs per subscriber, partially offset by higher customer data usage. In addition, the fourth quarter of 2022 was negatively impacted by the revaluation of certain non-cash contingent liabilities relating to a lower than anticipated wireless churn rate on Ting subscribers. Our lower network services costs per subscriber during the year ended December 31, 2022 resulted from the new MVNO rates, as a result of our amendmentto the MNSA with T-Mobile and our NSA with AT&T. In addition, the fourth quarter of 2022 was negatively impacted by migrating subscribers off the TSA with T-Mobile and onto our new billing and operational support systems. We are incurring duplicative costs related to our TSA with T-Mobile and our own billing and operational support systems as we work to migrate subscribers off the TSA with T-Mobile.

Previous report

Cost of sales – equipment and other.“Cost of sales – equipment and other” totaled $1.194 billion for the year ended December 31, 2022, a decrease of $154 million or 11.4% compared to the same period in 2021. The decrease in “Cost of sales – equipment and other” compared to the same period in 2021 was primarily related to a decrease in units shipped and a one-time reimbursement from T-Mobile as a result of our amendmentto the MNSA with T-Mobile, partially offset by higher costs per unit shipped due to unit mix. During the fourth quarter of 2022, we shipped a higher percentage of devices that are compatible with our 5G Network. These devices have a higher cost per unit which contributed to the increase in costs per unit shipped.

Previous report

Selling, general and administrative expenses.“Selling, general and administrative expenses” totaled $706 million during the year ended December 31, 2022, a $127 million or 22.0% increase compared to the same period in 2021. This change was primarily driven by higher marketing expenditures, an increase in costs to support the Retail Wireless segment, including costs of migrating subscribers off the TSA with T-Mobile and onto our new billing and operational support systems, and higher amortization of capitalized sales commissions.

Previous report

As a result of us providing 5G broadband service to over 50% of the U.S. population by June 14, 2023, the final build-out deadlines have been extended automatically to June 14, 2025 for us to offer 5G broadband service to at least 70% of the population in each Economic Area for the 700 MHz Licenses and AWS-4 Licenses and at least 75% of the population in each Economic Area for the H Block Licenses.

Previous report

During 2015, through our wholly-owned subsidiaries American AWS-3 Wireless II L.L.C. (“American II”) and American AWS-3 Wireless III L.L.C. (“American III”), we initially made over $10 billion in certain noncontrolling investments in Northstar Spectrum, LLC (“Northstar Spectrum”), the parent company of Northstar Wireless, L.L.C. (“Northstar Wireless,” and collectively with Northstar Spectrum, the “Northstar Entities”), and in SNR Wireless HoldCo, LLC (“SNR HoldCo”), the parent company of SNR Wireless LicenseCo, LLC (“SNR Wireless,” and collectively with SNR HoldCo, the “SNR Entities”), respectively. On October 27, 2015, the FCC granted certain AWS-3 wireless spectrum licenses (the “AWS-3 Licenses”) to Northstar Wireless and to SNR Wireless, respectively, which are recorded in “Regulatory authorizations, net” on our Consolidated Balance Sheets. Under the applicable accounting guidance in Accounting Standards Codification 810,Consolidation (“ASC 810”), Northstar Spectrum and SNR HoldCo are considered variable interest entities (“VIEs”) and, based on the characteristics of the structure of these entities and in accordance with the applicable accounting guidance, we consolidate these entities into our financial statements. On October 12, 2023, the FCC consented to the sale of Northstar Manager’s ownership interests in Northstar Spectrum, which we purchased for a total of approximately $109 million. This purchase resulted in the elimination of all of our redeemable noncontrolling interest as it related to Northstar Spectrum as of the purchase date and we continue to consolidate the Northstar Entities as wholly-owned subsidiaries. Subsequent to December 31, 2023, the FCC consented to the sale of SNR Management’s ownership interests in SNR HoldCo, which was purchased by our direct wholly-owned subsidiary EchoStar SNR HoldCo LLC for a total of approximately $442 million on February 16, 2024. This purchase resulted in the elimination of all of our redeemable noncontrolling interest as it related to SNR HoldCo as of the purchase date and we continue to consolidate the SNR Entities as wholly-owned subsidiaries. See Note 2 in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K for further information.

Previous report

RESULTS OF OPERATIONS – 5G Network Deployment Segment

Previous report

Cost of sales – equipment and other.“Cost of sales – equipment and other” totaled $977 million during the year ended December 31, 2023, an increase of $456 million compared to the same period in 2022. The increase primarily resulted from an increase in lease expense on communication towers, transport, cloud services, and other costs related to our 5G Network.

Previous report

Selling, general and administrative expenses.“Selling, general and administrative expenses” totaled $255 million during the year ended December 31, 2023, a $32 million increase compared to the same period in 2022. This change was primarily driven by an increase in costs to support our 5G Network Deployment.

Previous report

Impairment of long-lived assets and goodwill.* “*Impairment of long-lived assets and goodwill” totaled $120 million for the year ended December 31, 2023. This impairment represents a noncash impairment charge for goodwill. See Note 2 to the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K for further information.

Previous report

Cost of sales – equipment and other.“Cost of sales – equipment and other” totaled $522 million for the year ended December 31, 2022, an increase of $422 million compared to the same period in 2021. The increase primarily resulted from an increase in lease expense on communication towers, transport, cloud services, and other costs related to our 5G network.

Previous report

Selling, general and administrative expenses.“Selling, general and administrative expenses” totaled $224 million for the year ended December 31, 2022, a $56 million increase compared to the same period in 2021. This change was primarily driven by an increase in costs to support our 5G Network Deployment.

Previous report

Competition

Current report — wording carried from elsewhere

Our Wireless segment provides Wireless communication services and products. We currently offer our Wireless services for 5G VoNRto over 220 million Americans and for 5G broadband service to over 268 million Americans, as well as a competitive portfolio of wireless devices. We offer customers value by providing choice and flexibility in our Wireless services. We offer competitive consumer plans with no annual service contracts anddevice financing arrangements for certain qualified subscribers.

Current report — wording carried from elsewhere

On September 29, 2023, the FCC confirmed we met all of our June 14, 2023 band-specific 5G deployment commitments, and two of our three nationwide 5G commitments. The single remaining 5G commitment, that at least 70% of the U.S. population has access to average download speeds equal to 35 Mbps, was achieved in March 2024 using the drive test methodology previously agreed upon by us and the FCC and overseen by an independent monitor.

Current report — wording carried from elsewhere

Equipment sales and other revenue.“Equipment sales and other revenue” totaled $75 million for the year ended December 31, 2024, a decrease of $111 million or 59.7% compared to the same period in 2023. The decrease in “Equipment sales and other revenue” compared to the same period in 2023 was primarily related to a non-recurring $75 million license of our Adaptive Bitrate Streaming patents to Peloton covering certain Peloton products that resolves our litigation involving those products during the second quarter of 2023.

Current report — wording carried from elsewhere

Selling, general and administrative expenses.“Selling, general and administrative expenses” totaled $1.076 billion during the year ended December 31, 2024, a $339 million or 23.9% decrease compared to the same period in 2023. This change was primarily driven by a decrease in subscriber acquisition costs resulting from lower marketing expenditures and lower gross new DISH TV subscriber activations and a decrease in personnel costs.

Current report — wording carried from elsewhere

Impairment of long-lived assets and goodwill.* “*Impairment of long-lived assets and goodwill” totaled $6 million for the year ended December 31, 2023. This impairment represents a noncash impairment charge for goodwill. See Note 2 to the Notes to our Consolidated Financial Statementsin this Annual Report on Form 10-K for further information.

Current report — wording carried from elsewhere

Our Wireless segment business strategy is to expand our current target segments and profitably grow our Wireless subscriber base andcommercialize and grow customer traffic on our 5G Network. We intend to grow our Wireless subscriber base by acquiring and retaining high quality subscribers with competitive offers, choice and outstanding customer service that better meet those subscribers’ needs and budget.

Current report — wording carried from elsewhere

Currently, we offer Wireless subscribers competitive consumer plans with no annual service contracts and monthly service plans including high-speed data and unlimited talk and text. We also offer a variety of value-added services, including, but not limited to, device payment and protection plans and device financing arrangements for certain qualified subscribers.

Current report — wording carried from elsewhere

Wireless subscribers, gross*.*During the year ended December 31, 2024, we activated approximately 2.520 million gross new Wireless subscribers compared to approximately 2.743 million gross new Wireless subscribers during the same period in 2023, a decrease of 8.1%. Our gross new Wireless subscribers for the year ended December 31, 2024 was negatively impacted by our emphasis on acquiring and retaining higher quality subscribers and increased competitive pressures, including aggressive competitor marketing, discounted service plans and deeper wireless device subsidies.

Current report — wording carried from elsewhere

Impairment of long-lived assets and goodwill. “Impairment of long-lived assets and goodwill” totaled $536 million for the year ended December 31, 2023. This impairment represents a $533 million noncash impairment charge to goodwill and a $3 million noncash impairment for long-lived assets. See Note 2 to the Notes to our Consolidated Financial Statementsin this Annual Report on Form 10-K for further information.

Current report — wording carried from elsewhere

Interest income.“Interest income” totaled $117 million during the year ended December 31, 2024, a decrease of $91 million compared to the same period in 2023. This decrease primarily resulted from lower average cash and marketable investment securities balances during the year ended December 31, 2024.

Current report — wording carried from elsewhere

11 3/4% Senior Secured Notes due November 15, 2027

Current report — wording carried from elsewhere

5 7/8% Senior Notes due 2022

Current report — wording carried from elsewhere

2 3/8% Convertible Notes due 2024

Current report — wording carried from elsewhere

5* *7/8% Senior Notes due 2024

Current report — wording carried from elsewhere

3 3/8% Convertible Notes due 2026

Current report — wording carried from elsewhere

The indentures related to our outstanding EchoStar senior secured notes and convertible senior secured notes contain restrictive covenants that, among other things, impose limitations on our and certain of our subsidiaries’ ability to: (i) incur or guarantee additional indebtedness; (ii) make certain investments and other restricted payments; (iii) create liens; (iv) enter into certain transactions with affiliates; (v) merge or consolidate with another company; (vi)transfer or sell assets; (vii) allow to exist certain restrictions on paying dividends or other payments; and (viii) guarantor engagement in new activities. Should we fail to comply with these covenants, all or a portion of the debt under the senior secured notes could become immediately payable. The senior secured notes also provide that the debt may be required to be prepaid if certain change-in-control events occur. In addition, the convertible senior secured notes provide that, if a “fundamental change” (as defined in the related indenture) occurs, holders may require us to repurchase for cash all or part of their convertible notes. As of the date of filing of this Annual Report on Form 10-K, we were in compliance with the covenants and restrictions related to our respective long-term debt.

Previous report — wording carried elsewhere

DISH TV subscribers*.*We lost approximately 805,000 net DISH TV subscribers during the year ended December 31, 2022 compared to the loss of approximately 595,000 net DISH TV subscribers during the same period in 2021. This increase in net DISH TV subscriber losses primarily resulted from lower gross new DISH TV subscriber activations and a higher DISH TV churn rate.

Previous report — wording carried elsewhere

We cannot predict with any certainty the impact to our net Pay-TV subscriber additions, gross new DISH TV subscriber activations, and DISH TV subscriber churn rate resulting from programming interruptions or threatened programming interruptions that may occur in the future. As a result, we may at times suffer from periods of lower net Pay-TV subscriber additions or higher net Pay-TV subscriber losses.

Previous report — wording carried elsewhere

Selling, general and administrative expenses. “Selling, general and administrative expenses” totaled $491 million for the year ended December 31, 2022, a decrease of $5 million, or 1.1%, as compared to 2021. The decrease was primarily attributable to decreases in sales and marketing expenses.

Previous report — wording carried elsewhere

We also have obtained certain insurance for our EchoStar XXIV satellite covering launch plus the first year of operations. We will continue to assess circumstances going forward and make insurance-related decisions on a case-by-case basis.