EchoStar Corporation

Welcome to the Echo Star third quarter 2024 earnings call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the call, please press star zero from your telephone keypad. As a reminder, this conference is being recorded. I'll now turn the call over to Dean Manson, Chief Legal Officer. Please go ahead, sir.

Thank you. Welcome to Echostar's third quarter 2024 earnings call. We'll begin with opening remarks from Hamid Akhavan, President and CEO, followed by Paul Orban, EVP and Principal Financial Officer, Gary Shanman, EVP and Group President of Video Services, John Swearinga, President of Technology and COO, and Jeff Boggs, SVP of Finance for Hughes, who is joining us as Paul Gasky is currently traveling for enterprise business meetings. We request that any participant producing a report not identify other participants or their firms in such reports. We also do not allow audio recording, which we ask that you respect. All statements we make during this call, other than statements of historical fact, constitute forward-looking statements made pursuant to the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to be materially different from historical results and from any future results expressed or implied by the forward-looking statements. For a list of those factors and risks, please refer to our quarterly report on Form 10-Q for the quarter ended September 30, 2024, filed and accepted today, November 12, and our subsequent filings made with the SEC. We understand the SEC has some technical difficulties today disseminating all public company filings, So we posted the third quarter 10-Q directly to our investor relations website a few hours ago. Our 10-Q is now available on EDGAR as well. All cautionary statements we make during this call should be understood as being applicable to any forward-looking statements we make wherever they appear. You should carefully consider the risks described in our reports and should not place any undue reliance on any forward-looking statements. We assume no responsibility for updating any forward-looking statements. We refer to OIBDA and free cash flow during this call. The comparable gap measure and a reconciliation for OIPDA is presented in our earnings release and in the case of free cash flow in our 10Q. With that, I'll turn it over to Hamid.

Thank you, Dean. Welcome, everyone. Thank you for joining us today. For the past few earnings calls, we have postponed discussing certain aspects of our financing as transactions were under negotiation. However, I'm pleased to address these with you today. At the end of September, we announced a series of transactions which represents one of the largest and most comprehensive simultaneous M&A and balance sheet restructurings to date. Of the transactions which have already been completed, first, TPG Angela Gordon and a number of co-investors as well as DirecTV provided $2.5 billion in financing to pay DISH DBS November debt maturity, interest, and other operating needs. Second, we launched and successfully executed an exchange offer for the convertible notes of which we received tenders from 92.9% of the 2025s and 98.5% of the 2026s. Today, note holders who opted into the exchange will receive a combination of new secured straight and convertible notes with a lower total principal amount due and maturities extended to 2030. Furthermore, certain convertible node holders will provide approximately $5.2 billion in additional financing via secured nodes, which are due in 2029. Third, we issued $400 million in equity via a pipe facility subscribed by institutional investors. We expect both the secured nodes and the pipe to be funded today. As a result of these transactions, The going concern disclosure we had in the first half of 2024 has been removed. Finally, we agreed to sell our video services business, namely Dish and Sling, to DirecTV, subject to successful closing of a DBS exchange offer and satisfying other customary closing conditions. The transaction would reduce EchoStar's consolidated debt by approximately $11.7 billion The resulting combined pay TV company would benefit U.S. pay TV consumers by providing more choices and better value in this highly competitive market. The sale of our video services business at DirecTV will take time. Assuming successful completion of the related exchange offer, we expect it to close in late 2025. While we are hopeful the DBS exchange will be successful, we now have a more robust foundation to operate and grow EchoStar's business independent of the exchange outcome. Looking at the bigger picture of our business, the recent transactions highlight the valuation of our spectrum assets. As we look to the future of connectivity and an AI-powered world, wireless connectivity will be a primary enabler, and wireless spectrum will be the most scarce resource, giving further rise to its valuation. We believe there are upwards of tens of billions of dollars in asset value that is not accounted for in our current market cap. Closing this gap could have a tremendous positive impact on our share price. We are focused on realizing this value for our shareholders through robust development and the scaling of our mobile business. As for Echostar's third quarter operating results, I am once again pleased with our team's execution. We continue to manage costs throughout the business and focus on profitable growth at a scale. The pay TV segment continued to create significant cash flow for the business during the quarter. We grew the Sling TV customer base and improved operational efficiencies on the Dish TV side and cost-effective initiatives. On the Hughes front, we continue our march toward expansion of our enterprise business, such as our in-flight aviation products and services. In parallel, we focused on acquiring and retaining high-value consumer subscribers at HughesNet. For our Boost Mobile brand, we continued to make improvements and saw additional subscriber growth in the third quarter, excluding the impacts of the terminated ACP program. We'll talk more about the strategy and performance of the Boost Mobile in a few minutes, but we've improved the digital experience through a unified brand identity and offerings and added important new distribution through Apple retail channels. We continue to enhance and densify our open RAN 5G wireless network. The FCC took a significant step in promoting competition in the wireless market by approving our updated build-out framework for our 5G network. This new framework will enable us to focus on driving competition faster in key markets delivering lower-cost offerings to consumers, and accelerating and expanding our final build-up milestones for certain spectrum licenses. Overall, we made tremendous progress in realigning our business, addressing financial concerns, and setting up EchoStar for growth over the coming years. Before I turn the call over to Paul Orban for a commentary on the financials, and in light of the recent election, we look forward to working with the new administration on advancing U.S. leadership in 5G promoting competition both domestically and internationally, and driving innovation and growth with Open RAN, cloud-native, and non-terrestrial network or NTN satellite solutions. Now over to Paul Orbit.