EchoStar Corporation Class A Stock

Greetings, and welcome to the EchoStar Corporation Q2 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Jeff Blum, Acting Chief Legal Officer and Secretary. Thank you. You may begin.

Good afternoon. I'm here with Charlie Ergen; Paul Orban, our CFO; and John Swieringa, our COO. We will begin with opening remarks from Charlie, followed by a question-and-answer session. We ask that any participant producing a report not identify other participants or their firms in such reports. We also do not allow audio recordings.

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 Securities 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 annual report on Form 10-K for the fiscal year ended December 31, 2025, our 10-Q filed today and our subsequent filings made with the SEC. This information and supplemental materials relating to today's call will be posted on our Investor Relations website.

All cautionary statements we make during the 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 GAAP measure and a reconciliation for OIBDA is presented in our earnings release and in the case of free cash flow in our Form 10-Q as filed today with the SEC.

With that, I'll turn it over to Charlie.

Thank you, Jeff. We're just going to take questions. But before we take questions, I just want to give a few opening comments. As you all know, August 1, we had a $1.5 billion bond maturity for Hughes Corporation. We had discussions with the bondholders, but weren't able to come up with a workable solution. So we filed Chapter 11 bankruptcy this morning for Hughes.

I want to make just a couple of points on that. One is this filing is strictly limited to the Hughes entities. It does not include EchoStar Corporation, our other non-Hughes subsidiaries or even Hughes international entities. Second, we have first day motions this afternoon in front of the court to ensure that Hughes continues to operate in normal course of business. And that means we're paying our employees, we're delivering for customers and channel partners as usual, and we expect to fulfill all ongoing forward commitments to our vendors. And third, we don't know how long bankruptcy will take before we can emerge restructured.

As a result of the litigation that is expected in this, we won't take questions on Hughes, but I would refer you in our -- we are -- you do -- are referring to our press release, there's a link to our filing that I think lays out, chapter and verse, the details there.

So with that, we'll take questions.

[Operator Instructions] And your first question comes from David Barden with New Street Research.

I guess I wanted to start with, Charlie, no one probably knows better than you the discount to which EchoStar trades to its remaining portfolio of assets and SpaceX. Now that you've got the AT&T money, it would seem a logical thing to start buying back stock. And if not, why not? And what would be the priority for that capital next?

Yes. Thanks, David, for the question. I think the way -- first of all, you did -- you will see in the 10-K -- 10-Q, I guess, that we did increase the authorization. The Board increased the authorization on -- from up to $5 billion of buybacks.

So it's obviously, one of the things that we look at based on our capital structure is -- one of the things that we look at, I would say, first and foremost, we look at investing in our business. So we look at our existing businesses to invest in and the opportunities there. And then EchoStar Capital now under the leadership of Tom Cullen. We look at other things we can look at, which could include our own company. And then after that, if we can't find anything there, then you can work all the way down to paying dividends. So we've been a good steward of capital for a lot of years, and I hope we'll continue to do that.

Your next question comes from Brent Penter with Raymond James.

A couple for me. First one to follow up on David's question. You mentioned EchoStar Capital, and that was folded under the corporate development arm. Does that represent any change in philosophy about how you're investing at EchoStar Capital? And any change to the list of kind of opportunities you gave back in November last year?

Yes, Brent. No, really no change other than it's probably a little bit more efficient since we're kind of under one roof and probably move a little bit faster just because we're like literally in the same area in the company. And obviously, Tom comes with a wealth of experience in long term with -- in the industry, not just at EchoStar.

Okay. Got it. And then on the SpaceX transactions, given where the SpaceX market cap is today compared to the $400 billion valuation it was when you signed the deals, the implied value is obviously much higher. How do you size the expected tax payment today? And then are you doing any hedging on that? Or have you all had any discussions with SpaceX about alternative ways that you could structure those deals to reduce or delay those taxes?

Yes, Brent, those are all good questions. The -- I guess the way I try to answer your question is we still are of mind that the cost of finalizing the liquid -- the termination of our wireless network and our tax liability is in that $5 billion to $7 billion range. The -- we don't know the answer on where we're going to be there. It could be a little higher, a little lower than that. A, obviously, is litigation on the termination of the network. And there -- obviously, we don't know where SpaceX will be in the future. But we know that -- and we know that there's things like 1033 exchanges and things that can reduce tax liability.

So we're in that $5 billion to $7 billion range in terms of what we think it's going to be, but that includes our wireless network termination. So that -- but we're not -- again, we're a good steward of capital. So we're looking at everything and how we can make sure that we take care of capital the best way.

Okay. Got it. And then how are you all thinking about Boost Mobile strategically? And if you wanted to engage in any kind of M&A or partnerships in that business, how restrictive are the NSA and MNSA contracts with T-Mobile and AT&T and changing control provisions there?

Well, I wouldn't get -- I can't get into the actual contracts, but I talk about Boost in general. One is we haven't -- as management, we haven't cracked the code on how to be successful to the level we'd like to in the wireless business. In general, we've treaded water for 4 years now. We were slightly cash positive in the quarter, but we did lose subscribers. But having said that, the -- we have new leadership with Bob Rupczynski, who joined us 4 or 5 months ago, and he's certainly taken a fresh approach. We think we have some strategic initiatives going forward that will reinvigorate that part of our business.

In general, we're not -- we -- all of our businesses have to run at a profit long term. And they have to have a right to exist and because everybody is only as good as their last quarter. So we like the business. We're disappointed that we haven't done better in it. It's a great challenge for us. But it's strategically important for us. And we do have a fair amount of flexibility in our -- contractually to -- whether it be M&A or partnering with people. And we'll continue to see if we can figure out how to be productive there.

Your next question comes from Sebastiano Petti with JPMorgan.

Charlie, just maybe going back to David Barden's question, just -- I mean, why increase the buyback from $2 billion to $3 billion, but yet be out of the market? I mean is there anything like that is precluding EchoStar from buying back stock currently in the market?

And then maybe just a follow-up, thinking about the remaining assets, particularly AWS-3. I mean how are you thinking about that now on the other side of the auction and perhaps maybe time line? And I think would there be any debt that would need to be paid off from the sale of the AWS-3 spectrum at this point?

Yes. We do have some restrictions in our -- on buying back stock in our bond indentures. So I don't know how public those are, but we do have some restrictions. The way I would look -- Sebastiano, the way I'd look at EchoStar or the way I look at it or I think the way we look at it is that having closed the AT&T transaction, right, and putting $2.4 billion into an escrow for the closing down of our network that is mandated by the FCC. And put that $2.4 billion aside, we have about -- when you look at the total company, we have about $14 billion or $15 billion in cash. We have that $5 billion to $7 billion liability in our opinion, going forward, which includes the $2.4 billion.

And then we still have -- we have Boost, which we haven't shown we can -- it's certainly a valuable company or potentially a valuable company. And we have our traditional video business, which continues to throw off cash. And then in addition to that, we have 261.8 million shares of SpaceX. And obviously, you can figure out at least publicly what the value of that is. And then we have spectrum -- still a solid spectrum position of AWS-3, CBRS, 700 megahertz, et cetera, that you could take a stab at in terms of valuation.

And we have -- excluding Hughes, which is obviously in the restructuring process today and which will ultimately get sorted out, we have about $5 billion of cash -- I mean, of debt. And we have another almost $8 billion of debt that SpaceX transaction will pay at closing. And then we have $1.9 billion of convert debt that at this point is in the money with converts. So you end up with a company that's cash rich, not much debt. You can -- we're pretty easy to look at the value. And then obviously, the conglomerate discount that people give to the marketplace or the lack of confidence in management or whatever the discount rate is, that's how you value the company.

And then going forward, we're going to, as we always have, look for opportunity and manage the business in a respectable fashion. This year is interesting because we're -- a lot -- unfortunately, a lot of focus is really just cleaning up the network shutdown and now cleaning some of that up through the courts just because we had no other choice but to do that. And then getting into the position to focus our company on moving forward with all the opportunities that we have.

And then in addition to that, that pivot to an asset -- a cash-rich company, there's a pivot. Every company is going through the pivot to AI and how it affects your business. And our company wasn't built for AI. We didn't know anything about it years ago. And so we have to pivot. And in a funny sort of way, there's a restructuring going on within EchoStar to say, how do we take advantage of that paradigm shift of how AI changes businesses and the way businesses operate. And I think a lot of our success in the future will be dependent on how well we do with that. And it's certainly way too early to tell how we're going to do with that. But culturally, our team is excited about it and very focused on it.

Your next question comes from Walter Piecyk with LightShed.

Just a question on the DBS prepackaged proceedings. I know bidders could still obviously potentially emerge during this process. But assuming that you end up being the kind of stalking horse bidder for the -- and the winner of those assets, just thoughts on like what you do with the radios. Has there been any appetite in the market for the redeployment of those radios for like a wholesale fourth network? And any other assets that you might end up effectively still owning at the end of that reorg?

It would be -- Walt, it would be way premature to speculate on that. I mean I think that the -- you can see our stalking horse bid, I think, was potentially $300 million, somewhat less than that because of cash on hand. So you can hypothesize that there's not -- that at least in our opinion, there's not a lot of liquidation value there. So I think it's relatively immaterial in the scheme of things when you look at the other assets that we have.

Got it. And then on the...

I think -- and Walt, I cut you off there. I think the more important thing, the way I would look at it is we're a unique company in the sense that -- and in the sense that we have mobility through Boost, we have a lot of broadband relationships, not the least of which is through SpaceX and we have video. And so we know connectivity pretty well and connectivity is going to take a lot of different shapes for customers, but most customers are going to need WiFi, broadband, whether that be through a cable or satellite, probably maybe some people with both. People still have video needs, and we're uniquely positioned to do that.

And because it looks to me like in terms of an actual network, the Big 3 network have done a good job of building a pretty big moat around their businesses. And we kind of play with one foot in that business as well. So the real key is the knowledge base we have, the fact that we play in a lot of different places in the connectivity field, I think will be helpful for us going forward. We have to prove it, of course.

You bid also in the re-auction of the DE stuff. Do you have plans to bid in the upcoming C-band auction? And -- or does anything you -- any deal that you have with the FCC where, obviously, you've committed to sell your existing spectrum, does that prohibit you from bidding in upcoming auctions or even secondary market transactions for spectrum?

Yes. The auction rules aren't out for the C-band auction, but we would anticipate that we would not be prevented from participating. And we've participated, I think, in every auction since that -- since the first one. We don't -- I don't think -- actually, the first one was a satellite auction we participated, but the first terrestrial, we did not participate in, but we participated in ones after that.

So I don't think we'll be prevented. Whether it would make any sense for us to participate given where we are, that's a whole different question, and we certainly haven't analyzed that. Secondary market transactions, if there was something that we thought was strategic and important that would enhance the value of our company, we would look at it.

Just one last question. This EchoStar Capital, the last time this topic was discussed, I think the way Hamid at the time had answered it made it seem like the top priority was like finding new investments and taking all this capital that you're getting from the spectrum sales and finding new stuff. It sounds a little different in terms of the tone where you're saying, obviously, invest in what you already have, right, and then share repurchase and dividends. And I know it was mentioned kind of new initiatives, but is that kind of deprioritized in terms of the use of capital when all this cash starts flowing in from the spectrum sales?

Yes. No, I think I would say it a different way. I think obviously, investing in our core businesses today where we have opportunities. But secondarily, we would -- the second thing we'd look at is the opportunities that Hamid has already identified. He identified quite a few and quite a few relationships, some of which we already had. So I think we would look at returns there.

And then as part of that, as a subset of that, you would look at your own company, right? If you -- it just depends on how you would evaluate those opportunities. But we're -- and I guess I'd say a cautionary note, we're going to be patient. I mean, the market is pretty frothy. It -- we're not going to rush out to do something and overpay for something just because we have money. So it's -- I can only tell you if I'm playing poker, you can have -- you can win a few big hands and you're still going to bet the same way, right? It's still, I'm playing the odds. And it's pretty frothy right now. So we probably are more cautious -- we'd probably be more cautious than some.

Your next question comes from Michael Rollins with Citi.

Just curious, Charlie, if I could ask a follow-up to that and then a second question. So the follow-up, when you discussed being more cautious than some, does that also apply to the value of EchoStar? Or is that specifically relating to other investments or new investment opportunities?

And then secondly, just if you're able to clarify, did I read correctly that you're still waiting on a waiver from the FCC with respect to holding on to your spectrum without a network? And is there any outstanding risk that the FCC could take back remaining licenses that you still control and own that may preclude you from monetizing the spectrum you discussed earlier, the AWS-3, the CBRS, the 700 megahertz?

Okay. I'll take the first part, and then Jeff will take the second part. We're cautious about everything. That includes EchoStar. We're just cautious on the marketplace in terms of -- a lot of our value is based on SpaceX. So we're just cautious on the -- we're not pessimistic. We're just cautious because things are at historical highs in almost every metric. And so that's all. That may be stupid, that may be smart. We don't know.

In terms of spectrum, so in September, as you know, the FCC from the Chairman confirmed that we had met our build-outs, we had met our commitments. So that is sort of the last official statement from the FCC. As you mentioned, we have filed a waiver for our remaining spectrum licenses to sell those for fair value in exchange for an extension of building out the network. We're awaiting that. It makes sense now that we don't have a network any longer for that to be granted. So we hope the FCC will rule on that in the near term.

Your next question comes from Bryan Kraft with Deutsche Bank.

I have a few, if I could, mostly follow-ups. I guess, first, just going back to the buybacks. Will you be seeking an amendment to the covenant that's restricting share repurchases? And then also related to that, would you consider buying back the converts in the open market, which I don't believe would need an authorization?

And then on the investing side, I was just wondering if you could elaborate on the change in strategic direction that was alluded to in the 8-K announcing Hamid's resignation and what that really meant.

And then just going to the topic of DBS consolidation, which, obviously, there's a carve-out for in the covenants in the prepack. One of the worries that investors have is that DISH could end up being the buyer in that scenario. I know the last time, obviously, DIRECTV was the buyer. So just curious how you're thinking about at this point, if there were going to be a combination, I know that's not a guarantee, is it more likely that it would be similar to the September 2024 merger agreement where DIRECTV was the buyer? Or would you be open to being the buyer?

And then just the last one, I just wanted to sort of do a reality check with you on just maybe what the risk is on the time line for the DISH Wireless and DISH DBS bankruptcies just given the opposition from the infrastructure companies.

Yes. I'll take that last one, the time line of DISH Wireless first. I think our confirmation hearing -- it's a confirmation hearing, is set for October 13. So I think our expectation today is that that's going to -- the DISH Wireless bankruptcy could be wrapped up in the fourth quarter this year.

Now I'll go back to your first question, buybacks. I mean, we are -- we do have some restrictions on buyback. And to the extent we ever wanted to buy something back, we'd look at whether that was even possible. And if it wasn't, what we would do. But we like -- we look at everything, right? The converts, it's my understanding that we don't have any restrictions on buying converts, but whether that would make sense for us is a whole another question.

Change in investing, Hamid had done a lot of work on that side. And again, a lot of things that he put in place, he's kind of handed off to Tom. And I don't see a change in that strategy other than we forced -- other than we -- because we're all kind of at a one place now and we're all -- kind of daily conversations, so just communication is a little bit better. I think we look at our core businesses first a little, and Tom is heavily involved in that. So he had additional things going on that Hamid didn't have going on. Now that's all combined. And so the priorities are still pretty much the same.

Look at our business, look at other opportunities. And if we can't find anything, use our capital, whether it be stock buybacks or dividends. So good management is going to find opportunity. But because things are frothy, I think opportunities are a little bit harder because there's a lot of cash on the sidelines and some pretty interesting valuations out there.

Am I hearing you correctly...

DIRECTV question...

DIRECTV. The -- I've always said it's inevitable to put the companies together. We've probably squandered some opportunity to do that because obviously, the synergies -- there's still synergies there, but they're obviously not as high as they would have been before. But I think we would look at it. We have no preconceived notions if there was a willingness on DIRECTV's part to put -- to do something with the companies and what that might look like, buyer, seller, joint, we have no preconceived notions of that.

The question would be, is there something at the right value. We think we're playing a little bit longer-term game at DISH. We do -- we are investing in that business. We're investing in how we approach the customer and the customer relationships. It doesn't exactly -- in the short term, that's kind of a negative to OIBDA or EBITDA, right? You could have a shorter-term approach and make those numbers go up. And we have to look at it from a holistic perspective and say, we know the business well. We know the industry well. And I think we have pretty good ideas of valuations. If there's something where people could agree on valuations or agree on incentives going forward, then that would be -- when I say invest in our business, that's one of those things where you would invest in. But if somebody made the right offer, it's not a critical component of what we have to have going forward. But we like that business. So...

And just on the buyback, I mean, Charlie, it sounds like you don't have any real plan to buy back stock and maybe you're even a little cautious on the valuation of EchoStar because of the valuation of SpaceX, even though your stock is trading at like a 50% discount to NAV and you're increasing the authorization to $5 billion. I think we're all kind of struggling to understand what the real message is here and why you increased the authorization while you sound like you don't really have any plans to buy back stock. Is there like something that we're missing here? Or can you maybe shed a little more light on that?

Yes. I mean yes, you're missing the fact that, a, good management gets themselves in a position to have flexibility. So obviously, a larger buyback doesn't require us to buy anything back. But should the marketplace be displaced or we see an opportunity because we don't have other opportunities, then we're positioned to do something if we want to.

I think also missing that -- I know you got to write reports and you got to analyze things. But again, this is a company that's got a 46-year track record of managing capital and running a relatively successful business despite massive changes sometimes in our future over those 46 years. So the -- I don't think we fit into the normal box of professional management, multiple of EBITDA, come to conferences and talk about how great you're going to do and get to the end of the quarter and do unhealthy long-term things to make a particular number. I mean, we think about it long term. We think about growing value for our shareholders long term, and we try to make the best decisions.

We're making decisions that an owner would make, right? An owner that believes in building long-term value, and it doesn't fit into the normal box of what you might do. So as a result of that, I'm not trying to be evasive. We don't know what we'll do with our capital other than we believe that with our capital, we'll be prudent. And it will -- we probably have some mix of risk in terms of some things we take relative risk on and in some places, we're conservative. But we're generally conservative as a company, right? It's rare that we take a big risk. We've had to do it a few times. Most of the time it's turned out successful, but we're generally a conservative company.

I certainly appreciate that. I do think there's a big opportunity to create long-term value though, because of that NAV discount. And that was more the nature of the question.

Yes. I mean, I think it's Captain Obvious.

[Operator Instructions] Your next question comes from Mark Dunbar with JPMorgan.

Just given all the various lawsuits and machinations over the past year, just wondering how you think about access to the capital markets going forward. Obviously, you have a lot of cash but would like to just get your thoughts on that.

Well, a, I don't think we need access to the capital markets today. So we're not really thinking about that. But I do think it's important to try to work with our bondholders to get to a good solution. And I include vendors in that. I mean the tower companies did a good job for us. But on the other hand, they made a lot of money on us and they're going to lease out their capacity to others.

And so the way I look at it to do things professionally and realistically and unemotionally, and that's what we'll try to do. I've said this many times, it's unfortunate that particularly the tower companies instituted litigation because it stopped the communication. You now have lawyers on both sides. Lawyers make money by litigating. They have no incentive to try to get clients together and you end up going through attorneys and it takes a while. It takes much longer to get to the right answers, which to -- which normally ordinary people who are realistic and want to get to a solution that's better than not having a solution, it just takes longer time.

So it's unfortunate that the litigation happened. But I knew as soon as that started getting litigated that, that was going to lead to a much longer procedure. Now we have a third party, which is a judge in bankruptcy and the third party is going to make decisions for us, which we may -- which one side or the other may like or not like. My experience has been, I'd rather make that decision myself and in negotiation, but it takes two to tango.

And your next question comes from Michael Abatemarco with Helix Partners.

I just was wondering if you'd be able to clarify the $5 billion to $7 billion liability as it relates to the SpaceX taxes. Does that also include the kind of appreciation in value in SpaceX? And does that include any kind of 1033 dynamics?

It really -- the answer is it's taken all those variables into account and against our best guess, but it could be a little higher, a little lower. It's just we're trying to give you some indication of where it might be. So if you took -- take the high end of that, took $7 billion and said, here's where we think it's going to be, you probably got a model that's realistic for what we know today. So we're trying to give you some guidance, but we don't normally give guidance, and I guess, don't even take this guidance as guidance, but it's our best guess.

And there -- what makes it difficult is there are a lot of variables because there could be 1033s, there could be other things that affect -- we have litigation that's going to affect the shutdown cost of the network. We have -- so obviously, it could be higher given where the tower companies think things should go. So -- but -- as of today -- and then we'll let you know if things change. But as of today, we still see things in that range. And it's up to us as management that it's going to take some work to get it to that range. We're certainly not there yet.

[Operator Instructions] And with that, we will conclude today's call. All parties may disconnect. Have a good day.

Greetings, and welcome to EchoStar Corporation Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Dean Manson. Thank you. You may begin.

Thank you. Welcome to EchoStar's Third Quarter -- Year-End 2025 Earnings Call. We will begin with opening remarks from Hamid Akhavan, CEO of EchoStar Capital; followed by Charlie Ergen, CEO and Chairman of EchoStar.

We request that any participant producing a report not identify other participants or their firms and 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 annual report on Form 10-K for the fiscal year ended December 31, 2025, filed today, March 2, and our subsequent filings made with SEC. This information and supplemental materials related to today's call will be posted on our Investor Relations website.

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 GAAP measure and a reconciliation for OIBDA is presented in our earnings release and in the case of free cash flow in our Form 10-K as filed today with the SEC. Before we begin, I will also note that EchoStar has filed an application that will allow us to participate in the FCC's upcoming AWS-3 spectrum auction designated as Auction 113. Pursuant to the FCC's anti-collusion rules, we are currently in a quiet period. Accordingly, we will not be making any comments or responding to any questions that relate to Auction 113.

With that, I'll turn it over to Hamid.

Thank you, Dean. Welcome, everyone, and thank you for joining us today to discuss our 2025 end-of-year results. Before I hand over to Charlie, I would like to briefly comment on a few topics relevant to EchoStar Capital. As we await final regulatory approvals for our spectrum sale and the resulting influx of capital expected during the first half of this year, we remain committed to being excellent stewards of capital. If preparing to allocate and utilize these funds based on our view of how we might maximize shareholder returns with actions and spending from immediate to over the long horizon.

Our decisions are based on many considerations, including paying down expensive or maturing debt obligations, our current and anticipated tax liabilities and any mitigating avenues and investments and development opportunities at EchoStar Capital versus returning excess capital to the shareholders through the common short-term remuneration options. These considerations of both complex and interrelated, further complicated by dynamic external factors such as the possibility and the timing of a potential SpaceX IPO.

With this context as background, it would be difficult and potentially misleading for us to provide significant detail on most of these topics at this time. EchoStar is in means of a large-scale positive transformation arising from its vision, long horizon and strategic bets and decades of diligent execution. We feel confident about our ability to continue operating on the same success principles, and navigate for the best shareholder outcome in the long run.

With that, I will now turn the call over to Charlie.

Thanks, Hamid. And as you guys know, I don't have any -- I don't normally have any opening statements and I don't today. So we will just jump into questions.

[Operator Instructions] Our first question comes from Sebastiano Petti with JPMorgan.

Charlie or Hamid, I want to see if you could update us on how you're thinking about passive versus active investments within EchoStar Capital and notwithstanding your prepared remarks, is that still the right avenue or how you're kind of thinking about it? And within that context, given anticipated IPO of SpaceX would increasing or EchoStar's stake within SpaceX be something you would be considering?

And then Charlie, big picture question. EchoStar did have an announcement about a DDD constellation, which obviously you will not be pursuing but how do you think you see -- how do you see that ecosystem evolving having spent decades around the industry the convergence of wireless and satellite, I think you have a unique perspective. So I just love to hear your thoughts. Do you see this as complementary? Do you see this as a threat to the incumbents having experience trying to be a fourth player yourself?

I will try to and I'll try to answer the first few questions are all wrapping on. I apologies I missed some of it. Please repeat that. Look, EchoStar Capital, as I mentioned, we are looking at every possibility for utilization of the liquidity and cash when it arrives. As I mentioned, we're looking at short-term options, traditional. We turn to the shareholders through the best means. Obviously, we're looking at the long horizon for creating value, all of this in the context of taxation and how the net return to the shareholders may be we obviously looking at our opportunities every single day. And and judging that against what other options may be available. So it's a long answer to a short question, but honestly, that is the case, it would be foolish to do anything other than that.

We don't actually -- until the closing, we don't have actually a SpaceX excess equity. So that is not one thing that we can make any plans on to. We actually get the equity. We have a right to it, but we don't have the -- we actually don't have that equity yet. So we'll see how that plays out. IPO may happen, obviously, it will happen independent of our plans, but we'll make sure that we maximize our options around the timing whenever that shows up and what options you might have.

In terms of holding the size of the equity we have from SpaceX, I think we'd be very happy with that at this point. I don't think we are actively looking necessarily to make any transactions at this point based on that. So that remains on our balance sheet until we get it. And then after that, we'll decide how to proceed dependent conditions at that time. I am looking at both active and passive investments, again, depending on the return. So we'll keep you posted as soon as we get to the point that we actually have that cash at hand and ready to make some transactions.

Charlie, I think the was rest for you.

Yes. So on direct to device, I mean, obviously, we're disappointed that we weren't able to continue with something we've built over 17 years. And I think we're proud of the fact that we've helped create an ecosystem for a direct advice. And I think that we're also pleased that -- and we've made our bet and that's with SpaceX and StarLink. We see them as the most viable company to do that. And with the tremendous technology and launch capabilities. They're well positioned to certainly be a leader in that. We're -- as we publicly disclosed, we already have an agreement with them to provide that to our customers.

They obviously are going to -- Mobile World Congress is going on now, I expect there'll be quite a few announcements there. There'll be other players in the marketplace. But I don't think you're going to see too much from anybody except SpaceX in the near term or StarLink in the near term, and I think that based on our experience, that's the that's the company we think will be the leader.

Our next question is from Brent Penter with Raymond James.

First one for me, a follow-up on Sebastiano's question on SpaceX. So based on the deals, I think you all were supposed to get around a 2.8% stake, which at the time was valued at $400 billion. As you mentioned, these deals haven't closed yet, but they've since announced the merger with [ X AI ]. So how does that [ X AI ] deal affect your ownership in terms of percentage? And how can we think about any kind of mark-to-market associated with that deal?

Yes. This is Charlie. I don't think we know. I mean, I think we're not privy to what that IPO, if an IPO happens or what it would happen what it looked like. I think the merger appeared publicly to be something like 80-20 between [ X-AI ] and StarLink. So that's probably gives you a feel for what our investment might look like. But we just don't -- we don't have any internal information there today.

Okay. That makes sense. And then tower companies have announced that you all stopped paying them and you all talked about the litigation in your 10-K. Last quarter, you had said you believe that you were relieved of these payments but now you've actually stopped paying them. So just wondering what actually went into the decision to take that next step and stop paying?

Well, yes, thanks for the question. The first thing most important to us was, of course, to make sure that all of our customers on our network, we're not disenfranchised to buy the existential threat that we got when the FCC informed just of an investigation taker spectrum. So we believe that with that question is, of course, majeure event. But we wanted, first and foremost, take care of our customers, which we did, and we've moved successfully all our customers last year in the fourth quarter, we moved all our customers off of our network.

At that time, given the force majeure event and the FCC's action obviously we have a network that generates -- we have a network to generate no income. So it -- we informed all of our vendors that we had a force majeure in as we're allowed as we have per contracts. So -- and as you know, since that time, several companies have commenced litigation against our independent dish wires entity, which is party to the relevant tower agreements. And I'm disappointed in that because by contrast, those companies who haven't litigated, we've had good open faith negotiations, and we've settled hundreds of contracts.

And most recently, we signed a settlement agreement with a large tower company who didn't commence litigation because at that point, principles can talk to principles. When the other companies, it's lawyers. And so you can expect protract at my experience has been that, that will be protracted litigation because the lawyers talk to the lawyers, and they don't typically a hurry to anything done. And it's just different than when business people talk to business people.

I wish you weren't here, I wish it's an ongoing evolving situation, but we'll continue to appropriately respond to any litigation that's been commenced. We'll assess all of our available steps in front of any ports or venues, and we'll engage with more tower companies to see a consensual solutions, and we'll consider all our alternatives available to the company -- to the company that's party to the tower contracts to resolve these matters and -- but it's obviously for the tower companies in conventional litigation, that's all public and that likely typically, the wheels of justice don't move very quick and that will probably take some time before we actually know all the results of that.

But we don't believe -- just to be clear, we don't believe we'll any money. And I think it shows our good faith that we've with a lot of people and attempted to engage in negotiations with people when people don't pick litigation.

Okay. And can you remind us what assets exactly are held at that DISH wireless entity?

In general, Paul, do you want to take that?

Yes, sure. In general, it's the 5G network build. So it's all the assets that were deployed to build the network and have it operational. So antennas servers so forth -- anything you would need radios and so forth and so on. So yes.

So kind of the other segment that you're now reporting?

Correct. The other segment has those assets entered, yes.

Our next question comes from David Barden with New Street Research.

Two, if I could. First would be just, Hamid, could you talk about how the approach to the vendor payment situation impacted fourth quarter results in the wireless segment from an EBITDA perspective? And how -- when you do reach a settlement, how does that all run through? Is there -- I guess, we're not going to be able to predict it, but it would be fun to know how it's all working.

And then I guess, second, Charlie, just to confirm, you don't have an any dilution provision it sounds like but when you see Elon kind of plugging $1 trillion valuation for SpaceX out of the air when it was $400 billion in June and $250 billion for [ X-AI ]. As a large shareholder, where a large part of your stock value is this holding how much credence do you put in that? Like what do you really think it's worth? Because -- or do you really believe that it's worth $1.25 trillion put together?

Let me take the first part, I'm going to generally answer -- let me take the second part, and I'll generally answer the first part and turn the maybe to Paul. But again, I think that, again, our -- having spent decades on direct-to-device and space. It's our belief that SpaceX is a one-of-a-kind company. And I can't speak to the valuations, markets were up and down, but space is going to be an increasingly important aspect commercially. But obviously, you're seeing militarily and other things as well.

So in directed device, when you can connect -- it's not just phones, it's IoT, it's cars, you see anything mobility. When you connect any square into the planet, that's just a big business. And so I can only say it this way, that SpaceX is a company, and I'm not talking about just deal, I'm talking about the company and the management of that company. They've been the best company I've ever worked with in 45 years. So they're just responsive. They're creative. They move at a pace that most companies don't. So I think I don't think any amount of valuation is probably crazy there. Obviously, we're not privy to their numbers. So we invested on faith, and we invest in people, and we felt that the best people we could invest in.

So I'm anxious to see if they do in fact an IPO, obviously, a lot of things to look at. I'm anxious to look at that. But we're not -- we don't have insight is what -- we don't have -- we don't know what the value is, right, other than we believe than the transaction that we did we thought that initially we weren't getting the value for our spectrum. We thought with the growth of SpaceX that we likely could see that we could get to the value that we got that our spectrum held and it remains to be seen.

As far as what the question was about the cost for the network.

Yes. So let me address that. Thank you for the question. First of all, it's a little complicated. You have to go back to Q3 where we took the impairment charge that we recorded in that impairment charge were costs related to any future commitments where we had contracts. So for instance, the tower expenses would have been accrued for in that impairment charge. So you don't see those in the Q4 numbers. However, what you do see is just normal operating costs and accruals for normal operating costs that you have to run the network that's running through Q4. Hopefully, that makes sense.

[Operator Instructions] Our next question comes from Bryan Kraft with Deutsche Bank.

I had a couple, if you don't mind. First, I wanted to ask what the path is to getting the wireless business to profitability on an EBITDA basis. Secondly, I just wanted to ask you, how quickly do those connectivity expenses in the other segment go away over the course of 2026, it looks like about 70% might have been gone in 4Q based on the math I did. I don't know if that's right. But trying to figure out, does that go to 0 in 1Q or 2Q?

And then the last part of my question is, it's still your expectation that total decommissioning costs will be in that $7 billion to $10 billion range. And is there any further granularity that you could share on the tax liability component of that?

Paul, do you want to take that?

Yes. So the first on the Q4 cost that you had for the other segments, what you're going to see is over time, as we decommission all of our tower sites that, that number will decline, as you pointed out, it's not down to 0 yet, but you'll see a big decrease in that in Q1 and Q2. One thing to keep in mind though, those numbers do include that if you back into that number, it does include the noncash accretion on the lease liability. So like we talked about in the Q3 earnings call, we discounted back to today's dollars, the amounts that we owed on the lease and took that as an impairment charge. We needed to accrete that up over time. And so that's probably about half of the number that you're seeing going through the P&L there.

Okay. And then on the -- on how do we get DISH Wireless positive and profitable. I've now been involved for the last couple of months on the day-to-day operations. And so the it's just appointing where we are after 4 years. But we're very close to a breakeven business there. And I can tell you the way I look at it. The way I look at it is I look at the total cost of running that, including the hybrid core because that obviously has cost it doesn't have much cost of the network, but it obviously has cost.

And then I look at it for every new customer we get or they are profitable customer. In other words, I know we're making profit on the customers we have today. We've already invested in those customers. I've seen and that we can do that. But every company that we have here has to stand on its own. And we're not we're for-profit companies, and we have to make a profit in all our businesses. And so that will be the focus there. But we're close to being where we need to get to turn the corner, but we're not there yet. And then there was one other question, which I didn't -- I didn't go to understand the other question.

Is your expectation on the decommissioning cost, the $7 billion to $10 billion range that you had previously given. Is that still what you expect? And is there any further update you could give on the tax liability on the Spectrum transactions?

Yes. I think that the -- I think we've written off about $16 billion on the debt work decommissioning, which includes all the operational costs. And so it's a significant -- I mean we made a significant investment, and I think we wrote off about $16 billion. We think that in terms of taxes and further decommissioning that that's somewhere -- I think we believe that's in the $5 billion to $7 billion range today. And I think that's what we announced last quarter. But it's definitely -- there's nothing -- there's been no movement in our analysis of that yet. And obviously, it may take some time given the litigation, it may take some time to get to the final answer. It's in the $5 billion to $7 billion range is where we are today.

So sorry, $5 billion to $7billion is your updated view versus the 7 to 10 previously? Or just trying to clarify.

I think our really initial reaction was 7 to 10, and I think when pairs,maybe that number came out. But I think last quarter, I think we I think there was a range even in Paris of 5 to 10. And I think we got that down to 5 to 7 that doesn't mean that -- I mean, that's our best guess today, right, for taxes and decommissioning costs.

And to clarify, that's cash payments that we think we would make.

Dynamic, as I mentioned in my opening remarks, taxes, liabilities, investments, everything else, value in SpaceX. Everything else is in related is a dynamic picture is impossible, literally impossible to nail it down right now, given all the movements, some internal, some external beyond our control. So anything we give you outside of the estimation that we have, even the estimation we have it's just an estimation. I mean, things are changing very rapidly and be missing for us to give you a very precise number that can change tomorrow afternoon. So just that's the best we could do today. But obviously, as the variables gets reduced over time, we can give you a much barrage.

Our next question comes from John Hodulik with UBS.

A couple of questions for Charlie, if I could. First, Charlie, any high level thoughts on the Paramount, Warner Bros. deal. What that means for linear TV distribution? And maybe do you think it will affect the industry's ability to offer ski bundles going forward, which would seem to be driving a lot of the improvement we've seen in cord cutting?

And then number two, I don't know how much you can comment on this, given the upcoming auction, but just anything you can say about further spectrum sales, maybe timing or whether we should expect them and sort of the value of your sort of remaining Spectrum holdings?

Yes. On Paramount and Warner Brothers, I'd say we've had good relationships with both of those companies for a long, long time. Obviously, they're going to have a lot -- they're going to have a long regulatory process. So we'll have to see how that goes. But it's further concentration in an industry that is changing and to technically and the -- I always worry when you're competing against your own distributors. I mean, they have a direct fine to the consumer and you're competing against that, and they're a valued vendor that obviously will is something that we have to keep our eye on. But we'll wait for their filings, and they're both great companies and great management for both of those 2. So we'll see at the appropriate time whether we have any concerns.

The -- and then on -- what was the second question?

Spectrum sales.

Spectrum sales. Again, because of the auction, I'll I'm going to be very careful here. But look, it I think we agree with the leadership of the FCC that -- which is one of the things to do here is to get spectrum and get it used as quickly as we can. And that's led to the kind of situation that we're in today. And I think our goal is to find the spectrum that we continue to use as we can continue to have is find a home for that for the -- make sure that that's going to get used in the quickest and fastest and the best way for consumers and for leadership, technical leadership in the United States. And I hope maybe we play a part in that, but we may not -- so -- but it's still obviously a valuable asset that we have.

So I don't think we have any further questions. So I just want to make one thing. We are not going to we don't plan today to have a conference call in a couple of months after the first quarter. We certainly will have filings, but I don't think we'll have a lot to add to what we had today. I think we do plan to have a conference call after the second quarter. I think that hopefully, regulatory and our company looks and [indiscernible] time to get some structure around what he's doing. And I think we can give you a pretty good snapshot of but we're going, but we're obviously, we're optimistic about what we have and our ability to compete.

And so we look forward to August.

If there's material changes in the marketplace is something we could have a call. But at this point, we believe it's going to be August or in July or early August before we have another call unless something happens in the meantime, which we could have a call at any time, if that was the case. So thanks, everybody, for joining.

Thank you, everyone.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Greetings, and welcome to the EchoStar Corporation Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Dean Manson, Chief Legal Officer.

Thank you, Joe. Welcome, everyone, to EchoStar's Third Quarter 2025 Earnings Call. We will begin with opening remarks from Hamid Akhavan, President and CEO of EchoStar Capital, followed by Charles Ergen, CEO and Chairman of EchoStar. We are also joined by other members of the leadership team.

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 annual report on Form 10-K for the fiscal year ended December 31, 2024, filed on February 27, 2025, and our subsequent filings made with the SEC. This information and supplemental materials related to today's call will be posted on our Investor Relations website.

All cautionary statements we make during the 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 GAAP measure and a reconciliation for OIBDA is presented in our earnings release and in the case of free cash flow in our Form 10-Q as filed with the SEC today.

With that, I'll turn it over to Hamid.

Thank you, Dean. Welcome, everyone, and thank you for joining us today. I would like to start by addressing the change in our call format this morning in that we have Charlie Ergen, our Founder and Chairman, here with us today. Charlie and I will provide some updates on our business, our recent transactions and discuss some changes within our organization.

As you know, we recently announced the signing of a series of major transactions, one with AT&T at the end of August and another with SpaceX in September, valued at approximately $23 billion and $19 billion, respectively. These transactions were instrumental in resolving the FCC's review of the company's spectrum utilization. Further, just this morning, we announced an amended definitive agreement with SpaceX, which builds up on the agreement the company entered into in September to sell EchoStar's unpaired AWS-3 spectrum license for approximately $2.6 billion in SpaceX stock. Once these transactions close, we will have the capital runway necessary to continue to expand our existing operations as well as the freedom to pursue new opportunities.

This focus on new growth avenues significantly broadens the aperture of our business going forward. In light of this increase in the scope of responsibilities for the company, Charlie and I have decided to create a new division focused primarily on capital management and M&A. Going forward, I will lead this new division as the CEO of EchoStar Capital. I will also continue to manage Hughes Network Systems. Charlie will take on the position of EchoStar CEO in addition to his role as Chairman. Managing our video and wireless operating business units, these changes are effective immediately.

Building up on a 45-year operating heritage across communications, media and technology infrastructure, EchoStar Capital will be a great steward of our resources. a vision and thesis-driven and strategic investment-oriented operation with a global perspective and a proven track record of value creation. Our institutional knowledge and experience uniquely positions us in the marketplace to create superior and lasting value through innovation, execution and integration, allowing us to invest in operating businesses, we can expand our capabilities and market reach and focus on initiatives that generate sustainable shareholder value. I'm incredibly excited about this opportunity and ability to usher in this new phase for EchoStar.

I will now hand off to Charlie for a few comments.

Well, it's good to be back on the call, and it's funny kind of way. But I just have a couple of comments and you knew my style is just to take questions because I never know what's on your mind. Hamid and I will do that and team.

One housekeeping issue is we agree with the President in the sense that we think corporations should just only file -- have to file twice a year instead of quarterly because it just takes -- by the time you finish the quarter, you're almost starting to work on the next one, it takes enormous amount of time. But since that hasn't changed, obviously, we'll still continue to file quarterly. But we may, from time to time, not do quarterly conference calls like this because we'll try to stay focused on our business. We will do a call next quarter for year-end. And obviously, we'll have a lot of things change between now and then. But after that, we may be sporadic in terms of how we do how to do these calls.

So with that, let's take questions.

[Operator Instructions] And the first question comes from the line of John Hodulik with UBS.

Maybe first on EchoStar Capital. Charlie, could you talk about how it will be capitalized? Will all the proceeds from the spectrum sales go into EchoStar Capital? Or just anything you could tell us about those proceeds would be great. And just what areas do you expect to invest in?

And then lastly, if I could, you still have the AWS-3 spectrum. Any update you can give us on the potential sale of that block? And just how do you think of relative value for the paired versus the unpaired transaction we just saw?

Yes. Thanks, John. I'm going to take the second part of your question. I'm going to have, I think, Hamid, the better person to answer the EchoStar Capital question.

But on AWS-3, the big picture is the sale to SpaceX is timely. I think it's because we still own the paired AWS-3 and we sold some spectrum to AT&T, the unpaired was for us, somewhat orphan spectrum. But in SpaceX hands, it gives them a lot of flexibility of combining uplink and downlink and it gives them a lot of flexibility for where spectrum might come in the future. So, for them, obviously, went for a lower price, but they're going to be able to make obviously much better use of it than we can in today's terms. And so -- and we're pleased to get SpaceX stock because we think that's -- Hamid will talk about this maybe later, but that's obviously the kind of the first place EchoStar Capital is going with the equity interest in SpaceX. And we can talk more about why we think that's an excellent investment.

The paired spectrum is we still have. Obviously, we would transact if there was a meaningful transaction. AWS-3 is quite a bit more valuable. When you -- for us, this is -- and I think other people -- I think the other carriers look at it the same way. When you look at spectrum, value comes really from three sources. One is, is it in phones? And so is it in devices. That was one of the biggest problems we had in building our own network was getting some of our spectrum in devices. But our AWS-3 paired spectrum has always been in devices for as long as I can remember. I doubt there's -- there may not be any phones in the United States that have AWS-3 spectrum in it. So it's already valuable in that sense because you don't have a bunch of extra cost on devices.

But the second thing is who uses AWS-3 and the three major carriers all use AWS-3 spectrum. It's a very wide band, 70 by 90 megahertz, it's a very wide band and all three of them use it. And in most cases, they're adjacent to our spectrum. So -- and then that brings up the third thing is most -- what does it cost you to deploy the spectrum. And in most cases, it's my understanding that the radios that are out there today, all can take our AWS-3 spectrum without having to climb the tower and put new radios in for the most part.

So it's a very valuable spectrum in that sense. We'll get a sense of that, obviously, as the auction comes up next year for some of the spectrum from a smaller swath of spectrum, but we're very comfortable with that spectrum. And we'll work with the FCC in terms of the auction rules and how that might all take place. But I think it's -- I think it's the most valuable piece of the spectrum we have, and we'll see where that goes. Hamid?

Yes. Thank you. I'll answer the question regarding the proceeds from the sales. Our intention is that all of that would be within the EchoStar Capital. And EchoStar Capital will -- I believe our shareholders would be remiss if we didn't take advantage of 45 years of our institutional heritage and thesis-driven innovation and execution in the broad fields that EchoStar has been involved in to maximize the value that they can get for that capital that comes into the company. I can't see too many companies that have the strategic understanding and the breadth that EchoStar brings to the table across telco, space, aero, defense and all the fields that the portfolio families of EchoStar have been leading and involved in.

Now obviously, we always will be great stewards of capital, and we'll maximize the use of the capital. And if distribution of capital is necessary, we'll do that in an optimized way to our shareholders as necessary. So the road map is not 100% laid out at the moment, depending on how we see the market and opportunities come to us, we'll try to take advantage of every opportunity in the best way. And as I said, I can't imagine too many companies out there with the breadth and knowledge that EchoStar has gathered over the past 45 years.

That's our plan at the moment. Obviously, as time goes on, we will be more specific about how and where we deploy that capital or any sort of distribution that could be decided in the future. But to start, we need to get all of that in place. The money is not here yet. So we have time to organize ourselves around how we would maximize the use of that capital.

Great. And one more follow-up, if I can. Just Charlie, any update on negotiations with the tower companies? And what happens to the entity, the DISH network that has the deals with the towers? Will that entity sort of stay in place?

Well, the -- obviously, we had some unprecedented kind of curve out on us when the SEC informed us that they were going to investigate take the spectrum. So obviously, we believe that's a force majeure event. And so we're happy to -- we'll work with all our vendors. Obviously, we're the biggest company that got affected by that. But obviously, we also have other vendors and people we worked with for a long time they're affected by that, and we'll work with them to the extent that they want to work with us to try to resolve those issues.

Unfortunately, one company has already commenced litigation, and that kind of sour some of the ability to talk to people because once things go into litigation, it's lawyers talking to lawyers and it's not business people talking to business people. And so that's a bit unfortunate. But -- the network is obviously an independent company when we did it, still an independent company. And it will obviously handle this through that entity. It will handle all these negotiations through that entity.

So we'll see where that shakes out, and we hope that everything can -- other than the current litigation, we hope that those things can be resolved, and we're open to have those discussions.

The next question comes from the line of Brent Penter with Raymond James.

A couple of follow-ups on some of John's questions. So you clearly are excited about the SpaceX stake that's now getting bigger. As you bring in some of this net cash, how do you think about that as an additional area to deploy capital? And as SpaceX raises additional capital, do you have rights in terms of maintaining or potentially growing your stake? Just help us think about that SpaceX stake and then where you might put your capital.

First of all, we are very excited about having that equity on our balance sheet. We consider that our first investment in EchoStar Capital. We believe that Equity has tremendous growth opportunities just by the fact that SpaceX has such a significant lead in the technology within the space and space is becoming the next infrastructure in the world as launch capabilities and cost has become economical and also global security and communication has become more important in the age of AI. So we see that as being a strategic holding. We obviously will keep that our balance sheet excited about having the additional $2.6 billion that joins it.

We certainly look to have additional investments of similar strategic nature as we -- as I mentioned, there's a number of areas, a number of industries that we have a heritage and a deep thesis about understanding of those trends within the industry. We'll be very careful about investments that are synergistic with our thesis and understanding -- very excited about that opportunity.

I can't comment about us getting more SpaceX equity or some other transaction. As I said, we are just -- this is the first day of our announcement about how we're going to go forward. But we will be diversified. We'll certainly have -- we'll be great stewards of capital. And as time goes on, we'll be more specific about the transactions. Good news is that we still have a few more months before we even have the capital on our balance sheet. So we do have the time to do a proper job of planning and communicating with you where we're headed.

Yes. And I'm just going to follow up a little bit with -- this will give you some insight, I think, to the way Hamid and EchoStar will think about extra capital will think about things. But SpaceX in terms of -- we're excited about that as an investment. And what things we look at -- first thing we look at is management. And SpaceX management, we've got to work and gotten to know over the last 10 years because we've launched on them. And they really have been the best vendor that we've worked with the space and solve very complex problems for us to move very quickly. And then we've worked a lot closer, obviously, as we've gone through these deals. And so they don't brag about themselves. They're pretty understated, but they are doing -- based on my experience, they are doing incredible things with space, whether it be launching or satellites or services.

So the second thing you look at is, obviously, are they -- is this a place that over the next decade, there's going to be business. And as Hamid said, space is going to continue to grow particularly you see governments with golden dome and security, but it's also the consumer and the ability to do broadband from satellite and also connected devices, those two things fit together. There's a lot of synergy between those two things in one company.

And the third thing is who's going to be the winners and losers. And we look at other industries, I don't know who the winner in AI is going to be. One thing I'm sure of, there will be winners and there will be losers. I just don't know which one will be winners and which ones will be losers. But in space, I think it's pretty obvious that while there's some companies doing some very interesting and creative things, SpaceX is going to be the leader for the foreseeable future because they have the most efficient launch capability and satellite manufacturing capability, in my opinion, that I've seen.

So when you add all that together, and then I think we built for 17 years, this ability to technically be able to go satellite device and regulatory-wise in the spectrum and all those kind of things. We've now -- that's now in SpaceX hands or will be in SpaceX hands. And we know that worldwide capability and the same frequency, we know that that's -- we would have built a good system, but they're going to build even a greater system in a faster period of time. So that's going to be -- that's going to grow their business by -- that's going to -- that business by itself is going to be a huge part of where they grow. That's not probably in people's calculations of their value today. So that gives you a feel how we think about things.

Okay. Great. I appreciate all the detail there. And then a follow-up on the tower side. Since you all feel that you're relieved of those tower payments, what would actually cause you to stop making your payments to the tower companies? And then just any update on the timing of when we might have a resolution as we think about litigation and negotiations with them?

Yes. I just don't think we would get into that. I mean the only thing I would say is litigation is not positive.

The next question comes from the line of David Barden with New Street Research.

I guess my first question, Charlie, there weren't many numbers in the press release today about the SpaceX AWS-3 unpaired deal. But one of those numbers was that you pay or you invested at a $212 price. So could you, for the public side investors, tell us what information do you have? What information can you share to support what apparently is your belief that $212 is an appropriate valuation for the SpaceX company today?

And then I guess my second question is maybe for Hamid or maybe also Charlie. The taxes on the asset sales, Joe, what the taxes would be helpful kind of given all the different moving parts on depreciation and capitalized interest. But also there's a theory out there that if your frustration of purpose argument works with respect to the towers that you have access to the 1033 stepped-up basis on these spectrum sales and that the taxes could be far less than maybe the market imagined. So I wonder if you could kind of opine on that.

Yes. So I really -- in terms of valuation of SpaceX, I would just say that I think I'm always repeat myself that we don't -- we have a pretty good feel of what they're doing and where they are. I think they just publicly announced 8 million customers and in broadband, I think you could overlay their growth in broadband and then overlay a device growth and look along that same curve, and you would see a greater -- much greater valuation than the $400 million. So -- and again, as I said, the management team is excellent and understated in my opinion, in terms of what they do. And they have a pretty big moat around their business. They have 90% of the launch business, and that's -- and they've launched the new generation of satellites, which is at least twice as big as anything else out there, maybe even bigger. They've launched it 12x and they've caught it, returned back, right? And other people unfortunately are struggling to get their first ones up.

So I just think -- I actually, I think their lead is actually growing. Their biggest competitor is China probably, but China, I don't know this has even successfully landed rocket. So their lead is big and growing. So if you had to pick a winner in an industry, from my opinion, I could be wrong on this, of course. And while they'll face competition and there's creative things going on in their space, they're the most obvious, of any industry that I know, they're the most kind of obvious winner, right, in terms of every other industry, you just got a lot of people that you just don't know who roughly ends up on top. And of course, SpaceX still has challenges to get through, but -- and there's still risk there. But that's the way we think about it. That's the way we'll think about things that our capital, who has those characteristics.

On the tax side of it, we're well aware of 1033, but maybe I turn it over to Paul, do you want to take that?

I'll make a comment on then we go with Paul. First of all, I absolutely endorse Charlie's statements on SpaceX. But first, we want to mention that we are not insiders to SpaceX. So we have no inside knowledge of SpaceX. And Charlie and I views are 100% aligned and common on how great a SpaceX is, but that's just personal views. And based on what we have seen, you should rely on SpaceX's statements on what they see about the valuation of the business. We are excited about having that equity -- just -- as Charlie said, we see all the trends in the space being good and SpaceX being a leader in there. Naturally, we think that this is a good place for us to go.

Now on taxes, we have not broken out the taxes separately from our other liabilities in the towers and others that we just referenced. As we have previously said, we've not sharpened our numbers since the last time we spoke in Paris. We still believe that somewhere in the range of $7 billion to $10 billion is the combination of our unoptimized taxes and unoptimized value of our liabilities. So that range is what we essentially think we have.

Now can 1033 provide additional benefit and reduce that number? I'll ask Paul. He might have some knowledge in terms of how applicable that may be, Paul. Maybe you can comment on that.

Thanks. So there's a lot of puts and takes there. Obviously, the AT&T transaction is going to close in '26. The SpaceX transactions expected to close in '27. We have NOLs that play into the mix. And we're going to do everything we possibly can to mitigate the exposure. We're working on that currently. But the range that Hamid gave that includes both decommissioning costs and tax of $7 million to $10 million is still currently our best estimate.

So just to follow up real quick. The 1033 is not in the $7 to $10 million, but it's a possibility. Does it -- is it contingent on kind of how these litigations go and whether you're successful in making this frustration of purpose argument, which would allow you to kind of move up the basis and shift assets to another class?

I'll just say, it's been used. I think some of the 600 megahertz broadcasters when they put a spectrum in auction, I think they used 1033 in some cases successfully.

So we're aware of it. And obviously, it's -- there seems to be a lot of similarities between how it's been used in the past, but everything is specific, and we'll look at that as part of our strategy. And I don't think it's contingent.

Yes. I would just add to what Charlie said, it's not contingent on what happens with the litigation. Those are totally independent concepts.

The next question comes from the line of Walter Piecyk with LightShed.

On SATS cap, I assume all the cash from all the spectrum sales is going into there. Does that keep it away from DBS shareholders and any OpEx obligations, meaning like the tower companies?

And then, Hamid, you kind of like danced around returning the capital saying if it's necessary to do it. I don't know when it's ever like required that you distribute cash. But can you give us a little bit more color on kind of at what point do you say, hey, we've used our 45 years of experience. We've looked around. There's not enough interesting stuff, and we're going to send cash to the shareholders.

Let me take that piece first. Look, first of all, comments of dancing around. First of all, Walter, it's a little early for me to give you an exact formula or recipe or road map for how we're going to utilize the cash. But as you would expect, as any great company that has institutional knowledge and heritage within certain verticals, the best ability, the best option usually is to use that knowledge to deploy the capital because they're strategic. They're the insiders to an industry that a financial investor from outside will never, never get that insight, right? So we would be remiss not to take advantage of all that institutional knowledge and return the capital to shareholders that would now they have to deploy that capital in a way that they would not take advantage of this disability.

I think the shareholders that have been with us, and we have great ones around the table right here, Charlie himself, would certainly want us to maximize the value. Now there's a limit to that. If I had $2 trillion, I couldn't use all of it. How much institutional knowledge I have, I probably couldn't use enough because the industry just doesn't have that ability or just the opportunity is not there because the market is not good or the industries that we are focused on are out of favor or they just don't have enough great opportunities for us, then we obviously, as great stewards of capital, we figure out how we would distribute that capital back to the shareholders in a tax-optimized way. We are not novices in this. And certainly, we're not walking into this without a full understanding of the options ahead.

The only thing I can say is that we have deep heritage. This company has proven it can return value by the fact that you have seen for the past year, the thesis that Charlie had put in place decades ago has come to play. There's much more we could do there. But if at the end of the day, we have excess capital beyond what we can properly use -- strategically use, we certainly will not sit on it in an unoptimized way. Very, very early stage for me to make any further detail on that. It would be premature for me to say that. Just trust us that we'd be great stewards of capital. We manage it like our own capital as it is our own capital primarily.

And then just is this protected from DBSD and the tower companies?

And then just really a follow-up on that. Can you at least say that you're not going to like build a network or something of that ilk? These are really more passive investments that you're giving -- that you're using your years of expertise to look at?

Yes. This is Charlie. I'll take -- maybe Paul want to jump in there, but the -- obviously, our capital structure is well known, and they are obviously separate independent entities for specialized purposes. One thing that is clear for the AT&T transaction is we will be paying to DBS. DBS will receive about $2.8 billion for Tranche B, which is the C-band spectrum that we're selling to -- that's collateral there. So the one thing you can say is that there will be capital moving into DBS at at least $2.8 billion.

And then just on the types of investments, is this -- I assume these are not operational. These are all passive like, hey, we're investing in great new things that maybe SpaceX gives us access to?

So, well, we certainly don't intend to be purely passive investors. We don't intend to do that because, obviously, we do not want to be, and it does not -- it's not in our best interest of our shareholders to become a fully act regulated company, investment company. We will have to manage this according to those rules, which means we'll make a combination of active and passive investments. And even when we make a passive investment, it will be strategic for us. It will be a thesis-driven investment. It will not be just -- we're not wealth managers. We don't view ourselves as just broadly deploying capital in the marketplace. And we only focus on areas where we understand.

Now in some cases, that investment cannot be a controlled investment or significant influence investment as is the case for SpaceX. The valuation of that company is very high. We would not be able to provide enough and we would not have access to enough equity to make that a control or significant influence as defined by the '40 Act. But we will balance that with other investments that we will have control and we will have operating influence to the point that we manage around any sort of regulation that will be in front of us. We will be much more precise in all of this as time goes on.

Great questions for today, but we are aware of how we need to manage that, and we are not going to become a passive investment company. We like to rely on our heritage of operations. As I mentioned, we think we can -- a combination of our understanding of technology, our ability to execute and our heritage of innovation will give us a very good platform to create great value.

And I would just add, realize we own and run three different companies today and Hughes and DISH and Sling and Boost. So -- and clearly, obviously, from a Boost perspective, we think we have -- that's a business that should grow. And obviously, the video business is somewhat challenged as it has been for a decade, but we still see those businesses lasting for a long time.

Yes. And we obviously have -- both Charlie and I have extensive operating experience, not just domestically, but also globally. We have a very broad range and scope of places and domains and verticals that we can deploy the capital effectively.

The next question comes from the line of Michael Rollins with Citi.

Charlie, in your brief opening comments, you described the reasons that you're going to do an earnings call for the fourth quarter was it's end of the year. And there's -- you alluded to changes that could be coming between now and then. I was just curious if you could give us a little bit of a preview or a road map of the range of potential changes that can continue to happen for EchoStar between now and your fourth quarter earnings call?

And then secondly, just a follow-up on kind of moving beyond being a wireless network operator. As you're selling the spectrum, at what point can you unplug the radios so that you're no longer meeting the minimum use requirements, but you're able to start saving money from doing that? Is it when these transactions close? Is it now that you've announced a few transactions and you have maybe some more possibly that you have to kind of figure things out for? Or what's the formula where you could just start unplugging?

Yes. On the second part of that, we work with -- we really need to work with regulators on that. And so those discussions are ongoing. And so it wouldn't be appropriate to discuss that. But obviously, we'll have more color on that early next year.

I'd say I'm going to give you a general answer because it's a very good question about what might happen between now and February. You asked a good question. I think while we -- I think we pivot two pivots in our company. One is the pivot to being a capital-rich company, maybe more asset-light. But the other pivot is within EchoStar, where I'm going to be involved in the day-to-day operations now is to pivot to long-term thinking. So we had to think about things short term because we're putting all our capital into the build-out of our network. And we had lots of requirements, regulatory to do that. So we did that. So we had to think about things in the rest of our businesses in a short-term way.

That historically is not the way we think as a company. One of our principles is to think long term, and we can get back to that principle now. And so I think you'll see that we're -- by making -- by thinking about things long term, we maybe we'll take a little bit of a step backward short term -- because when you go from short term to long term, it's a little bit of a step backward. But I think you'll see that in a general sort of way, we'll be more competitive in terms of what we're doing in some of our businesses.

We think about things in terms of long-term cash. We don't really think about it for EBITDA and those kind of metrics. We think about deploying capital where we get a return. And we think about strategically, particularly in wireless, where you're one of really five county cable, you're one of five companies that are basically doing the same thing. How do we do some things differently and how do we look like a little bit different animal than what everybody else is doing.

And so we're kind of going -- we were building the highway and we were Uber and we were building the highway. Now we get to be Uber, and we don't -- we just rent the highway. And so for that, that puts us in a little bit different situation. And I will say that I don't think people truly understand the efficiency of what we call a hybrid MNO where we rent the radios, but we have the core, basically the brain, the cloud and how the system operates. So we can have a differentiated experience for our customers. We can -- we do get a lot of data from what we're doing with customers so we can make that experience better and automate that experience. And yet we don't have the burden of building and maintaining the towers, which normally wouldn't be a problem, but our scale is so small that was a challenge for us.

So I don't know that I totally answered your question, but from a big picture, we're going to be thinking a little bit longer term in the core business.

The next question comes from the line of Ben Swinburne with Morgan Stanley.

Charlie, good to have you back on the call. Appreciate your time I was curious if you could talk about any opportunity to sort of wrap the remaining AWS-3 spectrum that hasn't been sold with the upcoming auction where you are, as you know, on the hook for any shortfall with a multibillion-dollar liability. Is there any opportunity with the FCC to sort of combine those two try to monetize the spectrum and also kind of derisk the auction from an EchoStar perspective? Would love any thoughts if you have any to share.

Yes, Ben, it's a good question, and I'm not going to answer it, but I'll talk around the edges of it. But I mean, obviously, this FCC put us in a difficult situation. We went kind of through the five stages of grief denial and anger and depression and now we're in acceptance, of course. And that's the first thing from our perspective.

The second thing is we really hadn't talked with the FCC folks for a couple of years. And once we started having conversations, we've gotten on the same path. And this FCC has quite the vision of -- we didn't totally agree with it, but they want spectrum to get used more quickly and for the benefit of more Americans. And it's hard to argue with that vision. And once we've started communicating, now we're in lockstep really with where the FCC wants to go, and it's our job to now work with them and make sure that every -- all our assets get put to the best use for American public.

Part of that indirectly goes to your question, as you look at the AWS-3 auction coming up, there potentially are ways to make that the most efficient auctions. There may be -- and we're in the process of those discussions with the FCC, and they will -- obviously, others will have input into that as well. But we at least have a sounding board to say, how can we share your vision this FCC to get the spectrum in use as quickly as possible and in the hands of people that will compete with it.

One of the great things about the AT&T deal we did is because of our MNO hybrid MNO deal with AT&T, we could actually use the spectrum that we sold to. So you can think about those things in a different way. And so this FCC is going to -- they have a vision of where they want to go, they're going to -- they're going to be the most influential FCC that I've worked with ever. And so it's our job to help them get there where they want to go, and that's what we're going to do.

That's helpful. And just a follow-up on the Boost business now that you're running it. The history of MVNOs, these are typically not great businesses, and I know this is a hybrid MVNO. But you sound excited about the opportunity. It's got revenue scale, but it's at least to a degree, but it's still burning a lot of cash flow. I know you're going to start decommissioning and you've started decommissioning the network. Just can you talk about, I guess, the strategic vision for the business? And then I don't know if there's any help you can give us on the path to getting this thing to cash flow positive now that you've switched models.

Yes. So the strategy is simple. We have to do things -- we have to do two things. right? And if you look at any company that's the fourth or fifth player, this is what they have to do to be successful. You have to do two things. You have to use technology in a way to be different. And you have to do things that the other guys aren't doing or they could do, but they won't do. It didn't make sense for them to do it.

So on the technology side, we've already made our first strategic move, which is an agreement with SpaceX for our Boost customers to have worldwide connectivity to the handset, both for voice, text and broadband. So I'm sure others will follow suit with SpaceX. But carriers now are -- many carriers have some choice as to who they might sign up with. And so there's a wide variety of where those carriers are going. We are highly confident that we have aligned with which the company is going to have the best technology, and we can do some things different than others. So we've already started that. That's two years away, probably realistically, but that we've already started.

How we do things differently, I think, is for our team to come up, we'll -- I officially start like Monday. So we'll start having strategic sessions on how we can think about how we do some things differently. I don't think it's a good path. I don't think we can be successful if we look just like the other guys. They just have too much scale.

And any help on just getting the business to profitability? I don't know how much of the expense base goes away when you fully convert, anything like that?

Those of you who have been with us for 30 years as a public company know that we'd like to run things for cash, and we don't like losing money. So I don't have a -- we'll have a lot more on that. But I think that as you move to long-term thinking, that becomes an easier path. And short term is always difficult. But that was -- that's just the cards that we had to play short term. Now we get to play a bit better. We're better as a company when we're thinking long term.

And we're definitely going to be -- and again, if -- I think the nature of our hybrid MNO, it's underestimated by the market. People try to say it's an MNO or that. It's a different animal. And the AT&T network that we ride on is a great network. And with our spectrum, they're already putting our C-band to use, is my understanding, some of it. So that network is only going to get better. And so I just think -- I think we could be more competitive. We certainly will be more competitive than we have been in the past.

Yes. So adding to that, one of the things that hopefully shortens the path to profitability is the reduction of the fixed cost of the business, which you can imagine is drastic. Certainly from a network side, you need a much greater scale to reach that profitability going to retire the fixed cost. Obviously, not having that shortens the horizons tremendously. And second, having an MVNO deal with AT&T kind of makes our costs more variable on a usage basis. So again, another way to create operating leverage for us as the more we sell, I mean, obviously, we don't need to have a large scale in order to reach growth.

So all the strategic things that Charlie is talking about, should get us to profitability in a much shorter horizon than you would have originally modeled. We're not going to give you that today. But obviously, as time goes on, that information might become more available to you. We're excited about -- we're really excited about our ability to develop that business as the most scaled MVNO -- hybrid MNO, MVNO model in the marketplace with the benefit of having access to space and having to the great coverage of AT&T, which is using our spectrum now will be the best coverage in the nation in our view.

The next question comes from the line of Bryan Kraft with Deutsche Bank.

Had a few, if I could. First is a follow-up on the tax side. I was wondering if you could confirm that there will be a tax benefit from the impairment charge that you're taking today? And is that benefit excluded from the $7 billion to $10 billion range that you cited?

Secondly, just a follow-up on AWS-3 and the auction. Does the timing of the auction matter as it relates to you selling the paired AWS-3 licenses? Is it optimal to wait? Is it better to do it first? Just wondering how you're thinking about that? And then also the converts, I was wondering if ultimately you plan to settle those in cash or stock?

And then lastly, I would just love to hear your latest thoughts, Charlie, on a potential DBS merger with DIRECTV at this point in time.

Paul, do you want to take the first?

Yes. This is Paul. Good question there. I'll take the tax question. As it relates to the impairment charge, some of the items have already been deducted. For instance, we take bonus depreciation on the network or amortize the FCC spectrum. So we won't get a benefit of that. But the other costs, we will. And to answer your question, is that included in the $7 billion to $10 billion range? Yes, that is.

And this is Charlie. In terms of AWS timing, and so again, that's -- I wish I could give you more information, but we're really working with the FCC to make that, a, to make sure this most successful auction possible and that spectrum gets used as quickly as possible. But we're -- again, it's pretty valuable spectrum, I'd say that. And as part as the converts, we'll make a decision at the time that we can call those converts as to whether we call them or not. And if so, is it cash or stock or some combination of that. That would just be premature to speculate on that today.

And Hamid, maybe I'll throw over to you on DIRECTV.

Yes. Certainly, at EchoStar Capital, we look at every opportunity for value creation through inorganic transactions. The DISH and DIRECTV always has seemed like a natural combination and it's been an in-house combination. Our track record of making that work has not been great. So it's hard to predict how it might go. But certainly, we will always look at any opportunity to take advantage of assets we have in-house with a transaction.

I can't make any prediction right now about how that might go, but that item has always been on our radar, and Charlie has been very vocal about the fact that the combination of the two companies would create significant and tremendous amount of value.

Operator, we'll have time for one more question.

And the last question will come from the line of Chris Quilty with Quilty Space.

I was hoping you could possibly give a long-term update on the plans for one of those operating businesses, Hughes. You've obviously got downturns in the VSAT business and the consumer broadband. It looks like IFC is growing. Are there thoughts on either growing that business organically or nonorganically? And what markets are you most focused on?

Chris, thank you. Regarding Hughes, as you know, we have been on a multiyear journey at Hughes at least three years now. to transition that business more towards an enterprise business from a consumer business and purely from the realization and understanding that the consumer connectivity to satellite is now highly competitive given the SpaceX's offerings and perhaps in the future, other LEO offerings such as Kuiper. We recognized years ago that we could not have a LEO system on the broadband side to compete with those. So we started shifting towards enterprise. Our expectation is that as early as next year, we'll be crossing over the 50% mark on enterprise revenue. We have had significant progress in an aero, which we had almost no share on three years ago, and now we are only one of the couple of companies in the world that are growing on the aero side.

So there are some progress being made in there. We're happy with that. We still have a long journey to make Hughes much larger scale in the enterprise. We are on the Gartner's leader quadrant as one of the few -- in fact, in this industry, in their industry, in its industry, there is none other than Hughes on the Gartner's leader quadrant. So it shows the ability of Hughes to serve global brands across the world. We'll try to monetize and maximize that if there's any sort of M&A opportunity.

As I mentioned, on the list of areas, domains where we will be looking for additional M&A. You saw three or four of those actually fall within the Hughes purview. That's aero, space. we talked about enterprise services. We talked about defense and domestic manufacturing, which I think all of those are areas where we have green shoots and a good understanding of the trends. And if there's -- at EchoStar Capital, if we find opportunities in any of those domains that would enhance users' position, we'll take advantage of that.

That concludes our call. Thanks for joining. Thanks, everybody.