Exhibit 99.2
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QUARTERLY INVESTOR SUMMARY August 6, 2014 |
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DISH 2Q14 Financial Results Conference Call – Noon ET Today U.S. or Canada 800-616-6729 Internationally 763-488-9145 Conference ID: 78894146 DISH NETWORK REPORTS SECOND QUARTER 2014 FINANCIAL RESULTS 2 ENGLEWOOD, Colo., Aug. 6, 2014 DISH Network Corp. (NASDAQ: DISH) today reported revenue totaling $3.69 billion for the quarter ending June 30, 2014, compared to $3.49 billion for the corresponding period in 2013. Subscriber-related revenue increased 5.6 percent to $3.65 billion from $3.45 billion in the year-ago period. Net income attributable to DISH Network totaled $213 million for the second quarter 2014, compared to a loss of $11 million from the year-ago quarter. DISH activated approximately 656,000 gross new pay-TV subscribers in the second quarter 2014, compared to approximately 624,000 gross new pay-TV subscribers in the prior year’s second quarter. Net pay-TV subscribers declined approximately 44,000 in the second quarter. The company closed the second quarter with 14.053 million pay-TV subscribers, compared to 14.014 million pay-TV subscribers at the end of second quarter 2013. Pay-TV ARPU for the second quarter totaled $84.15, an improvement over the second quarter 2013 pay-TV ARPU of $80.81. Pay-TV subscriber churn rate was 1.66 percent versus 1.67 percent for second quarter 2013. DISH added approximately 36,000 net broadband subscribers in the second quarter, bringing its broadband subscriber base to approximately 525,000. Year-to-Date Review DISH Network's first-half 2014 revenue of $7.28 billion increased 6.1 percent, compared to $6.86 billion in revenue from the same period last year. In the first six months of 2014, net income attributable to DISH Network totaled $389 million, compared with $205 million during the same period last year. Diluted earnings per share were $0.84 for the first six months of 2014, compared with $0.45 during the same period in 2013. Detailed financial data and other information are available in DISH Network's Form 10-Q for the quarter ended June 30, 2014, filed today with the Securities and Exchange Commission. DISH Network will host its second quarter 2014 financial results conference call today at noon Eastern time. The dial-in numbers are (800) 616-6729 (U.S.) and (763) 488-9145, conference ID number 78894146. A replay of the call will be available today at 4 p.m. EDT at [http://dish.client.shareholder.com/events.cfm]. About DISH DISH Network Corporation (NASDAQ: DISH), through its subsidiaries, provides approximately 14.053 million pay-TV subscribers, as of June 30, 2014, with the highest quality programming and technology with the most choices at the best value. Subscribers enjoy a high definition line-up with more than 200 national HD channels, the most international channels, and award-winning HD and DVR technology. DISH Network Corporation is a Fortune 250 company. Visit www.dish.com. |
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DISH QUARTERLY INVESTER SUMMARY–2Q14 DISH SEGMENT – PAY-TV METRICS 3 Pay-TV Net Additions DISH lost approximately 44,000 net Pay-TV subscribers during 2Q14, compared to a loss of approximately 78,000 net Pay-TV subscribers during 2Q13. The decrease in the loss of net Pay-TV subscribers versus the same period in 2013 primarily resulted from higher gross new Pay-TV subscriber activations. Pay-TV Churn Our Pay-TV churn rate for 2Q14 was 1.66% compared to 1.67% for the same period in 2013. While our Pay-TV churn rate was similar compared to the same period in 2013, our Pay-TV churn rate continues to be adversely affected by increased competitive pressures, including aggressive marketing and discounted promotional offers. Our Pay-TV churn rate is also impacted by, among other things, the credit quality of previously acquired subscribers, our ability to consistently provide outstanding customer service, price increases, service interruptions driven by programming disputes, and our ability to control piracy and other forms of fraud. Pay-TV Gross Activations During 2Q14, DISH activated approximately 656,000 gross new Pay-TV subscribers compared to approximately 624,000 gross new Pay-TV subscribers during 2Q13, an increase of 5.1%. This increase was driven primarily by increased advertising. Although our gross new Pay-TV subscriber activations increased, our gross new Pay-TV subscriber activations continue to be negatively impacted by increased competitive pressures, including aggressive marketing, discounted promotional offers, and more aggressive retention efforts in a mature market. In addition, our gross new Pay-TV subscriber activations continue to be adversely affected by sustained economic weakness and uncertainty. (78) 35 8 40 (44) 2Q13 3Q13 4Q13 1Q14 2Q14 Pay-TV Net Additions In thousands 1.67% 1.66% 1.53% 1.42% 1.66% 2Q13 3Q13 4Q13 1Q14 2Q14 Pay-TV Churn Rate In percentage 624 734 654 639 656 2Q13 3Q13 4Q13 1Q14 2Q14 Pay-TV Gross Activations In thousands |
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DISH QUARTERLY INVESTER SUMMARY–2Q14 DISH SEGMENT – PAY-TV METRICS-CONTINUED 4 Pay-TV Subscribers DISH closed the second quarter with 14.053 million Pay-TV subscribers compared to 14.014 million Pay-TV subscribers at the end of second quarter 2013. Pay-TV ARPU Pay-TV average monthly revenue per subscriber (Pay-TV ARPU) was $84.15 during 2Q14 versus $80.81 during the same period in 2013. The $3.34 or 4.1% increase in Pay-TV ARPU was primarily attributable to the programming package price increases in February 2014 and higher hardware related revenue. Pay-TV SAC Pay-TV Subscriber Acquisition Cost (Pay-TV SAC) was $846 during 2Q14 compared to $883 during the same period in 2013, a decrease of $37 or 4.2%. This change was primarily attributable to a decrease in hardware costs per activation. The decrease in hardware costs per activation was driven by a reduction in manufacturing costs for new Hopper with Sling receiver systems and a higher percentage of remanufactured receivers being activated on new subscriber accounts. 14,014 14,049 14,057 14,097 14,053 2Q13 3Q13 4Q13 1Q14 2Q14 Pay - TV Subscribers In thousands $883 $842 $863 $862 $846 2Q13 3Q13 4Q13 1Q14 2Q14 Pay - TV SAC Dollars $80.81 $80.98 $81.24 $82.36 $84.15 2Q13 3Q13 4Q13 1Q14 2Q14 Pay - TV ARPU Dollars |
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DISH QUARTERLY INVESTER SUMMARY–2Q14 DISH SEGMENT – BROADBAND METRICS 5 Broadband Net Additions DISH added approximately 36,000 net Broadband subscribers during 2Q14 compared to the addition of approximately 61,000 net Broadband subscribers during the same period in 2013. This decrease versus the same period in 2013 primarily resulted from a higher number of customer disconnects driven by a larger Broadband subscriber base in the second quarter 2014 compared to the same period in 2013. Broadband Gross Activations During 2Q14 and 2Q13, DISH activated approximately 76,000 and 79,000 gross new Broadband subscribers, respectively. Broadband Subscribers DISH closed the second quarter with 525,000 Broadband subscribers compared to 310,000 Broadband subscribers at the end of second quarter 2013. 310 385 436 489 525 2Q13 3Q13 4Q13 1Q14 2Q14 Broadband Subscribers In thousands 79 101 80 83 76 2Q13 3Q13 4Q13 1Q14 2Q14 Broadband Gross Activations In thousands 61 75 51 53 36 2Q13 3Q13 4Q13 1Q14 2Q14 Broadband Net Additions In thousands |
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DISH QUARTERLY INVESTER SUMMARY–2Q14 SELECTED FINANCIAL RESULTS 6 Subscriber-Related Revenue Subscriber-related revenue totaled $3.645 billion for 2Q14, an increase of $192 million or 5.6% compared to the same period in 2013. The change in Subscriber-related revenue from the same period in 2013 was primarily related to the increase in Pay-TV ARPU discussed previously and revenue from broadband services. Included in Subscriber-related revenue was $92 million and $47 million of revenue related to our broadband services for 2Q14 and 2Q13, respectively. Subscriber-Related Expenses Subscriber-related expenses totaled $2.104 billion during 2Q14, an increase of $180 million or 9.4% compared to the same period in 2013. The increase in Subscriber-related expenses was primarily attributable to higher pay-TV programming costs and higher Broadband subscriber-related expenses due to the increase in our Broadband subscriber base. The increase in programming costs was driven by rate increases in certain of our programming contracts, including the renewal of certain contracts at higher rates. Included in Subscriber-related expenses was $60 million and $33 million of expense related to our broadband services for 2Q14 and 2Q13, respectively. Net Income Net income (loss) attributable to DISH Network was $213 million during 2Q14, an increase of $224 million compared to a loss of $11 million for the same period in 2013. Note that net income for 2Q13 was negatively impacted by a $438 million impairment charge related to the T2 and D1 satellites. $3,453 $3,464 $3,500 $3,556 $3,645 2Q13 3Q13 4Q13 1Q14 2Q14 Subscriber - Related Revenue Dollars in millions ($11) $315 $288 $176 $213 2Q13 3Q13 4Q13 1Q14 2Q14 Net Income Dollars in millions $1,924 $1,977 $2,006 $2,069 $2,104 2Q13 3Q13 4Q13 1Q14 2Q14 Subscriber - Related Expenses Dollars in millions |
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DISH QUARTERLY INVESTER SUMMARY–2Q14 SELECTED FINANCIAL RESULTS-CONTINUED 7 Adjusted EBITDA Adjusted EBITDA was $742 million during 2Q14, an increase of $311 million or 72.2% compared to the same period in 2013. Note that Adjusted EBITDA for 2Q13 was negatively impacted by a $438 million impairment charge related to the T2 and D1 satellites. Non-GAAP Reconciliation-Adjusted EBITDA to Net Income $431 $788 $888 $695 $742 2Q13 3Q13 4Q13 1Q14 2Q14 Adjusted EBITDA Dollars in millions Quarter To Date 6/30/2013 9/30/2013 12/31/2013 3/31/2014 6/30/2014 (In thousands) Adjusted EBITDA Adjusted EBITDA 430,573 $ 787,844 $ 888,281 $ 695,443 $ 741,657 $ Interest expense, net (170,986) (149,427) (151,343) (161,830) (134,557) Income tax (provision) benefit, net 40,357 (38,140) (175,625) (108,462) (121,892) Depreciation and amortization (304,642) (253,036) (266,178) (249,220) (271,895) Income (loss) from continuing operations attributable to DISH Network (4,698) 347,241 295,135 175,931 213,313 Plus: Income (loss) from discontinued operations, net of tax (6,354) (32,334) (7,097) - - Net income (loss) attributable to DISH Network (11,052) $ 314,907 $ 288,038 $ 175,931 $ 213,313 $ |
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DISH QUARTERLY INVESTER SUMMARY–2Q14 CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share amounts) (Unaudited) 8 June 30, December 31, Assets 2014 2013 Current Assets: Cash and cash equivalents 4,127,359 $ 4,700,022 $ Marketable investment securities 4,775,772 5,039,382 Trade accounts receivable - other, net of allowance for doubtful accounts of $17,258 and $15,981, respectively 953,671 902,416 Trade accounts receivable - EchoStar, net of allowance for doubtful accounts of zero 19,113 55,102 Inventory 528,336 512,707 Deferred tax assets 135,952 129,864 Prepaid income taxes 94,048 118,021 Current assets - discontinued operations - 68,239 Derivative financial instruments 292,333 292,507 Other current assets 167,083 495,186 Total current assets 11,093,667 12,313,446 Noncurrent Assets: Restricted cash and marketable investment securities 92,786 94,861 Property and equipment, net 3,746,741 4,097,711 FCC authorizations 4,968,171 3,296,665 Marketable and other investment securities 473,830 151,273 Noncurrent assets - discontinued operations - 9,965 Other noncurrent assets, net 393,501 392,509 Total noncurrent assets 9,675,029 8,042,984 Total assets 20,768,696 $ 20,356,430 $ Liabilities and Stockholders' Equity (Deficit) Current Liabilities: Trade accounts payable - other 181,854 $ 281,932 $ Trade accounts payable - EchoStar 318,351 355,023 Deferred revenue and other 878,763 843,386 Accrued programming 1,495,899 1,242,129 Accrued interest 227,953 232,734 Other accrued expenses 539,392 512,081 Current liabilities - discontinued operations - 49,471 Current portion of long-term debt and capital lease obligations 1,665,979 1,034,893 Total current liabilities 5,308,191 4,551,649 Long-Term Obligations, Net of Current Portion: Long-term debt and capital lease obligations, net of current portion 11,795,566 12,596,793 Deferred tax liabilities 1,988,315 1,945,690 Long-term liabilities - discontinued operations - 19,804 Long-term deferred revenue, distribution and carriage payments and other long-term liabilities 240,693 245,489 Total long-term obligations, net of current portion 14,024,574 14,807,776 Total liabilities 19,332,765 19,359,425 Commitments and Contingencies Stockholders’ Equity (Deficit): Class A common stock 2,783 2,760 Class B common stock 2,384 2,384 Additional paid-in capital 2,632,864 2,588,224 Accumulated other comprehensive income (loss) 190,129 173,872 Accumulated earnings (deficit) 168,543 (220,701) Treasury stock, at cost (1,569,459) (1,569,459) Total DISH Network stockholders’ equity (deficit) 1,427,244 977,080 Noncontrolling interest 8,687 19,925 Total stockholders’ equity (deficit) 1,435,931 997,005 Total liabilities and stockholders’ equity (deficit) 20,768,696 $ 20,356,430 $ As of |
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DISH QUARTERLY INVESTER SUMMARY–2Q14 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (Unaudited) 9 2014 2013 2014 2013 Revenue: Subscriber-related revenue 3,645,101 $ 3,452,764 $ 7,201,288 $ 6,800,931 $ Equipment sales and other revenue 26,279 24,024 48,518 49,247 Equipment sales, services and other revenue - EchoStar 16,739 8,986 32,511 11,126 Total revenue 3,688,119 3,485,774 7,282,317 6,861,304 Costs and Expenses (exclusive of depreciation shown separately below): Subscriber-related expenses 2,104,236 1,924,020 4,173,368 3,835,613 Satellite and transmission expenses 180,957 135,896 330,453 259,077 Cost of sales - equipment, services and other 30,165 21,694 57,958 43,494 Subscriber acquisition costs: Cost of sales - subscriber promotion subsidies 68,310 67,745 131,185 145,232 Other subscriber acquisition costs 253,823 242,053 506,287 509,535 Subscriber acquisition advertising 134,329 124,738 268,136 243,669 Total subscriber acquisition costs 456,462 434,536 905,608 898,436 General and administrative expenses 189,660 202,200 392,773 375,469 Depreciation and amortization 271,895 304,642 521,115 534,812 Impairment of long-lived assets - 437,575 - 437,575 Total costs and expenses 3,233,375 3,460,563 6,381,275 6,384,476 Operating income (loss) 454,744 25,211 901,042 476,828 Other Income (Expense): Interest income 18,212 43,795 32,376 80,947 Interest expense, net of amounts capitalized (152,769) (214,781) (328,763) (376,297) Other, net 8,834 96,698 3,645 108,098 Total other income (expense) (125,723) (74,288) (292,742) (187,252) Income (loss) before income taxes 329,021 (49,077) 608,300 289,576 Income tax (provision) benefit, net (121,892) 40,357 (230,354) (86,062) Income (loss) from continuing operations 207,129 (8,720) 377,946 203,514 Income (loss) from discontinued operations, net of tax - (6,354) - (7,912) Net income (loss) 207,129 (15,074) 377,946 195,602 Less: Net income (loss) attributable to noncontrolling interest (6,184) (4,022) (11,298) (8,944) Net income (loss) attributable to DISH Network 213,313 $ (11,052) $ 389,244 $ 204,546 $ Weighted-average common shares outstanding - Class A and B common stock: Basic 459,863 455,452 459,147 454,353 Diluted 462,607 455,452 461,941 457,405 Earnings per share - Class A and B common stock: Basic net income (loss) per share from continuing operations attributable to DISH Network 0.46 $ (0.01) $ 0.85 $ 0.47 $ Basic net income (loss) per share from discontinued operations - (0.01) - (0.02) Basic net income (loss) per share attributable to DISH Network 0.46 $ (0.02) $ 0.85 $ 0.45 $ Diluted net income (loss) per share from continuing operations attributable to DISH Network 0.46 $ (0.01) $ 0.84 $ 0.46 $ Diluted net income (loss) per share from discontinued operations - (0.01) - (0.01) Diluted net income (loss) per share attributable to DISH Network 0.46 $ (0.02) $ 0.84 $ 0.45 $ For the Three Months Ended June 30, For the Six Months Ended June 30, |
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DISH QUARTERLY INVESTER SUMMARY–2Q14 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) 10 2014 2013 Cash Flows From Operating Activities: Net income (loss) 377,946 $ 195,602 $ Less: Income (loss) from discontinued operations, net of tax - (7,912) Income (loss) from continuing operations 377,946 $ 203,514 $ Adjustments to reconcile net income (loss) to net cash flows from operating activities: Depreciation and amortization 521,115 534,812 Impairment of long-lived assets - 437,575 Realized and unrealized losses (gains) on investments (6,906) (107,947) Non-cash, stock-based compensation 20,644 14,646 Deferred tax expense (benefit) 58,118 (50,071) Other, net 49,358 98,169 Changes in current assets and current liabilities 130,881 139,144 Net cash flows from operating activities from continuing operations 1,151,156 1,269,842 Net cash flows from operating activities from discontinued operations, net (30,007) (38,575) Cash Flows From Investing Activities: Purchases of marketable investment securities (2,679,365) (3,590,433) Sales and maturities of marketable investment securities 2,925,112 1,836,573 Purchases of derivative financial instruments - (592,015) Purchases of property and equipment (600,610) (592,552) Change in restricted cash and marketable investment securities 2,075 43,069 Purchases of FCC authorizations - H Block wireless spectrum licenses (1,343,372) - Other, net 39,473 (173,800) Net cash flows from investing activities from continuing operations (1,656,687) (3,069,158) Net cash flows from investing activities from discontinued operations, net, including $0 and $594 of purchases of property and equipment, respectively 20,847 10,783 Cash Flows From Financing Activities: Proceeds from issuance of long-term debt - 2,300,000 Proceeds from issuance of restricted debt - 2,600,000 Redemption of restricted debt - (2,600,000) Funding of restricted debt escrow - (2,596,750) Releases of restricted debt escrow - 2,596,771 Repurchases of long-term debt (101,208) - Debt issuance costs - (11,427) Repayment of long-term debt and capital lease obligations (15,606) (20,378) Net proceeds from Class A common stock options exercised and stock issued under the Employee Stock Purchase Plan 29,696 37,071 Other 19,986 9,605 Net cash flows from financing activities from continuing operations (67,132) 2,314,892 Net cash flows from financing activities from discontinued operations, net - (153) Effect of exchange rates on cash and cash equivalents from discontinued operations - 51 Net increase (decrease) in cash and cash equivalents from continuing operations (572,663) 515,576 Cash and cash equivalents, beginning of period from continuing operations 4,700,022 3,573,742 Cash and cash equivalents, end of period from continuing operations 4,127,359 $ 4,089,318 $ Net increase (decrease) in cash and cash equivalents from discontinued operations (9,160) (27,894) Cash and cash equivalents, beginning of period from discontinued operations 9,160 32,398 Cash and cash equivalents, end of period from discontinued operations - $ 4,504 $ For the Six Months Ended June 30, |
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DISH QUARTERLY INVESTER SUMMARY–2Q14 RESULTS OF OPERATIONS 2Q14 VS. 2Q13 (In thousands) (Unaudited) 11 For the Three Months Ended June 30, Statements of Operations Data 2014 2013 Amount % Revenue: Subscriber-related revenue 3,645,101 $ 3,452,764 $ 192,337 $ 5.6 Equipment sales and other revenue 26,279 24,024 2,255 9.4 Equipment sales, services and other revenue - EchoStar 16,739 8,986 7,753 86.3 Total revenue 3,688,119 3,485,774 202,345 5.8 Costs and Expenses: Subscriber-related expenses 2,104,236 1,924,020 180,216 9.4 % of Subscriber-related revenue 57.7% 55.7% Satellite and transmission expenses 180,957 135,896 45,061 33.2 % of Subscriber-related revenue 5.0% 3.9% Cost of sales - equipment, services and other 30,165 21,694 8,471 39.0 Subscriber acquisition costs 456,462 434,536 21,926 5.0 General and administrative expenses 189,660 202,200 (12,540) (6.2) % of Total revenue 5.1% 5.8% Depreciation and amortization 271,895 304,642 (32,747) (10.7) Impairment of long-lived assets - 437,575 (437,575) (100.0) Total costs and expenses 3,233,375 3,460,563 (227,188) (6.6) Operating income (loss) 454,744 25,211 429,533 * Other Income (Expense): Interest income 18,212 43,795 (25,583) (58.4) Interest expense, net of amounts capitalized (152,769) (214,781) 62,012 28.9 Other, net 8,834 96,698 (87,864) (90.9) Total other income (expense) (125,723) (74,288) (51,435) (69.2) Income (loss) before income taxes 329,021 (49,077) 378,098 * Income tax (provision) benefit, net (121,892) 40,357 (162,249) * Effective tax rate 37.0% (82.2%) Income (loss) from continuing operations 207,129 (8,720) 215,849 * Income (loss) from discontinued operations, net of tax - (6,354) 6,354 100.0 Net income (loss) 207,129 (15,074) 222,203 * Less: Net income (loss) attributable to noncontrolling interest (6,184) (4,022) (2,162) (53.8) Net income (loss) attributable to DISH Network 213,313 $ (11,052) $ 224,365 $ * Other Data: Pay-TV subscribers, as of period end (in millions) 14.053 14.014 0.039 0.3 Pay-TV subscriber additions, gross (in millions) 0.656 0.624 0.032 5.1 Pay-TV subscriber additions, net (in millions) (0.044) (0.078) 0.034 43.6 Pay-TV average monthly subscriber churn rate 1.66% 1.67% (0.01%) (0.6) Pay-TV average subscriber acquisition cost per subscriber (“Pay-TV SAC”) 846 $ 883 $ (37) $ (4.2) Pay-TV average monthly revenue per subscriber (“Pay-TV ARPU”) 84.15 $ 80.81 $ ** 3.34 $ 4.1 Broadband subscribers, as of period end (in millions) 0.525 0.310 0.215 69.4 Broadband subscriber additions, gross (in millions) 0.076 0.079 (0.003) (3.8) Broadband subscriber additions, net (in millions) 0.036 0.061 (0.025) (41.0) Adjusted EBITDA 741,657 $ 430,573 $ 311,084 $ 72.2 * Percentage is not meaningful. ** For the quarter ended June 30, 2013, Pay-TV ARPU has been adjusted by $0.09 to exclude the effect of discontinued operations. Variance |
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DISH QUARTERLY INVESTER SUMMARY–2Q14 CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS 12 |
