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Prepackaged Restructuring and Deconsolidation | 6 Months Ended
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Jun. 30, 2026
Prepackaged Restructuring and Deconsolidation |
Prepackaged Restructuring and Deconsolidation | ​
3. | Prepackaged Restructuring and Deconsolidation
​ Prepackaged Restructuring ​ On June 30, 2026, our subsidiary, DISH DBS Corporation and certain of its subsidiaries (the “DISH DBS Filing Entities”), including DISH Wireless L.L.C. and its subsidiaries (the “DISH Wireless Filing Entities,” and together with the DISH DBS Filing Entities, the “Filing Entities”), commenced voluntary cases under chapter 11 of title 11 of the United States Bankruptcy Code (the “Prepackaged Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), Houston Division, to pursue confirmation of a joint prepackaged plan of reorganization (the "Prepackaged Chapter 11 Plan"). The Prepackaged Chapter 11 Plan restructures certain funded debt obligations of the DISH DBS Filing Entities and all claims asserted against the DISH Wireless Filing Entities. The Prepackaged Chapter 11 Cases of the DISH DBS Filing Entities and the DISH Wireless Filing Entities are jointly administered for procedural purposes and the Prepackaged Chapter 11 Plan is a joint plan for all of the Filing Entities. ​ The Prepackaged Chapter 11 Plan implements the terms of the RSA signed on March 19, 2026, as amended, modified or supplemented, subject to approval by the Bankruptcy Court. Holders of more than 88% of the DISH DBS Filing Entities’ secured and unsecured notes, who also hold more than $8.8 billion of claims against the DISH Wireless Filing Entities, have signed the RSA and have agreed to support the Prepackaged Chapter 11 Plan. As a result, the Filing Entities anticipate that all classes of claims will vote to accept, or be deemed to have accepted, the Prepackaged Chapter 11 Plan. The Prepackaged Chapter 11 Plan remains subject to approval by the Bankruptcy Court. The Filing Entities are targeting emergence from the Prepackaged Chapter 11 Plan during the second half of 2026. ​ ​ Deconsolidation ​ As a result of the Prepackaged Chapter 11 Cases, pursuant to the guidance in Accounting Standards Codification 810, Consolidation (“ASC 810”), for financial reporting purposes, we no longer have a controlling financial interest in the DISH DBS Filing Entities and all other subsidiaries of DISH DBS (together the “DISH DBS Deconsolidated Subsidiaries”) or the DISH Wireless Filing Entities and all other subsidiaries of DISH Wireless (together the “DISH Wireless Deconsolidated Subsidiaries,” and together with the DISH DBS Deconsolidated Subsidiaries, collectively referred to as the “Deconsolidated Subsidiaries”), due to the oversight and control assumed by the Bankruptcy Court and as such we deconsolidated those subsidiaries for financial reporting purposes effective June 30, 2026. The financial positions and results of operations of the Deconsolidated Subsidiaries are no longer included in our condensed consolidated financial statements subsequent to the deconsolidation date. Our results of operations include the operations of the Deconsolidated Subsidiaries for the three and six months ended June 30, 2026. Upon deconsolidation, we are required to initially measure our retained noncontrolling equity investment in the Deconsolidated Subsidiaries at fair value. Based on Level 3 inputs, including the discount rate, churn rate and ARPU, we estimated this initial fair value to be $0, as the fair value of the liabilities of the Deconsolidated Subsidiaries exceeded the fair value of their assets. ​ Upon deconsolidation, we recorded a non-cash “Deconsolidation gain” of $9.729 billion on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2026. The deconsolidation gain is not currently taxable as the Prepackaged Chapter 11 Cases does not terminate the Deconsolidated Subsidiaries’ status as members of the consolidated tax group, preserving the tax deferral of the gain under applicable income tax regulations. ​ The following table presents the components of our “Deconsolidation gain”: ​
​ | ​ | ​ | ​
​ | ​ | As of
​ | ​ | June 30,
​ | ​ | 2026
​ | ​ | (In thousands)
Net liabilities of the Deconsolidated Subsidiaries | ​ | $ | 11,427,038
Investment in Deconsolidated Subsidiaries | ​ | ​ | —
Deferred tax adjustment (1) | ​ | ​ | (1,513,571)
Allowance for credit losses (1) | ​ | ​ | (133,196)
Parent guarantees (1) | ​ | ​ | (51,313)
Deconsolidation gain | ​ | $ | 9,728,958
(1) | These amounts are recorded at the parent, EchoStar.
​ Subsequent to the deconsolidation on June 30, 2026, all intercompany balances between us and the Deconsolidated Subsidiaries are now classified as third-party transactions. Substantially all third-party receivables from the DISH Wireless Filing Entities have been fully reserved. We maintain continuing involvement with the DISH DBS Filing Entities through various arrangements, including, but not limited to, certain satellite leases and professional and shared services. ​ The DISH DBS Filing Entities are targeting emergence from the Prepackaged Chapter 11 Plan during the second half of 2026, subject to Bankruptcy Court approval, upon which we will regain control of the DISH DBS Deconsolidated Subsidiaries for financial reporting purposes, and reconsolidate those subsidiaries at that time based on the associated fair value of their assets and liabilities. ​ ​ Advances from the Filing Entities for Vendor Disbursements ​ DISH DBS Filing Entities. Prior to the Prepackaged Chapter 11 Plan, the DISH DBS Filing Entities advanced funds to us for the sole designated purpose of settling certain shared services and third-party obligations on the DISH DBS Filing Entities' behalf (the “Advances from the DISH DBS Filing Entities for Vendor Disbursements”). As of June 30, 2026, Advances from the DISH DBS Filing Entities for Vendor Disbursements totaled $1.051 billion, which is recorded in “Current restricted cash, cash equivalents and marketable investment securities” with the corresponding liability recorded in “Other accrued expenses and liabilities” on our Condensed Consolidated Balance Sheets. As of June 30, 2026, we had not settled any of the DISH DBS Filing Entities' obligations. ​ DISH Wireless Filing Entities. Prior to the Prepackaged Chapter 11 Plan, the DISH Wireless Filing Entities advanced funds to us for the sole designated purpose of settling certain shared services and third-party obligations on the DISH Wireless Filing Entities’ behalf (the “Advances from the DISH Wireless Filing Entities for Vendor Disbursements”). As of June 30, 2026, Advances from the DISH Wireless Filing Entities for Vendor Disbursements totaled $4 million, which is recorded in “Current restricted cash, cash equivalents and marketable investment securities” with the corresponding liability recorded in “Other accrued expenses and liabilities” on our Condensed Consolidated Balance Sheets. As of June 30, 2026, we had not settled any of the DISH Wireless Filing Entities' obligations. ​ The Advances from the DISH DBS Filing Entities for Vendor Disbursements together with the Advances from the DISH Wireless Filing Entities for Vendor Disbursements, are collectively referred to as the “Advances from the Filing Entities for Vendor Disbursements”. ​ Parent Guarantees ​ Prior to deconsolidation, we guaranteed certain of the DISH Wireless Filing Entities’ obligations under certain contracts and leases. Concurrently with the deconsolidation, this arrangement ceased to be treated as an intercompany guarantee and as such we recorded the fair value of the parent guarantee of $51 million in “Long-term deferred revenue and other long-term liabilities” on our Condensed Consolidated Balance Sheets. ​ Individually Significant Component ​ Based on the guidance in Accounting Standards Codification 205-20, Presentation of Financial Statements—Discontinued Operations, (“ASC 205-20”) management concluded that discontinued operations presentation for the Deconsolidated Subsidiaries is not warranted as the disposal does not meet the criteria for discontinued operations. ​ ​ However, the DISH Wireless Deconsolidated Subsidiaries consist primarily of our legacy 5G Network and 5G Network deployment operations in our Other segment and the DISH DBS Deconsolidated Subsidiaries consists of substantially all of our Pay-TV segment operations, and as such under Accounting Standards Codification (ASC) 360-10, Impairment and Disposal of Long-Lived Assets, each group represents an individually significant component of our consolidated financial statements. The following table summarizes our individually significant components: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Three Months Ended | ​ | For the Six Months Ended
​ | ​ | June 30, | ​ | June 30,
​ | ​ | 2026 | ​ | 2025 | ​ | 2026 | ​ | 2025
​ | ​ | (In thousands)
DISH DBS Deconsolidated Subsidiaries: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income (loss) before income taxes | ​ ​ ​ | $ | (8,206,561) | ​ ​ ​ | $ | 414,703 | ​ ​ ​ | $ | (7,869,324) | ​ ​ ​ | $ | 879,162
Deconsolidation gain | ​ | $ | 5,209,671 | ​ | $ | — | ​ | $ | 5,209,671 | ​ | $ | —
​ | ​ ​ ​ | ​ | ​ | ​ ​ ​ | ​ | ​ | ​ ​ ​ | ​ | ​ | ​ ​ ​ | ​ | ​
DISH Wireless Deconsolidated Subsidiaries: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income (loss) before income taxes | ​ | $ | (417,892) | ​ | $ | (1,080,850) | ​ | $ | (873,241) | ​ | $ | (2,090,193)
Deconsolidation gain | ​ | $ | 6,217,367 | ​ | $ | — | ​ | $ | 6,217,367 | ​ | $ | —
​ Financing during the Prepackaged Chapter 11 Cases ​ DISH DBS Filing Entities ​ The DISH DBS Filing Entities continue to operate their businesses in the ordinary course and manage as debtors in possession. Prior to the commencement of the Prepackaged Chapter 11 Cases, we and the DISH DBS Filing Entities operated under a centralized cash management system. As such, we will continue to provide funds to operate their businesses in the ordinary course, utilizing the Advances from DISH DBS Filing Entities for Vendor Disbursements. ​ DISH Wireless Filing Entities ​ We and the DISH Wireless Filing Entities agreed to a secured, junior, multi-draw debtor-in-possession term loan facility for an aggregate borrowing principal amount of up to $85 million (the "Parent DIP Facility") pursuant to the terms pending approval by the Bankruptcy Court. The Parent DIP Facility matures on December 31, 2026. Interest accrues at an annual rate of 11 1/2% and is payable monthly. Interest payments are payable in kind. The DISH Wireless Filing Entities, at their option, may elect to repay the Parent DIP Facility amount outstanding prior to maturity in whole or in part without premium or penalty, subject to providing prior written notice to us. We may elect to reduce the borrowing principal amount or require prepayment of the Parent DIP Facility from any supplemental liquidity obtained by the DISH Wireless Filing Entities after the Parent DIP Facility is drawn. As of June 30, 2026, no amounts had been drawn on the Parent DIP Facility. ​ The Parent DIP Facility is secured by a junior lien on substantially all of the DISH Wireless Filing Entities assets and ranks junior to the Prepetition Secured Loan held by the DISH DBS Filing Entities. Under the Parent DIP Facility, subject to Bankruptcy Court approval, we will have superpriority administrative expense claims senior to all other administrative and other claims against the DISH Wireless Filing Entities and liens senior in right of payment to unsecured claims but junior in right of payment to claims under the Prepetition Secured Loan. ​ ​ Prior to the Prepackaged Chapter 11 Plan, the DISH DBS Filing Entities entered into a secured intercompany financing arrangement with the DISH Wireless Filing Entities (the “Prepetition Secured Loan”) for a principal amount of $75 million to provide operating liquidity to the DISH Wireless Filing Entities. The Prepetition Secured Loan matures on April 21, 2027. Interest accrues at an annual rate of 5 1/2% and is payable monthly in cash. The DISH Wireless Filing Entities, at their option, may elect to repay the Prepetition Secured Loan amount outstanding prior to maturity in whole or in part at any time without premium or penalty. The Prepetition Secured Loan is secured by a lien on substantially all of the DISH Wireless Filing Entities’ assets. ​ Stalking Horse Bid. In connection with the Prepackaged Chapter 11 Plan, we and the DISH Wireless Filing Entities entered into a Stalking Horse Asset Purchase Agreement (the "APA"). Under the APA, we propose to acquire substantially all of the DISH Wireless Filing Entities assets free and clear of liens and encumbrances under Section 363 of the Bankruptcy Code, establishing a baseline floor price for the estate. To ensure value maximization, FTI Capital Advisors is actively marketing the assets to third parties under a proposed competitive bidding timeline. If we are the successful bidder, we intend to credit bid up to $85 million of our Parent DIP Facility claims to reduce the cash purchase price. If we are outbid by a third party, we may serve as the designated backup bidder to ensure transaction certainty.

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