Dish Network 2004 Annual Report Download - page 3

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9601 S. Meridian Blvd. • Englewood, Colorado 80112 • Tel: (303) 723-1000 • Fax: (303) 723-1999
August 24, 2005
To our Shareholders and Bondholders,
I am proud that our Company has accomplished multiple milestones in the 17 months since my
last letter to you. While we face stronger competition from digital cable and broadband bundling, DISH
Network added 1.48 million customers during 2004, surpassing the 10 million-subscriber milestone in June
of that year. We finished 2004 with 10.9 million customers and our subscriber base had grown to 11.46
million through June 2005. That means approximately one in every 10 American households now receives
DISH Network service.
Our subscriber growth is driven to a great extent by our offer of the lowest all-digital price in
America, industry-leading customer service and expansion of our programming options. We ended 2004
offering local channels in over 150 markets and all 50 states, and remained a leader in international
programming. As we continue to grow, we are focused on maintaining the standard of customer
satisfaction established when we commenced service in 1996. During 2004, DISH Network again ranked
No. 1 in customer satisfaction among cable/satellite TV subscribers in the U.S. according to the highly
respected J.D. Power & Associates survey and in 2005, we were recognized with the highest ranking in the
ACSI survey for the second year in a row.
Digital video recorders are playing an increasing role in our operational success. Customers’
growing recognition of the value of this technology is creating increased customer satisfaction and
personalization of our programming services, helping us to address customer churn. In addition, our focus
on leasing, rather than subsidizing the sale, of set top boxes allows us to re-deploy equipment as customers
disconnect, partially offsetting new subscriber acquisition costs.
Based on these and other efforts, we generated $7.15 billion in revenue during 2004, earnings of
$215 million (or $0.46 per share) and $21 million of free cash flow. We also repurchased approximately 26
million shares of DISH Network stock for $810 million, and paid a cash dividend of $456 million. We
issued $1 billion of new debt at favorable rates, while retiring $2.4 billion of outstanding higher-rate
debt. The entire EchoStar management group remains focused on generating shareholder value every day.
We are pleased to welcome two new executives to the EchoStar team during 2005: Vice Chairman
Carl Vogel and President and Chief Operating Officer Michael Neuman. We believe EchoStar will benefit
from their expertise and leadership.
As EchoStar celebrates its 25th year in business, we are focused on continued subscriber growth
and the development of additional services. We expect to launch our 10th satellite in the first quarter of
2006, and our purchase of the Rainbow I satellite was on the horizon as we prepared this report. The
additional capacity could provide us with ways to increase, among other things, our international
programming choices and the number of local and core high definition channels we offer.
We look forward to continued success and thank you for your support.
Sincerely,
Charles W. Ergen
Chairman and Chief Executive Officer