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EchoStar Q3 Revenue Rises 28%, Net Income Soars

Englewood, Colo. — Climbing subscriber-related revenue and higher sales of digital set-top boxes and related components helped boost total third-quarter revenue at EchoStar Communications by 28 percent, hitting $1.8 billion, up from a year-ago $1.5 billion.

EchoStar, a provider of satellite digital TV services through its DISH network, reported that net income about tripled during the three months, ended Sept. 30, climbing to $102.3 million, compared with $35.1 million in the same period last year.

DISH network subscribers at the end of the third quarter totaled 10.5 million, a 15.3 percent increase over the 9.1 million on hand at the close of the third quarter in 2003. The 305,000 new net Dish network subscribers for the third quarter compares with the 285,000 added in the same three months a year ago.

Subscriber-related revenue for the three months total $1.7 billion, a 26.9 percent rise over the $1.4 billion recorded in the third quarter of 2003. The increase was directly attributable to continued DISH network subscriber growth and an increase in monthly average revenue per subscriber (ARPU), which hit $56.11 during the third quarter, up from $50.88 year-on-year. The increase was due to price increases on popular packages, a reduction in the number of subscribers receiving subsidized programming through promotions, the increase in availability of local channels by satellite and an increase in subscribers with multiple set-top boxes, including digital video recorders.

Subscriber acquisition costs hit $377.1 million in the third quarter, a rise of 8.8 percent over the $346.5 million registered in the same period a year earlier, due to a larger number of gross DISH network subscriber additions.

Monthly churn percentage in the third quarter increased to 1.77 percent, up from 1.72 percent, while average subscriber acquisition costs per subscriber reached $421, down from the $466 registered in the same three months last year.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $327.4 million in the third quarter, up from $261 million the previous year, primarily attributable to changes in operating revenue and expenses. The company uses EBITDA results as a measurement of operating efficiency and overall financial performance.

For the nine months, total EchoStar revenue increased to $5.2 billion from a year-ago $4.2 billion, while net income dropped to $144.7 million from a year-earlier $221.8 million. Subscriber-related revenue hit $4.9 billion, up from a year-earlier $4 billion. Subscriber acquisition costs climbed to $1.2 billion in the nine months, compared with $940.4 million last year.

Net subscriber additions for the nine months were 1.1 million, compared with 905,000 year-over-year. Average revenue per subscriber hit $54.54, compared with $51.38 in the same period a year ago.

Monthly churn percentage in the nine months totaled 1.66 percent, compared with 1.58 percent last year, and average subscriber acquisition costs per subscriber came in at $458, up from the $441 dollars recorded in the same time frame in 2003.