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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DECEMBER 23, 1998
ECHOSTAR COMMUNICATIONS CORPORATION
NEVADA 0-26176 88-0336997
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation) Number) Identification No.)
5701 SOUTH SANTA FE DRIVE, LITTLETON, COLORADO 80120
(303) 723-1000
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ITEM 5. OTHER EVENTS
EchoStar Communications Corp. (NASDAQ: DISH, DISHP) announced today that
it has commenced cash tender offers to purchase any and all of the following
debt securities issued by its direct and indirect subsidiaries: the $375
million aggregate outstanding principal amount of 12 1/2% Senior Secured
Notes due 2002 issued by EchoStar DBS Corporation; the 12 7/8% Senior Secured
Discount Notes due 2004, with an accreted value as of Jan. 1, 1999, of $592.8
million, issued by Dish, Ltd.; and the 13 1/8% Senior Secured Discount Notes
due 2004, with an accreted value as of Jan. 1, 1999, of $498.1 million,
issued by EchoStar Satellite Broadcasting Corporation. The issues of notes
described above are referred to as "the Notes." The tender offers are part
of a plan to refinance existing indebtedness at more favorable rates and
terms. The terms and conditions of the tender offers are set forth in an
Offer to Purchase and Consent Solicitations Statement and a related Consent
and Letter of Transmittal. The tender offers will expire at 12:00 midnight,
Eastern Time on Friday, Jan. 22, 1999, unless extended.
In conjunction with the tender offers, EchoStar is soliciting consents
to certain proposed amendments to the indentures governing the Notes that
would eliminate substantially all of the restrictive covenants and would
amend certain other provisions. Adoption of the proposed amendments requires
the consent of holders of not less than a majority, in the case of certain
proposed amendments, and not less than two-thirds, in the case of the other
proposed amendments, of the aggregate principal amount of each issue of
Notes. Holders who tender their Notes will be required to consent to the
proposed amendments.
The purchase price for the Notes will be determined in accordance with a
pricing formula that is based on a fixed spread of 75 basis points above the
yield on the 6 1/8% U.S. Treasury Note due July 31, 2000, for the 12 1/2%
Notes; 6 3/4% U.S. Treasury Note due June 30, 1999, for the 12 7/8% Notes and
6 7/8% U.S. Treasury Note due March 31, 2000, for the 13 1/8% Notes. The
purchase price includes a consent payment of $20 per $1,000 principal amount
of the 12 1/2% Notes or per the accreted value of each $1,000 principal
amount at maturity of the 12 7/8% Notes and the 13 1/8% Notes, to holders who
tender their Notes and give their consent at, or prior to 12:00 midnight,
Eastern Time on January 7, 1999, unless extended.
Closing of the tender offers is subject to the receipt by EchoStar or
its subsidiaries of the proceeds of a new debt financing or financings
necessary to pay the consideration payable in connection with the tender
offers and the consent solicitations, the receipt of the required consents
from the holders of Notes, the receipt of the required consents and waivers
from the holders of Exchange Notes as described below and certain other
conditions described in the Offer to Purchase and Consent Solicitation
Statement.
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EchoStar also today announced that it has sent to all holders of
EchoStar's issued and outstanding 12 1/8% Series B Senior Redeemable
Exchangeable Preferred Stock due 2004 (the "Series B Preferred") a notice to
exchange all of the outstanding shares of Series B Preferred into 12 1/8 %
Senior Exchange Notes (the "Exchange Notes") on the terms and conditions set
forth in the certificate of designation relating to the Series B Preferred.
Subject to satisfaction of certain conditions to the exchange, the Exchange
Notes will be issued on Jan. 4, 1999, or as soon as practicable thereafter.
Immediately following the exchange, EchoStar intends to commence an offer to
purchase any and all outstanding Exchange Notes and to solicit consents from
the registered holders to amendments to the indenture governing the Exchange
Notes. The proposed amendments relating to the Exchange Notes are expected
to include amendments similar to the proposed amendments to the Notes and the
Company expects to offer similar compensation to holders of Exchange Notes as
it has offered to holders of Notes. If the tender offer for the Exchange
Notes is commenced on Jan. 4, 1999, the Company expects that the time by
which the holders must tender their Exchange Notes to be entitled to a
consent payment will be midnight, Friday, Jan. 8, 1999, unless extended.
Receipt of the requisite consents to the proposed amendments to the indenture
governing the Exchange Notes would be a condition to such payments to holders
of Exchange Notes and to consummation of the tender offers for both the Notes
and the Exchange Notes. This statement does not constitute an offer to
purchase, or a solicitation of an offer to sell any Exchange Notes. Such an
offer will only be made pursuant to an Offer to Purchase and Consent
Solicitation Statement after issuance of the Exchange Notes.
Donaldson, Lufkin & Jenrette Securities Corporation is acting as the
sole dealer manager in connection with the tender offers for the Notes.
Donaldson, Lufkin & Jenrette Securities Corporation and NationsBanc
Montgomery Securities LLC are acting as co-financial advisors in connection
with the consent solicitations. The depositary for the tender offers is U.S.
Bank Trust National Association. Copies of the Offer to Purchase and Consent
Solicitation Statement and additional information concerning the terms of the
tender offers may be obtained by contacting Donaldson, Lufkin & Jenrette
Securities Corporation at (212) 892-7054.
Certain matters discussed in this statement are "forward looking
statements" intended to qualify for the safe harbors from liability
established by the Private Securities Litigation Reform Act of 1995. These
"forward looking statements" can generally be identified as such because the
context of the statement will include words such as the company "believes,"
"anticipates," "expects," or words of similar import. Similarly, statements
that describe the company's future plans, objectives or goals are
forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those currently anticipated. Such risks and uncertainties
include, but are not limited to: a total or partial loss of a satellite due
to operational failures, space debris or otherwise; uncertainty as to the
Company's future profitability; the Company's ability to develop and
implement operational and financial systems to manage rapidly growing
operations; an increase in competition from cable television, Direct
Broadcast Satellite ("DBS"), other satellite system operators, and other
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providers of subscription television services; the introduction of new
technologies and competitors into the subscription television business; a
merger of existing DBS competitors; the Company's ability to integrate and
successfully operate acquired businesses and the risks associated with such
businesses; the Company's ability to obtain financing on acceptable terms to
finance the Company's growth strategy and for the Company to operate within
the limitations imposed by financing arrangements; uncertainty as to the
future profitability of acquired businesses; trends in the cable television,
broadcast television and satellite television industries; impediments to the
retransmission of local or distant broadcast network signals; a decrease in
sales of digital equipment and related services to international service
providers; a decrease in Dish Network subscriber growth; an increase in
subscriber acquisition costs; lower than expected demand for the Company's
delivery of local broadcast network signals; changes in relationships with
customers; changes in the regulatory environment, such as the inability of
the Company to retain necessary authorizations from the Federal
Communications Commission ("FCC") or a change in the regulations governing
the subscription television service industry; the outcome of pending
litigation and regulatory inquiries; an unexpected business interruption due
to the failure of third parties to remediate Year 2000 issues; and the impact
of accounting policies required to be adopted. Other factors that could
materially affect such forward-looking statements can be found in EchoStar's
periodic reports filed with the Securities and Exchange Commission.
Shareholders, potential investors and other readers are urged to consider
these factors carefully in evaluating the forward-looking statements. The
forward-looking statements made herein are only made as of the date of this
statement and EchoStar undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant, EchoStar Communications Corporation, has duly caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
ECHOSTAR COMMUNICATIONS CORPORATION
By: /s/ DAVID K. MOSKOWITZ
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David K. Moskowitz
Senior Vice President and
General Counsel
Date: December 23, 1998
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