10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

(Mark One)

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2016.

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM  TO 

Commission File Number:  001-33807

EchoStar Corporation

(Exact Name of Registrant as Specified in Its Charter)

Nevada	26-1232727
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
100 Inverness Terrace East, Englewood, Colorado	80112-5308
(Address of Principal Executive Offices)	(Zip Code)

(303) 706-4000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý  No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ý  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer ý	Accelerated filer  o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller
		reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o  No  ý

As of May 3, 2016, the registrant’s outstanding common stock consisted of 46,062,515 shares of Class A common stock and 47,687,039 shares of Class B common stock, each $0.001 par value.

TABLE OF CONTENTS

Disclosure Regarding Forward-Looking Statements		i
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 (Unaudited)	1
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2016 and 2015 (Unaudited)	2
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015 (Unaudited)	3
	Notes to Condensed Consolidated Financial Statements (Unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	50
Item 4.	Controls and Procedures	52
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	53
Item 1A.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults Upon Senior Securities	54
Item 4.	Mine Safety Disclosures	54
Item 5.	Other Information	54
Item 6.	Exhibits	54
	Signatures	55

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about our estimates, expectations, plans, objectives, strategies, and financial condition, expected impact of regulatory developments and legal proceedings, opportunities in our industries and businesses and other trends and projections for the next fiscal quarter and beyond.  All statements, other than statements of historical facts, may be forward-looking statements.  Forward-looking statements may also be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “estimate,” “expect,” “predict,” “continue,” “future,” “will,” “would,” “could,” “can,” “may” and similar terms.  These forward-looking statements are based on information available to us as of the date of this Form 10-Q and represent management’s current views and assumptions.  Forward-looking statements are not guarantees of future performance, events or results and involve potential known and unknown risks, uncertainties and other factors, many of which may be beyond our control and may pose a risk to our operating and financial condition.  Accordingly, actual performance, events or results could differ materially from those expressed or implied in the forward-looking statements due to a number of factors including, but not limited to: 

• our reliance on our primary customer, DISH Network Corporation and its subsidiaries (“DISH Network”), for a significant portion of our revenue;

• our ability to implement our strategic initiatives;

• the impact of variable demand and the adverse pricing environment for digital set-top boxes;

• dependence on our ability to successfully manufacture and sell our digital set-top boxes in increasing volumes on a cost-effective basis and with acceptable quality;

• our ability to bring advanced technologies to market to keep pace with our customers and competitors;

• risk related to our foreign operations and other uncertainties associated with doing business internationally, including changes in foreign exchange rates between foreign currencies and the United States dollar, economic instability and political disturbances;

• significant risks related to the construction, launch and operation of our satellites, such as the risk of material malfunction on one or more of our satellites, changes in the space weather environment that could interfere with the operation of our satellites, and our general lack of commercial insurance coverage on our satellites;

• our failure to adequately anticipate the need for satellite capacity or the inability to obtain satellite capacity for our Hughes segment; and

• the failure of third-party providers of components, manufacturing, installation services and customer support services to appropriately deliver the contracted goods or services.

Other factors that could cause or contribute to such differences include, but are not limited to, those discussed under the caption “Risk Factors” in Part II, Item 1A of this Form 10-Q and in Part I, Item 1A of our most recent Annual Report on Form 10-K (“Form 10-K”) filed with the Securities and Exchange Commission (“SEC”), those discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein and in our Form 10-K, and those discussed in other documents we file with the SEC.

All cautionary statements made herein should be read as being applicable to all forward-looking statements wherever they appear.  Investors should consider the risks and uncertainties described herein and should not place undue reliance on any forward-looking statements.  We do not undertake, and specifically disclaim, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

i

PART I — FINANCIAL INFORMATION

Item 1.    FINANCIAL STATEMENTS

ECHOSTAR CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(Unaudited)

	As of
	March 31,			December 31,
	2016			2015
Assets
Current Assets:
Cash and cash equivalents	$	898,816		$	924,240
Marketable investment securities, at fair value	603,346			612,338
Trade accounts receivable, net of allowance for doubtful accounts of $13,772 and $12,485, respectively	163,726			179,240
Trade accounts receivable - DISH Network, net of allowance for doubtful accounts of zero	340,532			277,159
Inventory	70,136			67,010
Prepaids and deposits	60,287			56,949
Other current assets	12,501			16,723
Total current assets	2,149,344			2,133,659
Noncurrent Assets:
Restricted cash and marketable investment securities	21,664			21,002
Property and equipment, net of accumulated depreciation of $3,097,803 and $2,998,074, respectively	3,527,450			3,412,990
Regulatory authorizations, net	546,411			543,812
Goodwill	510,630			510,630
Other intangible assets, net	118,650			132,653
Investments in unconsolidated entities	208,744			209,264
Other receivable - DISH Network	91,171			90,966
Other noncurrent assets, net	162,171			154,510
Total noncurrent assets	5,186,891			5,075,827
Total assets	$	7,336,235		$	7,209,486
Liabilities and Stockholders’ Equity
Current Liabilities:
Trade accounts payable	$	231,873		$	213,671
Trade accounts payable - DISH Network	25,694			24,682
Current portion of long-term debt and capital lease obligations, net of unamortized debt issuance costs	1,896,233			35,698
Deferred revenue and prepayments	62,579			61,881
Accrued compensation	27,886			29,767
Accrued royalties	22,609			22,531
Accrued interest	41,645			8,596
Accrued expenses and other	100,937			130,005
Total current liabilities	2,409,456			526,831
Noncurrent Liabilities:
Long-term debt and capital lease obligations, net of unamortized debt issuance costs	290,570			2,156,667
Deferred tax liabilities, net	676,799			650,392
Other noncurrent liabilities	97,742			93,954
Total noncurrent liabilities	1,065,111			2,901,013
Total liabilities	3,474,567			3,427,844
Commitments and Contingencies (Note 14)
Stockholders’ Equity:
Preferred Stock, $.001 par value, 20,000,000 shares authorized:
Hughes Retail Preferred Tracking Stock, $.001 par value, 13,000,000 shares authorized, 6,290,499 issued and outstanding at each of March 31, 2016 and December 31, 2015	6			6
Common stock, $.001 par value, 4,000,000,000 shares authorized:
Class A common stock, $.001 par value, 1,600,000,000 shares authorized, 51,580,578 shares issued and 46,048,260 shares outstanding at March 31, 2016 and 51,087,839 shares issued and 45,555,521 shares outstanding at December 31, 2015	52			51
Class B common stock, $.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at each of March 31, 2016 and December 31, 2015	48			48
Class C common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of March 31, 2016 and December 31, 2015	—			—
Class D common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of March 31, 2016 and December 31, 2015	—			—
Additional paid-in capital	3,797,153			3,776,451
Accumulated other comprehensive loss	(106,353		)	(117,233		)
Accumulated earnings	183,472			134,317
Treasury stock, at cost	(98,162		)	(98,162		)
Total EchoStar stockholders’ equity	3,776,216			3,695,478
Noncontrolling interest in HSS Tracking Stock	74,031			74,854
Other noncontrolling interests	11,421			11,310
Total stockholders’ equity	3,861,668			3,781,642
Total liabilities and stockholders’ equity	$	7,336,235		$	7,209,486

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

ECHOSTAR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

(Unaudited)

	For the Three Months Ended March 31,
	2016			2015
Revenue:
Equipment revenue - DISH Network	$	249,613		$	223,959
Equipment revenue - other	80,477			79,136
Services and other revenue - DISH Network	213,727			222,804
Services and other revenue - other	272,542			272,754
Total revenue	816,359			798,653
Costs and Expenses:
Cost of sales - equipment (exclusive of depreciation and amortization)	286,863			260,223
Cost of sales - services and other (exclusive of depreciation and amortization)	197,162			208,240
Selling, general and administrative expenses	98,693			97,928
Research and development expenses	20,442			17,872
Depreciation and amortization	126,734			133,185
Total costs and expenses	729,894			717,448
Operating income	86,465			81,205
Other Income (Expense):
Interest income	3,966			2,611
Interest expense, net of amounts capitalized	(23,210		)	(35,308		)
Gains on marketable investment securities, net	2,462			9
Equity in losses of unconsolidated affiliates, net	(963		)	(53		)
Other, net	7,386			(2,465		)
Total other expense, net	(10,359		)	(35,206		)
Income before income taxes	76,106			45,999
Income tax provision, net	(27,663		)	(18,401		)
Net income	48,443			27,598
Less: Net loss attributable to noncontrolling interest in HSS Tracking Stock	(823		)	(2,169		)
Less: Net income attributable to other noncontrolling interests	111			369
Net income attributable to EchoStar	49,155			29,398
Less: Net loss attributable to Hughes Retail Preferred Tracking Stock (Note 4)	(1,519		)	(4,004		)
Net income attributable to EchoStar common stock	$	50,674		$	33,402
Weighted-average common shares outstanding - Class A and B common stock:
Basic	93,331			91,969
Diluted	93,852			93,357
Earnings per share - Class A and B common stock:
Basic	$	0.54		$	0.36
Diluted	$	0.54		$	0.36
Comprehensive Income:
Net income	$	48,443		$	27,598
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	11,624			(26,400		)
Unrealized gains on available-for-sale securities and other	1,503			1,218
Recognition of realized gains on available-for-sale securities in net income	(2,247		)	(9		)
Total other comprehensive income (loss), net of tax	10,880			(25,191		)
Comprehensive income	59,323			2,407
Less: Comprehensive loss attributable to noncontrolling interest in HSS Tracking Stock	(823		)	(2,169		)
Less: Comprehensive income attributable to other noncontrolling interests	111			369
Comprehensive income attributable to EchoStar	$	60,035		$	4,207

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

ECHOSTAR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	For the Three Months Ended March 31,
	2016			2015
Cash Flows from Operating Activities:
Net income	$	48,443		$	27,598
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	126,734			133,185
Equity in losses of unconsolidated affiliates, net	963			53
Gains on marketable investment securities, net	(2,462		)	(9		)
Stock-based compensation	4,384			4,175
Deferred tax provision	25,684			17,871
Changes in current assets and current liabilities, net	(18,184		)	31,730
Changes in noncurrent assets and noncurrent liabilities, net	3,388			1,411
Other, net	3,899			5,548
Net cash flows from operating activities	192,849			221,562
Cash Flows from Investing Activities:
Purchases of marketable investment securities	(321,892		)	(250,861		)
Sales and maturities of marketable investment securities	323,889			269,588
Purchases of property and equipment	(235,223		)	(177,802		)
Refunds and other receipts related to capital expenditures	24,087			—
Changes in restricted cash and marketable investment securities	(662		)	(1,046		)
Acquisition of regulatory authorization	—			(3,428		)
Expenditures for externally marketed software	(5,959		)	(4,944		)
Other, net	1,460			6
Net cash flows from investing activities	(214,300		)	(168,487		)
Cash Flows from Financing Activities:
Repayment of other debt and capital lease obligations	(10,542		)	(16,508		)
Net proceeds from Class A common stock options exercised and stock issued under the Employee Stock Purchase Plan	6,335			8,039
Other, net	(302		)	3,521
Net cash flows from financing activities	(4,509		)	(4,948		)
Effect of exchange rates on cash and cash equivalents	536			(5,674		)
Net increase (decrease) in cash and cash equivalents	(25,424		)	42,453
Cash and cash equivalents, beginning of period	924,240			549,053
Cash and cash equivalents, end of period	$	898,816		$	591,506
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest (including capitalized interest)	$	10,476		$	10,848
Capitalized interest	$	22,021		$	12,485
Cash paid for income taxes	$	2,586		$	1,608
Employee benefits paid in Class A common stock	$	11,126		$	10,711
Satellites and other assets financed under capital lease obligations	$	2,351		$	2,682
Increase (decrease) in capital expenditures included in accounts payable, net	$	3,670		$	(4,485	)
Reduction of capital lease obligation for AMC-15 and AMC-16 satellites	$	—		$	4,500

 The accompanying notes are an integral part of these condensed consolidated financial statements.

3

ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.    Organization and Business Activities

Principal Business

EchoStar Corporation (which, together with its subsidiaries, is referred to as “EchoStar,” the “Company,” “we,” “us” and/or “our”) is a holding company that was organized in October 2007 as a corporation under the laws of the State of Nevada.  We are a global provider of satellite operations, video delivery solutions, digital set-top boxes, and broadband satellite technologies and services for home and office, delivering innovative network technologies, managed services, and solutions for enterprises and governments.  Our Class A common stock is publicly traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SATS.”

We currently operate in the following three business segments:

• Hughes — which provides satellite broadband internet access to North American consumers and broadband network services and equipment to domestic and international enterprise markets.  The Hughes segment also provides managed services to large enterprises and solutions to customers for mobile satellite systems.

• EchoStar Technologies (“ETC”) — which designs, develops and distributes secure end-to-end video technology solutions including digital set-top boxes and related products and technology, primarily for satellite TV service providers and telecommunication companies. Our EchoStar Technologies segment also provides digital broadcast operations, including satellite uplinking/downlinking, transmission services, signal processing, conditional access management, and other services, primarily to DISH Network Corporation and its subsidiaries (“DISH Network”) and Dish Mexico, S. de R.L. de C.V. (“Dish Mexico”), a joint venture we entered into in 2008. In addition, we provide our TV Anywhere technology through Slingbox® units directly to consumers via retail outlets and online, as well as to the pay-TV operator market. Beginning in 2015, this segment also includes Move Networks, our over-the-top (“OTT”), Streaming Video on Demand (“SVOD”) platform business, which includes assets acquired from Sling TV Holding L.L.C. (formerly DISH Digital Holding L.L.C.) (“Sling TV Holding”), and primarily provides support services to DISH Network’s Sling TV^TM operations. In 2016, we introduced a security and home automation solution provided directly to consumers.

• EchoStar Satellite Services (“ESS”) — which uses certain of our owned and leased in-orbit satellites and related licenses to provide satellite services on a full-time and occasional-use basis primarily to DISH Network, Dish Mexico, United States (“U.S.”) government service providers, internet service providers, broadcast news organizations, programmers, and private enterprise customers.

Our operations also include real estate and other activities that have not been assigned to our operating segments, including, costs incurred in certain satellite development programs and other business development activities, expenses of various corporate departments, and our centralized treasury operations, including, income from our investment portfolio and interest expense on our debt.  These activities are accounted for in the “All Other and Eliminations” column in Note 15.

In 2008, DISH Network completed its distribution to us of its digital set-top box business, certain infrastructure, and other assets and related liabilities, including certain of its satellites, uplink and satellite transmission assets, and real estate (the “Spin-off”).  Since the Spin-off, EchoStar and DISH Network have operated as separate publicly-traded companies.  However, as a result of the Satellite and Tracking Stock Transaction, described in Note 4 below and in our most recent Annual Report on Form 10-K, DISH Network owns Hughes Retail Preferred Tracking Stock representing an aggregate 80.0% economic interest in the residential retail satellite broadband business of our Hughes segment including certain operations, assets and liabilities attributed to such business.  In addition, a substantial majority of the voting power of the shares of EchoStar and DISH Network is owned beneficially by Charles W. Ergen, our Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family.

4

ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Note 2.    Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information.  Accordingly, these financial statements do not include all of the information and notes required for complete financial statements prepared in accordance with GAAP.  In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.  For further information, refer to the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2015.

Principles of Consolidation

We consolidate all entities in which we have a controlling financial interest. We are deemed to have a controlling financial interest in variable interest entities where we are the primary beneficiary.  We are deemed to have a controlling financial interest in other entities when we own more than 50 percent of the outstanding voting shares and other shareholders do not have substantive rights to participate in management. For entities we control but do not wholly own, we record a noncontrolling interest within stockholders’ equity for the portion of the entity’s equity attributed to the noncontrolling ownership interests.  As of March 31, 2016 and December 31, 2015, noncontrolling interests consist primarily of HSS Tracking Stock owned by DISH Network, as described in Note 4 below.  All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheets, the reported amounts of revenue and expense for each reporting period, and certain information disclosed in the notes to our condensed consolidated financial statements.  Estimates are used in accounting for, among other things, amortization periods for deferred subscriber acquisition costs, revenue recognition using the percentage-of-completion method, allowances for doubtful accounts, allowances for sales returns and rebates, warranty obligations, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of stock-based compensation awards, fair value of assets and liabilities acquired in business combinations, lease classifications, asset impairment testing, useful lives and methods for depreciation and amortization of long-lived assets, and certain royalty obligations.  We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances.  Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated financial statements.  Changing economic conditions may increase the inherent uncertainty in the estimates and assumptions indicated above.  We review our estimates and assumptions periodically and the effects of revisions are reflected in the period they occur or prospectively if the revised estimate affects future periods.

Fair Value Measurements

We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.  Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs.  We utilize the highest level of inputs available according to the following hierarchy in determining fair value:

• Level 1, defined as observable inputs being quoted prices in active markets for identical assets;

• Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

5

ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

• Level 3, defined as unobservable inputs for which little or no market data exists, consistent with characteristics of the asset or liability that would be considered by market participants in a transaction to purchase or sell the asset or liability.

Transfers between levels in the fair value hierarchy are considered to occur at the beginning of the quarterly accounting period.  There were no transfers between levels for each of the three months ended March 31, 2016 or 2015.

As of March 31, 2016 and December 31, 2015, the carrying amounts of our cash and cash equivalents, trade accounts receivable, net of allowance for doubtful accounts, accounts payable and accrued liabilities were equal to or approximated fair value due to their short-term nature or proximity to current market rates.

Fair values of our current marketable investment securities are based on a variety of observable market inputs.  For our investments in publicly traded equity securities and U.S. government securities, fair value ordinarily is determined based on a Level 1 measurement that reflects quoted prices for identical securities in active markets.  Fair values of our investments in other marketable debt securities generally are based on Level 2 measurements as the markets for such debt securities are less active.  Trades of identical debt securities on or near the measurement date are considered a strong indication of fair value.  Matrix pricing techniques that consider par value, coupon rate, credit quality, maturity and other relevant features also may be used to determine fair value of our investments in marketable debt securities.

Fair values for our publicly traded debt are based on quoted market prices in less active markets and are categorized as Level 2 measurements.  The fair values of our privately held debt are Level 2 measurements and are estimated to approximate their carrying amounts based on the proximity of their interest rates to current market rates.  As of March 31, 2016 and December 31, 2015, the fair values of our in-orbit incentive obligations, based on measurements categorized within Level 2 of the fair value hierarchy, approximated their carrying amounts of $78.5 million and $79.3 million, respectively.  We use fair value measurements from time to time in connection with impairment testing and the assignment of purchase consideration to assets and liabilities of acquired companies.  Those fair value measurements typically include significant unobservable inputs and are categorized within Level 3 of the fair value hierarchy.

Research and Development

Costs incurred in research and development activities generally are expensed as incurred. A significant portion of our research and development costs are incurred in connection with the specific requirements of a customer’s order. In such instances, the amounts for these customer funded development efforts are included in cost of sales.

Cost of sales includes research and development costs of approximately $12.0 million and $14.8 million for the three months ended March 31, 2016 and 2015, respectively. In addition, we incurred $20.4 million and $17.9 million for the three months ended March 31, 2016 and 2015, respectively, for other research and development expenses.

Capitalized Software Costs

Costs related to the procurement and development of software for internal-use and externally marketed software are capitalized and amortized using the straight-line method over the estimated useful life of the software, not in excess of five years.  Capitalized costs of internal-use software are included in “Property and equipment, net” and capitalized costs of externally marketed software are included in “Other noncurrent assets, net” in our condensed consolidated balance sheets.  Externally marketed software is generally installed in the equipment we sell to customers.  We conduct software program reviews for externally marketed capitalized software costs at least annually, or as events and circumstances warrant such a review, to determine if capitalized software development costs are recoverable and to ensure that costs associated with programs that are no longer generating revenue are expensed.  As of March 31, 2016 and December 31, 2015, the net carrying amount of externally marketed software was $66.4 million and $62.8 million, respectively.  We capitalized costs related to the development of externally marketed software of $5.9 million and $5.0 million for the three months ended March 31, 2016 and 2015, respectively.  We recorded amortization expense relating to the development of externally marketed software of $2.3 million and $1.9 million for the three months ended March 31, 2016 and 2015, respectively.  The weighted average useful life of our externally marketed software was approximately three years as of March 31, 2016.

6

ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”).  It outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance.  The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.”  In August 2015, the FASB issued Accounting Standards Update No. 2015-14, which deferred by one year the mandatory effective date of ASU 2014-09.  As a result, public entities are required to adopt the new revenue standard in annual periods beginning after December 15, 2017 and in interim periods within those annual periods.  The standard may be applied either retrospectively to prior periods or as a cumulative-effect adjustment as of the date of adoption.  Early adoption is permitted, but not before annual periods beginning after December 15, 2016.  In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Identifying Performance Obligations and Licensing, which amends guidance on identifying performance obligations and accounting for licenses of intellectual property. We have not determined when we will adopt the new revenue standard or selected the transition method that we will apply upon adoption.  We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

In February 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”).  This standard amends the consolidation guidance for variable interest entities and general partners’ investments in limited partnerships and similar entities.  ASU 2015-02 is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and requires either a retrospective or a modified retrospective approach as of the beginning of the fiscal year of adoption.  We adopted ASU 2015-02 in the first quarter of 2016. The adoption of the standard did not impact our consolidated financial statements.

In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”).  This standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums.  ASU 2015-03 is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and requires a retrospective approach to adoption.  Early adoption is permitted.  We adopted ASU 2015-03 in the first quarter of 2016. Upon adoption, we presented unamortized debt issuance cost previously reported in “Other noncurrent assets, net” with a carrying amount of $31.3 million as of December 31, 2015, as a reduction of our “Long-term debt and capital lease obligations, net of unamortized debt issuance costs” (see Note 11 for further discussion).

In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). This update substantially revises standards for the recognition, measurement and presentation of financial instruments, including requiring all equity investments to be measured at fair value with changes in the fair value recognized through net income. It also amends certain disclosure requirements associated with the fair value of financial instruments. ASU 2016-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted for certain requirements. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”). This standard requires lessees to recognize assets and liabilities for all leases with lease terms more than 12 months, including leases classified as operating leases. The standard also modifies the definition of a lease and the criteria for classifying leases as operating leases or financing leases. ASU 2016-02 is effective for annual periods beginning after December 15, 2018 and interim periods within those periods. Early adoption is permitted. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplifies the accounting for share-based payment awards. This update requires all excess tax benefits and deficiencies to be recognized as income tax expense or benefit and permits an entity to make an entity-wide policy election to either estimate forfeitures or recognize forfeitures as they occur. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those periods. The update specifies requirements for

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

retrospective, modified retrospective or prospective application for the various amendments contained in the update. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

Note 3.Earnings per Share

We present basic earnings per share (“EPS”) and diluted EPS for our Class A and Class B common stock.  The EchoStar Tracking Stock (see Note 4 for definitions and a further discussion of the preferred tracking stock, the EchoStar Group and the Hughes Retail Group) is a participating security that shares in our consolidated earnings and therefore, we apply the two-class method to calculate EPS.  Under the two-class method, we allocate net income or loss attributable to EchoStar between common stock and the EchoStar Tracking Stock considering both dividends declared on each class of stock and the participation rights of each class of stock in undistributed earnings.  Based on the 51.89% economic interest in the Hughes Retail Group, represented by the EchoStar Tracking Stock, we allocate undistributed earnings to the EchoStar Tracking Stock based on 51.89% of the attributed net income or loss of the Hughes Retail Group.  Moreover, because the reported amount of “Net income attributable to EchoStar” in our condensed consolidated statements of operations and comprehensive income (loss) excludes DISH Network’s 28.11% economic interest (represented by the HSS Tracking Stock) in the net loss of the Hughes Retail Group (reported as a noncontrolling interest), the amount of consolidated net income or loss allocated to holders of Class A and Class B common stock effectively excludes an aggregate 80.0% of the attributed net loss of the Hughes Retail Group.

Basic EPS for our Class A and Class B common stock excludes potential dilution and is computed by dividing “Net income attributable to EchoStar common stock” by the weighted-average number of common shares outstanding for the period.  Diluted EPS reflects the potential dilution that could occur if our common stock awards were exercised or vested.  The potential dilution from common stock awards was computed using the treasury stock method based on the average market value of our Class A common stock during the period.  The calculation of our diluted weighted-average common shares outstanding excluded options to purchase shares of our Class A common stock, whose effect would be anti-dilutive, of 3.3 million and 1.2 million shares for the three months ended March 31, 2016 and 2015, respectively. 

The following table presents basic and diluted EPS amounts for all periods and the corresponding weighted-average shares outstanding used in the calculations.

	For the Three Months Ended March 31,
	2016			2015
	(In thousands, except per share amounts)
Net income attributable to EchoStar	$	49,155		$	29,398
Less: Net loss attributable to EchoStar Tracking Stock	(1,519		)	(4,004		)
Net income attributable to EchoStar common stock	$	50,674		$	33,402
Weighted-average common shares outstanding :
Class A and B common stock:
Basic	93,331			91,969
Dilutive impact of stock awards outstanding	521			1,388
Diluted	93,852			93,357
Earnings per share:
Class A and B common stock:
Basic	$	0.54		$	0.36
Diluted	$	0.54		$	0.36

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ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Note 4.    Hughes Retail Preferred Tracking Stock

Satellite and Tracking Stock Transaction

In February 2014, EchoStar entered into agreements with certain subsidiaries of DISH Network pursuant to which, effective March 1, 2014, (i) EchoStar issued shares of its newly authorized Hughes Retail Preferred Tracking Stock (the “EchoStar Tracking Stock”) and Hughes Satellite Systems Corporation (“HSS”), a subsidiary of EchoStar, also issued shares of its newly authorized Hughes Retail Preferred Tracking Stock (the “HSS Tracking Stock” and together with the EchoStar Tracking Stock, the “Tracking Stock”) to DISH Network in exchange for five satellites (EchoStar I, EchoStar VII, EchoStar X, EchoStar XI, and EchoStar XIV), including the assumption of related in-orbit incentive obligations, and $11.4 million in cash and (ii) DISH Network began receiving certain satellite services on these five satellites from us (the “Satellite and Tracking Stock Transaction”). The Tracking Stock tracks the economic performance of the residential retail satellite broadband business of our Hughes segment, including certain operations, assets and liabilities attributed to such business (collectively, the “Hughes Retail Group” or “HRG”).  The shares of the Tracking Stock issued to DISH Network represent an aggregate 80.0% economic interest in the Hughes Retail Group (the shares issued as EchoStar Tracking Stock represent a 51.89% economic interest in the Hughes Retail Group and the shares issued as HSS Tracking Stock represent a 28.11% economic interest in the Hughes Retail Group.) In addition to the remaining 20.0% economic interest in the Hughes Retail Group, EchoStar retains all economic interest in the wholesale satellite broadband business and other businesses of EchoStar. The Satellite and Tracking Stock Transaction was consistent with the long-term strategy of the Company to increase the scale of its satellite services business, which provides high-margin revenues, while continuing to benefit from the growth of the satellite broadband business.  As a result of the additional satellites received in the Satellite and Tracking Stock Transaction, EchoStar has increased short-term cash flow that it believes will better position it to achieve its strategic objectives.

EchoStar and HSS have adopted policy statements (the “Policy Statements”) setting forth management and allocation policies for purposes of attributing all of the business and operations of EchoStar to either the Hughes Retail Group or the “EchoStar Group,” which is defined as all other operations of EchoStar, including all existing and future businesses, other than the Hughes Retail Group. Among other things, the Policy Statements govern how assets, liabilities, revenue and expenses are attributed or allocated between HRG and the EchoStar Group. Such attributions and allocations generally do not affect the amounts reported in our consolidated financial statements, except for the attribution of stockholders’ equity and net income or loss between the holders of Tracking Stock and common stock. The Policy Statements also do not significantly affect the way that management assesses operating performance and allocates resources within our Hughes segment.

We provide unaudited attributed financial information for HRG and the EchoStar Group in an exhibit to our periodic reports on Form 10-Q and Form 10-K.  For a description of the Tracking Stock and the initial recording of the Satellite and Tracking Stock Transaction in our consolidated financial statements, as well as the purpose and effect of the transaction on the Company and the Company’s Class A common stock, see Note 4 to the consolidated financial statements in our most recent Annual Report on Form 10-K.

As of March 31, 2016, DISH Network held 6.3% and 7.5% of the aggregate number of outstanding shares of EchoStar and HSS capital stock, respectively.

Note 5.    Other Comprehensive Income (Loss) and Related Tax Effects

We have not recognized any tax effects on foreign currency translation adjustments because they are not expected to result in future taxable income or deductions.  We have not recognized any tax effects on unrealized gains or losses on available-for-sale securities because such gains or losses would affect the amount of existing capital loss carryforwards for which the related deferred tax asset has been fully offset by a valuation allowance.

Accumulated other comprehensive loss includes cumulative foreign currency translation losses of $112.7 million and $124.3 million as of March 31, 2016 and December 31, 2015, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2016 and 2015 were as follows:

	Affected Line Item in our Condensed Consolidated Statement of Operations	For the Three Months Ended March 31,
Accumulated Other Comprehensive Loss Components		2016			2015
		(In thousands)
Recognition of realized gains on available-for-sale securities in net income (1)	Gains on marketable investment securities, net	$	(2,247	)	$	(9	)
Total reclassifications, net of tax and noncontrolling interests		$	(2,247	)	$	(9	)

(1) When available-for-sale securities are sold, the related unrealized gains and losses that were previously recognized in other comprehensive income (loss) are reclassified and recognized as “Gains on marketable investment securities, net” in our condensed consolidated statements of operations and comprehensive income (loss).

Note 6.    Investment Securities

Our marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities consisted of the following:

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Marketable investment securities—current, at fair value:
Corporate bonds	$	552,701	$	562,236
Strategic equity securities	34,395		38,864
Other	16,250		11,238
Total marketable investment securities—current	603,346		612,338
Restricted marketable investment securities (1)	13,939		13,227
Total	617,285		625,565
Restricted cash and cash equivalents (1)	7,725		7,775
Investments in unconsolidated entities—noncurrent:
Cost method	81,174		81,174
Equity method	127,570		128,090
Total investments in unconsolidated entities—noncurrent	208,744		209,264
Total marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities	$	833,754	$	842,604

(1) Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash and marketable investment securities” in our condensed consolidated balance sheets.

Marketable Investment Securities

Our marketable investment securities portfolio consists of various debt and equity instruments, which generally are classified as available-for-sale or trading securities depending on our investment strategy for those securities.  The value of our investment portfolio depends on the value of such securities and other instruments comprising the portfolio.

Corporate Bonds

Our corporate bond portfolio includes debt instruments issued by individual corporations, primarily in the industrial and financial services industries.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Strategic Equity Securities

Our strategic investment portfolio consists of investments in shares of common stock of public companies, which are highly speculative and have experienced and continue to experience volatility. We did not receive any dividend income for the three months ended March 31, 2016 or 2015.

As of March 31, 2016 and December 31, 2015, our strategic equity securities included shares of common stock of one of our customers that we received in satisfaction of certain milestone payments that were required to be paid to us under an existing long-term contract. For the three months ended March 31, 2016 and 2015, “Gains on marketable investment securities, net” includes $0.2 million and zero on such common stock in our trading securities portfolio, respectively, which had a fair value of $10.6 million as of March 31, 2016.

Other

Our other current marketable investment securities portfolio includes investments in various debt instruments, including U.S. government bonds.

Restricted Cash and Marketable Investment Securities

As of March 31, 2016 and December 31, 2015, our restricted marketable investment securities, together with our restricted cash, included amounts required as collateral for our letters of credit or surety bonds.

Unrealized Gains (Losses) on Marketable Investment Securities

The components of our available-for-sale investments are summarized in the table below.

	Amortized		Unrealized					Estimated
	Cost		Gains		Losses			Fair Value
	(In thousands)
As of March 31, 2016
Debt securities:
Corporate bonds	$	552,914	$	314	$	(527	)	$	552,701
Other (including restricted)	30,171		19		(1		)	30,189
Equity securities - strategic	17,396		7,173		(732		)	23,837
Total marketable investment securities	$	600,481	$	7,506	$	(1,260	)	$	606,727
As of December 31, 2015
Debt securities:
Corporate bonds	$	562,849	$	10	$	(623	)	$	562,236
Other (including restricted)	24,495		—		(30		)	24,465
Equity securities - strategic	20,855		7,748		(82		)	28,521
Total marketable investment securities	$	608,199	$	7,758	$	(735	)	$	615,222

As of March 31, 2016, restricted and non-restricted marketable investment securities included debt securities of $481.3 million with contractual maturities of one year or less and $101.6 million with contractual maturities greater than one year.  We may realize proceeds from certain investments prior to their contractual maturity as a result of our ability to sell these securities prior to their contractual maturity.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Available-for-Sale Securities in a Loss Position

The following table reflects the length of time that our available-for-sale securities have been in an unrealized loss position.  We do not intend to sell these securities before they recover or mature, and it is more likely than not that we will hold these securities until they recover or mature.  We believe that changes in the estimated fair values of these securities are primarily related to temporary market conditions as of March 31, 2016.

	As of
	March 31, 2016					December 31, 2015
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
Less than 12 months	$	253,633	$	(1,252	)	$	364,160	$	(609	)
12 months or more	20,125		(8		)	149,889		(126		)
Total	$	273,758	$	(1,260	)	$	514,049	$	(735	)

Sales of Marketable Investment Securities

We recognized gains from the sales of our available-for-sale securities of $2.2 millionfor the three months ended March 31, 2016 and de minimis gains for the three months ended March 31, 2015. We recognized de minimis losses from the sales of our available-for-sale securities for each of the three months ended March 31, 2016 and 2015.

Proceeds from sales of our available-for-sale securities totaled $12.2 million and $87.1 million for the three months ended March 31, 2016 and 2015, respectively.

Fair Value Measurements

Our current marketable investment securities are measured at fair value on a recurring basis as summarized in the table below.  As of March 31, 2016 and December 31, 2015, we did not have investments that were categorized within Level 3 of the fair value hierarchy.

	As of
	March 31, 2016						December 31, 2015
	Total		Level 1		Level 2		Total		Level 1		Level 2
	(In thousands)
Cash equivalents (including restricted)	$	835,395	$	12,062	$	823,333	$	840,950	$	38,771	$	802,179
Debt securities:
Corporate bonds	$	552,701	$	—	$	552,701	$	562,236	$	—	$	562,236
Other (including restricted)	30,189		12,796		17,393		24,465		12,078		12,387
Equity securities - strategic	34,395		34,395		—		38,864		38,864		—
Total marketable investment securities	$	617,285	$	47,191	$	570,094	$	625,565	$	50,942	$	574,623

Investments in Unconsolidated Entities — Noncurrent

We have several strategic investments in certain non-publicly traded equity securities that are accounted for using either the equity or the cost method of accounting.  Our ability to realize value from our strategic investments in companies that are not publicly traded depends on the success of those companies’ businesses and their ability to obtain sufficient capital to execute their business plans.  Because private markets are not as liquid as public markets, there is also increased risk that we will not be able to sell these investments, or that when we desire to sell them we will not be able to obtain fair value for them.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Note 7.    Trade Accounts Receivable

Our trade accounts receivable consisted of the following:

	As of
	March 31, 2016			December 31, 2015
	(In thousands)
Trade accounts receivable	$	159,722		$	168,714
Contracts in process, net	17,776			23,011
Total trade accounts receivable	177,498			191,725
Allowance for doubtful accounts	(13,772		)	(12,485		)
Trade accounts receivable - DISH Network	340,532			277,159
Total trade accounts receivable, net	$	504,258		$	456,399

As of March 31, 2016 and December 31, 2015, progress billings offset against contracts in process amounted to $4.9 million and $2.9 million, respectively.

Note 8.    Inventory

Our inventory consisted of the following:

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Finished goods	$	52,866	$	52,839
Raw materials	9,117		9,042
Work-in-process	8,153		5,129
Total inventory	$	70,136	$	67,010

Note 9.    Property and Equipment

Property and equipment consisted of the following:

		As of
	Depreciable Life (In Years)	March 31, 2016			December 31, 2015
		(In thousands)
Land	—	$	42,467		$	41,457
Buildings and improvements	1-40	370,450			367,947
Furniture, fixtures, equipment and other	1-12	1,268,237			1,254,325
Customer rental equipment	2-4	611,939			588,430
Satellites - owned	2-15	2,381,120			2,381,120
Satellites acquired under capital leases	10-15	665,518			665,518
Construction in progress	—	1,285,522			1,112,267
Total property and equipment		6,625,253			6,411,064
Accumulated depreciation		(3,097,803		)	(2,998,074		)
Property and equipment, net		$	3,527,450		$	3,412,990

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Construction in progress consisted of the following:

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Progress amounts for satellite construction, including prepayments under capital leases and launch services costs	$	1,119,793	$	963,103
Satellite related equipment	138,735		126,373
Other	26,994		22,791
Construction in progress	$	1,285,522	$	1,112,267

Construction in progress includes the following owned and leased satellites under construction or undergoing in-orbit testing as of March 31, 2016.

Satellites	Segment	Expected Launch Date
Eutelsat 65 West A (2)	Hughes	March 2016 (1)
EchoStar XXI	Other	Third quarter of 2016
EchoStar XXIII	Other	Third quarter of 2016
EchoStar XIX	Other	Fourth quarter of 2016
EchoStar 105/SES-11	ESS	Fourth quarter of 2016
Telesat T19V (“63 West”) (2)	Hughes	Second quarter of 2018

(1) This satellite was launched in March 2016 and is expected to be placed into service during the second quarter of 2016.

(2) We entered into a satellite services agreement and made prepayments for certain capacity on this satellite once launched, but are not a party to the construction contract.

Depreciation expense associated with our property and equipment consisted of the following:

	For the Three Months Ended March 31,
	2016		2015
	(In thousands)
Satellites	$	46,965	$	49,087
Furniture, fixtures, equipment and other	30,185		30,503
Customer rental equipment	29,137		30,187
Buildings and improvements	3,086		3,395
Total depreciation expense	$	109,373	$	113,172

Satellites

As of March 31, 2016, we utilized in support of our operations, 17 of our owned and leased satellites in geosynchronous orbit, approximately 22,300 miles above the equator.  We depreciate our owned satellites on a straight-line basis over the estimated useful life of each satellite.  Two of our satellites are accounted for as capital leases and are depreciated on a straight-line basis over their respective lease terms.  We utilized one satellite that is accounted for as an operating lease and not included in property and equipment as of March 31, 2016.

Satellite Anomalies

Our satellites may experience anomalies from time to time, some of which may have a significant adverse impact on their remaining useful lives, the commercial operation of the satellites or our operating results. We are not aware of any anomalies with respect to our owned or leased satellites that have had any such material adverse effect during the three months ended March 31, 2016.  There can be no assurance, however, that anomalies will not have any such adverse impacts in the future.  In addition, there can be no assurance that we can recover critical transmission capacity in the event one or more of our in-orbit satellites were to fail. 

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Note 10.    Goodwill, Regulatory Authorizations and Other Intangible Assets

Goodwill

The excess of the cost of an acquired business over the fair values of net tangible and identifiable intangible assets at the time of the acquisition is recorded as goodwill.  Goodwill is assigned to our reporting units of our operating segments and is subject to impairment testing annually, or more frequently when events or changes in circumstances indicate the fair value of a reporting unit is more likely than not less than its carrying amount.

As of March 31, 2016 and December 31, 2015, approximately $504.2 million of our goodwill was assigned to reporting units of our Hughes segment and $6.4 million was assigned to the Move Networks reporting unit of our EchoStar Technologies segment.  We test this goodwill for impairment annually in the second quarter and third quarter, respectively. 

Regulatory Authorizations

Regulatory authorizations included amounts with finite and indefinite useful lives, as follows:

	As of December 31, 2015			Additions			Currency Translation Adjustment			As of March 31, 2016
	(In thousands)
Finite useful lives:
Cost	$	82,007		$	—		$	4,258		$	86,265
Accumulated amortization	(9,852		)	(1,121		)	(538		)	(11,511		)
Net	72,155			(1,121		)	3,720			74,754
Indefinite lives	471,657			—			—			471,657
Total regulatory authorizations, net	$	543,812		$	(1,121	)	$	3,720		$	546,411

Other Intangible Assets

Our other intangible assets, which are subject to amortization, consisted of the following:

	Weighted Average Useful Life (in Years)	As of
		March 31, 2016							December 31, 2015
		Cost		Accumulated Amortization			Carrying Amount		Cost		Accumulated Amortization			Carrying Amount
		(In thousands)
Customer relationships	8	$	293,932	$	(219,702	)	$	74,230	$	293,932	$	(213,543	)	$	80,389
Contract-based	10	255,366		(255,366		)	—		255,366		(251,493		)	3,873
Technology-based	7	137,337		(115,439		)	21,898		137,337		(111,840		)	25,497
Trademark portfolio	20	29,700		(7,178		)	22,522		29,700		(6,806		)	22,894
Favorable leases	4	4,707		(4,707		)	—		4,707		(4,707		)	—
Total other intangible assets		$	721,042	$	(602,392	)	$	118,650	$	721,042	$	(588,389	)	$	132,653

Customer relationships are amortized predominantly in relation to the expected contribution of cash flow to the business over the life of the intangible asset.  Other intangible assets are amortized on a straight-line basis over the periods the assets are expected to contribute to our cash flows.  Intangible asset amortization expense, including amortization of regulatory authorizations with finite lives and externally marketed capitalized software, was $17.4 million and $20.0 million for the three months ended March 31, 2016 and 2015, respectively.

15

ECHOSTAR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Note 11.    Debt and Capital Lease Obligations

The following table summarizes the carrying amounts and fair values of our debt:

		As of
		March 31, 2016					December 31, 2015
	Effective Interest Rates	Carrying Amount			Fair Value		Carrying Amount			Fair Value
		(In thousands)
6 1/2% Senior Secured Notes due 2019	6.959%	$	990,000		$	1,093,950	$	990,000		$	1,071,675
7 5/8% Senior Notes due 2021	8.062%	900,000			1,001,250		900,000			954,000
Other	12.1 - 14.3%	778			778		803			803
Less: Unamortized debt issuance costs		(29,738		)	—		(31,276		)	—
Subtotal		1,861,040			$	2,095,978	1,859,527			$	2,026,478
Capital lease obligations		325,763					332,838
Total debt and capital lease obligations		2,186,803					2,192,365
Less: Current portion		(1,896,233		)			(35,698		)
Long-term debt and capital lease obligations, net of unamortized debt issuance costs		$	290,570				$	2,156,667

The fair values of our debt are estimates categorized within Level 2 of the fair value hierarchy.

Prior to our adoption of ASU 2015-03 in the first quarter of 2016 (see Note 2), we presented unamortized debt issuance costs in “Other noncurrent assets, net.”

On May 6, 2016, we announced that HSS is offering to repurchase for cash all or any part of its outstanding 6 1/2% Senior Secured Notes due 2019 (the “Senior Secured Notes”) and its outstanding 7 5/8% Senior Notes due 2021 (the “Unsecured Notes” and, together with the “Senior Secured Notes,” the “Notes”) at a purchase price equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon to the date of repurchase.

As previously disclosed and as discussed in Note 4 herein and in our most recently filed Annual Report on Form 10-K, HSS, together with EchoStar, entered into the Satellite and Tracking Stock Transaction and issued the HSS Tracking Stock to DISH Network.

HSS recently became aware of a possible interpretation under which the Satellite and Tracking Stock Transaction may be considered to have constituted a Change of Control as defined under the respective indentures governing the Notes (the “Indentures”). Under the Indentures, a Change of Control occurs when EchoStar shall cease to beneficially own 100% of the Equity Interests (as defined in the respective Indentures) of HSS. The Indentures provide that, upon the occurrence of a Change of Control, HSS is required, within 30 days, to make an offer to each Holder (as defined in the respective Indentures) of the respective Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon to the date of repurchase.

The Notes have traded at prices well above 101% of their respective principal amounts at all times since the issuance of the HSS Tracking Stock. In addition, both prior to and following the Satellite and Tracking Stock Transaction, Mr. Charles W. Ergen held and exercised, and continues to hold and exercise, voting control over both DISH Network and EchoStar and therefore, the ultimate voting control as to all matters regarding the Equity Interests of HSS was not affected by the Satellite and Tracking Stock Transaction. Although we believe that a Change of Control or related default may not have occurred, we have nevertheless determined that it was prudent for HSS to make a Change of Control Offer as defined under each of the Indentures. Upon commencement of the Change of Control Offers on May 6, 2016, we do not believe there was any such continuing default under the Indentures.

Under the Change of Control Offers, HSS will repurchase any Notes surrendered by the Holders thereof at a purchase price of 101% of the principal amount of the Notes plus accrued and unpaid interest, notwithstanding that the Notes have traded at a

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significantly higher price during the entire period since the issuance of the HSS Tracking Stock as part of the Satellite and Tracking Stock Transaction. Following the launch of the Change of Control Offers, in accordance with GAAP, the Notes are reported in “Current portion of long-term debt and capital lease obligations, net of unamortized debt issuance costs” on our consolidated balance sheets as of March 31, 2016 as the Holders may require HSS to repurchase the Notes under the Change of Control Offers. Following the completion of the Change of Control Offers, which is currently expected to occur on or about June 8, 2016, but which we may extend to a date no later than July 5, 2016, any outstanding Notes are expected to again be reported in “Long-term debt and capital lease obligations, net of unamortized debt issuance costs” on our consolidated balance sheets. We expect that the Senior Secured Notes and the Unsecured Notes will remain outstanding until their maturity in 2019 and 2021, respectively.

Note 12.    Income Taxes

Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period.  Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to significant volatility due to several factors, including income and losses from investments for which we have a full valuation allowance, changes in tax laws and relative changes in unrecognized tax benefits.  Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income.  For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.

Income tax expense was approximately $27.7 million and $18.4 million for the three months ended March 31, 2016 and 2015, respectively.  Our estimated effective income tax rate was 36.3% and 40.0% for the three months ended March 31, 2016 and 2015, respectively.  The variations in our current year effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2016 was primarily due to the impact of state and local taxes, partially offset by research and experimentation credits. For the three months ended March 31, 2015, the variation in our effective tax rate from the U.S. federal statutory rate was primarily due to the increase in our valuation allowance associated with certain foreign losses as well as realized and unrealized losses that are capital in nature for tax purposes, partially offset by research and experimentation tax credits.

Note 13.    Stock-Based Compensation

We maintain stock incentive plans to attract and retain officers, directors and key employees.  Stock awards under these plans include both performance based and non-performance based stock incentives.  We granted stock options to our employees and nonemployee directors to acquire 195,840 shares and 82,970 shares of our Class A common stock for the three months ended March 31, 2016 and 2015, respectively.

In 2015, we granted 100,000 restricted stock units (“RSUs”). The RSUs vested based on the attainment of certain quarterly company performance criteria for the second, third and fourth quarters of 2015.  During 2015, 66,666 of the RSUs vested and during the three months ended March 31, 2016, the remaining 33,334 of the RSUs vested.

Total non-cash, stock-based compensation expense for all of our employees is shown in the following table for the three months ended March 31, 2016 and 2015 and was assigned to the same expense categories as the base compensation for such employees:

	For the Three Months Ended March 31,
	2016		2015
	(In thousands)
Research and development expenses	$	908	$	762
Selling, general and administrative expenses	3,476		3,413
Total stock-based compensation	$	4,384	$	4,175

As of March 31, 2016, total unrecognized stock-based compensation cost, net of estimated forfeitures, related to our unvested stock awards was $31.5 million.

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Note 14.    Commitments and Contingencies

Commitments

As of March 31, 2016, our satellite-related obligations were approximately $1.18 billion.  Our satellite-related obligations primarily include payments pursuant to agreements for the construction of the EchoStar XIX, EchoStar XXI, EchoStar XXIII, EchoStar 105/SES-11, and 63 West satellites, payments pursuant to launch services contracts and regulatory authorizations, executory costs for our capital lease satellites, costs under satellite service agreements and in-orbit incentives relating to certain satellites, as well as commitments for long-term satellite operating leases and satellite service arrangements.

Contingencies

Patents and Intellectual Property

Many entities, including some of our competitors, have or may in the future obtain patents and other intellectual property rights that cover or affect products or services directly or indirectly related to those that we offer. We may not be aware of all patents and other intellectual property rights that our products and services may potentially infringe. Damages in patent infringement cases can be substantial, and in certain circumstances can be trebled. Further, we cannot estimate the extent to which we may be required in the future to obtain licenses with respect to intellectual property rights held by others and the availability and cost of any such licenses. Various parties have asserted patent and other intellectual property rights with respect to components within our direct broadcast satellite (“DBS”) products and services. We cannot be certain that these persons do not own the rights they claim, that these rights are not valid or that our products and services do not infringe on these rights. Further, we cannot be certain that we would be able to obtain licenses from these persons on commercially reasonable terms or, if we were unable to obtain such licenses, that we would be able to redesign our products and services to avoid infringement.

Separation Agreement

In connection with the Spin-off, we entered into a separation agreement with DISH Network that provides, among other things, for the division of certain liabilities, including liabilities resulting from litigation.  Under the terms of the separation agreement, we have assumed certain liabilities that relate to our business, including certain designated liabilities for acts or omissions that occurred prior to the Spin-off.  Certain specific provisions govern intellectual property related claims under which, generally, we will only be liable for our acts or omissions following the Spin-off and DISH Network will indemnify us for any liabilities or damages resulting from intellectual property claims relating to the period prior to the Spin-off, as well as DISH Network’s acts or omissions following the Spin-off.

Litigation

We are involved in a number of legal proceedings (including those described below) concerning matters arising in connection with the conduct of our business activities.  Many of these proceedings are at preliminary stages and/or seek an indeterminate amount of damages.  We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss or an additional loss may have been incurred and to determine if accruals are appropriate.  We record an accrual for litigation and other loss contingencies when we determine that a loss is probable and the amount of the loss can be reasonably estimated.  If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made.  There can be no assurance that legal proceedings against us will be resolved in amounts that will not differ from the amounts of our recorded accruals. Legal fees and other costs of defending litigation are charged to expense as incurred.

For certain cases described below, management is unable to predict with any degree of certainty the outcome or provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons, (i) the proceedings are in various stages; (ii) damages have not been sought or specified; (iii) damages are unsupported, indeterminate and/or exaggerated in management’s opinion; (iv) there is uncertainty as to the outcome of pending appeals or motions; (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties are involved (as with many patent-related cases).  For these cases, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on our financial condition, operating results or cash flows, though there is no assurance that the resolution and outcomes of these proceedings,

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individually or in the aggregate, will not be material to our financial condition, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period.

We intend to vigorously defend the proceedings against us. In the event that a court ultimately rules against us, we may be subject to adverse consequences, including, without limitation, substantial damages, which may include treble damages, fines, penalties, compensatory damages and/or other equitable or injunctive relief that could require us to materially modify our business operations or certain products or services that we offer to our consumers. In addition, adverse decisions against DISH Network in the proceedings described below could decrease the number of products and components we sell to DISH Network, which could have a material adverse effect on our business operations and our financial condition, results of operation and cash flows.

California Institute of Technology

On October 1, 2013, the California Institute of Technology (“Caltech”) filed suit against two of our subsidiaries, Hughes Communications, Inc. and Hughes Network Systems, LLC (“HNS”), as well as against DISH Network, DISH Network L.L.C., and dishNET Satellite Broadband L.L.C., in the United States District Court for the Central District of California alleging infringement of United States Patent Nos. 7,116,710; 7,421,032; 7,916,781; and 8,284,833, each of which is entitled “Serial Concatenation of Interleaved Convolutional Codes forming Turbo-Like Codes.”  Caltech asserted that encoding data as specified by the DVB-S2 standard infringes each of the asserted patents.  In the operative Amended Complaint, served on March 6, 2014, Caltech claims that the Hopper^TM set-top box that we design and sell to DISH Network, as well as certain of our Hughes segment’s satellite broadband products and services, infringe the asserted patents by implementing the DVB-S2 standard.  On September 26, 2014, Caltech requested leave to amend its Amended Complaint to add EchoStar Corporation and our subsidiary, EchoStar Technologies L.L.C. as defendants, as well as to allege that a number of additional set-top boxes infringe the asserted patents.  On November 7, 2014, the Court rejected that request.  Additionally, on November 4, 2014, the Court ruled that the patent claims at issue in the suit are directed to patentable subject matter.  On February 17, 2015, Caltech filed a second complaint in the same district against the same defendants alleging that HNS’ Gen4 HT1000 and HT1100 products infringe the same patents asserted in the first case.  We answered that second complaint on March 24, 2015.  The trial for the first case which was scheduled to commence on April 20, 2015, was vacated by the Court on March 16, 2015 and a new trial date has yet to be set.  On May 5, 2015, the Court granted summary judgment for us on a number of issues, finding that Caltech’s damages theory improperly apportioned alleged damages, that allegations of infringement against DISH Network, DISH Network L.L.C., and dishNET Satellite Broadband L.L.C. should be dismissed from the case, and affirming that Caltech could not assert infringement under the doctrine of equivalents.  The Court also granted motions by Caltech seeking findings that certain of its patents were not indefinite or subject to equitable estoppel.  The Court otherwise denied motions for summary judgment, including a motion by Caltech seeking summary judgment of infringement.  On May 14, 2015, the judge assigned to the case passed away.  A new judge has not yet been formally assigned. The parties are discussing resolving these cases without further litigation.  There can be no assurance that a settlement agreement will be reached.  If a settlement agreement is not reached, we cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages and we intend to vigorously defend these cases.

ClearPlay, Inc.

On March 13, 2014, ClearPlay, Inc. (“ClearPlay”) filed a complaint against EchoStar Corporation and our subsidiary, EchoStar Technologies L.L.C., as well as against DISH Network and DISH Network L.L.C. in the United States District Court for the District of Utah.  The complaint alleges infringement of United States Patent Nos. 6,898,799, entitled “Multimedia Content Navigation and Playback”; 7,526,784, entitled “Delivery of Navigation Data for Playback of Audio and Video Content”; 7,543,318, entitled “Delivery of Navigation Data for Playback of Audio and Video Content”; 7,577,970, entitled “Multimedia Content Navigation and Playback”; and 8,117,282, entitled “Media Player Configured to Receive Playback Filters From Alternative Storage Mediums.”  ClearPlay alleges that the AutoHop^TM feature of the Hopper^TM set-top box infringes the asserted patents.  On February 11, 2015, the Court stayed the case pending various third-party challenges before the United States Patent and Trademark Office regarding the validity of certain of the patents ClearPlay asserted in the case.

CRFD Research, Inc. (a subsidiary of Marathon Patent Group, Inc.)

On January 17, 2014, CRFD Research, Inc. (“CRFD”) filed a complaint against EchoStar Corporation and our subsidiary, EchoStar Technologies L.L.C., as well as against DISH Network, DISH DBS Corporation and DISH Network L.L.C., in United States District Court for the District of Delaware, alleging infringement of United States Patent No. 7,191,233 (the “233

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patent”).  The 233 patent is entitled “System for Automated, Mid-Session, User-Directed, Device-to-Device Session Transfer System,” and relates to transferring an ongoing software session from one device to another.  CRFD alleges that certain of our set-top boxes infringe the 233 patent.  On the same day, CRFD filed patent infringement complaints against AT&T Inc.; Comcast Corp.; DirecTV; Time Warner Cable Inc.; Cox Communications, Inc.; Level 3 Communications, Inc.; Akamai Technologies, Inc.; Cablevision Systems Corp. and Limelight Networks, Inc.  On January 26, 2015, we and DISH Network filed a petition before the United States Patent and Trademark Office challenging the validity of the 233 patent, which was subsequently instituted along with two third-party petitions also challenging the validity of the 233 patent.  On June 4, 2015, the litigation in the District Court was ordered stayed pending resolution of our petition before the United States Patent and Trademark Office, and on January 16, 2016, the United States Patent and Trademark Office held oral arguments on the merits of the petition.  CRFD is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein.

Elbit

On January 23, 2015, Elbit Systems Land and C4I LTD and Elbit Systems of America Ltd. (together referred to as “Elbit”) filed a complaint against our subsidiary HNS, as well as against Black Elk Energy Offshore Operations, LLC, Bluetide Communications, Inc. and Helm Hotels Group, in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent Nos. 6,240,073 (the “073 patent”) and 7,245,874 (“874 patent”).  The 073 patent is entitled “Reverse Link for a Satellite Communication Network” and the 874 patent is entitled “Infrastructure for Telephony Network.”  Elbit alleges that the 073 patent is infringed by broadband satellite systems that practice the Internet Protocol Over Satellite standard.  Elbit alleges that the 874 patent is infringed by the manufacture and sale of broadband satellite systems that provide cellular backhaul service via connections to E1 or T1 interfaces at cellular backhaul base stations.  On April 2, 2015, Elbit filed an amended complaint removing Helm Hotels Group as a defendant, but making similar allegations against a new defendant, Country Home Investments, Inc.  Over November 3 and 4, 2015, and January 22, 2016, the defendants filed petitions before the United States Patent and Trademark Office challenging the validity of the patents in suit and on April 13, 2016, the defendants answered Elbit’s complaint. By April 29, 2016, three of the four petitions were denied, with a decision regarding one petition still pending.

The Hopper Litigation

On May 24, 2012, DISH Network L.L.C., filed suit in the United States District Court for the Southern District of New York against American Broadcasting Companies, Inc. (“ABC”), CBS Corporation (“CBS”), Fox Entertainment Group, Inc., Fox Television Holdings, Inc., Fox Cable Network Services, L.L.C. (collectively, “Fox”) and NBCUniversal Media, LLC (“NBC”).  The lawsuit seeks a declaratory judgment that DISH Network L.L.C is not infringing any defendant’s copyright, or breaching any defendant’s retransmission consent agreement, by virtue of the PrimeTime Anytime^TM and AutoHop^TM features of the Hopper^TM set-top boxes we design and sell to DISH Network.  A consumer can use the PrimeTime Anytime feature at his or her option, to record certain primetime programs airing on ABC, CBS, Fox, and/or NBC up to every night, and to store those recordings for up to eight days.  A consumer can use the AutoHop feature at his or her option, to watch certain recordings the subscriber made with our PrimeTime Anytime feature, commercial-free, if played back at a certain point after the show’s original airing.

Later on May 24, 2012, (i) Fox Broadcasting Company, Twentieth Century Fox Film Corp. and Fox Television Holdings, Inc. filed a lawsuit against DISH Network and DISH Network L.L.C. (collectively, “DISH”) in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature, the AutoHop feature, as well as DISH’s use of Slingbox unit’s placeshifting functionality infringe their copyrights and breach their retransmission consent agreements, (ii) NBC Studios LLC, Universal Network Television, LLC, Open 4Business Productions LLC and NBCUniversal Media, LLC filed a lawsuit against DISH in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature and the AutoHop feature infringe their copyrights, and (iii) CBS Broadcasting Inc., CBS Studios Inc. and Survivor Productions LLC filed a lawsuit against DISH in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature and the AutoHop feature infringe their copyrights.

As a result of certain parties’ competing counterclaims and venue-related motions brought in both the New York and California actions, as described below, and certain networks filing various amended complaints, the claims have proceeded in the following venues:  (1) the copyright and contract claims regarding the ABC and CBS parties in New York; and (2) the copyright and contract claims regarding the Fox and NBC parties in California.

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California Actions.  On August 17, 2012, the NBC plaintiffs filed a first amended complaint in their California action adding EchoStar Corporation and our subsidiary EchoStar Technologies L.L.C. to the NBC litigation, alleging various claims of copyright infringement.  We and our subsidiary answered on September 18, 2012.

On November 7, 2012, the California court denied the Fox plaintiffs’ motion for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime Anytime and AutoHop features, and the Fox plaintiffs appealed.  On March 27, 2013, at the request of the parties, the Central District of California granted a stay of all proceedings in the action brought by the NBC plaintiffs, pending resolution of the appeal by the Fox plaintiffs.  On July 24, 2013, the United States Court of Appeals for the Ninth Circuit affirmed the denial of the Fox plaintiffs’ motion for a preliminary injunction as to the PrimeTime Anytime and AutoHop features.  On August 7, 2013, the Fox plaintiffs filed a petition for rehearing and rehearing en banc, which was denied on January 24, 2014.  The United States Supreme Court granted the Fox plaintiffs an extension until May 23, 2014 to file a petition for writ of certiorari, but they did not file.  As a result, the stay of the NBC plaintiffs’ action expired.  On August 6, 2014, at the request of the parties, the Central District of California granted a further stay of all proceedings in the action brought by the NBC plaintiffs, pending a final judgment on all claims in the Fox plaintiffs’ action.  As discussed below, the Fox action was dismissed on February 11, 2016. As a result, on March 4, 2016, at the request of the parties to the NBC action, the Central District of California granted a further stay of all proceedings in the action until September 9, 2016; provided that after May 27, 2016, any party to the action may file a motion with the Court to lift the stay. No trial date is currently set on the NBC claims.

In addition, on February 21, 2013, the Fox plaintiffs filed a second motion for preliminary injunction against: (i) DISH Network, seeking to enjoin the Hopper Transfers^TM feature in the second-generation Hopper set-top box, alleging breach of a retransmission consent agreement; and (ii) EchoStar Technologies L.L.C. and DISH Network, seeking to enjoin the Slingbox unit’s placeshifting functionality in the second-generation Hopper set-top box, alleging copyright infringement by both defendants, and breach of the earlier-mentioned retransmission consent agreement by DISH Network.  The Fox plaintiffs’ motion was denied on September 23, 2013.  The Fox plaintiffs appealed, and on July 14, 2014, the United States Court of Appeals for the Ninth Circuit affirmed the denial of the Fox plaintiffs’ motion.  On October 17, 2014, the California court heard oral argument on the Fox plaintiffs’ and our respective motions for summary judgment.  On January 12, 2015, the Court entered an order ruling on the parties’ respective summary judgment motions, holding that: (a) the Slingbox unit’s placeshifting functionality and the PrimeTime Anytime, AutoHop and Hopper Transfers features do not violate copyright law; (b) certain quality assurance copies (which were discontinued in November 2012) did violate copyright law; and (c) the Slingbox unit’s placeshifting functionality, the Hopper Transfers feature and certain quality assurance copies breach DISH’s retransmission consent agreement with Fox.  At the parties’ joint request, the Court had stayed the case until January 15, 2016. Pursuant to a settlement agreement between us, DISH Network and the Fox plaintiffs, on February 10, 2016, we, DISH Network and the Fox plaintiffs filed a motion to dismiss with prejudice all of our respective claims pending in the California Court. That motion was granted on February 11, 2016.

New York Actions.  On October 9, 2012, the ABC plaintiffs filed copyright counterclaims in the New York action against EchoStar Technologies, L.L.C., with the CBS plaintiffs filing similar copyright counterclaims in the New York action against EchoStar Technologies L.L.C. on October 12, 2012.  Additionally, the CBS plaintiffs filed a counterclaim alleging that DISH Network fraudulently concealed the AutoHop feature when negotiating the renewal of its CBS retransmission consent agreement.

On November 23, 2012, the ABC plaintiffs filed a motion for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime Anytime and AutoHop features.  On September 18, 2013, the New York court denied that motion.  The ABC plaintiffs appealed, and oral argument on the appeal was heard on February 20, 2014 before the United States Court of Appeals for the Second Circuit.  Pursuant to a settlement between us and the ABC parties, on March 4, 2014, the ABC parties withdrew their appeal to the United States Court of Appeals for the Second Circuit, and, on March 6, 2014, we and the ABC parties dismissed without prejudice all of our respective claims pending in the United States District Court for the Southern District of New York.  The CBS claims in the New York action were scheduled for trial on May 29, 2015.  However, on December 6, 2014 the parties to the CBS case reached a settlement agreement and all claims pending in New York Court were dismissed with prejudice on December 10, 2014.

Michael Heskiaoff, Marc Langenohl, and Rafael Mann

On July 10, 2015, Messrs. Michael Heskiaoff and Marc Langenohl, purportedly on behalf of themselves and all others similarly situated, filed suit against our subsidiary Sling Media, Inc. in the United States District Court for the Southern District of New York.  The complaint alleges that Sling Media Inc.’s display of advertising to its customers violates a number of state statutes

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dealing with consumer deception.  On September 25, 2015, the plaintiffs filed an amended complaint, and Mr. Rafael Mann, purportedly on behalf of himself and all others similarly situated, filed an additional complaint alleging similar causes of action. On November 16, 2015, the cases were consolidated.

Realtime Data LLC

On May 8, 2015, Realtime Data LLC (“Realtime”) filed suit against EchoStar Corporation and our subsidiary HNS in the United States District Court for the Eastern District of Texas alleging infringement of United States Patent Nos. 7,378,992, entitled “Content Independent Data Compression Method and System”; 7,415,530, entitled “System and Methods for Accelerated Data Storage and Retrieval”; and 8,643,513, entitled “Data Compression System and Methods.”  On September 14, 2015, Realtime amended its complaint, additionally alleging infringement of United States Patent No. 9,116,908, entitled “System and Methods for Accelerated Data Storage and Retrieval.” Realtime generally alleges that the asserted patents are infringed by certain HNS data compression products and services.  Over April 29, 2016 and May 5, 2016, the defendants filed petitions before the United States Patent and Trademark Office challenging the validity of the asserted patents. Realtime is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein.

Shareholder Derivative Litigation

On December 5, 2012, Greg Jacobi, purporting to sue derivatively on behalf of EchoStar Corporation, filed suit (the “Jacobi Litigation”) against Charles W. Ergen, Michael T. Dugan, R. Stanton Dodge, Tom A. Ortolf, C. Michael Schroeder, Joseph P. Clayton, David K. Moskowitz, and EchoStar Corporation in the United States District Court for the District of Nevada.  The complaint alleges that a March 2011 attempted grant of 1.5 million stock options to Charles Ergen breached defendants’ fiduciary duties, resulted in unjust enrichment, and constituted a waste of corporate assets.

On December 18, 2012, Chester County Employees’ Retirement Fund, derivatively on behalf of EchoStar Corporation, filed a suit (the “Chester County Litigation”) against Charles W. Ergen, Michael T. Dugan, R. Stanton Dodge, Tom A. Ortolf, C. Michael Schroeder, Anthony M. Federico, Pradman P. Kaul, Joseph P. Clayton, and EchoStar Corporation in the United States District Court for the District of Colorado.  The complaint similarly alleges that the March 2011 attempted grant of 1.5 million stock options to Charles Ergen breached defendants’ fiduciary duties, resulted in unjust enrichment, and constituted a waste of corporate assets.

On February 22, 2013, the Chester County Litigation was transferred to the District of Nevada, and on April 3, 2013, the Chester County Litigation was consolidated into the Jacobi Litigation.  Oral argument on a motion to dismiss the Jacobi Litigation was held February 21, 2014.  On April 11, 2014, the Chester County Litigation was stayed pending resolution of the motion to dismiss.  On March 30, 2015, the Court dismissed the Jacobi Litigation, with leave for Jacobi to amend his complaint by April 20, 2015.  On April 20, 2015, Jacobi filed an amended complaint, which on June 12, 2015, we moved to dismiss. On March 17, 2016, the Court dismissed the amended Jacobi Litigation, and on April 15, 2016, Jacobi filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit.

Of the attempted grant of 1.5 million options to Mr. Ergen in 2011, only 800,000 were validly granted and remain outstanding. 

Technology Development and Licensing, LLC

On January 22, 2009, Technology Development and Licensing, LLC (“TDL”) filed suit against EchoStar Corporation and DISH Network in the United States District Court for the Northern District of Illinois alleging infringement of United States Patent No. Re. 35,952, which relates to certain favorite channel features.  TDL is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein.  The case has been stayed since July 2009, pending two reexamination petitions before the United States Patent and Trademark Office, which concluded in August 2015 resulting in 42 out of the 53 claims of the 952 patent being cancelled.  As a result, the case resumed in August 2015.  A trial date has not been set.

TQ Beta LLC

On June 30, 2014, TQ Beta LLC (“TQ Beta”) filed suit against DISH Network, DISH DBS Corporation, DISH Network L.L.C., as well as EchoStar Corporation and our subsidiaries, EchoStar Technologies, L.L.C, HSS, and Sling Media, Inc., in the United States District Court for the District of Delaware, alleging infringement of United States Patent No. 7,203,456 (the “456

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patent”), which is entitled “Method and Apparatus for Time and Space Domain Shifting of Broadcast Signals.”  TQ Beta alleges that the Hopper, Hopper with Sling, ViP 722 and ViP 722k DVR devices, as well as the DISH Anywhere service and DISH Anywhere mobile application, infringe the 456 patent, but has not specified the amount of damages that it seeks.  TQ Beta is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein.  During August 2015, EchoStar Corporation and DISH Network L.L.C. filed petitions before the United States Patent and Trademark Office challenging the validity of the 456 patent, and in February 2016, the United States Patent and Trademark Office agreed to institute proceedings on our petitions. On February 25, 2016, the case was stayed pending resolution of these proceedings before the United States Patent and Trademark Office, and the Court vacated all pending court dates and deadlines.

Two-Way Media Ltd

On February 17, 2016, Two-Way Media Ltd (“TWM”) filed a complaint against EchoStar Corporation and our subsidiaries EchoStar Technologies L.L.C., EchoStar Satellite Services L.L.C., and Sling Media, Inc., as well as against DISH Network Corporation, DISH DBS Corporation, DISH Network L.L.C., DISH Network Service L.L.C., Sling TV Holding L.L.C., Sling TV L.L.C., and Sling TV Purchasing L.L.C. TWM brought the suit in the United States District Court for the District of Colorado, alleging infringement of United States Patent Nos. 5,778,187; 5,983,005; 6,434,622; and 7,266,686, each entitled “Multicasting Method and Apparatus”; and 9,124,607, entitled “Methods and Systems for Playing Media.” TWM alleges that the SlingTV, Sling International, DISH Anywhere, and DISHWorld services, as well as the Slingbox units and DISH DVRs incorporating Slingbox technology, infringe the asserted patents. TWM is an entity that seeks to license a patent portfolio without itself practicing any of the claims recited therein.

Other

In addition to the above actions, we are subject to various other legal proceedings and claims, which arise in the ordinary course of our business.  As part of our ongoing operations, the Company is subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as by governmental/regulatory authorities responsible for enforcing the laws and regulations to which the Company may be subject. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the federal government. Some states have adopted similar state whistleblower and false claims provisions. In addition, the Company from time to time receives inquiries from federal, state and foreign agencies regarding compliance with various laws and regulations.

In our opinion, the amount of ultimate liability with respect to any of these actions is unlikely to materially affect our financial position, results of operations or cash flows, though the resolutions and outcomes, individually or in the aggregate, could be material to our financial position, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period.

The Company indemnifies its directors, officers and employees for certain liabilities that might arise from the performance of their responsibilities for the Company. Additionally, in the normal course of its business, the Company enters into contracts pursuant to which the Company may make a variety of representations and warranties and indemnify the counterparty for certain losses. The Company’s possible exposure under these arrangements cannot be reasonably estimated as this involves the resolution of claims made, or future claims that may be made, against the Company or its officers, directors or employees, the outcomes of which are unknown and not currently predictable or estimable.

Note 15.    Segment Reporting

Operating segments are business components of an enterprise for which separate financial information is available and regularly evaluated by the chief operating decision maker (“CODM”), who for EchoStar is the Company’s Chief Executive Officer.  Under this definition, we operate in three primary business segments, Hughes, EchoStar Technologies and EchoStar Satellite Services as described in Note 1 of these condensed consolidated financial statements.

The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, or EBITDA.  Our segment operating results do not include real estate and other activities, costs incurred in certain satellite development programs and other business development activities, expenses of various corporate departments and our centralized treasury operations, including income from our investment portfolio and interest expense on our debt.  These activities are accounted for in the “All Other and Eliminations” column in the table below.  Total assets by

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segment have not been reported herein because the information is not provided to our CODM on a regular basis.  The Hughes Retail Group is included in our Hughes segment and our CODM reviews separate HRG financial information only to the extent such information is included in our periodic filings with the SEC.  Therefore, we do not consider HRG to be a separate operating segment.

Transactions between segments were not significant for the three months ended March 31, 2016 or 2015.

The following table presents revenue, EBITDA, and capital expenditures for each of our operating segments.

	Hughes		EchoStar Technologies		EchoStar Satellite Services		All Other and Eliminations			Consolidated Total
	(In thousands)
For the Three Months Ended March 31, 2016
External revenue	$	325,539	$	384,939	$	102,815	$	3,066		$	816,359
Intersegment revenue	$	699	$	187	$	174	$	(1,060	)	$	—
Total revenue	$	326,238	$	385,126	$	102,989	$	2,006		$	816,359
EBITDA	$	99,468	$	28,168	$	88,186	$	6,974		$	222,796
Capital expenditures	$	104,237	$	5,341	$	24,720	$	76,838		$	211,136
For the Three Months Ended March 31, 2015
External revenue	$	324,950	$	346,033	$	125,198	$	2,472		$	798,653
Intersegment revenue	$	330	$	187	$	200	$	(717	)	$	—
Total revenue	$	325,280	$	346,220	$	125,398	$	1,755		$	798,653
EBITDA	$	91,273	$	25,561	$	106,419	$	(9,572	)	$	213,681
Capital expenditures	$	64,527	$	15,104	$	27,783	$	70,388		$	177,802

The following table reconciles total consolidated EBITDA to reported “Income before income taxes” in our condensed consolidated statements of operations and comprehensive income (loss):

	For the Three Months Ended March 31,
	2016			2015
	(In thousands)
EBITDA	$	222,796		$	213,681
Interest income and expense, net	(19,244		)	(32,697		)
Depreciation and amortization	(126,734		)	(133,185		)
Net loss attributable to noncontrolling interest in HSS Tracking Stock and other noncontrolling interests	(712		)	(1,800		)
Income before income taxes	$	76,106		$	45,999

Note 16.    Related Party Transactions

DISH Network

Following the Spin-off, we and DISH Network have operated as separate publicly-traded companies.  However, pursuant to the Satellite and Tracking Stock Transaction, described in Note 4 and below, DISH Network owns Hughes Retail Preferred Tracking Stock representing an aggregate 80.0% economic interest in the residential retail satellite broadband business of our Hughes segment including certain operations, assets and liabilities attributed to such business.  In addition, a substantial majority of the voting power of the shares of EchoStar and DISH Network is owned beneficially by Charles W. Ergen, our Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family.

In connection with and following the Spin-off, we and DISH Network have entered into certain agreements pursuant to which we obtain certain products, services and rights from DISH Network; DISH Network obtains certain products, services and

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rights from us; and we and DISH Network have indemnified each other against certain liabilities arising from our respective businesses.  We also may enter into additional agreements with DISH Network in the future.  Generally, the amounts DISH Network pays for products and services provided under the agreements are based on our cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided.

The following is a summary of the terms of our principal agreements with DISH Network that may have an impact on our financial condition and results of operations.

“Equipment revenue — DISH Network”

Receiver Agreement.  Effective January 2012, we and DISH Network entered into a receiver agreement (the “2012 Receiver Agreement”), pursuant to which DISH Network has the right, but not the obligation, to purchase digital set-top boxes, related accessories, and other equipment from us for the period from January 2012 through December 2014.  The 2012 Receiver Agreement replaced the receiver agreement we entered into with DISH Network in connection with the Spin-off.  The 2012 Receiver Agreement allows DISH Network to purchase digital set-top boxes, related accessories, and other equipment from us either: (i) at cost (decreasing as we reduce costs and increasing as costs increase) plus a dollar mark-up which will depend upon the cost of the product subject to a collar on our mark-up; or (ii) at cost plus a fixed margin, which will depend on the nature of the equipment purchased.  Under the 2012 Receiver Agreement, our margins will be increased if we are able to reduce the costs of our digital set-top boxes and our margins will be reduced if these costs increase.  We provide DISH Network with standard manufacturer warranties for the goods sold under the 2012 Receiver Agreement.  Additionally, the 2012 Receiver Agreement includes an indemnification provision, whereby the parties indemnify each other for certain intellectual property matters.  DISH Network is able to terminate the 2012 Receiver Agreement for any reason upon at least 60 days’ notice to us.  We are able to terminate the 2012 Receiver Agreement if certain entities acquire DISH Network.  DISH Network has an option, but not the obligation, to extend the 2012 Receiver Agreement for one additional year upon 180 days’ notice prior to the end of the term.  In May 2014, we received DISH Network’s notice to extend the 2012 Receiver Agreement for one year through December 2015, and in November 2015, we amended the 2012 Receiver Agreement with DISH Network to extend the term of the 2012 Receiver Agreement for one year through December 2016.

“Services and other revenue — DISH Network”

Broadcast Agreement.  Effective January 2012, we and DISH Network entered into a broadcast agreement (the “2012 Broadcast Agreement”) pursuant to which we provide certain broadcast services to DISH Network, including teleport services such as transmission and downlinking, channel origination services, and channel management services, for the period from January 2012 through December 2016.  The 2012 Broadcast Agreement replaced the broadcast agreement that we entered into with DISH Network in connection with the Spin-off.  The fees for the services provided under the 2012 Broadcast Agreement are calculated at either:  (a) our cost of providing the relevant service plus a fixed dollar fee, which is subject to certain adjustments; or (b) our cost of providing the relevant service plus a fixed margin, which will depend on the nature of the services provided.  DISH Network has the ability to terminate channel origination services and channel management services for any reason and without any liability upon at least 60 days’ notice to us.  If DISH Network terminates the teleport services provided under the 2012 Broadcast Agreement for a reason other than our breach, DISH Network generally is obligated to reimburse us for any direct costs we incur related to any such termination that we cannot reasonably mitigate.

Broadcast Agreement for Certain Sports Related Programming.  In May 2010, we and DISH Network entered into a broadcast agreement pursuant to which we provide certain broadcast services to DISH Network in connection with its carriage of certain sports related programming.  The term of this agreement is ten years.  If DISH Network terminates this agreement for a reason other than our breach, DISH Network generally is obligated to reimburse us for any direct costs we incur related to any such termination that we cannot reasonably mitigate.  The fees for the broadcast services provided under this agreement depend, among other things, upon the cost to develop and provide such services.

RUS Implementation Agreement. In September 2010, DISH Broadband L.L.C. (“DISH Broadband”), DISH Network’s indirect, wholly-owned subsidiary, was selected by the Rural Utilities Service (“RUS”) of the United States Department of Agriculture to receive up to approximately $14.1 million in broadband stimulus grant funds (the “Grant Funds”). Effective November 2011, HNS and DISH Broadband entered into a RUS Implementation Agreement (the “RUS Agreement”) pursuant to which HNS provided certain portions of the equipment and broadband service used to implement DISH Broadband’s RUS program. While the RUS Agreement expired in June 2013 when the Grant Funds were exhausted, HNS is required to continue

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providing services to DISH Broadband’s customers activated prior to the expiration of the RUS Agreement in accordance with the terms and conditions of the RUS Agreement.

Satellite Services Provided to DISH Network.  Since the Spin-off, we have entered into certain satellite service agreements pursuant to which DISH Network receives satellite services on certain satellites owned or leased by us.  The fees for the services provided under these satellite service agreements depend, among other things, upon the orbital location of the applicable satellite, the number of transponders that are providing services on the applicable satellite, and the length of the service arrangements.  The terms of each service arrangement is set forth below:

EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV.  As part of the Satellite and Tracking Stock Transaction discussed in Note 4, in March 2014, we began providing certain satellite services to DISH Network on the EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV satellites.  The term of each satellite services agreement generally terminates upon the earlier of:  (i) the end of life of the satellite; (ii) the date the satellite fails; or (iii) a certain date, which depends upon, among other things, the estimated useful life of the satellite.  DISH Network generally has the option to renew each satellite service agreement on a year-to-year basis through the end of the respective satellite’s life.  There can be no assurance that any options to renew such agreements will be exercised.  DISH Network elected not to renew the satellite services agreement relative to the EchoStar I satellite.  The agreement for the EchoStar I satellite expired pursuant to its terms effective November 2015. In December 2015, DISH Network renewed the satellite services agreement relative to the EchoStar VII satellite for one year to June 2017.

EchoStar VIII.  In May 2013, DISH Network began receiving satellite services from us on the EchoStar VIII satellite as an in-orbit spare.  Effective March 2014, this satellite services arrangement converted to a month-to-month service agreement with both parties having the right to terminate upon 30 days’ notice.  The agreement terminated in accordance with its terms effective November 2015.

EchoStar IX.  Effective January 2008, DISH Network began receiving satellite services from us on the EchoStar IX satellite.  Subject to availability, DISH Network generally has the right to continue to receive satellite services from us on the EchoStar IX satellite on a month-to-month basis.

EchoStar XII.  DISH Network receives satellite services from us on the EchoStar XII satellite.  The term of the satellite services agreement terminates upon the earlier of: (i) the end of life of the satellite; (ii) the date the satellite fails or the date the transponder(s) on which the service was being provided under the agreement fails; or (iii) September 2017.  DISH Network generally has the option to renew the agreement on a year-to-year basis through the end of the satellite’s life.  There can be no assurance that any options to renew this agreement will be exercised.

EchoStar XVI.  In December 2009, we entered into an initial ten-year transponder service agreement with DISH Network, pursuant to which DISH Network has received satellite services from us on the EchoStar XVI satellite since January 2013.  Effective December 2012, we and DISH Network amended the transponder service agreement to, among other things, change the initial term to generally expire upon the earlier of: (i) the end-of-life or replacement of the satellite; (ii) the date the satellite fails; (iii) the date the transponder(s) on which service is being provided under the agreement fails; or (iv) four years following the actual service commencement date.  Prior to expiration of the initial term, we, upon certain conditions, and DISH Network have the option to renew for an additional six-year period.  If either we or DISH Network exercise our respective six-year renewal options, DISH Network has the option to renew for an additional five-year period prior to expiration of the then-current term.  There can be no assurance that any option to renew this agreement will be exercised. In the event that we or DISH Network does not exercise the six-year renewal option or DISH Network does not exercise the five-year renewal option, DISH Network has the option to purchase the EchoStar XVI satellite for a certain price. If DISH Network does not elect to purchase the EchoStar XVI satellite at that time, we may sell the EchoStar XVI satellite to a third party and DISH Network is required to pay us a certain amount in the event we are not able to sell the EchoStar XVI satellite for more than a certain amount.

Nimiq 5 Agreement.  In September 2009, we entered into a fifteen-year satellite service agreement with Telesat Canada (“Telesat”) to receive service on all 32 DBS transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”).  In September 2009, we also entered into a satellite service agreement (the “DISH Nimiq 5 Agreement”) with DISH Network, pursuant to which DISH Network receives satellite services from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement.

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Under the terms of the DISH Nimiq 5 Agreement, DISH Network makes certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service, and continue through the service term.  Unless earlier terminated under the terms and conditions of the DISH Nimiq 5 Agreement, the service term will expire ten years following the date the Nimiq 5 satellite was placed into service.  Upon expiration of the initial term, DISH Network has the option to renew the DISH Nimiq 5 Agreement on a year-to-year basis through the end of life of the Nimiq 5 satellite.  Upon in-orbit failure or end of life of the Nimiq 5 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite.  There can be no assurance that any options to renew the DISH Nimiq 5 Agreement will be exercised or that DISH Network will exercise its option to receive service on a replacement satellite.

QuetzSat-1 Agreement.  In November 2008, we entered into a ten-year satellite service agreement with SES Latin America, which provides, among other things, for the provision by SES Latin America to us of service on 32 DBS transponders on the QuetzSat-1 satellite.  Concurrently, in 2008, we entered into a transponder service agreement with DISH Network, pursuant to which DISH Network receives satellite services on 24 of the DBS transponders on the QuetzSat-1 satellite.  The QuetzSat-1 satellite was launched in September 2011 and was placed into service in November 2011 at the 67.1 degree west longitude orbital location.  In February 2013, we and DISH Network entered into an agreement pursuant to which we receive certain satellite services from DISH Network on five DBS transponders on the QuetzSat-1 satellite.  In January 2013, the QuetzSat-1 satellite was moved to the 77 degree west longitude orbital location and DISH Network commenced commercial operations at such location in February 2013.

Under the terms of our contractual arrangements with DISH Network, we began to provide service to DISH Network on the QuetzSat-1 satellite in February 2013 and will continue to provide service through the remainder of the service term.  Unless extended or earlier terminated under the terms and conditions of our agreement with DISH Network for the QuetzSat-1 satellite, the initial service term will expire in November 2021.  Upon expiration of the initial service term, DISH Network has the option to renew the agreement for the QuetzSat-1 satellite on a year-to-year basis through the end of life of the QuetzSat-1 satellite.  Upon an in-orbit failure or end of life of the QuetzSat-1 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite.  There can be no assurance that any options to renew this agreement will be exercised or that DISH Network will exercise its option to receive service on a replacement satellite.

103 Degree Orbital Location/SES-3.  In May 2012, we entered into a spectrum development agreement (the “103 Spectrum Development Agreement”) with Ciel Satellite Holdings Inc. (“Ciel”) to develop certain spectrum rights at the 103 degree west longitude orbital location (the “103 Spectrum Rights”).  In June 2013, we and DISH Network entered into a spectrum development agreement (the “DISH 103 Spectrum Development Agreement”) pursuant to which DISH Network may use and develop the 103 Spectrum Rights.  Unless earlier terminated under the terms and conditions of the DISH 103 Spectrum Development Agreement, the term generally will continue for the duration of the 103 Spectrum Rights.

In connection with the 103 Spectrum Development Agreement, in May 2012, we also entered into a ten-year service agreement with Ciel pursuant to which we receive certain satellite services from Ciel on the SES-3 satellite at the 103 degree orbital location.  In June 2013, we and DISH Network entered into an agreement pursuant to which DISH Network receives certain satellite services from us on the SES-3 satellite (the “DISH 103 Service Agreement”).  Under the terms of the DISH 103 Service Agreement, DISH Network makes certain monthly payments to us through the service term.  Unless earlier terminated under the terms and conditions of the DISH 103 Service Agreement, the initial service term will expire on the earlier of: (i) the date the SES-3 satellite fails; (ii) the date the transponder(s) on which service was being provided under the agreement fails; or (iii) June 2023.  Upon in-orbit failure or end of life of the SES-3 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite.  There can be no assurance that DISH Network will exercise its option to receive service on a replacement satellite.

Satellite and Tracking Stock Transaction.  In February 2014, we entered into agreements with DISH Network to implement a transaction pursuant to which, among other things: (i) in March 2014, EchoStar and HSS issued shares of the Tracking Stock to DISH Network in exchange for five satellites owned by DISH Network (EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV) (including assumption of related in-orbit incentive obligations) and approximately $11.4 million in cash; and (ii) in March 2014, DISH Network began receiving certain satellite services on these five satellites from us.  See Note 4 herein and in our most recent Form 10-K for further information.

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TT&C Agreement.  Effective January 2012, we entered into a telemetry, tracking and control (“TT&C”) agreement pursuant to which we provide TT&C services to DISH Network for a period ending in December 2016 (the “2012 TT&C Agreement”).  The 2012 TT&C Agreement replaced the TT&C agreement we entered into with DISH Network in connection with the Spin-off.  The fees for services provided under the 2012 TT&C Agreement are calculated at either:  (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided.  DISH Network is able to terminate the 2012 TT&C Agreement for any reason upon 60 days’ notice.

In connection with the Satellite and Tracking Stock Transaction, in February 2014, we amended the TT&C Agreement to cease the provision of TT&C services to DISH Network for the EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV satellites.  Effective March 2014, we provide TT&C services for the D-1 and EchoStar XV satellites; however, for the period that we received satellite services on the EchoStar XV satellite from DISH Network, we waived the fees for the TT&C services on the EchoStar XV satellite.

Real Estate Lease Agreements.  We have entered into lease agreements pursuant to which DISH Network leases certain real estate from us.  The rent on a per square foot basis for each of the leases is comparable to per square foot rental rates of similar commercial property in the same geographic area at the time of the lease, and DISH Network is responsible for its portion of the taxes, insurance, utilities and maintenance of the premises.  The term of each of the leases is set forth below:

Inverness Lease Agreement.  The lease for certain space at 90 Inverness Circle East in Englewood, Colorado is for a period ending in December 2016.  This agreement can be terminated by either party upon six months’ prior notice. This agreement may be extended by mutual consent, in which case this agreement will be converted to a month-to-month lease agreement. Upon such extension, both parties have the right to terminate this agreement upon 30 days’ notice. In February 2016, DISH Network provided us notice to terminate this lease effective in August 2016.

Meridian Lease Agreement.  The lease for all of 9601 S. Meridian Blvd. in Englewood, Colorado is for a period ending in December 2016. This agreement may be extended by mutual consent, in which case this agreement will be converted to a month-to-month lease agreement. Upon extension, both parties have the right to terminate this agreement upon 30 days’ notice.

Santa Fe Lease Agreement.  The lease for all of 5701 S. Santa Fe Dr. in Littleton, Colorado is for a period ending in December 2016. This agreement may be extended by mutual consent, in which case this agreement will be converted to a month-to-month lease agreement. Upon extension, both parties have the right to terminate this agreement upon 30 days’ notice.

EchoStar Data Networks Sublease Agreement.  The sublease for certain space at 211 Perimeter Center in Atlanta, Georgia is for a period ending in October 2016. DISH Network may extend this agreement for an additional five years.

Gilbert Lease Agreement.  The original lease for certain space at 801 N. DISH Dr. in Gilbert, Arizona was a month to month lease and could be terminated by either party upon 30 days’ prior notice.  The original lease was terminated in May 2014.  Effective August 2014, we began leasing this space to DISH Network under a new lease for a period ending in July 2016.  DISH Network has renewal options for three additional one year terms.

Cheyenne Lease Agreement.  The lease for certain space at 530 EchoStar Drive in Cheyenne, Wyoming is for a period ending in December 2031. This agreement may be extended by mutual consent, in which case this agreement will be converted to a month-to-month lease agreement. Upon extension, both parties have the right to terminate this agreement upon 30 days’ notice.

Product Support Agreement.  In connection with the Spin-off, we entered into a product support agreement pursuant to which DISH Network has the right, but not the obligation, to receive product support from us (including certain engineering and technical support services) for all set-top boxes and related accessories that we have previously sold and in the future may sell to DISH Network.  The fees for the services provided under the product support agreement are calculated at cost plus a fixed margin, which varies depending on the nature of the services provided.  The term of the product support agreement is the economic life of such set-top boxes and related accessories, unless terminated earlier.  DISH Network may terminate the product support agreement for any reason upon at least 60 days’ notice.  In the event of an early termination of this agreement, DISH Network is entitled to a refund of any unearned fees paid to us for the services.

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DISHOnline.com Services Agreement.  Effective January 2010, DISH Network entered into a two-year agreement with us pursuant to which DISH Network receives certain services associated with an online video portal.  The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services.  DISH Network has the option to renew this agreement for successive one year terms and the agreement may be terminated by DISH Network for any reason upon at least 120 days’ notice to us.  In October 2014, DISH Network exercised its right to renew this agreement for a one-year period ending in December 2015, and in November 2015, DISH Network exercised its right to renew this agreement for an additional one-year period ending in December 2016.

DISH Remote Access Services Agreement.  Effective February 2010, we entered into an agreement with DISH Network pursuant to which DISH Network receives, among other things, certain remote digital video recorder (“DVR”) management services.  The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services.  This agreement had an initial term of five years with automatic renewal for successive one year terms.  This agreement automatically renewed in February 2016 for an additional one-year period until February 2017.  The agreement may be terminated by DISH Network for any reason upon at least 120 days’ notice to us.

SlingService Services Agreement.  Effective February 2010, we entered into an agreement with DISH Network pursuant to which DISH Network receives certain services related to placeshifting.  The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services.  This agreement had an initial term of five years with automatic renewal for successive one year terms.  This agreement automatically renewed in February 2016 for an additional one-year period until February 2017.  The agreement may be terminated by DISH Network for any reason upon at least 120 days’ notice to us.

TerreStar Agreement.  In March 2012, DISH Network completed its acquisition of substantially all the assets of TerreStar Networks Inc. (“TerreStar”).  Prior to DISH Network’s acquisition of substantially all the assets of TerreStar and our completion of the Hughes Acquisition, TerreStar and HNS entered into various agreements pursuant to which our Hughes segment provides, among other things, hosting, operations and maintenance services for TerreStar’s satellite gateway and associated ground infrastructure.  These agreements generally may be terminated by DISH Network at any time for convenience.

Hughes Broadband Distribution Agreement.  Effective October 2012, HNS and dishNET Satellite Broadband L.L.C. (“dishNET”), a wholly-owned subsidiary of DISH Network, entered into a distribution agreement (the “Distribution Agreement”) pursuant to which dishNET has the right, but not the obligation, to market, sell and distribute the Hughes satellite internet service (the “Hughes service”).  dishNET pays HNS a monthly per subscriber wholesale service fee for the Hughes service based upon a subscriber’s service level and based upon certain volume subscription thresholds.  The Distribution Agreement also provides that dishNET has the right, but not the obligation, to purchase certain broadband equipment from us to support the sale of the Hughes service.  The Distribution Agreement had an initial term of five years with automatic renewal for successive one year terms unless terminated by either party with a written notice at least 180 days before the expiration of the then-current term.  In February 2014, HNS and dishNET entered into an amendment to the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement until March 2024.  Upon expiration or termination of the Distribution Agreement, the parties will continue to provide the Hughes service to the then-current dishNET subscribers pursuant to the terms and conditions of the Distribution Agreement.

Set-Top Box Application Development Agreement.  In November 2012, we and DISH Network entered into a set-top box application development agreement (the “Application Development Agreement”) pursuant to which we provide DISH Network with certain services relating to the development of web-based applications for set-top boxes for the period ending in February 2016.  The Application Development Agreement automatically renewed in February 2016 for a one-year period ending in February 2017, and renews automatically for successive one-year periods thereafter, unless terminated earlier by us or DISH Network at any time upon at least 90 days’ notice.  The fees for services provided under the Application Development Agreement are calculated at our cost of providing the relevant service plus a fixed margin, which will depend on the nature of the services provided.

XiP Encryption Agreement.  In July 2012, we entered into an encryption agreement with DISH Network for our whole-home HD DVR line of set-top boxes (the “XiP Encryption Agreement”) pursuant to which we provide certain security measures on our whole-home HD DVR line of set-top boxes to encrypt the content delivered to the set-top box via a smart card and secure the content between set-top boxes.  The XiP Encryption Agreement’s term ends on the same day as the 2012 Receiver Agreement and therefore was automatically extended until December 2016 when we and DISH Network extended the 2012

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(Unaudited)

Receiver Agreement in November 2015.  We and DISH Network each have the right to terminate the XiP Encryption Agreement for any reason upon at least 180 days’ notice and 30 days’ notice, respectively.  The fees for the services provided under the XiP Encryption Agreement are calculated on a monthly basis based on the number of receivers utilizing such security measures each month.

DBSD North America Agreement.  In March 2012, DISH Network completed its acquisition of 100% of the equity of reorganized DBSD North America, Inc. (“DBSD North America”).  Prior to DISH Network’s acquisition of DBSD North America and our completion of the Hughes Acquisition, DBSD North America and HNS entered into an agreement pursuant to which our Hughes segment provides, among other things, hosting, operations and maintenance services of DBSD North America’s satellite gateway and associated ground infrastructure.  This agreement will expire in February 2017.

Sling TV Holding L.L.C. (formerly DISH Digital Holding L.L.C.) (“Sling TV Holding”).  Effective July 2012, we and DISH Network formed Sling TV Holding, which was owned two-thirds by DISH Network and one-third by us.  Sling TV Holding was formed to develop and commercialize certain advanced technologies.  At that time, we, DISH Network and Sling TV Holding entered into the following agreements with respect to Sling TV Holding: (i) a contribution agreement pursuant to which we and DISH Network contributed certain assets in exchange for our respective ownership interests in Sling TV Holding; (ii) a limited liability company operating agreement (“Operating Agreement”), which provides for the governance of Sling TV Holding; and (iii) a commercial agreement (“Commercial Agreement”) pursuant to which, among other things, Sling TV Holding had: (a) certain rights and corresponding obligations with respect to its business; and (b) the right, but not the obligation, to receive certain services from us and DISH Network, respectively.

Effective August 2014, we and Sling TV Holding entered into an exchange agreement (“Exchange Agreement”) pursuant to which, among other things, Sling TV Holding distributed certain assets to us and we reduced our interest in Sling TV Holding to a 10.0% non-voting interest.  As a result, DISH Network has a 90.0% equity interest and a 100% voting interest in Sling TV Holding.  In addition, we, DISH Network and Sling TV Holding amended and restated the Operating Agreement, primarily to reflect the changes implemented by the Exchange Agreement.  Finally, we, DISH Network and Sling TV Holding amended and restated the Commercial Agreement, pursuant to which, among other things, Sling TV Holding:  (1) continues to have certain rights and corresponding obligations with respect to its business; (2) continues to have the right, but not the obligation, to receive certain services from us and DISH Network; and (3) has a license from us to use certain of the assets distributed to us as part of the Exchange Agreement. 

Cost of sales — equipment and services and other — DISH Network

Remanufactured Receiver and Services Agreement.  In connection with the Spin-off, we entered into a remanufactured receiver and services agreement with DISH Network pursuant to which we have the right, but not the obligation, to purchase remanufactured receivers and related components from DISH Network at cost plus a fixed margin, which varies depending on the nature of the equipment purchased.  In November 2014, we and DISH Network extended this agreement for a one-year period ending in December 2015, and in November 2015, we and DISH Network extended this agreement for a one-year period ending in December 2016.  We may terminate the remanufactured receiver and services agreement for any reason upon at least 60 days’ notice to DISH Network.  DISH Network may also terminate this agreement if certain entities acquire DISH Network.

Satellite Services Received from DISH Network - EchoStar XV.  In May 2013, we began receiving satellite services from DISH Network on the EchoStar XV satellite and relocated the satellite to the 45 degree west longitude orbital location for testing pursuant to our Brazilian authorization.  Effective March 2014, this satellite services agreement converted to a month-to-month service agreement with both parties having the right to terminate this agreement upon 30 days’ notice.  In October 2015, we provided DISH Network a notice to terminate this agreement effective in November 2015, and the agreement was terminated according to its terms in November 2015. 

“General and administrative expenses — DISH Network”

Professional Services Agreement.  In connection with the Spin-off, we entered into various agreements with DISH Network including the Transition Services Agreement, Satellite Procurement Agreement and Services Agreement, which all expired in January 2010 and were replaced by a Professional Services Agreement.  In January 2010, we and DISH Network agreed that we shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under the Transition Services Agreement:  information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

services.  Additionally, we and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage us to manage the process of procuring new satellite capacity for DISH Network (previously provided under the Satellite Procurement Agreement), receive logistics, procurement and quality assurance services from us (previously provided under the Services Agreement) and other support services.  The Professional Services Agreement automatically renewed in January 2016 for an additional one-year period until January 2017 and renews automatically for successive one-year periods thereafter, unless terminated earlier by either party upon at least 60 days’ notice.  However, either party may terminate the Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice.

Real Estate Lease Agreements.  We have entered into a lease agreement pursuant to which we lease certain real estate from DISH Network.  The rent on a per square foot basis is comparable to per square foot rental rates of similar commercial property in the same geographic area at the time of the lease, and we are responsible for our portion of the taxes, insurance, utilities and maintenance of the premises.  The lease agreement is for certain space at 1285 Joe Battle Blvd., El Paso, Texas, was for an initial period ending in August 2015, and provided us with renewal options for four consecutive three year terms.  Effective August 2015, we exercised our first renewal option for a period ending in August 2018.

“Other agreements — DISH Network”

Intellectual Property Matters Agreement. We entered into an Intellectual Property Matters Agreement with DISH Network in connection with the Spin-off. The Intellectual Property Matters Agreement governs our relationship with DISH Network with respect to patents, trademarks and other intellectual property. The Intellectual Property Matters Agreement will continue in perpetuity. Pursuant to the Intellectual Property Matters Agreement, DISH Network irrevocably assigned to us all right, title and interest in certain patents, trademarks and other intellectual property necessary for the operation of our set-top box business. In addition, the agreement permits us to use, in the operation of our set-top box business, certain other intellectual property currently owned or licensed by DISH Network. In addition, DISH Network may not use the “EchoStar” name as a trademark, except in certain limited circumstances. Similarly, the Intellectual Property Matters Agreement provides that we will not make any use of the name or trademark “DISH Network” or any other trademark owned by DISH Network, except in certain circumstances.

Tax Sharing Agreement.  In connection with the Spin-off, we entered into a tax sharing agreement with DISH Network which governs our respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off.  Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network, and DISH Network will indemnify us for such taxes.  However, DISH Network is not liable for and will not indemnify us for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code, because of:  (i) a direct or indirect acquisition of any of our stock, stock options or assets; (ii) any action that we take or fail to take; or (iii) any action that we take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions.  In such case, we will be solely liable for, and will indemnify DISH Network for, any resulting taxes, as well as any losses, claims and expenses.  The tax sharing agreement will only terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed.

In light of the tax sharing agreement, among other things, and in connection with our consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, we and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of our consolidated tax returns.  Prior to the agreement with DISH Network, the federal tax benefits of $83.2 million were reflected as a deferred tax asset for depreciation and amortization, which was netted in our noncurrent deferred tax liabilities.  The agreement requires DISH Network to pay us $83.2 million of the federal tax benefit it receives at such time as we would have otherwise been able to realize such tax benefit, which we currently estimate would be after 2016.  Accordingly, we recorded a noncurrent receivable from DISH Network for $83.2 million in “Other receivable — DISH Network” and a corresponding increase in our net noncurrent deferred tax liabilities to reflect the effects of this agreement in September 2013.  In addition, in September 2013, we and DISH Network agreed upon a tax sharing arrangement for filing certain combined state income tax returns and a method of allocating the respective tax liabilities between us and DISH Network for such combined returns, through the taxable period ending on December 31, 2017.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

We and DISH Network file combined income tax returns in certain states. In 2014 and 2015, we earned and recognized a tax benefit for certain state income tax credits that we would be unable to utilize currently if we had filed separately from DISH Network. DISH Network expects to utilize these tax credits to reduce its state income tax payable. We expect to increase additional paid-in capital upon receipt of any consideration paid to us by DISH Network in exchange for these tax credits.

TiVo.  In April 2011, we and DISH Network entered into a settlement agreement with TiVo, Inc. (“TiVo”).  The settlement resolved all pending litigation between us and DISH Network, on the one hand, and TiVo, on the other hand, including litigation relating to alleged patent infringement involving certain DISH Network DVRs.  Under the settlement agreement, all pending litigation was dismissed with prejudice and all injunctions that permanently restrain, enjoin or compel any action by us or DISH Network were dissolved.  We and DISH Network are jointly responsible for making payments to TiVo in the aggregate amount of $500.0 million, including an initial payment of $300.0 million and the remaining $200.0 million in six equal annual installments between 2012 and 2017.  Pursuant to the terms and conditions of the agreements entered into in connection with the Spin-off, DISH Network made the initial payment to TiVo in May 2011, except for the contribution from us totaling approximately $10.0 million, representing an allocation of liability relating to our sales of DVR-enabled receivers to an international customer.  Subsequent payments are allocated between us and DISH Network based on historical sales of certain licensed products, with EchoStar being responsible for 5% of each annual payment.

Sling Trademark License Agreement.  In December 2014, Sling TV Holding entered into an agreement with Sling Media, Inc., our subsidiary, pursuant to which Sling TV Holding has the right, for a fixed fee, to use certain trademarks, domain names and other intellectual property related to the “Sling” trademark through December 2016.

gTLD Bidding Agreement.  In April 2015, we and DISH Network entered into a gTLD Bidding Agreement whereby, among other things: (i) DISH Network obtained rights from us to participate in a generic top level domain (“gTLD”) auction, assuming all rights and obligations from us related to our application with the Internet Corporation for Assigned Names and Numbers (“ICANN”) for a particular gTLD; (ii) DISH Network agreed to reimburse us for our ICANN application fee and certain out-of-pocket expenses related to the application and the auction; and (iii) we and DISH Network agreed to split equally the net proceeds obtained by DISH Network as the losing bidder in the auction, less such fee reimbursement and out-of-pocket expenses.

Patent Cross-License Agreements.  In December 2011, we and DISH Network entered into separate patent cross-license agreements with the same third party whereby:  (i) we and such third party licensed our respective patents to each other subject to certain conditions; and (ii) DISH Network and such third party licensed their respective patents to each other subject to certain conditions (each, a “Cross-License Agreement”).  Each Cross-License Agreement covers patents acquired by the respective party prior to January 2017 and aggregate payments under both Cross-License Agreements total less than $10.0 million.  Each Cross-License Agreement also contains an option to extend each Cross-License Agreement to include patents acquired by the respective party prior to January 2022.  If both options are exercised, the aggregate additional payments to such third party would total less than $3.0 million.  However, we and DISH Network may elect to extend our respective Cross-License Agreement independently of each other.  Since the aggregate payments under both Cross-License Agreements were based on the combined annual revenue of us and DISH Network, we and DISH Network agreed to allocate our respective payments to such third party based on our respective percentage of combined total revenue.

PMC.  In 2008, Personalized Media Communications, Inc. (“PMC”) filed suit against us, DISH Network and Motorola Inc., in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent Nos. 5,109,414; 4,965,825; 5,233,654; 5,335,277 and 5,887,243, which relate to satellite signal processing.  In May 2015, we, DISH Network and PMC entered into a settlement and release agreement that provided, among other things, for a license by PMC to us and DISH Network for certain patents and patent applications and the dismissal of all of PMC’s claims in the action against us and DISH Network with prejudice.  In June 2015, the Court dismissed all of PMC’s claims in the action against us and DISH Network with prejudice.  In June 2015, we and DISH Network agreed that we would contribute a one-time payment of $5.0 million towards the settlement under the agreements entered into in connection with the Spin-off and the 2012 Receiver Agreement.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Other Agreements

Hughes Systique Corporation (“Hughes Systique”)

We contract with Hughes Systique for software development services.  In 2008, Hughes Communications, Inc. agreed to make available to Hughes Systique a term loan facility of up to $1.5 million, and it funded an initial $0.5 million to Hughes Systique pursuant to the term loan facility.  In 2009, Hughes Communications, Inc. funded the remaining $1.0 million of its $1.5 million commitment under the term loan facility.  The initial interest rate on the outstanding loans was 6%, payable annually, and the accrued and unpaid interest is added to the principal amount outstanding under the loan facility in certain circumstances. The loans are convertible into shares of Hughes Systique upon non-payment or an event of default.  In May 2014, we amended the term loan facility to increase the interest rate from 6% to 8%, payable annually, to reflect then-current market conditions and extend the maturity date of the loans to May 1, 2015, and in April 2015, we extended the maturity date of the loans to May 1, 2016 on the same terms.  In 2015, Hughes Systique repaid $1.5 million of the outstanding principal of the loan facility.  In February 2016, Hughes Systique repaid $0.3 million of the outstanding principal of the loan facility. As of March 31, 2016, the principal outstanding amount of the loan facility was $0.3 million.  In April 2016, Hughes Systique repaid in full the outstanding principal of the loan facility. In addition to our 44.0% ownership in Hughes Systique, Mr. Pradman Kaul, the President of Hughes Communications, Inc. and a member of our board of directors and his brother, who is the CEO and President of Hughes Systique, in the aggregate, own approximately 25.8%, on an undiluted basis, of Hughes Systique’s outstanding shares as of March 31, 2016.  Furthermore, Mr. Pradman Kaul serves on the board of directors of Hughes Systique.  Hughes Systique is a variable interest entity and we are considered the primary beneficiary of Hughes Systique due to, among other factors, our ability to direct the activities that most significantly impact the economic performance of Hughes Systique.  As a result, we consolidate Hughes Systique’s financial statements in our condensed consolidated financial statements.

NagraStar L.L.C.

We own 50.0% of NagraStar L.L.C. (“NagraStar”), a joint venture that is our primary provider of encryption and related security technology used in our set-top boxes.  We account for our investment in NagraStar using the equity method.  We made purchases from NagraStar totaling approximately $6.4 million and $4.6 million for the three months ended March 31, 2016 and 2015, respectively.  As of March 31, 2016 and December 31, 2015, we had trade accounts payable to NagraStar totaling approximately $3.4 million and $2.6 million, respectively.

Dish Mexico

We own 49.0% of an entity that provides direct-to-home satellite services in Mexico known as Dish Mexico.  We provide certain broadcast services and satellite services and sell hardware such as digital set-top boxes and related equipment to Dish Mexico.

The following table summarizes revenue from sales of hardware and services we provided to Dish Mexico.

	For the Three Months Ended March 31,
	2016		2015
	(In thousands)
Digital set-top boxes and related accessories	$	22,554	$	12,828
Satellite services	$	5,837	$	5,837
Uplink services	$	1,009	$	1,542

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Due from Dish Mexico	$	35,569	$	32,906

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Deluxe/EchoStar LLC

We own 50.0% of Deluxe/EchoStar LLC (“Deluxe”), a joint venture that we entered into in 2010 to build an advanced digital cinema satellite distribution network targeting delivery to digitally equipped theaters in the U.S. and Canada.  We account for our investment in Deluxe using the equity method.  We recognized revenue from Deluxe for transponder services and the sale of broadband equipment of approximately $0.7 million for each of the three months ended March 31, 2016 and 2015.  As of March 31, 2016 and December 31, 2015, we had trade accounts receivable from Deluxe of approximately $0.3 million and $0.1 million, respectively.

SmarDTV

In May 2015, we acquired a 22.5% interest in SmarDTV, which we account for using the equity method.  Pursuant to a services agreement, we purchased engineering services from SmarDTV totaling $1.7 million and zero for the three months ended March 31, 2016 and 2015, respectively.  As of March 31, 2016 and December 31, 2015, we had trade accounts payable to SmarDTV of $1.7 million and $0.9 million, respectively, and current note receivables from SmarDTV of zero and $0.5 million, respectively, arising from a working capital adjustment pursuant to the acquisition agreement. In March 2016, SmarDTV repaid $0.5 million of current note receivables. 

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Item 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless the context indicates otherwise, as used herein, the terms “we,” “us,” “EchoStar,” the “Company” and “our” refer to EchoStar Corporation and its subsidiaries.  References to “$” are to United States dollars.  The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and notes to our financial statements included elsewhere in this Quarterly Report on Form 10-Q.  This management’s discussion and analysis is intended to help provide an understanding of our financial condition, changes in our financial condition and our results of operations.  Many of the statements in this management’s discussion and analysis are forward-looking statements that involve assumptions and are subject to risks and uncertainties that are often difficult to predict and beyond our control.  Actual results could differ materially from those expressed or implied by such forward-looking statements.  See “Disclosure Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q for further discussion.  For a discussion of additional risks, uncertainties and other factors that could impact our results of operations or financial condition, see the caption “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2015.  Further, such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and we undertake no obligation to update them.

EXECUTIVE SUMMARY

EchoStar is a global provider of satellite operations, video delivery solutions, digital set-top boxes, and broadband satellite technologies and services for the home and office, delivering innovative network technologies, managed services, and solutions for enterprises and governments.  We currently operate in three business segments, which are differentiated primarily by their operational focus: Hughes, EchoStar Technologies, and EchoStar Satellite Services.  These segments are consistent with the way decisions regarding the allocation of resources are made, as well as how operating results are reviewed by our chief operating decision maker (“CODM”), who for EchoStar is the Company’s Chief Executive Officer.

Our segment operating results do not include real estate and other activities, costs incurred in certain satellite development programs and other business development activities, expenses of various corporate departments, and our centralized treasury operations, including income from our investment portfolio and interest expense on our debt.  These activities are accounted for in “All Other and Eliminations.”

Highlights from our financial results are as follows:

2016 First Quarter Consolidated Results of Operations

• Revenue of $816.4 million

• Operating income of $86.5 million

• Net income attributable to EchoStar common stock of $50.7 million and basic earnings per share of common stock of $0.54

• EBITDA of $222.8 million (see reconciliation of this non-GAAP measure in Note 15 to the condensed consolidated financial statements)

Consolidated Financial Condition as of March 31, 2016

• Total assets of $7.33 billion

• Total liabilities of $3.47 billion

• Total stockholders’ equity of $3.86 billion

• Cash, cash equivalents and current marketable investment securities of $1.50 billion

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Hughes Segment

Our Hughes segment is a global provider of broadband satellite technologies and services for the home and office, delivering innovative network technologies, managed services, and solutions for consumers, enterprises and governments.

We continue our efforts in growing our consumer revenue, which depends on our success in adding new subscribers on our Hughes segment’s satellite networks.  The addition of new subscribers and the performance of our consumer service offering are the primary drivers of revenue growth in our consumer business.  Service costs related to ongoing support of our direct and indirect customers and partners are typically impacted most significantly by our growth.  Long-term trends continue to be influenced primarily by the subscriber growth in our consumer business. 

New satellite launches are expected to provide additional capacity for subscriber growth while we manage subscriber growth across our existing satellite platform.  In March 2013, we entered into a contract for the design and construction of the EchoStar XIX satellite, which is expected to be launched in the fourth quarter of 2016.  The EchoStar XIX satellite is a next-generation, high throughput geostationary satellite that will employ a multi-spot beam, bent pipe Ka-band architecture and will provide additional capacity for the Hughes broadband services to the consumer market in North America, as well as new capacity covering Mexico and other Latin American countries.  Capital expenditures associated with the construction and launch of the EchoStar XIX satellite are included in “All Other and Eliminations” in our segment reporting.

Our Hughes segment also provides managed services, hardware, and satellite services to large enterprises.  In addition, we provide gateway and terminal equipment to customers for mobile satellite systems.  The fixed priced nature of our long-term enterprise contracts minimizes significant quarter to quarter fluctuations; however, the growth of our enterprise business relies heavily on global economic conditions.  We continue to monitor the competitive landscape for pricing in relation to our competitors and alternative technologies.

We continue our efforts in growing our consumer satellite services business outside of the U.S. In April 2014, we entered into a satellite services agreement pursuant to which Eutelsat do Brasil will provide to us fixed broadband service using the Ka-band capacity into Brazil on the EUTELSAT 65 West A satellite for a 15-year term.  The satellite launched in March 2016, and we expect to begin delivering consumer satellite broadband services in Brazil in the second half of 2016. In addition, in September 2015, we entered into satellite services agreements pursuant to which affiliates of Telesat Canada (“Telesat”) will provide to us fixed broadband service into South America using the Ka-band capacity on a satellite to be located at the 63 degree west longitude orbital location for a 15-year term. We expect the satellite to be launched in the second quarter of 2018.

As of March 31, 2016 and December 31, 2015, our Hughes segment had approximately 1,038,000 and 1,035,000 broadband subscribers, respectively.  These broadband subscribers include customers that subscribe to our HughesNet broadband services through retail, wholesale and small/medium enterprise service channels.  Gross subscriber additions decreased in the first quarter of 2016 compared to the same period in 2015 primarily due to satellite beams servicing certain areas reaching capacity.  Our average monthly subscriber churn for the first quarter of 2016 increased as compared to the same period in 2015.  As a result, for the quarter ended March 31, 2016, net subscriber additions of approximately 3,300 were lower than for the same period in 2015 primarily due to decreased available capacity and the increase in churn on the larger base of subscribers. Subscriber additions excludes small/medium enterprise service channels.

As of March 31, 2016 and December 31, 2015, our Hughes segment had approximately $1.40 billion and $1.44 billion, respectively, of contracted revenue backlog.  We define Hughes contracted revenue backlog as our expected future revenue under customer contracts that are non-cancelable, excluding agreements with customers in our consumer market.

EchoStar Technologies Segment

Our EchoStar Technologies segment designs, develops and distributes secure end-to-end video technology solutions including digital set-top boxes and related products and technology, primarily for satellite TV service providers and telecommunication companies.  The primary customer for our digital set-top boxes is DISH Network Corporation and its subsidiaries (“DISH Network”), and we also sell our digital set-top boxes to Bell TV, a direct-to-home satellite service provider in Canada, Dish Mexico, S. de R.L. de C.V. (“Dish Mexico”), a joint venture that we entered into in 2008, and other international customers.  We depend on DISH Network for a substantial portion of our EchoStar Technologies segment revenue and we expect that DISH Network will continue to be the primary source of revenue for our EchoStar Technologies segment.  In addition, our equipment revenue from DISH Network depends on the timing of orders for set-top boxes and related accessories from DISH Network

36

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

based on its actual and projected subscriber growth.  Therefore, the results of operations of our EchoStar Technologies segment are, and are likely to continue to be, closely linked to the performance of DISH Network’s pay-TV service.

Our EchoStar Technologies segment also provides digital broadcast operations, including satellite uplinking/downlinking, transmission services, signal processing, conditional access management, and other services, primarily to DISH Network and Dish Mexico.  In addition, we provide our TV Anywhere technology through Slingbox units directly to consumers via retail outlets and online, as well as to the pay-TV operator market.

Prior to 2015, Move Networks, our over-the-top (“OTT”), Streaming Video on Demand (“SVOD”) platform business, including certain assets that were distributed to us in August 2014 in connection with the Exchange Agreement with Sling TV Holding L.L.C. (formerly, DISH Digital Holding L.L.C.) (“Sling TV Holding”), (see Note 16 in our notes to condensed consolidated financial statements), was managed separately from our operating segments and was reported within “All Other and Eliminations.” 

During the second quarter of 2015, our EchoStar Technologies segment contributed several of its European subsidiaries to SmarDTV SA (“SmarDTV”), a Swiss subsidiary of Kudelski SA that offers set-top boxes and conditional access modules, in exchange for a 22.5% interest in the equity and subordinated debt of SmarDTV.  We and SmarDTV also entered into a services agreement pursuant to which our EchoStar Technologies segment purchases certain engineering services from SmarDTV.

We continue to focus on building and strengthening our brand recognition by providing unique and technologically advanced features and products.  Products containing new technologies and features typically have higher initial selling prices, margins and volumes.  As products mature and new products are in the late stages of development, volumes typically decrease as our customers, primarily DISH Network, increase deployment of refurbished set-top boxes as opposed to purchasing new units from us.  The market for our digital set-top boxes, like other electronic products, has also been characterized by regular reductions in selling prices and production costs.  Our ability to sustain or increase profitability also depends in large part on our ability to control or reduce our costs of producing digital set-top boxes.  Based on our experience, we expect our cost of manufacturing a specific set-top box model to decline over time as our contract manufacturers generate efficiencies with scale of production and engineering cost reductions.  Overall, our success depends heavily on our ability to bring advanced technologies to market to continue to be a market leader and innovator.

The number of potential new customers for our set-top box business in our EchoStar Technologies segment is small and may be limited as prospective customers that have been competitors of DISH Network may continue to view us as a competitor due to our common ownership with DISH Network.  Our customers face emerging competition from other providers of digital media and potential government action preventing them from using security systems in connection with set-top boxes. In particular, programming offered over the internet has become more prevalent as the speed and quality of broadband networks have improved. As a result, we expect that demand for our satellite television digital set-top boxes from DISH Network and other customers could decline and we may not be able to sustain our current revenue levels.

With our expertise in connectivity, security, and video, we are developing new consumer product and service offerings intended to grow our EchoStar Technologies segment revenue over time, which includes a security and home automation solution we introduced in the first quarter of 2016.

EchoStar Satellite Services Segment

Our EchoStar Satellite Services segment operates its business using its owned and leased in-orbit satellites.  We provide satellite services on a full-time and occasional-use basis primarily to DISH Network, Dish Mexico, U.S. government service providers, internet service providers, broadcast news organizations, programmers and private enterprise customers.

We depend on DISH Network for a significant portion of the revenue for our EchoStar Satellite Services segment, and we expect that DISH Network will continue to be the primary source of revenue for our EchoStar Satellite Services segment.  Therefore, the results of operations of our EchoStar Satellite Services segment are linked to long-term changes in DISH Network’s satellite capacity requirements.  We continue to pursue expanding our business offerings by providing value added services such as telemetry, tracking and control services to third parties. 

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

In August 2014, we entered into: (i) a construction contract with Airbus Defence and Space SAS for the construction of the EchoStar 105/SES-11 satellite with C-band, Ku-band and Ka-band payloads; (ii) an agreement with SES Satellite Leasing Limited for the procurement of the related launch services; and (iii) an agreement with SES Americom Inc. (“SES”) pursuant to which we will transfer the title to the C-band and Ka-band payloads to SES Satellite Leasing Limited at launch and transfer the title to the Ku-band payload to SES following in-orbit testing of the satellite. Simultaneously, SES will provide to us satellite service on the entire Ku-band payload on the EchoStar 105/SES-11 satellite for an initial ten-year term, with an option for us to renew the agreement on a year-to-year basis.

Revenue growth in our EchoStar Satellite Services segment is a function of available satellite capacity to sell.  Our EchoStar 105/SES-11 satellite is currently under construction and will replace the capacity currently leased on the AMC-15 satellite.  Once launched, which is expected in the fourth quarter of 2016, and placed into operation, we expect revenue from the satellite to exceed the revenue currently serviced by the AMC-15 satellite.  Any factors that interfere with the construction and launch schedule of the EchoStar 105/SES-11 satellite could impact our expected revenue.  In addition, any disruption in planned renewals of our service arrangements could impact customer commitments and have an impact on our revenue and financial performance.  Technical issues, regulatory and licensing issues, manufacturer performance/stability and availability of capital to continue to fund our programs also are factors in achieving our business plans for this segment.

As of March 31, 2016 and December 31, 2015, our EchoStar Satellite Services segment had contracted revenue backlog attributable to satellites currently in orbit of approximately $1.32 billion and $1.41 billion, respectively.

New Business Opportunities

Our industry is evolving with the increase in worldwide demand for broadband internet access for information, entertainment and commerce. In addition to fiber and wireless systems, other technologies such as geostationary high throughput satellites, low-earth orbit networks, balloons, and High Altitude Platform Systems (“HAPS”) will likely play significant roles in enabling global broadband access, networks and services. We intend to use our expertise, technologies, capital, investments, global presence, relationships and other capabilities to continue to provide broadband internet systems, networks and services for information, entertainment and commerce in North America and internationally for consumers, enterprises and governments.

We are selectively exploring opportunities to pursue partnerships, joint ventures and strategic acquisition opportunities, domestically and internationally, that we believe may allow us to increase our existing market share, expand into new markets, broaden our portfolio of products and intellectual property, and strengthen our relationships with our customers. We may allocate significant resources for long-term initiatives that may not have a short or medium term or any positive impact on our revenue, results of operations, or cash flow.

In 2012, we acquired the right to use various frequencies at the 45 degree west longitude orbital location (“Brazilian Authorization”) from ANATEL, the Brazilian communications regulatory agency.  The Brazilian Authorization provides us the rights to utilize Ku-band spectrum for broadcast satellite service (“BSS”), Ka-band spectrum and S-band spectrum.  With regards to the Ku-band BSS spectrum, we continue to pursue various opportunities to support a Brazilian pay-TV service.  We are also exploring options for the Ka-band and S-band spectrums.  In April 2014, we entered into an agreement with Space Systems Loral, LLC (“SS/L”) for the construction of the EchoStar XXIII satellite, a high powered BSS satellite, which will use some of the components from CMBStar, a satellite that we suspended construction of in 2008.  The EchoStar XXIII satellite is expected to launch in the third quarter of 2016 and will be deployed at the 45 degree west longitude orbital location.

In December 2013, we acquired 100% of Solaris Mobile, which is based in Dublin, Ireland and licensed by the European Union and its member states (“EU”) to provide mobile satellite services (“MSS”) and complementary ground component (“CGC”) services covering the entire EU using S-band spectrum.  Solaris Mobile changed its name to EchoStar Mobile Limited (“EchoStar Mobile”) in the first quarter of 2015.  We are in the process of developing commercial services, expected to begin in the second half of 2016, utilizing the operable payload we own on the EUTELSAT 10A (also known as “W2A”) satellite, along with our EchoStar XXI S-band satellite.  The EchoStar XXI satellite will provide space segment capacity to EchoStar Mobile.  We believe we are in a unique position to deploy a European wide MSS/CGC network and maximize the long-term value of our S-band spectrum in Europe and other regions within the scope of our licenses.

In June 2015, we made an equity investment in WorldVu Satellites Limited (“OneWeb”), a low-earth orbit satellite company. In addition, our Hughes segment entered into an agreement with OneWeb to provide certain equipment and services in connection with the ground system for OneWeb’s low-earth orbit satellites.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Capital expenditures associated with the construction and launch of the EchoStar XXIII and EchoStar XXI satellites are included in “All Other and Eliminations” in our segment reporting.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2016 Compared to the Three Months Ended March 31, 2015

	For the Three Months Ended March 31,						Variance
Statements of Operations Data (1)	2016			2015			Amount			%
	(Dollars in thousands)
Revenue:
Equipment revenue - DISH Network	$	249,613		$	223,959		$	25,654		11.5
Equipment revenue - other	80,477			79,136			1,341			1.7
Services and other revenue - DISH Network	213,727			222,804			(9,077		)	(4.1	)
Services and other revenue - other	272,542			272,754			(212		)	(0.1	)
Total revenue	816,359			798,653			17,706			2.2
Costs and Expenses:
Cost of sales - equipment	286,863			260,223			26,640			10.2
% of Total equipment revenue	86.9		%	85.9		%
Cost of sales - services and other	197,162			208,240			(11,078		)	(5.3	)
% of Total services and other revenue	40.5		%	42.0		%
Selling, general and administrative expenses	98,693			97,928			765			0.8
% of Total revenue	12.1		%	12.3		%
Research and development expenses	20,442			17,872			2,570			14.4
% of Total revenue	2.5		%	2.2		%
Depreciation and amortization	126,734			133,185			(6,451		)	(4.8	)
Total costs and expenses	729,894			717,448			12,446			1.7
Operating income	86,465			81,205			5,260			6.5
Other Income (Expense):
Interest income	3,966			2,611			1,355			51.9
Interest expense, net of amounts capitalized	(23,210		)	(35,308		)	12,098			(34.3	)
Gains on marketable investment securities, net	2,462			9			2,453			*
Equity in losses of unconsolidated affiliates, net	(963		)	(53		)	(910		)	*
Other, net	7,386			(2,465		)	9,851			*
Total other expense, net	(10,359		)	(35,206		)	24,847			(70.6	)
Income before income taxes	76,106			45,999			30,107			65.5
Income tax provision, net	(27,663		)	(18,401		)	(9,262		)	50.3
Net income	48,443			27,598			20,845			75.5
Less: Net loss attributable to noncontrolling interest in HSS Tracking Stock	(823		)	(2,169		)	1,346			(62.1	)
Less: Net income attributable to other noncontrolling interests	111			369			(258		)	(69.9	)
Net income attributable to EchoStar	$	49,155		$	29,398		$	19,757		67.2
Other Data:
EBITDA (2)	$	222,796		$	213,681		$	9,115		4.3
Subscribers, end of period	1,038,000			998,000			40,000			4.0

*    Percentage is not meaningful.

(1) An explanation of our key metrics is included on pages 48 and 50 under the heading “Explanation of Key Metrics and Other Items.”

(2) A reconciliation of EBITDA to “Income before income taxes,” the most directly comparable GAAP measure in the accompanying financial statements, is included on page 42.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Equipment revenue - DISH Network.  “Equipment revenue - DISH Network” totaled $249.6 million for the three months ended March 31, 2016, an increase of $25.6 million, or 11.5%, compared to the same period in 2015.

Equipment revenue - DISH Network from our Hughes segment for the three months ended March 31, 2016 increased by $1.7 million to $2.8 million compared to the same period in 2015.  The increase was primarily due to the increase in the volume of unit sales of broadband equipment to dishNETSatellite Broadband L.L.C. (“dishNET”).

Equipment revenue - DISH Network from our EchoStar Technologies segment for the three months ended March 31, 2016 increased by $23.9 million, or 10.7%, to $246.8 million compared to the same period in 2015.  Our EchoStar Technologies segment offers multiple set-top boxes with different price points depending on their capabilities and functionalities. The revenue and associated margins we earn on sales are determined largely through the 2012 Receiver Agreement which could result in prices reflecting, among other things, the set-top boxes and other equipment that meet DISH Network’s current sales and marketing priorities, the product and service alternatives available from other equipment suppliers, our ability to respond to DISH Network’s requirements, and our ability to differentiate ourselves from other equipment suppliers on bases other than pricing. In addition, products containing new technologies and features typically have higher initial prices, which reduce over time as a result of manufacturing efficiencies. Volume of unit sales could reduce over time as a result of demand decreases or as DISH Network increases the deployment of refurbished units as opposed to new units purchased from us. The increase in revenue for the three months ended March 31, 2016 was primarily due to an increase in the weighted average price of set-top boxes and related accessories, offset partially by a decrease in the volume of sales of set-top boxes.  The increase in revenue of set-top boxes was due to a 39.9% increase in the weighted average price of the set-top boxes sold, partially offset by a 17.8% decrease in the volume of unit sales.  The increase in revenue of related accessories was due to a 3.8% increase in the weighted average price of related accessories sold and a 1.8% increase in the volume of unit sales.

Equipment revenue - other.  “Equipment revenue - other” totaled $80.5 million for the three months ended March 31, 2016, an increase of $1.3 million or 1.7%, compared to the same period in 2015.

Equipment revenue - other from our Hughes segment for the three months ended March 31, 2016 decreased by $5.2 million, or 10.7%, to $42.8 million compared to the same period in 2015.  The decrease was mainly due to a decrease of $12.3 million in revenue from our international and telecom systems customers. These decreases were partially offset by an increase of $6.7 million in sales of broadband equipment to our domestic consumer and enterprise markets.

Equipment revenue - other from our EchoStar Technologies segment for the three months ended March 31, 2016 increased by $6.5 million, or 20.8%, to $37.7 million compared to the same period in 2015.  The increase was attributable to an increase in the volume of unit sales of set-top boxes and related accessories of 73.7% and 43.9%, respectively, sold primarily to Dish Mexico. The increase was partially offset by a decrease in the weighted average price of set-top boxes and related accessories of 29.7% and 18.2%, respectively, sold primarily to the same customer.

Services and other revenue - DISH Network.  “Services and other revenue - DISH Network” totaled $213.7 million for the three months ended March 31, 2016, a decrease of $9.1 million or 4.1%, compared to the same period in 2015.

Services and other revenue - DISH Network from our Hughes segment for the three months ended March 31, 2016 increased by $2.5 million, or 11.0%, to $25.3 million compared to the same period in 2015.  The increase was primarily attributable to an increase in wholesale subscribers receiving services pursuant to our Distribution Agreement with dishNET.

Services and other revenue - DISH Network from our EchoStar Technologies segment for the three months ended March 31, 2016 increased by $9.1 million, or 10.2%, to $98.0 million compared to the same period in 2015.  The increase was primarily due to an increase of $8.0million in revenue earned for support services related to Sling TV Holding and other projects.

Services and other revenue - DISH Network from our EchoStar Satellite Services segment for the three months ended March 31, 2016 decreased by $21.3 million, or 19.6%, to $87.4 million compared to the same period in 2015.  The decrease was mainly due to a decrease of $20.8 million in revenue as a result of the termination of the satellite services

40

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

arrangement for services provided to DISH Network from the EchoStar I and EchoStar VIII satellites effective in November 2015.

Services and other revenue - other.  “Services and other revenue - other” totaled $272.5 million for the three months ended March 31, 2016, a decrease of $0.2 million, or 0.1%, compared to the same period in 2015.

Services and other revenue - other from our Hughes segment for the three months ended March 31, 2016 increased by $1.9 million, or 0.8%, to $255.4 million compared to the same period in 2015.  The increase was primarily attributable to an increase of $12.8 million in sales of broadband services to our domestic consumer markets, partially offset by a decrease of $7.5 million of broadband services to our international customers, and a decrease of $3.4 million in sales of broadband services to our domestic enterprise markets.

Services and other revenue - other from our EchoStar Technologies segment for the three months ended March 31, 2016 decreased by $0.6 million, or 18.7%, to $2.6 million compared to the same period in 2015.  The decrease was primarily attributable to a decrease in revenue from certain non-recurring engineering projects and services.

Services and other revenue - other from our EchoStar Satellite Services segment for the three months ended March 31, 2016 decreased by $1.2 million, or 6.9%, to $15.6 million compared to the same period in 2015.  The decrease was primarily attributable to a decrease in sales of transponder services in 2016 compared to the same period in 2015 due to a decrease in the number of transponders available for sale.

Cost of sales - equipment.  “Cost of sales - equipment” totaled $286.9 million for the three months ended March 31, 2016, an increase of $26.6 million, or 10.2%, compared to the same period in 2015.

Cost of sales - equipment from our Hughes segment for the three months ended March 31, 2016 decreased by $2.1 million, or 4.6%, to $43.1 million compared to the same period in 2015.  The decrease was primarily attributable to a decrease of $8.3 million in equipment costs related to the decrease in sales to our international and telecom systems customers. This decrease was partially offset by an increase of $5.4 million in equipment costs related to the increase in sales volume of broadband equipment to DISH Network related to our Distribution Agreement with dishNET and to our domestic consumer and enterprise markets.

Cost of sales - equipment from our EchoStar Technologies segment for the three months ended March 31, 2016 increased by $28.7 million, or 13.3%, to $243.8 million compared to the same period in 2015.  The increase was primarily attributable to an increase in equipment costs related to the increase in the weighted average price of set-top boxes and related accessories sold to DISH Network and an increase in the volume of sales of set-top boxes and related accessories sold to Dish Mexico, offset partially by a decrease in the volume of unit sales of set-top boxes sold to DISH Network.

Cost of sales - services and other.  “Cost of sales - services and other” totaled $197.2 million for the three months ended March 31, 2016, a decrease of $11.1 million, or 5.3%, compared to the same period in 2015.

Cost of sales - services and other from our Hughes segment for the three months ended March 31, 2016 decreased by $4.5 million, or 4.0%, to $108.3 million compared to the same period in 2015.  The decrease was primarily attributable to a decrease in costs of our broadband services provided to our international customers and our domestic consumer and enterprise markets of $3.0 million and $1.3 million, respectively.

Cost of sales - services and other from our EchoStar Technologies segment for the three months ended March 31, 2016 increased by $7.0 million, or 10.8%, to $71.7 million compared to the same period in 2015.  The increase was primarily due to an increase in support costs related to engineering services provided in 2016 compared to the same period in 2015.

Cost of sales - services and other from All Other and Eliminations for the three months ended March 31, 2016 decreased by $12.4 million, or 94.7%, to $0.7 million compared to the same period in 2015.  The decrease in cost of sales was primarily due to a decrease in services received from DISH Network for the EchoStar XV satellite as a result of the termination of the satellite service agreement effective in November 2015.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Research and development expenses.  “Research and development expenses” totaled $20.4 million for the three months ended March 31, 2016, an increase of $2.6 million or 14.4%, compared to the same period in 2015.  The increase was primarily related to an increase in research and development expense of $1.4 million and $1.2 million in our Hughes segment and EchoStar Technologies segment, respectively.  The Company’s research and development activities vary based on the activity level and scope of other engineering and customer related development contracts.

Depreciation and amortization.  “Depreciation and amortization” expenses totaled $126.7 million for the three months ended March 31, 2016, a decrease of $6.5 million or 4.8%, compared to the same period in 2015.  The decrease was primarily attributable to a decrease in depreciation expense of $2.7 million relating to the fully depreciated EchoStar IX satellite as of October 2015, a decrease in amortization expense of $2.1 million from certain of our fully amortized other intangible assets and a decrease in depreciation expense of $1.1 million on customer rental equipment in our Hughes segment.

Interest expense, net of amounts capitalized.  “Interest expense, net of amounts capitalized” totaled $23.2 million for the three months ended March 31, 2016, a decrease of $12.1 million or 34.3%, compared to the same period in 2015.  The decrease was primarily due to higher capitalized interest of $9.5 million related to the construction of the EchoStar XIX, EchoStar XXI, EchoStar XXIII, and EchoStar 105/SES-11 satellites, and payments for satellite services on the EUTELSAT 65 West A and Telesat T19V (“63 West”) satellites, and a decrease in interest expense of $1.8 million relating to the partial redemption of the outstanding principal amount of HSS’ 6 1/2% Senior Secured Notes due 2019 (the “Senior Secured Notes”) in the second quarter of 2015.

Gains on marketable investment securities, net.  “Gains on marketable investment securities, net” totaled $2.5 million for the three months ended March 31, 2016, an increase of $2.5 million compared to the same period in 2015.  The increase in gains was primarily due to an increase of $2.2 million in gains on our available-for-sale securities portfolio.

Other, net.  “Other, net” totaled $7.4 million in income for the three months ended March 31, 2016 compared to $2.5 million of expense for the three months ended March 31, 2015.  The increase of $9.9 million was primarily related to $10.5 million for a 2015 provision recorded in connection with Federal Communications Commission (“FCC”) regulatory fees reversed in 2016 and an increase of $4.1 million in foreign exchange gains.  The increase was partially offset by a $4.5 million non-recurring reduction of the capital lease obligation for the AMC-15 and AMC-16 satellites recorded in the first quarter of 2015 as a result of anomalies that previously affected the operation of these satellites.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”).  EBITDA was $222.8 million for the three months ended March 31, 2016, an increase of $9.1 million, or 4.3%, compared to the same period in 2015.  The increase was primarily due to $10.5 million attributable to a 2015 provision recorded in connection with FCC regulatory fees reversed in 2016 and an increase of $4.1 million in foreign exchange gains.  The increase was partially offset by a $4.5 million non-recurring reduction of the capital lease obligation for the AMC-15 and AMC-16 satellites recorded in the first quarter of 2015 as a result of prior anomalies affecting these satellites and a decrease in operating income, excluding depreciation and amortization, of $1.2 million for the three months ended March 31, 2016.  EBITDA is a non-GAAP financial measure and is described under Explanation of Key Metrics and Other Items below.  The following table reconciles EBITDA to Income before income taxes, the most directly comparable GAAP measure in the accompanying financial statements.

	For the Three Months Ended March 31,						Variance
	2016			2015			Amount		%
	(Dollars in thousands)
EBITDA	$	222,796		$	213,681		$	9,115	4.3
Interest income and expense, net	(19,244		)	(32,697		)	13,453		(41.1	)
Depreciation and amortization	(126,734		)	(133,185		)	6,451		(4.8	)
Net loss attributable to noncontrolling interest in HSS Tracking Stock and other noncontrolling interests	(712		)	(1,800		)	1,088		(60.4	)
Income before income taxes	$	76,106		$	45,999		$	30,107	65.5

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Income tax provision, net.  Income tax expense was $27.7 million for the three months ended March 31, 2016, compared to $18.4 million for the same period in 2015.  Our effective income tax rate was 36.3% for the three months ended March 31, 2016 compared to 40.0% for the same period in 2015.  The variations in our current year effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2016 was primarily due to the impact of state and local taxes, partially offset by research and experimentation credits. For the three months ended March 31, 2015, the variation in our effective tax rate from the U.S. federal statutory rate was primarily due to the increase in our valuation allowance associated with certain foreign losses as well as realized and unrealized losses that are capital in nature for tax purposes, partially offset by research and experimentation tax credits.

Net income attributable to EchoStar.  “Net income attributable to EchoStar” was $49.2 million for the three months ended March 31, 2016, an increase of $19.8 million, or 67.2%, compared to the same period in 2015.  The increase was primarily due to (i) $10.5 million attributable to a 2015 provision recorded in connection with FCC regulatory fees reversed in 2016, (ii) higher capitalized interest of $9.5 million related to the construction of the EchoStar XIX, EchoStar XXI, EchoStar XXIII, and EchoStar 105/SES-11 satellites, and payments for satellite services on the EUTELSAT 65 West A and 63 West satellites, (iii) an increase in operating income, including depreciation and amortization, of $5.3 million, (iv) an increase of $2.2 million in gains on our available-for-sale securities portfolio, and (v) a decrease in interest expense of $1.8 million relating to the partial redemption of the Senior Secured Notes in the second quarter of 2015. The increase was partially offset by an increase in income tax expense of $9.3 million.

Segment Operating Results and Capital Expenditures

Three Months Ended March 31, 2016 Compared to the Three Months Ended March 31, 2015

	Hughes		EchoStar Technologies		EchoStar Satellite Services		All Other and Eliminations			Consolidated Total
	(In thousands)
For the Three Months Ended March 31, 2016
Total revenue	$	326,238	$	385,126	$	102,989	$	2,006		$	816,359
Capital expenditures	$	104,237	$	5,341	$	24,720	$	76,838		$	211,136
EBITDA	$	99,468	$	28,168	$	88,186	$	6,974		$	222,796
For the Three Months Ended March 31, 2015
Total revenue	$	325,280	$	346,220	$	125,398	$	1,755		$	798,653
Capital expenditures	$	64,527	$	15,104	$	27,783	$	70,388		$	177,802
EBITDA	$	91,273	$	25,561	$	106,419	$	(9,572	)	$	213,681

Hughes Segment

	For the Three Months Ended March 31,				Variance
	2016		2015		Amount		%
	(Dollars in thousands)
Total revenue	$	326,238	$	325,280	$	958	0.3
Capital expenditures	$	104,237	$	64,527	$	39,710	61.5
EBITDA	$	99,468	$	91,273	$	8,195	9.0

Revenue

Hughes segment total revenue for the three months ended March 31, 2016 increased by $1.0 million, or 0.3%, compared to the same period in 2015.  The increase was primarily due to an increase of $17.7 million in revenue related to sales of broadband equipment and services to our consumer markets and dishNET and an increase of $6.5 million in revenue related to sales of broadband equipment to our domestic enterprise market.  These increases were partially offset by a decrease in revenue of broadband equipment and services to our international and telecom systems customers of $19.8 million, and a decrease of $3.4 million in revenue related to sales of broadband services to our domestic enterprise market.

43

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Capital Expenditures

Hughes segment capital expenditures for the three months ended March 31, 2016 increased by $39.7 million, or 61.5%, compared to the same period in 2015, primarily as a result of an increase in expenditures on the 63 West and EUTELSAT 65 West A satellites, and satellite ground infrastructures related to the EchoStar XIX and EchoStar XXI satellites.

EBITDA

Hughes segment EBITDA for the three months ended March 31, 2016 was $99.5 million, an increase of $8.2 million, or 9.0%, compared to the same period in 2015.  The increase was primarily attributable to a $7.6 million increase in gross margin and an increase of $2.2 million in foreign exchange gains.

EchoStar Technologies Segment

	For the Three Months Ended March 31,				Variance
	2016		2015		Amount			%
	(Dollars in thousands)
Total revenue	$	385,126	$	346,220	$	38,906		11.2
Capital expenditures	$	5,341	$	15,104	$	(9,763	)	(64.6	)
EBITDA	$	28,168	$	25,561	$	2,607		10.2

Revenue

EchoStar Technologies segment total revenue for the three months ended March 31, 2016 increased by $38.9 million, or 11.2%, compared to the same period in 2015, primarily resulting from an increase of $23.9 million in equipment revenue from DISH Network, an increase of $6.5 million in equipment revenue - other, and an increase of $9.1 million in service revenue from DISH Network.

Capital Expenditures

EchoStar Technologies segment capital expenditures for the three months ended March 31, 2016 decreased by $9.8 million, or 64.6%, compared to the same period in 2015, primarily due to a decrease in expenditures related to our digital broadcast centers of $11.5 million, partially offset by increased expenditures related to the support of our Move Networks business of $1.6 million.

EBITDA

EchoStar Technologies segment EBITDA for the three months ended March 31, 2016 was $28.2 million, an increase of $2.6 million, or 10.2%, compared to the same period in 2015.  The increase in EBITDA for our EchoStar Technologies segment was primarily driven by an increase of $3.2 million in gross margin primarily due to an increase in the weighted average price of set-top boxes and related accessories sold to DISH Network and our international customers as well as an increase in service revenue to DISH Network for support services related to Sling TV Holding and other projects. These increases were partially offset by a decrease in the volume of sales of set-top boxes to DISH Network.

44

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

EchoStar Satellite Services Segment

	For the Three Months Ended March 31,				Variance
	2016		2015		Amount			%
	(Dollars in thousands)
Total revenue	$	102,989	$	125,398	$	(22,409	)	(17.9	)
Capital expenditures	$	24,720	$	27,783	$	(3,063	)	(11.0	)
EBITDA	$	88,186	$	106,419	$	(18,233	)	(17.1	)

Revenue

EchoStar Satellite Services segment total revenue for the three months ended March 31, 2016 decreased by $22.4 million, or 17.9%, compared to the same period in 2015, primarily due to a decrease of $20.8 million in service revenue from DISH Network as a result of the termination of the satellite services arrangement for services provided to DISH Network from the EchoStar I and EchoStar VIII satellites effective in November 2015.

Capital Expenditures

EchoStar Satellite Services segment capital expenditures for the three months ended March 31, 2016 decreased by $3.1 million, or 11.0%, compared to the same period in 2015, primarily related to a decrease in expenditures on the EchoStar 105/SES-11 satellite.

EBITDA

EchoStar Satellite Services segment EBITDA for the three months ended March 31, 2016 was $88.2 million, a decrease of $18.2 million, or 17.1%, compared to the same period in 2015.  The decrease in EBITDA for our EchoStar Satellite Services segment was primarily due to a decrease of $21.3 million in gross margin primarily driven by the decrease in service revenue as a result of the termination of the satellite services arrangement for services provided to DISH Network from the EchoStar I and EchoStar VIII satellites effective in November 2015 and a $4.5 million non-recurring reduction of the capital lease obligation for the AMC-15 and AMC-16 satellites recorded in the first quarter of 2015 as a result of prior anomalies affecting these satellites. The decrease in EBITDA was partially offset by a 2015 provision of $3.75 million recorded in connection with FCC regulatory fees reversed in 2016.

All Other and Eliminations

All Other and Eliminations accounts for certain items and activities in our condensed consolidated financial statements that have not been assigned to our operating segments.  These include without limitation real estate and other activities, costs incurred in satellite development programs and other business development activities, expenses of various corporate departments, and our centralized treasury activities, including without limitation income from our investment portfolio and interest expense on our debt.

	For the Three Months Ended March 31,					Variance
	2016		2015			Amount		%
	(Dollars in thousands)
Total revenue	$	2,006	$	1,755		$	251	14.3
Capital expenditures	$	76,838	$	70,388		$	6,450	9.2
EBITDA	$	6,974	$	(9,572	)	$	16,546	*

*    Percentage is not meaningful.

45

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Capital Expenditures

For the three months ended March 31, 2016, All Other and Eliminations capital expenditures increased by $6.5 million, or 9.2%, compared to the same period in 2015, primarily related to an increase in satellite expenditures on the EchoStar XXI satellite of $14.4 million. The increase in satellite expenditures were offset partially by a decrease in satellite expenditures on the EchoStar XXIII satellite of $11.5 million.  The EchoStar XXI satellite is intended to be used by EchoStar Mobile in providing mobile satellite services in the European Union and the EchoStar XXIII satellite will be initially deployed at the 45 degree west longitude orbital location providing services in Brazil.

EBITDA

For the three months ended March 31, 2016, All Other and Eliminations EBITDA was $7.0 million of income, compared to a loss of $9.6 million for the same period in 2015.  The $16.5 million increase in EBITDA was primarily related to a decrease of $12.7 million in cost of sales relating to the EchoStar XV satellite for services provided from DISH Network as a result of the termination of the satellite service agreement effective in November 2015, $3.0 million attributable to a 2015 provision recorded in connection with FCC regulatory fees reversed in 2016, and an increase of $2.2 million in gains on our available-for-sale securities portfolio.

LIQUIDITY AND CAPITAL RESOURCES

Cash, Cash Equivalents and Current Marketable Investment Securities

We consider all liquid investments purchased with an original maturity of 90 days or less to be cash equivalents.  See Note 6 to our condensed consolidated financial statements for further discussion regarding our marketable investment securities.  As of March 31, 2016 and December 31, 2015, our cash, cash equivalents and current marketable investment securities totaled $1.50 billion and $1.54 billion, respectively.

As of March 31, 2016 and December 31, 2015, we held $603.3 million and $612.3 million, respectively, of various debt and equity instruments including corporate bonds, corporate equity securities, and government bonds.

The following discussion highlights our cash flow activities for the three months ended March 31, 2016.

Cash flows from operating activities.  We typically reinvest the cash flow from operating activities in our business.  For the three months ended March 31, 2016, we reported net cash inflows from operating activities of $192.8 million, a decrease in cash inflows of $28.7 million, compared to the same period in 2015.  The decrease in cash inflows was primarily attributable to a decrease of $47.9 million resulting from changes in operating assets and liabilities related to timing differences between the incurrence of expense and cash payments, partially offset by higher net income of $19.2 million adjusted to exclude: (i) “Depreciation and amortization;” (ii) “Equity in losses of unconsolidated affiliates, net;” (iii) “Gains on marketable investment securities, net;” (iv) “Stock-based compensation;” (v) “Deferred tax provision;” and (vii) “Other, net.”

Cash flows from investing activities.  Our investing activities generally include purchases and sales of marketable investment securities, capital expenditures, acquisitions and strategic investments.  For the three months ended March 31, 2016, we reported net cash outflows from investing activities of $214.3 million, an increase in cash outflows of $45.8 million compared to the same period in 2015.  The increase in cash outflows primarily related to an increase of $33.3 million in capital expenditures in 2016 when compared to the same period in 2015 and an increase of $16.7 million in purchases of marketable investment securities, net of sales and maturities. The increase in cash outflows were partially offset by the acquisition of a regulatory authorization in the first half of 2015 of $3.4 million.

Cash flows from financing activities.  Our financing activities generally include proceeds related to the issuance of debt and cash used for the repurchase, redemption or payment of long-term debt and capital lease obligations and the proceeds from Class A common stock options exercised and stock issued under our stock incentive plans and employee stock purchase plan.  For the three months ended March 31, 2016, we reported net cash outflows from financing activities of $4.5 million, a decrease in cash outflows of $0.4 million, compared to the same period in 2015.  The decrease in cash outflows was primarily due to a decrease of $7.7 million in capital lease obligation payments relating to the expiration of the capital lease for the AMC-16 satellite, effective February 2015, partially offset by a decrease of $4.7 million in excess tax benefits recognized on the exercise

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

of stock options and a decrease of $1.7 million in net proceeds from Class A common stock options exercised and stock issued under the employee stock purchase plan.

Obligations and Future Capital Requirements

Contractual Obligations

As of March 31, 2016, our satellite-related obligations were approximately $1.18 billion.  Our satellite-related obligations primarily include payments pursuant to agreements for the construction of the EchoStar XIX, EchoStar XXI, EchoStar XXIII, EchoStar 105/SES-11, and 63 West satellites, payments pursuant to launch services contracts and regulatory authorizations, executory costs for our capital lease satellites, costs under satellite service agreements and in-orbit incentives relating to certain satellites, as well as commitments for long-term satellite operating leases and satellite service arrangements.

Off-Balance Sheet Arrangements

Other than the transactions below, we generally do not engage in off-balance sheet financing activities or use derivative financial instruments for hedge accounting or speculative purposes.

As of March 31, 2016, we had $46.8 million of letters of credit and insurance bonds.  Of this amount, $20.8 million was secured by restricted cash, $10.4 million was related to insurance bonds, and $15.6 million was issued under credit arrangements available to our foreign subsidiaries.  Certain letters of credit are secured by assets of our foreign subsidiaries.

As of March 31, 2016, we had foreign currency forward contracts with a notional value of $1.5 million in place to partially mitigate foreign currency exchange risk.  From time to time, we may enter into foreign currency forward contracts, or take other measures, to mitigate risks associated with foreign currency denominated assets, liabilities, commitments and anticipated foreign currency transactions.

Satellite Insurance

We generally do not carry in-orbit insurance on our satellites or use commercial insurance to mitigate the potential financial impact of launch or in-orbit failures because we believe that the cost of insurance is uneconomical relative to the risk of such failures. Therefore, we generally bear the risk of any uninsured launch or in-orbit failures.  Pursuant to the terms of the agreements governing certain portions of our indebtedness, we are required, subject to certain limitations on coverage, to maintain launch and in-orbit insurance for our SPACEWAY 3, EchoStar XVI, and EchoStar XVII satellites. 

Future Capital Requirements

We primarily rely on our existing cash and marketable investment securities balances, as well as cash flow generated through our operations to fund our business.  Since we currently depend on DISH Network for a substantial portion of our revenue, our cash flow from operations depends heavily on DISH Network’s needs for equipment and services.  To the extent that DISH Network’s gross new subscriber activations decrease or DISH Network experiences a net loss of subscribers, sales of our digital set-top boxes and related components as well as broadband services provided to DISH Network may decline, which in turn could have a material adverse effect on our financial position and results of operations.  There can be no assurance that we will have positive cash flows from operations.  Furthermore, if we experience negative cash flows, our existing cash and marketable investment securities balances may be reduced.

We have a significant amount of outstanding indebtedness.  As of March 31, 2016, our total indebtedness was $2.22 billion, of which $325.8 million related to capital lease obligations.  Our liquidity requirements will be significant, primarily due to our debt service requirements.  In addition, our future capital expenditures are likely to increase if we make additional investments in infrastructure necessary to support and expand our business, or if we decide to purchase one or more additional satellites.  Other aspects of our business operations may also require additional capital.  We periodically evaluate various strategic initiatives, the pursuit of which could also require us to raise significant additional capital, which may not be available on acceptable terms or at all.

We anticipate that our existing cash and marketable investment securities are sufficient to fund the currently anticipated operations of our business through the next twelve months.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

On May 6, 2016, we announced that HSS is offering to repurchase for cash all or any part of its outstanding Senior Secured Notes and its outstanding 7 5/8% Senior Notes due 2021 (the “Unsecured Notes” and, together with the “Senior Secured Notes,” the “Notes”) at a purchase price equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon to the date of repurchase. See Note 11 in the notes to our condensed consolidated financial statements for further discussion of HSS’ Change of Control Offers to repurchase the Notes.

The Notes currently trade at prices well above 101% of their respective principal amounts and have done so since the issuance of the HSS Tracking Stock. We expect that the Notes will remain outstanding until their maturity in 2019 and 2021, respectively. If any Notes are tendered for purchase in the Change of Control Offers, we expect to fund such purchases with available cash and external sources of financing that we believe are available to us.  Any such financing is subject to prevailing market conditions.  

Satellites

As our satellite fleet ages, we will be required to evaluate replacement alternatives such as acquiring, leasing or constructing additional satellites, with or without customer commitments for capacity.  We may also construct or lease additional satellites in the future to provide satellite services at additional orbital locations or to improve the quality of our satellite services.

Stock Repurchases

Pursuant to a stock repurchase program approved by our board of directors, we are authorized to repurchase up to $500.0 million of our outstanding shares of Class A common stock through December 31, 2016.  As of March 31, 2016, we have not repurchased any common stock under this program.

Seasonality

For our Hughes segment, service revenue is generally not impacted by seasonal fluctuations other than those associated with fluctuations related to sales and promotional activities.  However, like many communications infrastructure equipment vendors, a higher amount of our hardware revenue occurs in the second half of the year due to our customers’ annual procurement and budget cycles.  Large enterprises and operators often allocate their capital expenditure budgets at the beginning of their fiscal year (which often coincides with the calendar year).  The typical sales cycle for large complex system procurements is six to 12 months, which often results in the customer expenditure occurring towards the end of the year.  Customers often seek to expend the budgeted funds prior to the end of the year and the next budget cycle. 

For our EchoStar Technologies segment, we are affected by seasonality to the extent it impacts our customers as a result of their sales and promotion activities, which can vary from year to year.  Although the seasonal impacts have not been significant, historically, the first half of the year generally produces fewer new subscribers for the pay-TV industry than the second half of the year.  However, we cannot provide assurance that this trend will continue in the future.

Our EchoStar Satellite Services segment is not generally affected by seasonal impacts.

Inflation

Inflation has not materially affected our operations during the past three years.  We believe that our ability to increase the prices charged for our products and services in future periods will depend primarily on competitive pressures or contractual terms.

EXPLANATION OF KEY METRICS AND OTHER ITEMS

Equipment revenue - DISH Network.  “Equipment revenue - DISH Network” primarily includes sales of digital set-top boxes and related components, including Slingbox products and related hardware products, and sales of satellite broadband equipment and related equipment, primarily related to the Hughes service, to DISH Network.

Equipment revenue - other.  “Equipment revenue - other” primarily includes sales of digital set-top boxes and related components to Bell TV, Dish Mexico and other domestic and international customers, including sales of Slingbox products and related hardware products, and sales of broadband equipment and networks to customers in our enterprise and consumer markets.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Services and other revenue - DISH Network.  “Services and other revenue - DISH Network” primarily includes revenue associated with satellite and transponder services, satellite uplinking/downlinking, signal processing, conditional access management, telemetry, tracking and control, development of web-based applications for set-top boxes, professional services, facilities rental revenue and other services provided to DISH Network.  “Services and other revenue - DISH Network” also includes subscriber wholesale service fees for the Hughes service sold to dishNET.

Services and other revenue - other.  “Services and other revenue - other” primarily includes the sales of enterprise and consumer broadband services, as well as maintenance and other contracted services.  “Services and other revenue - other” also includes revenue associated with satellite and transponder services, satellite uplinking/downlinking and other services provided to customers other than DISH Network.

Cost of sales - equipment.  “Cost of sales - equipment” principally includes costs associated with digital set-top boxes and related components sold to DISH Network, Bell TV, Dish Mexico and other domestic and international customers, including costs associated with Slingbox products and related hardware products.  “Cost of sales - equipment” also includes the cost of broadband equipment and networks sold to customers in our enterprise and consumer markets, and to DISH Network.

Cost of sales - services and other.  “Cost of sales - services and other” primarily includes the cost of broadband services provided to our enterprise and consumer customers, and to DISH Network, as well as the cost of providing maintenance and other contracted services.  “Cost of sales - services and other” also includes the costs associated with satellite and transponder services, satellite uplinking/downlinking, signal processing, conditional access management, telemetry, tracking and control, product support and development of applications for set-top boxes, professional services, facilities rental costs, and other services provided to our customers, including DISH Network.

Selling, general and administrative expenses.  “Selling, general and administrative expenses” primarily includes selling and marketing costs and employee-related costs associated with administrative services (e.g., information systems, human resources and other services), including stock-based compensation expense.  It also includes professional fees (e.g. legal, information systems and accounting services) and other items associated with facilities and administrative services provided by DISH Network and other third parties.

Research and development expenses.  “Research and development expenses” primarily includes costs associated with the design and development of products to support future growth and provide new technology and innovation to our customers.

Interest income.  “Interest income” primarily includes interest earned on our cash, cash equivalents and marketable investment securities, including premium amortization and discount accretion on debt securities.

Interest expense, net of amounts capitalized.  “Interest expense, net of amounts capitalized” primarily includes interest expense associated with our debt and capital lease obligations (net of capitalized interest), and amortization of debt issuance costs.

Gains on marketable investment securities, net.  “Gains on marketable investment securities, net” primarily includes gains, net of any losses, on the sale or exchange of investments and other-than-temporary impairment on certain of our marketable investment securities.

Equity in losses of unconsolidated affiliates, net.  “Equity in losses of unconsolidated affiliates, net” includes earnings or losses from our investments accounted for under the equity method.

Other, net.  “Other, net” primarily includes foreign exchange gains and losses, dividends received from our marketable investment securities, and other non-operating income or expense items that are not appropriately classified elsewhere in our condensed consolidated statements of operations and comprehensive income (loss).

Earnings before interest, taxes, depreciation and amortization (“EBITDA”).  EBITDA is defined as “Net income attributable to EchoStar” excluding “Interest expense, net of amounts capitalized,” “Interest income,” “Income tax provision, net,” and “Depreciation and amortization.”  EBITDA is not a measure determined in accordance with GAAP.  This non-GAAP measure is reconciled to “Income before income taxes” in our discussion of “Results of Operations” above.  EBITDA should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

GAAP.  Conceptually, EBITDA measures the amount of income generated each period that could be used to service debt, pay taxes and fund capital expenditures.  EBITDA is used by our management as a measure of operating efficiency and overall financial performance for benchmarking against our peers and competitors.  Management believes EBITDA provides meaningful supplemental information regarding liquidity and the underlying operating performance of our business.  Management also believes that EBITDA is useful to investors because it is frequently used by securities analysts, investors, and other interested parties to evaluate the performance of companies in our industry.

Subscribers.  “Subscribers” include customers that subscribe to our Hughes segment’s HughesNet broadband services, through retail, wholesale and small/medium enterprise service channels.

Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risks Associated with Financial Instruments and Foreign Currency

Our investments and debt are exposed to market risks, discussed below.

Cash, Cash Equivalents and Current Marketable Investment Securities

As of March 31, 2016, our cash, cash equivalents and current marketable investment securities had a fair value of $1.50 billion.  Of this amount, a total of $1.47 billion was invested in: (a) cash; (b) commercial paper and corporate notes with an overall average maturity of less than one year and rated in one of the four highest rating categories by at least two nationally recognized statistical rating organizations; (c) debt instruments of the U.S. government and its agencies; and/or (d) instruments with similar risk, duration and credit quality characteristics to the commercial paper and corporate obligations described above.  The primary purpose of these investing activities has been to preserve principal until the cash is required to, among other things, fund operations, make strategic investments and expand the business.  Consequently, the size of this portfolio fluctuates significantly as cash is received and used in our business.  The value of this portfolio may be negatively impacted by credit losses; however, this risk is mitigated through diversification that limits our exposure to any one issuer.

Interest Rate Risk

A change in interest rates would not affect the fair value of our cash, or materially affect the fair value of our cash equivalents due to their maturities of less than 90 days.  A change in interest rates would affect the fair value of our current marketable debt securities portfolio; however, we normally hold these investments to maturity.  Based on our current non-strategic investment portfolio of $1.47 billion as of March 31, 2016, a hypothetical 10% change in average interest rates during 2016 would not have a material impact on the fair value of our cash, cash equivalents and debt securities portfolio due to the limited duration of our investments.

Our cash, cash equivalents and current marketable debt securities had an average annual rate of return for the three months ended March 31, 2016 of 1.4%.  A change in interest rates would affect our future annual interest income from this portfolio, since funds would be re-invested at different rates as the instruments mature.  A hypothetical 10% decrease in average interest rates during 2016 would have resulted in a decrease of approximately $1.5 million in annual interest income.

Strategic Marketable Investment Securities

As of March 31, 2016, we held current strategic investments in the publicly traded common stock of several companies with a fair value of $34.4 million.  These investments, which are held for strategic and financial purposes, are concentrated in a small number of companies, are highly speculative and have experienced and continue to experience volatility.  The fair value of these investments can be significantly impacted by the risk of adverse changes in securities markets generally, as well as risks related to the performance of the companies whose securities we have invested in, risks associated with specific industries, and other factors.  These investments are subject to significant fluctuations in fair value due to the volatility of the securities markets and of the underlying businesses.  In general, our strategic marketable investment securities portfolio is not significantly impacted by interest rate fluctuations as it currently consists solely of equity securities, the value of which is more closely related to factors specific to the underlying business.  A hypothetical 10% adverse change in the market price of our public strategic equity investments would result in a decrease of approximately $3.4 million in the fair value of these investments.

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Restricted cash and marketable investment securities and investments in unconsolidated entities

Restricted cash and marketable investment securities

As of March 31, 2016, we had $21.7 million of restricted cash and marketable investment securities invested in:  (a) cash; (b) debt instruments of the U.S. government and its agencies; (c) commercial paper and corporate notes with an overall average maturity of less than one year and rated in one of the four highest rating categories by at least two nationally recognized statistical rating organizations; and (d) instruments with similar risk, duration and credit quality characteristics to the commercial paper described above.  Based on our investment portfolio as of March 31, 2016, a hypothetical 10% increase in average interest rates would not have a material impact on the fair value of our restricted cash and marketable investment securities.

Investments in unconsolidated entities

As of March 31, 2016, we had $208.7 million of noncurrent equity instruments that we hold for strategic business purposes and account for under the cost or equity methods of accounting.  The fair value of these instruments is not readily determinable.  We periodically review these investments and estimate fair value when there are indications of impairment.  A hypothetical 10% adverse change in the value of these debt and equity instruments would result in a decrease of approximately $20.9 million in the value of these investments.

Our ability to realize value from our strategic investments in companies that are privately held depends on the success of those companies’ businesses and their ability to obtain sufficient capital to execute their business plans.  Because private markets are not as liquid as public markets, there is also increased risk that we will not be able to sell these investments, or that when we desire to sell them we will not be able to obtain fair value for them.

Foreign Currency Exchange Risk

We generally conduct our business in U.S. dollars.  Our international business is conducted in a variety of foreign currencies with our largest exposures being to the Brazilian real, the Indian rupee, and the British pound.  This exposes us to fluctuations in foreign currency exchange rates.  Transactions in foreign currencies are converted into U.S. dollars using exchange rates in effect on the dates of the transactions.

Our objective in managing our exposure to foreign currency changes is to reduce earnings and cash flow volatility associated with foreign exchange rate fluctuations.  Accordingly, we may enter into foreign currency forward contracts, or take other measures, to mitigate risks associated with foreign currency denominated assets, liabilities, commitments and anticipated foreign currency transactions.  As of March 31, 2016, we had $6.8 million of net foreign currency denominated receivables and payables outstanding, and foreign currency forward contracts with a notional value of $1.5 million in place to partially mitigate foreign currency exchange risk.  The estimated fair values of the foreign exchange contracts were not material as of March 31, 2016.  The impact of a hypothetical 10% adverse change in exchange rates on the carrying amount of the net assets and liabilities of our foreign subsidiaries would be an estimated loss to the cumulative translation adjustment of $32.4 million as of March 31, 2016.

Derivative Financial Instruments

We generally do not use derivative financial instruments for speculative purposes and we generally do not apply hedge accounting treatment to our derivative financial instruments.  We evaluate our derivative financial instruments from time to time but there can be no assurance that we will not enter into additional foreign currency forward contracts, or take other measures, in the future to mitigate our foreign exchange risk.

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Item 4.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report such that the information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the first quarter of 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  We continue to review our internal control over financial reporting, and may from time to time make changes aimed at enhancing its effectiveness and to ensure that our systems evolve with our business.

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PART II — OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS

For a discussion of legal proceedings, see Part I, Item 1. Financial Statements — Note 14 “Commitments and Contingencies — Litigation” in this Form 10-Q.

Item 1A.    RISK FACTORS

Item 1A, “Risk Factors,” of our Form 10-K for the year ended December 31, 2015 includes a detailed discussion of our risk factors.  Except as provided below, for the three months ended March 31, 2016, there were no material changes in our risk factors as previously disclosed.

Our business is subject to risks of adverse government regulation.

Our business is subject to varying degrees of regulation in the U.S. by the FCC, and other federal, state and local entities, and in foreign countries by similar entities and internationally by the International Telecommunications Union. For instance, under its Spectrum Frontiers proceeding, the FCC is considering enabling the use of a portion of frequency bands we operate, including without limitation, the Ka-band, on a shared basis with 5G services, which could have a material adverse effect on our operations. These regulations are subject to the administrative and political process and do change, for political and other reasons, from time to time. Moreover, a substantial number of foreign countries in which we have, or may in the future make, an investment, regulate, in varying degrees, the ownership of satellites and other telecommunication facilities/networks and foreign investment in telecommunications companies. Violations of laws or regulations may result in various sanctions including fines, loss of authorizations and the denial of applications for new authorizations or for the renewal of existing authorizations. Further material changes in law and regulatory requirements may also occur, and there can be no assurance that our business and the business of our subsidiaries will not be adversely affected by future legislation, new regulation or deregulation. The failure to obtain or comply with the authorizations and regulations governing our operations could have a material adverse effect on our ability to generate revenue and our overall competitive position and could result in our suffering serious harm to our reputation.

Our articles of incorporation designate the Eighth Judicial District Court of Clark County of the State of Nevada as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our articles of incorporation provide that, unless we consent in writing to an alternative forum, the Eighth Judicial District Court of Clark County of the State of Nevada will be the sole and exclusive forum for any and all actions, suits or proceedings, whether civil, administrative or investigative or that asserts any claim or counterclaim brought in our name or on our behalf, asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, arising or asserting a claim arising pursuant to any provision of the Nevada Restated Statutes Chapters 78 or 92A, our articles of incorporation or our bylaws, interpreting, applying, enforcing or determining the validity of our articles of incorporation or bylaws or asserting a claim that is governed by the internal affairs doctrine. Any person purchasing or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to this provision of our articles of incorporation. This choice of forum provision may limit our stockholders’ ability to bring certain claims, including claims against our directors, officers or employees, in a judicial forum that the stockholder finds favorable and therefore the choice of forum provision may discourage lawsuits with respect to such claims. Stockholders who do bring a claim in the Eighth Judicial District Court of Clark County could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Nevada. The Eighth Judicial District Court of Clark County may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders. Alternatively, if a court were to find this provision of our articles of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could have a material adverse effect on our business, financial condition or results of operations.

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Item 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

There were no repurchases of our Class A common stock for the three months ended March 31, 2016.

Item 3.    DEFAULTS UPON SENIOR SECURITIES

Not applicable

Item 4.    MINE SAFETY DISCLOSURES

Not applicable

Item 5.    OTHER INFORMATION

None

Item 6.    EXHIBITS

Exhibit No.	Description
3.1*	Certificate of Amendment to Articles of Incorporation of EchoStar Corporation, dated as of May 4, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of EchoStar Corporation, filed May 5, 2016, Commission File No. 001-33807).
10.1*	Amendment to Employment Agreement, dated as of April 1, 2016, between Hughes Communications, Inc. and Pradman Kaul (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of EchoStar Corporation, filed April 6, 2016, Commission File No. 001-33807).**
10.2*	Echostar Corporation Executive Officer Bonus Incentive Plan, dated as of May 4, 2016 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of EchoStar Corporation, filed May 5, 2016, Commission File No. 001-33807).**
31.1(H)	Section 302 Certification of Chief Executive Officer.
31.2(H)	Section 302 Certification of Chief Financial Officer.
32.1(I)	Section 906 Certifications of Chief Executive Officer and Chief Financial Officer.
99.1(H)	Unaudited Condensed Attributed Financial Information and Notes for Hughes Retail Group.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Label Linkbase.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

(H) Filed herewith.

(I) Furnished herewith

* Incorporated by reference.

** Constitutes a management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ECHOSTAR CORPORATION
Date: May 10, 2016	By:	/s/ Michael T. Dugan
		Michael T. Dugan
		Chief Executive Officer, President and Director
		(Principal Executive Officer)
Date: May 10, 2016	By:	/s/ David J. Rayner
		David J. Rayner
		Executive Vice President, Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Section 302 Certification

I, Michael T. Dugan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of EchoStar Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016
By:	/s/ Michael T. Dugan
Name:	Michael T. Dugan
Title:	Chief Executive Officer, President and Director
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Section 302 Certification

I, David J. Rayner, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of EchoStar Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016
By:	/s/ David J. Rayner
Name:	David J. Rayner
Title:	Executive Vice President, Chief Financial Officer and Treasurer
	(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

Section 906 Certifications

In connection with the quarterly report for the quarter ended March 31, 2016 on Form 10-Q (the “Quarterly Report”) of EchoStar Corporation (the “Company”) as filed with the Securities and Exchange Commission on the date hereof, we, Michael T. Dugan and David J. Rayner, Chief Executive Officer and Chief Financial Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

(i) the Quarterly Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934; and

(ii) the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2016
By:	/s/ Michael T. Dugan
Name:	Michael T. Dugan
Title:	Chief Executive Officer, President and Director
	(Principal Executive Officer)
By:	/s/ David J. Rayner
Name:	David J. Rayner
Title:	Executive Vice President, Chief Financial Officer and Treasurer
	(Principal Financial and Accounting Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS BEEN PROVIDED TO THE COMPANY AND WILL BE RETAINED BY THE COMPANY AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.

EX-99.1

EXHIBIT 99.1

Unaudited Condensed Attributed Financial Information for Hughes Retail Group

On March 1, 2014, EchoStar Corporation (the terms “we,” “us,” “EchoStar,” and “our” refer to EchoStar Corporation and its subsidiaries) issued shares of its newly authorized Hughes Retail Preferred Tracking Stock (the “EchoStar Tracking Stock”) and Hughes Satellite Systems Corporation (“HSS”), a subsidiary of EchoStar, also issued shares of its newly authorized Hughes Retail Preferred Tracking Stock (the “HSS Tracking Stock” and together with the EchoStar Tracking Stock, the “Tracking Stock”) to certain subsidiaries of DISH Network Corporation.

The Tracking Stock is intended to reflect the separate performance of the Hughes Retail Group, which is comprised primarily of our business of providing satellite broadband internet services to residential retail subscribers, including the assets and liabilities primarily associated with the operation of the business; and the business operations, revenue, billings, operating and other direct and indirect support activities to provide services to the business and Hughes retail subscribers.  The Hughes Retail Group also includes any proceeds associated with a sale or transfer of the Hughes Retail Group or any assets of the Hughes Retail Group, and any other assets acquired by or for the account of the Hughes Retail Group or otherwise attributed, contributed, allocated or transferred to the Hughes Retail Group from time to time.  The EchoStar Group is comprised of all existing and future businesses of EchoStar and its subsidiaries, excluding the Hughes Retail Group.

Holders of the Tracking Stock and our common stock are holders of capital stock of the issuer (EchoStar or HSS) and are subject to risks associated with an investment in the issuer and all of its businesses, assets and liabilities.  The issuance of the Tracking Stock does not affect the rights of our creditors or the creditors of our subsidiaries.

Notwithstanding the following attribution of assets, liabilities, revenue, expenses and cash flows to the Hughes Retail Group and the EchoStar Group, our tracking stock structure does not affect the ownership of or the legal title to our assets or responsibility for our liabilities.

The accompanying condensed attributed financial information as of, and for, the three months ended March 31, 2016 and 2015 and the year ended December 31, 2015 are unaudited.  The Company’s management is solely responsible for this financial information and believes that it has been prepared in conformity with accounting principles generally accepted in the United States.

The following tables present our consolidated assets and liabilities as of March 31, 2016 and December 31, 2015 and our consolidated revenue, expenses and cash flows for the three months ended March 31, 2016 and 2015.  The tables further present our assets, liabilities, revenue, expenses and cash flows that are attributed to the Hughes Retail Group as if that business and its assets had been attributed to that group at the beginning of each period.  The financial information in this Exhibit should be read in conjunction with our unaudited condensed consolidated financial statements for the period ended March 31, 2016 included in our Quarterly Report on Form 10-Q.

1

CONDENSED ATTRIBUTED BALANCE SHEETS

(In thousands)

(Unaudited) 

	Attributed As of March 31, 2016									Attributed As of December 31, 2015
	Hughes Retail Group		EchoStar Group		Inter-Group Eliminations			EchoStar Consolidated		Hughes Retail Group		EchoStar Group		Inter-Group Eliminations			EchoStar Consolidated
Assets
Current Assets:
Cash, cash equivalents and marketable investment securities	$	—	$	1,502,162	$	—		$	1,502,162	$	—	$	1,536,578	$	—		$	1,536,578
Trade accounts receivable, net	26,097		137,629		—			163,726		27,094		152,146		—			179,240
Trade accounts receivable - DISH Network, net	—		340,532		—			340,532		—		277,159		—			277,159
Inventory	6,531		65,132		(1,527		)	70,136		6,699		61,878		(1,567		)	67,010
Prepaids and deposits	400		59,887		—			60,287		990		55,959		—			56,949
Inter-group advances	—		20,700		(20,700		)	—		—		30,398		(30,398		)	—
Other current assets	—		12,501		—			12,501		—		16,723		—			16,723
Total current assets	33,028		2,138,543		(22,227		)	2,149,344		34,783		2,130,841		(31,965		)	2,133,659
Noncurrent Assets:
Restricted cash and marketable investment securities	—		21,664		—			21,664		—		21,002		—			21,002
Property and equipment, net	158,738		3,385,386		(16,674		)	3,527,450		162,497		3,266,315		(15,822		)	3,412,990
Regulatory authorizations, net	—		546,411		—			546,411		—		543,812		—			543,812
Goodwill	260,000		250,630		—			510,630		260,000		250,630		—			510,630
Other intangible assets, net	27,466		91,184		—			118,650		31,488		101,165		—			132,653
Economic interest in Hughes Retail Group	—		88,554		(88,554		)	—		—		89,140		(89,140		)	—
Investments in unconsolidated entities	—		208,744		—			208,744		—		209,264		—			209,264
Other receivable - DISH Network	—		91,171		—			91,171		—		90,966		—			90,966
Deferred tax assets	23,631		4,229		(23,631		)	4,229		19,685		4,041		(19,685		)	4,041
Other noncurrent assets, net	33,855		124,754		(667		)	157,942		35,277		115,859		(667		)	150,469
Total noncurrent assets	503,690		4,812,727		(129,526		)	5,186,891		508,947		4,692,194		(125,314		)	5,075,827
Total assets	$	536,718	$	6,951,270	$	(151,753	)	$	7,336,235	$	543,730	$	6,823,035	$	(157,279	)	$	7,209,486
Liabilities and Stockholders’ Equity
Current Liabilities:
Trade accounts payable	$	14,920	$	216,953	$	—		$	231,873	$	12,023	$	201,648	$	—		$	213,671
Trade accounts payable - DISH Network	—		25,694		—			25,694		—		24,682		—			24,682
Current portion of long-term debt and capital lease obligations, net of unamortized debt issuance costs	—		1,896,233		—			1,896,233		—		35,698		—			35,698
Deferred revenue and prepayments	26,818		35,761		—			62,579		26,636		35,245		—			61,881
Accrued compensation	—		27,886		—			27,886		—		29,767		—			29,767
Accrued royalties	—		22,609		—			22,609		—		22,531		—			22,531
Accrued interest	—		41,645		—			41,645		—		8,596		—			8,596
Inter-group advances	20,700		—		(20,700		)	—		30,398		—		(30,398		)	—
Accrued expenses and other	28,339		72,598		—			100,937		26,399		103,606		—			130,005
Total current liabilities	90,777		2,339,379		(20,700		)	2,409,456		95,456		461,773		(30,398		)	526,831
Noncurrent Liabilities:
Long-term debt and capital lease obligations, net of unamortized debt issuance costs	—		290,570		—			290,570		—		2,156,667		—			2,156,667
Deferred tax liabilities	—		700,430		(23,631		)	676,799		—		670,077		(19,685		)	650,392
Other noncurrent liabilities	3,172		94,570		—			97,742		2,576		91,378		—			93,954
Total noncurrent liabilities	3,172		1,085,570		(23,631		)	1,065,111		2,576		2,918,122		(19,685		)	2,901,013
Total liabilities	93,949		3,424,949		(44,331		)	3,474,567		98,032		3,379,895		(50,083		)	3,427,844
Stockholders’ Equity:
Equity/Attributed net assets (liabilities)	442,769		3,440,869		(107,422		)	3,776,216		445,698		3,356,976		(107,196		)	3,695,478
Noncontrolling interest in HSS Tracking Stock	—		74,031		—			74,031		—		74,854		—			74,854
Other noncontrolling interests	—		11,421		—			11,421		—		11,310		—			11,310
Equity/Attributed net assets (liabilities)	442,769		3,526,321		(107,422		)	3,861,668		445,698		3,443,140		(107,196		)	3,781,642
Total liabilities and equity/attributed net assets (liabilities)	$	536,718	$	6,951,270	$	(151,753	)	$	7,336,235	$	543,730	$	6,823,035	$	(157,279	)	$	7,209,486

2

CONDENSED ATTRIBUTED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited) 

	Attributed For the Three Months Ended March 31, 2016												Attributed For the Three Months Ended March 31, 2015
	Hughes Retail Group			EchoStar Group			Inter-Group Eliminations			EchoStar Consolidated			Hughes Retail Group			EchoStar Group			Inter-Group Eliminations			EchoStar Consolidated
Revenue:
Services and equipment revenue - other	$	158,806		$	276,497		$	(82,284	)	$	353,019		$	146,161		$	287,860		$	(82,131	)	$	351,890
Services and equipment revenue - DISH Network	—			463,340			—			463,340			—			446,763			—			446,763
Total revenue	158,806			739,837			(82,284		)	816,359			146,161			734,623			(82,131		)	798,653
Costs and Expenses:
Cost of sales (exclusive of depreciation and amortization)	91,594			472,040			(79,609		)	484,025			86,008			460,454			(77,999		)	468,463
Selling, general and administrative expenses	38,630			60,063			—			98,693			38,634			59,294			—			97,928
Research and development expenses	—			20,442			—			20,442			—			17,872			—			17,872
Depreciation and amortization	33,402			95,196			(1,864		)	126,734			34,251			99,934			(1,000		)	133,185
Total costs and expenses	163,626			647,741			(81,473		)	729,894			158,893			637,554			(78,999		)	717,448
Operating income (loss)	(4,820		)	92,096			(811		)	86,465			(12,732		)	97,069			(3,132		)	81,205
Other Income (Expense):
Interest income	—			3,993			(27		)	3,966			—			2,649			(38		)	2,611
Interest expense, net of amounts capitalized	(27		)	(23,210		)	27			(23,210		)	(38		)	(35,308		)	38			(35,308		)
Gains on marketable investment securities, net	—			2,462			—			2,462			—			9			—			9
Economic interest in earnings (loss) of Hughes Retail Group	—			(586		)	586			—			—			(1,543		)	1,543			—
Other, net	—			6,423			—			6,423			—			(2,518		)	—			(2,518		)
Total other income (expense), net	(27		)	(10,918		)	586			(10,359		)	(38		)	(36,711		)	1,543			(35,206		)
Income (loss) before income taxes	(4,847		)	81,178			(225		)	76,106			(12,770		)	60,358			(1,589		)	45,999
Income tax benefit (provision), net	1,918			(29,581		)	—			(27,663		)	5,054			(23,455		)	—			(18,401		)
Net income (loss)	(2,929		)	51,597			(225		)	48,443			(7,716		)	36,903			(1,589		)	27,598
Less: Net loss attributable to noncontrolling interests in HSS Tracking Stock	—			(823		)	—			(823		)	—			(2,169		)	—			(2,169		)
Less: Net income attributable to noncontrolling interests	—			111			—			111			—			369			—			369
Net income (loss) attributable to EchoStar	$	(2,929	)	$	52,309		$	(225	)	$	49,155		$	(7,716	)	$	38,703		$	(1,589	)	$	29,398

3

CONDENSED ATTRIBUTED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited) 

	Attributed For the Three Months Ended March 31, 2016												Attributed For the Three Months Ended March 31, 2015
	Hughes Retail Group			EchoStar Group			Inter-Group Eliminations			EchoStar Consolidated			Hughes Retail Group			EchoStar Group			Inter-Group Eliminations			EchoStar Consolidated
Cash Flows from Operating Activities:
Net income (loss)	$	(2,929	)	$	51,597		$	(225	)	$	48,443		$	(7,716	)	$	36,903		$	(1,589	)	$	27,598
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization	33,402			95,196			(1,864		)	126,734			34,251			99,934			(1,000		)	133,185
Equity in losses of unconsolidated affiliates, net	—			963			—			963			—			53			—			53
Economic interest in loss (earnings) of Hughes Retail Group	—			586			(586		)	—			—			1,543			(1,543		)	—
Gains on marketable investment securities, net	—			(2,462		)	—			(2,462		)	—			(9		)	—			(9		)
Stock-based compensation	—			4,384			—			4,384			—			4,175			—			4,175
Deferred tax provision (benefit)	(3,946		)	29,630			—			25,684			(5,054		)	22,925			—			17,871
Changes in current assets and current liabilities, net	6,774			(24,918		)	(40		)	(18,184		)	(1,076		)	32,607			199			31,730
Changes in noncurrent assets and noncurrent liabilities, net	2,020			1,368			—			3,388			(1,213		)	2,497			127			1,411
Other, net	—			3,899			—			3,899			—			5,548			—			5,548
Net cash flows from operating activities	35,321			160,243			(2,715		)	192,849			19,192			206,176			(3,806		)	221,562
Cash Flows from Investing Activities:
Purchases of marketable investment securities	—			(321,892		)	—			(321,892		)	—			(250,861		)	—			(250,861		)
Sales and maturities of marketable investment securities	—			323,889			—			323,889			—			269,588			—			269,588
Purchases of property and equipment	(25,623		)	(212,315		)	2,715			(235,223		)	(31,423		)	(150,185		)	3,806			(177,802		)
Refunds and other receipts related to capital expenditures	—			24,087			—			24,087			—			—			—			—
Changes in restricted cash and cash equivalents	—			(662		)	—			(662		)	—			(1,046		)	—			(1,046		)
Acquisition of regulatory authorization	—			—			—			—			—			(3,428		)	—			(3,428		)
Expenditures for externally marketed software	—			(5,959		)	—			(5,959		)	—			(4,944		)	—			(4,944		)
Inter-group advances	—			9,698			(9,698		)	—			—			(12,231		)	12,231			—
Other, net	—			1,460			—			1,460			—			6			—			6
Net cash flows from investing activities	(25,623		)	(181,694		)	(6,983		)	(214,300		)	(31,423		)	(153,101		)	16,037			(168,487		)
Cash Flows from Financing Activities:
Repayment of other debt and capital lease obligations	—			(10,542		)	—			(10,542		)	—			(16,508		)	—			(16,508		)
Net proceeds from Class A common stock options exercised and stock issued under the Employee Stock Purchase Plan	—			6,335			—			6,335			—			8,039			—			8,039
Inter-group advances	(9,698		)	—			9,698			—			12,231			—			(12,231		)	—
Inter-group equity contributions (distributions), net	—			—			—			—			—			—			—			—
Other, net	—			(302		)	—			(302		)	—			3,521			—			3,521
Net cash flows from financing activities	(9,698		)	(4,509		)	9,698			(4,509		)	12,231			(4,948		)	(12,231		)	(4,948		)
Effect of exchange rates on cash and cash equivalents	—			536			—			536			—			(5,674		)	—			(5,674		)
Net increase (decrease) in cash and cash equivalents	—			(25,424		)	—			(25,424		)	—			42,453			—			42,453
Cash and cash equivalents, beginning of period	—			924,240			—			924,240			—			549,053			—			549,053
Cash and cash equivalents, end of period	$	—		$	898,816		$	—		$	898,816		$	—		$	591,506		$	—		$	591,506

4

NOTES TO CONDENSED ATTRIBUTED FINANCIAL INFORMATION

(Unaudited)

Note 1.Business Description

The Hughes Retail Group is generally comprised of our business of providing satellite broadband internet services to residential retail subscribers, including the assets and liabilities primarily associated with the operation of the business; and the business operations, revenue, billings, operating and other direct and indirect support activities to provide services to the business and Hughes retail subscribers.  The Hughes Retail Group also includes any proceeds associated with a sale or transfer of the Hughes Retail Group or any assets of the Hughes Retail Group, and any other assets acquired by or for the account of the Hughes Retail Group or otherwise attributed, contributed, allocated or transferred to the Hughes Retail Group from time to time.  The EchoStar Group consists of all other operations of EchoStar, including all existing and future businesses other than the Hughes Retail Group.  EchoStar has adopted a policy statement (the “Policy Statement”) as described in Note 2 below, which sets forth management and allocation policies for purposes of attributing all of the business and operations of EchoStar to either the Hughes Retail Group or the EchoStar Group (each as fully defined in the Policy Statement and collectively, the “Groups”).

Note 2.Basis of Presentation

The overall objective of the attributed financial information is to present the amounts reported in EchoStar’s condensed consolidated financial statements attributed to the Hughes Retail Group and the EchoStar Group.  The Policy Statement contains specific provisions that determine how certain assets, liabilities, revenue and expenses are attributed to the Groups.  The Policy Statement does not explicitly address the attribution of all amounts reported in our condensed consolidated financial statements; accordingly, management applies judgment in attributing certain amounts based on its assessment of the activities of the Groups and the guiding principles set forth in the Policy Statement. 

Set forth below is an overview of the Policy Statement and additional discussion about how we have attributed amounts in our condensed consolidated financial statements to the Groups.

Policy Statement

In accordance with the Policy Statement, all existing and future retail subscribers, including related customer contracts, are attributed to the Hughes Retail Group.  Assets and liabilities that are directly related to the Hughes Retail Group are attributed to the Hughes Retail Group, including certain accounts receivable, inventory, property and equipment, deferred subscriber acquisition costs, intangible assets and tax related assets and liabilities.  To the extent practicable, costs and expenses are attributed without markup to the Hughes Retail Group or the EchoStar Group based on specific identification.  Common or shared costs, including corporate overhead, are allocated between the Hughes Retail Group and the EchoStar Group using objective methods and criteria that reflect the relative usage of the corresponding functions or services.  Where resources are shared by the Groups and determinations based on use alone are not practicable, we use other methods and criteria that we believe are fair and result in a reasonable estimate of the costs associated with operation, utilization, and maintenance of such resources to each Group.  Such methods and criteria may include allocations based on revenue, operating costs, square footage, headcount or management estimates.  Under the documents governing the Tracking Stock, any change in our management’s allocation methodologies requires the consent of the holders of a majority of the outstanding shares of the Tracking Stock, but does not require the consent of our common stockholders.

The Hughes Retail Group utilizes broadband satellite capacity that is operated and maintained by the EchoStar Group.  The Policy Statement provides for a monthly charge to the Hughes Retail Group for its utilization of such capacity based on the number of retail subscribers and revenue per month.  In addition, the Policy Statement establishes pricing for the Hughes Retail Group purchases of customer rental equipment from the EchoStar Group based on cost plus a fixed margin percentage.  Income taxes incurred by EchoStar and its subsidiaries that include operations of the Hughes Retail Group are allocated between the EchoStar Group and the Hughes Retail Group based primarily on the relative amounts of earnings or loss attributable to each Group.

The various attributions, allocations and inter-group charges provided for in the Policy Statement generally do not affect the amounts reported in EchoStar’s condensed consolidated financial statements, except for effects on the attribution of equity and net income or loss between the holders of Tracking Stock and EchoStar’s common stockholders.  The Policy Statement also does not significantly affect the way that the Hughes segment management assesses operating performance and allocates resources.  In addition, our chief operating decision maker reviews the Hughes Retail Group financial information only to the extent such information is included in our periodic filings with the SEC.  Therefore we do not consider the Hughes Retail Group to be a separate operating segment.

5

NOTES TO CONDENSED ATTRIBUTED FINANCIAL INFORMATION

(Unaudited)

Balance Sheet Attributions

Assets attributed to the Hughes Retail Group based on specific identification consist primarily of trade accounts receivable from retail broadband subscribers, property and equipment (primarily customer rental equipment) used solely in the retail business, and deferred subscriber acquisition costs included in other noncurrent assets.  Goodwill and other intangible assets (primarily customer relationships, developed technology and trademarks), which were recognized in connection with our acquisition of Hughes Communications, Inc. in June 2011, were attributed to the Hughes Retail Group based on an analysis of information for the retail business that was available at the acquisition date.

No attribution to the Hughes Retail Group has been made for certain significant assets that it shares with the EchoStar Group, including regulatory authorizations and property and equipment (such as satellites and related terrestrial facilities), because those assets are operated and maintained by the EchoStar Group and it is not practicable to allocate the asset carrying amounts between the Groups.  However, the Hughes Retail Group has the right to use such assets and is charged for its use of such assets in accordance with the Policy Statement.

Liabilities attributed to the Hughes Retail Group based on specific identification consist primarily of customer prepayments and deferred revenue related to retail subscribers and deferred tax liabilities related to assets and liabilities that have been attributed to the Hughes Retail Group.  Except to a limited extent, it is not practicable to attribute accounts payable and accrued liabilities to the Hughes Retail Group because those amounts arise from centralized processes managed by the EchoStar Group.  The Hughes Retail Group generally incurs inter-group payables to all other operations in connection with such centralized processes.  As provided in the Policy Statement, none of our long-term debt is attributed to the Hughes Retail Group; however, interest is charged on all inter-group payables.

Revenue and Expense Attributions

The Hughes Retail Group revenue relates to services and equipment provided to retail broadband subscribers and is readily identifiable based on specific identification.

Expenses attributed to the Hughes Retail Group based on specific identification include depreciation of property and equipment and amortization of intangible assets that are attributed to the Hughes Retail Group.  Certain other operating expenses, such as compensation of employees that work exclusively in the retail business, are also attributed to the Hughes Retail Group based on specific identification.  A substantial portion of the Hughes Retail Group cost of sales is based on the specific inter-group pricing provisions of the Policy Statement, including a monthly charge per retail subscriber and charges for customer rental equipment at cost plus a fixed margin percentage.  The Hughes Retail Group operating expenses also reflect allocations of corporate overhead and other expenses incurred by EchoStar.

Cash Flow Attributions

The Hughes Retail Group participates in EchoStar’s centralized cash management system and does not maintain separate cash accounts.  Under the centralized cash management system, net advances of cash to or from the Hughes Retail Group are reflected in an inter-group receivable or payable account, which bears interest at the same rate earned by EchoStar on its cash and marketable investment securities portfolio.  There is no allocation of EchoStar’s long-term debt or related interest costs to the Hughes Retail Group.

Cash receipts from retail broadband subscribers and payments of certain expenses attributed to the Hughes Retail Group on a specific identification basis generally are reflected in the attributed statements of cash flows in the period the cash is received or paid.  It is not practicable to determine the timing of related cash disbursements under the centralized cash management system for other costs and expenses attributed to the Hughes Retail Group.  The accompanying statements of cash flows generally presents cash flows related to such transactions when they are recognized on an accrual basis in an inter-group receivable or payable account.  Periodic changes in inter-group receivables or payables generally are indicative of amounts received or paid by the EchoStar Group on behalf of the Hughes Retail Group and are reported in the accompanying attributed statements of cash flows as investing activity for the Group with a net receivable balance or as financing activity for the Group with a net payable balance.

6

NOTES TO CONDENSED ATTRIBUTED FINANCIAL INFORMATION

(Unaudited)

Note 3.Property and Equipment

Property and equipment for the Hughes Retail Group consisted of the following:

	Depreciable	As of
	Life (In Years)	March 31, 2016			December 31, 2015
		(In thousands)
Customer rental equipment	2-4	$	609,708		$	584,086
Accumulated depreciation		(450,970		)	(421,589		)
Property and equipment, net		$	158,738		$	162,497

Depreciation expense associated with the Hughes Retail Group property and equipment, net of retirements, was $29.4 million for each of the three months ended March 31, 2016 and 2015.

Note 4.Goodwill and Other Intangible Assets

Goodwill

Goodwill is assigned to reporting units of our operating segments.  A portion of the Hughes segment goodwill was attributed to the Hughes Retail Group as if the Hughes Retail Group had been a separate reporting unit at June 8, 2011, the date EchoStar completed the acquisition of Hughes Communications, Inc.  Approximately $260.0 million of the $504.2 million Hughes segment goodwill was attributed to the Hughes Retail Group.

Other Intangible Assets

Other intangible assets for the Hughes Retail Group consisted of the following:

	As of
	March 31, 2016							December 31, 2015
	Cost		Accumulated Amortization			Carrying Amount		Cost		Accumulated Amortization			Carrying Amount
	(In thousands)
Customer relationships	$	145,100	$	(132,532	)	$	12,568	$	145,100	$	(129,660	)	$	15,440
Technology-based	23,500		(18,931		)	4,569		23,500		(17,951		)	5,549
Trademark portfolio	13,620		(3,291		)	10,329		13,620		(3,121		)	10,499
Total other intangible assets	$	182,220	$	(154,754	)	$	27,466	$	182,220	$	(150,732	)	$	31,488

Customer relationships are amortized predominantly in relation to the expected contribution of cash flow to the business over the life of the intangible asset.  Other intangible assets are amortized on a straight-line basis over the periods the assets are expected to contribute to our cash flows.  Amortization expense was $4.0 million and $4.9 million for the three months ended March 31, 2016 and 2015, respectively.

Note 5.Income Taxes

We establish a provision for income taxes currently payable or receivable and for income tax amounts deferred to future periods based upon a separate return allocation method which results in income tax expense that approximates the expense that would result if the Hughes Retail Group was a stand-alone entity.  Deferred tax assets and liabilities are recorded for the estimated future tax effects of differences that exist between the financial reporting carrying amount and tax bases of assets and liabilities.  Deferred tax assets are offset by valuation allowances when we determine it is more likely than not that such deferred tax assets will not be realized in the foreseeable future.

Note 6.Equity/Attributed Net Assets

The reported amounts of equity/attributed net assets for the Hughes Retail Group and EchoStar Group represent the excess of attributed assets over attributed liabilities for the respective groups.  EchoStar Group equity includes the 20.0% retained economic interest of EchoStar common stockholders in the net assets of the Hughes Retail Group.

The Hughes Retail Group equity/attributed net assets consisted of attributed paid-in capital and accumulated earnings as follows:

	As of
	March 31, 2016			December 31, 2015
	(In thousands)
Attributed paid-in capital	$	456,122		$	456,122
Attributed accumulated earnings (deficit):
Periods prior to March 1, 2014	33,395			33,395
Periods beginning March 1, 2014	(46,748		)	(43,819		)
Total	(13,353		)	(10,424		)
Total equity/attributed net assets	$	442,769		$	445,698

7

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 03, 2016
Entity Registrant Name	EchoStar CORP
Entity Central Index Key	0001415404
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Class A common stock
Entity Common Stock, Shares Outstanding		46,062,515
Class B common stock
Entity Common Stock, Shares Outstanding		47,687,039

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current Assets:
Cash and cash equivalents	$ 898,816	$ 924,240
Marketable investment securities, at fair value	603,346	612,338
Trade accounts receivable, net of allowance for doubtful accounts of $13,772 and $12,485, respectively	163,726	179,240
Trade accounts receivable - DISH Network, net of allowance for doubtful accounts of zero	340,532	277,159
Inventory	70,136	67,010
Prepaids and deposits	60,287	56,949
Other current assets	12,501	16,723
Total current assets	2,149,344	2,133,659
Noncurrent Assets:
Restricted cash and marketable investment securities	21,664	21,002
Property and equipment, net of accumulated depreciation of $3,097,803 and $2,998,074, respectively	3,527,450	3,412,990
Regulatory authorizations, net	546,411	543,812
Goodwill	510,630	510,630
Other intangible assets, net	118,650	132,653
Investments in unconsolidated entities	208,744	209,264
Other receivable - DISH Network	91,171	90,966
Other noncurrent assets, net	162,171	154,510
Total noncurrent assets	5,186,891	5,075,827
Total assets	7,336,235	7,209,486
Current Liabilities:
Trade accounts payable	231,873	213,671
Trade accounts payable - DISH Network	25,694	24,682
Current portion of long-term debt and capital lease obligations, net of unamortized debt issuance costs	1,896,233	35,698
Deferred revenue and prepayments	62,579	61,881
Accrued compensation	27,886	29,767
Accrued royalties	22,609	22,531
Accrued interest	41,645	8,596
Accrued expenses and other	100,937	130,005
Total current liabilities	2,409,456	526,831
Noncurrent Liabilities:
Long-term debt and capital lease obligations, net of unamortized debt issuance costs	290,570	2,156,667
Deferred tax liabilities, net	676,799	650,392
Other noncurrent liabilities	97,742	93,954
Total noncurrent liabilities	1,065,111	2,901,013
Total liabilities	3,474,567	3,427,844
Stockholders’ Equity:
Additional paid-in capital	3,797,153	3,776,451
Accumulated other comprehensive loss	(106,353)	(117,233)
Accumulated earnings	183,472	134,317
Treasury stock, at cost	(98,162)	(98,162)
Total EchoStar stockholders’ equity	3,776,216	3,695,478
Noncontrolling interest in HSS Tracking Stock	74,031	74,854
Other noncontrolling interests	11,421	11,310
Total stockholders’ equity	3,861,668	3,781,642
Total liabilities and stockholders’ equity	7,336,235	7,209,486
Class A common stock
Stockholders’ Equity:
Common stock	52	51
Class B common stock
Stockholders’ Equity:
Common stock	48	48
Class C common stock
Stockholders’ Equity:
Common stock	0	0
Class D common stock
Stockholders’ Equity:
Common stock	0	0
Preferred Stock
Stockholders’ Equity:
Preferred Stock	$ 6	$ 6

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current Assets:
Allowance for doubtful accounts on trade accounts receivable (in dollars)	$ 13,772,000	$ 12,485,000
Allowance for doubtful accounts on trade accounts receivable - DISH Network (in dollars)	0	0
Property and equipment, accumulated depreciation (in dollars)	$ 3,097,803,000	$ 2,998,074,000
Common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	4,000,000,000	4,000,000,000
Class A common stock
Common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	1,600,000,000	1,600,000,000
Common stock, shares issued (in shares)	51,580,578	51,087,839
Common stock, shares outstanding (in shares)	46,048,260	45,555,521
Class B common stock
Common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	800,000,000	800,000,000
Common stock, shares issued (in shares)	47,687,039	47,687,039
Common stock, shares outstanding (in shares)	47,687,039	47,687,039
Class C common stock
Common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	800,000,000	800,000,000
Common stock, shares issued (in shares)	0	0
Common stock, shares outstanding (in shares)	0	0
Class D common stock
Common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	800,000,000	800,000,000
Common stock, shares issued (in shares)	0	0
Common stock, shares outstanding (in shares)	0	0
Preferred Stock
Preferred Stock
Preferred Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Hughes Retail Preferred Tracking Stock
Preferred Stock
Preferred Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	13,000,000	13,000,000
Preferred stock, shares issued (in shares)	6,290,499	6,290,499
Preferred stock, shares outstanding (in shares)	6,290,499	6,290,499

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenue:
Equipment revenue - DISH Network	$ 249,613	$ 223,959
Equipment revenue - other	80,477	79,136
Services and other revenue - DISH Network	213,727	222,804
Services and other revenue - other	272,542	272,754
Total revenue	816,359	798,653
Costs and Expenses:
Cost of sales - equipment (exclusive of depreciation and amortization)	286,863	260,223
Cost of sales - services and other (exclusive of depreciation and amortization)	197,162	208,240
Selling, general and administrative expenses	98,693	97,928
Research and development expenses	20,442	17,872
Depreciation and amortization	126,734	133,185
Total costs and expenses	729,894	717,448
Operating income	86,465	81,205
Other Income (Expense):
Interest income	3,966	2,611
Interest expense, net of amounts capitalized	(23,210)	(35,308)
Gains on marketable investment securities, net	2,462	9
Equity in losses of unconsolidated affiliates, net	(963)	(53)
Other, net	7,386	(2,465)
Total other expense, net	(10,359)	(35,206)
Income before income taxes	76,106	45,999
Income tax provision, net	(27,663)	(18,401)
Net income	48,443	27,598
Less: Net loss attributable to noncontrolling interest in HSS Tracking Stock	(823)	(2,169)
Less: Net income attributable to other noncontrolling interests	111	369
Net income attributable to EchoStar	49,155	29,398
Less: Net loss attributable to Hughes Retail Preferred Tracking Stock (Note 4)	(1,519)	(4,004)
Net income attributable to EchoStar common stock	$ 50,674	$ 33,402
Weighted-average common shares outstanding - Class A and B common stock:
Basic (in shares)	93,331	91,969
Diluted (in shares)	93,852	93,357
Earnings per share - Class A and B common stock:
Basic (in dollars per share)	$ 0.54	$ 0.36
Diluted (in dollars per share)	$ 0.54	$ 0.36
Comprehensive Income:
Net income	$ 48,443	$ 27,598
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	11,624	(26,400)
Unrealized gains on available-for-sale securities and other	1,503	1,218
Recognition of realized gains on available-for-sale securities in net income	(2,247)	(9)
Total other comprehensive income (loss), net of tax	10,880	(25,191)
Comprehensive income	59,323	2,407
Less: Comprehensive loss attributable to noncontrolling interest in HSS Tracking Stock	(823)	(2,169)
Less: Comprehensive income attributable to other noncontrolling interests	111	369
Comprehensive income attributable to EchoStar	$ 60,035	$ 4,207

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows from Operating Activities:
Net income	$ 48,443	$ 27,598
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	126,734	133,185
Equity in losses of unconsolidated affiliates, net	963	53
Gains on marketable investment securities, net	(2,462)	(9)
Stock-based compensation	4,384	4,175
Deferred tax provision	25,684	17,871
Changes in current assets and current liabilities, net	(18,184)	31,730
Changes in noncurrent assets and noncurrent liabilities, net	3,388	1,411
Other, net	3,899	5,548
Net cash flows from operating activities	192,849	221,562
Cash Flows from Investing Activities:
Purchases of marketable investment securities	(321,892)	(250,861)
Sales and maturities of marketable investment securities	323,889	269,588
Purchases of property and equipment	(235,223)	(177,802)
Refunds and other receipts related to capital expenditures	24,087	0
Changes in restricted cash and marketable investment securities	(662)	(1,046)
Acquisition of regulatory authorization	0	(3,428)
Expenditures for externally marketed software	(5,959)	(4,944)
Other, net	1,460	6
Net cash flows from investing activities	(214,300)	(168,487)
Cash Flows from Financing Activities:
Repayment of other debt and capital lease obligations	(10,542)	(16,508)
Net proceeds from Class A common stock options exercised and stock issued under the Employee Stock Purchase Plan	6,335	8,039
Other, net	(302)	3,521
Net cash flows from financing activities	(4,509)	(4,948)
Effect of exchange rates on cash and cash equivalents	536	(5,674)
Net increase (decrease) in cash and cash equivalents	(25,424)	42,453
Cash and cash equivalents, beginning of period	924,240	549,053
Cash and cash equivalents, end of period	898,816	591,506
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest (including capitalized interest)	10,476	10,848
Capitalized interest	22,021	12,485
Cash paid for income taxes	2,586	1,608
Employee benefits paid in Class A common stock	11,126	10,711
Satellites and other assets financed under capital lease obligations	2,351	2,682
Increase (decrease) in capital expenditures included in accounts payable, net	3,670	(4,485)
Reduction of capital lease obligation for AMC-15 and AMC-16 satellites	$ 0	$ 4,500

XML

Organization and Business Activities

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business Activities

Organization and Business Activities

Principal Business

EchoStar Corporation (which, together with its subsidiaries, is referred to as “EchoStar,” the “Company,” “we,” “us” and/or “our”) is a holding company that was organized in October 2007 as a corporation under the laws of the State of Nevada.  We are a global provider of satellite operations, video delivery solutions, digital set-top boxes, and broadband satellite technologies and services for home and office, delivering innovative network technologies, managed services, and solutions for enterprises and governments.  Our Class A common stock is publicly traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SATS.”

We currently operate in the following three business segments:

• Hughes — which provides satellite broadband internet access to North American consumers and broadband network services and equipment to domestic and international enterprise markets.  The Hughes segment also provides managed services to large enterprises and solutions to customers for mobile satellite systems.

• EchoStar Technologies (“ETC”) — which designs, develops and distributes secure end-to-end video technology solutions including digital set-top boxes and related products and technology, primarily for satellite TV service providers and telecommunication companies. Our EchoStar Technologies segment also provides digital broadcast operations, including satellite uplinking/downlinking, transmission services, signal processing, conditional access management, and other services, primarily to DISH Network Corporation and its subsidiaries (“DISH Network”) and Dish Mexico, S. de R.L. de C.V. (“Dish Mexico”), a joint venture we entered into in 2008. In addition, we provide our TV Anywhere technology through Slingbox® units directly to consumers via retail outlets and online, as well as to the pay-TV operator market. Beginning in 2015, this segment also includes Move Networks, our over-the-top (“OTT”), Streaming Video on Demand (“SVOD”) platform business, which includes assets acquired from Sling TV Holding L.L.C. (formerly DISH Digital Holding L.L.C.) (“Sling TV Holding”), and primarily provides support services to DISH Network’s Sling TV^TM operations. In 2016, we introduced a security and home automation solution provided directly to consumers.

• EchoStar Satellite Services (“ESS”) — which uses certain of our owned and leased in-orbit satellites and related licenses to provide satellite services on a full-time and occasional-use basis primarily to DISH Network, Dish Mexico, United States (“U.S.”) government service providers, internet service providers, broadcast news organizations, programmers, and private enterprise customers.

Our operations also include real estate and other activities that have not been assigned to our operating segments, including, costs incurred in certain satellite development programs and other business development activities, expenses of various corporate departments, and our centralized treasury operations, including, income from our investment portfolio and interest expense on our debt.  These activities are accounted for in the “All Other and Eliminations” column in Note 15.

In 2008, DISH Network completed its distribution to us of its digital set-top box business, certain infrastructure, and other assets and related liabilities, including certain of its satellites, uplink and satellite transmission assets, and real estate (the “Spin-off”).  Since the Spin-off, EchoStar and DISH Network have operated as separate publicly-traded companies.  However, as a result of the Satellite and Tracking Stock Transaction, described in Note 4 below and in our most recent Annual Report on Form 10-K, DISH Network owns Hughes Retail Preferred Tracking Stock representing an aggregate 80.0% economic interest in the residential retail satellite broadband business of our Hughes segment including certain operations, assets and liabilities attributed to such business.  In addition, a substantial majority of the voting power of the shares of EchoStar and DISH Network is owned beneficially by Charles W. Ergen, our Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information.  Accordingly, these financial statements do not include all of the information and notes required for complete financial statements prepared in accordance with GAAP.  In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.  For further information, refer to the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2015.

Principles of Consolidation

We consolidate all entities in which we have a controlling financial interest. We are deemed to have a controlling financial interest in variable interest entities where we are the primary beneficiary.  We are deemed to have a controlling financial interest in other entities when we own more than 50 percent of the outstanding voting shares and other shareholders do not have substantive rights to participate in management. For entities we control but do not wholly own, we record a noncontrolling interest within stockholders’ equity for the portion of the entity’s equity attributed to the noncontrolling ownership interests.  As of March 31, 2016 and December 31, 2015, noncontrolling interests consist primarily of HSS Tracking Stock owned by DISH Network, as described in Note 4 below.  All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheets, the reported amounts of revenue and expense for each reporting period, and certain information disclosed in the notes to our condensed consolidated financial statements.  Estimates are used in accounting for, among other things, amortization periods for deferred subscriber acquisition costs, revenue recognition using the percentage-of-completion method, allowances for doubtful accounts, allowances for sales returns and rebates, warranty obligations, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of stock-based compensation awards, fair value of assets and liabilities acquired in business combinations, lease classifications, asset impairment testing, useful lives and methods for depreciation and amortization of long-lived assets, and certain royalty obligations.  We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances.  Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated financial statements.  Changing economic conditions may increase the inherent uncertainty in the estimates and assumptions indicated above.  We review our estimates and assumptions periodically and the effects of revisions are reflected in the period they occur or prospectively if the revised estimate affects future periods.

Fair Value Measurements

We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.  Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs.  We utilize the highest level of inputs available according to the following hierarchy in determining fair value:

• Level 1, defined as observable inputs being quoted prices in active markets for identical assets;

• Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

• Level 3, defined as unobservable inputs for which little or no market data exists, consistent with characteristics of the asset or liability that would be considered by market participants in a transaction to purchase or sell the asset or liability.

Transfers between levels in the fair value hierarchy are considered to occur at the beginning of the quarterly accounting period.  There were no transfers between levels for each of the three months ended March 31, 2016 or 2015.

As of March 31, 2016 and December 31, 2015, the carrying amounts of our cash and cash equivalents, trade accounts receivable, net of allowance for doubtful accounts, accounts payable and accrued liabilities were equal to or approximated fair value due to their short-term nature or proximity to current market rates.

Fair values of our current marketable investment securities are based on a variety of observable market inputs.  For our investments in publicly traded equity securities and U.S. government securities, fair value ordinarily is determined based on a Level 1 measurement that reflects quoted prices for identical securities in active markets.  Fair values of our investments in other marketable debt securities generally are based on Level 2 measurements as the markets for such debt securities are less active.  Trades of identical debt securities on or near the measurement date are considered a strong indication of fair value.  Matrix pricing techniques that consider par value, coupon rate, credit quality, maturity and other relevant features also may be used to determine fair value of our investments in marketable debt securities.

Fair values for our publicly traded debt are based on quoted market prices in less active markets and are categorized as Level 2 measurements.  The fair values of our privately held debt are Level 2 measurements and are estimated to approximate their carrying amounts based on the proximity of their interest rates to current market rates.  As of March 31, 2016 and December 31, 2015, the fair values of our in-orbit incentive obligations, based on measurements categorized within Level 2 of the fair value hierarchy, approximated their carrying amounts of $78.5 million and $79.3 million, respectively.  We use fair value measurements from time to time in connection with impairment testing and the assignment of purchase consideration to assets and liabilities of acquired companies.  Those fair value measurements typically include significant unobservable inputs and are categorized within Level 3 of the fair value hierarchy.

Research and Development

Costs incurred in research and development activities generally are expensed as incurred. A significant portion of our research and development costs are incurred in connection with the specific requirements of a customer’s order. In such instances, the amounts for these customer funded development efforts are included in cost of sales.

Cost of sales includes research and development costs of approximately $12.0 million and $14.8 million for the three months ended March 31, 2016 and 2015, respectively. In addition, we incurred $20.4 million and $17.9 million for the three months ended March 31, 2016 and 2015, respectively, for other research and development expenses.

Capitalized Software Costs

Costs related to the procurement and development of software for internal-use and externally marketed software are capitalized and amortized using the straight-line method over the estimated useful life of the software, not in excess of five years.  Capitalized costs of internal-use software are included in “Property and equipment, net” and capitalized costs of externally marketed software are included in “Other noncurrent assets, net” in our condensed consolidated balance sheets.  Externally marketed software is generally installed in the equipment we sell to customers.  We conduct software program reviews for externally marketed capitalized software costs at least annually, or as events and circumstances warrant such a review, to determine if capitalized software development costs are recoverable and to ensure that costs associated with programs that are no longer generating revenue are expensed.  As of March 31, 2016 and December 31, 2015, the net carrying amount of externally marketed software was $66.4 million and $62.8 million, respectively.  We capitalized costs related to the development of externally marketed software of $5.9 million and $5.0 million for the three months ended March 31, 2016 and 2015, respectively.  We recorded amortization expense relating to the development of externally marketed software of $2.3 million and $1.9 million for the three months ended March 31, 2016 and 2015, respectively.  The weighted average useful life of our externally marketed software was approximately three years as of March 31, 2016.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”).  It outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance.  The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.”  In August 2015, the FASB issued Accounting Standards Update No. 2015-14, which deferred by one year the mandatory effective date of ASU 2014-09.  As a result, public entities are required to adopt the new revenue standard in annual periods beginning after December 15, 2017 and in interim periods within those annual periods.  The standard may be applied either retrospectively to prior periods or as a cumulative-effect adjustment as of the date of adoption.  Early adoption is permitted, but not before annual periods beginning after December 15, 2016.  In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Identifying Performance Obligations and Licensing, which amends guidance on identifying performance obligations and accounting for licenses of intellectual property. We have not determined when we will adopt the new revenue standard or selected the transition method that we will apply upon adoption.  We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

In February 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”).  This standard amends the consolidation guidance for variable interest entities and general partners’ investments in limited partnerships and similar entities.  ASU 2015-02 is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and requires either a retrospective or a modified retrospective approach as of the beginning of the fiscal year of adoption.  We adopted ASU 2015-02 in the first quarter of 2016. The adoption of the standard did not impact our consolidated financial statements.

In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”).  This standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums.  ASU 2015-03 is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and requires a retrospective approach to adoption.  Early adoption is permitted.  We adopted ASU 2015-03 in the first quarter of 2016. Upon adoption, we presented unamortized debt issuance cost previously reported in “Other noncurrent assets, net” with a carrying amount of $31.3 million as of December 31, 2015, as a reduction of our “Long-term debt and capital lease obligations, net of unamortized debt issuance costs” (see Note 11 for further discussion).

In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). This update substantially revises standards for the recognition, measurement and presentation of financial instruments, including requiring all equity investments to be measured at fair value with changes in the fair value recognized through net income. It also amends certain disclosure requirements associated with the fair value of financial instruments. ASU 2016-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted for certain requirements. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”). This standard requires lessees to recognize assets and liabilities for all leases with lease terms more than 12 months, including leases classified as operating leases. The standard also modifies the definition of a lease and the criteria for classifying leases as operating leases or financing leases. ASU 2016-02 is effective for annual periods beginning after December 15, 2018 and interim periods within those periods. Early adoption is permitted. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplifies the accounting for share-based payment awards. This update requires all excess tax benefits and deficiencies to be recognized as income tax expense or benefit and permits an entity to make an entity-wide policy election to either estimate forfeitures or recognize forfeitures as they occur. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those periods. The update specifies requirements for retrospective, modified retrospective or prospective application for the various amendments contained in the update. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

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Earnings per Share

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

We present basic earnings per share (“EPS”) and diluted EPS for our Class A and Class B common stock.  The EchoStar Tracking Stock (see Note 4 for definitions and a further discussion of the preferred tracking stock, the EchoStar Group and the Hughes Retail Group) is a participating security that shares in our consolidated earnings and therefore, we apply the two-class method to calculate EPS.  Under the two-class method, we allocate net income or loss attributable to EchoStar between common stock and the EchoStar Tracking Stock considering both dividends declared on each class of stock and the participation rights of each class of stock in undistributed earnings.  Based on the 51.89% economic interest in the Hughes Retail Group, represented by the EchoStar Tracking Stock, we allocate undistributed earnings to the EchoStar Tracking Stock based on 51.89% of the attributed net income or loss of the Hughes Retail Group.  Moreover, because the reported amount of “Net income attributable to EchoStar” in our condensed consolidated statements of operations and comprehensive income (loss) excludes DISH Network’s 28.11% economic interest (represented by the HSS Tracking Stock) in the net loss of the Hughes Retail Group (reported as a noncontrolling interest), the amount of consolidated net income or loss allocated to holders of Class A and Class B common stock effectively excludes an aggregate 80.0% of the attributed net loss of the Hughes Retail Group.

Basic EPS for our Class A and Class B common stock excludes potential dilution and is computed by dividing “Net income attributable to EchoStar common stock” by the weighted-average number of common shares outstanding for the period.  Diluted EPS reflects the potential dilution that could occur if our common stock awards were exercised or vested.  The potential dilution from common stock awards was computed using the treasury stock method based on the average market value of our Class A common stock during the period.  The calculation of our diluted weighted-average common shares outstanding excluded options to purchase shares of our Class A common stock, whose effect would be anti-dilutive, of 3.3 million and 1.2 million shares for the three months ended March 31, 2016 and 2015, respectively. 

The following table presents basic and diluted EPS amounts for all periods and the corresponding weighted-average shares outstanding used in the calculations.

	For the Three Months Ended March 31,
	2016			2015
	(In thousands, except per share amounts)
Net income attributable to EchoStar	$	49,155		$	29,398
Less: Net loss attributable to EchoStar Tracking Stock	(1,519		)	(4,004		)
Net income attributable to EchoStar common stock	$	50,674		$	33,402
Weighted-average common shares outstanding :
Class A and B common stock:
Basic	93,331			91,969
Dilutive impact of stock awards outstanding	521			1,388
Diluted	93,852			93,357
Earnings per share:
Class A and B common stock:
Basic	$	0.54		$	0.36
Diluted	$	0.54		$	0.36

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Hughes Retail Preferred Tracking Stock

3 Months Ended

Mar. 31, 2016

Hughes Retail Preferred Tracking Stock

Hughes Retail Preferred Tracking Stock

Hughes Retail Preferred Tracking Stock

Satellite and Tracking Stock Transaction

In February 2014, EchoStar entered into agreements with certain subsidiaries of DISH Network pursuant to which, effective March 1, 2014, (i) EchoStar issued shares of its newly authorized Hughes Retail Preferred Tracking Stock (the “EchoStar Tracking Stock”) and Hughes Satellite Systems Corporation (“HSS”), a subsidiary of EchoStar, also issued shares of its newly authorized Hughes Retail Preferred Tracking Stock (the “HSS Tracking Stock” and together with the EchoStar Tracking Stock, the “Tracking Stock”) to DISH Network in exchange for five satellites (EchoStar I, EchoStar VII, EchoStar X, EchoStar XI, and EchoStar XIV), including the assumption of related in-orbit incentive obligations, and $11.4 million in cash and (ii) DISH Network began receiving certain satellite services on these five satellites from us (the “Satellite and Tracking Stock Transaction”). The Tracking Stock tracks the economic performance of the residential retail satellite broadband business of our Hughes segment, including certain operations, assets and liabilities attributed to such business (collectively, the “Hughes Retail Group” or “HRG”).  The shares of the Tracking Stock issued to DISH Network represent an aggregate 80.0% economic interest in the Hughes Retail Group (the shares issued as EchoStar Tracking Stock represent a 51.89% economic interest in the Hughes Retail Group and the shares issued as HSS Tracking Stock represent a 28.11% economic interest in the Hughes Retail Group.) In addition to the remaining 20.0% economic interest in the Hughes Retail Group, EchoStar retains all economic interest in the wholesale satellite broadband business and other businesses of EchoStar. The Satellite and Tracking Stock Transaction was consistent with the long-term strategy of the Company to increase the scale of its satellite services business, which provides high-margin revenues, while continuing to benefit from the growth of the satellite broadband business.  As a result of the additional satellites received in the Satellite and Tracking Stock Transaction, EchoStar has increased short-term cash flow that it believes will better position it to achieve its strategic objectives.

EchoStar and HSS have adopted policy statements (the “Policy Statements”) setting forth management and allocation policies for purposes of attributing all of the business and operations of EchoStar to either the Hughes Retail Group or the “EchoStar Group,” which is defined as all other operations of EchoStar, including all existing and future businesses, other than the Hughes Retail Group. Among other things, the Policy Statements govern how assets, liabilities, revenue and expenses are attributed or allocated between HRG and the EchoStar Group. Such attributions and allocations generally do not affect the amounts reported in our consolidated financial statements, except for the attribution of stockholders’ equity and net income or loss between the holders of Tracking Stock and common stock. The Policy Statements also do not significantly affect the way that management assesses operating performance and allocates resources within our Hughes segment.

We provide unaudited attributed financial information for HRG and the EchoStar Group in an exhibit to our periodic reports on Form 10-Q and Form 10-K.  For a description of the Tracking Stock and the initial recording of the Satellite and Tracking Stock Transaction in our consolidated financial statements, as well as the purpose and effect of the transaction on the Company and the Company’s Class A common stock, see Note 4 to the consolidated financial statements in our most recent Annual Report on Form 10-K.

As of March 31, 2016, DISH Network held 6.3% and 7.5% of the aggregate number of outstanding shares of EchoStar and HSS capital stock, respectively.

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Other Comprehensive Income (Loss) and Related Tax Effects

3 Months Ended

Mar. 31, 2016

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Other Comprehensive Income (Loss) and Related Tax Effects

Other Comprehensive Income (Loss) and Related Tax Effects

We have not recognized any tax effects on foreign currency translation adjustments because they are not expected to result in future taxable income or deductions.  We have not recognized any tax effects on unrealized gains or losses on available-for-sale securities because such gains or losses would affect the amount of existing capital loss carryforwards for which the related deferred tax asset has been fully offset by a valuation allowance.

Accumulated other comprehensive loss includes cumulative foreign currency translation losses of $112.7 million and $124.3 million as of March 31, 2016 and December 31, 2015, respectively.

Reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2016 and 2015 were as follows:

	Affected Line Item in our Condensed Consolidated Statement of Operations	For the Three Months Ended March 31,
Accumulated Other Comprehensive Loss Components		2016			2015
		(In thousands)
Recognition of realized gains on available-for-sale securities in net income (1)	Gains on marketable investment securities, net	$	(2,247	)	$	(9	)
Total reclassifications, net of tax and noncontrolling interests		$	(2,247	)	$	(9	)

(1) When available-for-sale securities are sold, the related unrealized gains and losses that were previously recognized in other comprehensive income (loss) are reclassified and recognized as “Gains on marketable investment securities, net” in our condensed consolidated statements of operations and comprehensive income (loss).

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Investment Securities

3 Months Ended

Mar. 31, 2016

Investments [Abstract]

Investment Securities

Investment Securities

Our marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities consisted of the following:

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Marketable investment securities—current, at fair value:
Corporate bonds	$	552,701	$	562,236
Strategic equity securities	34,395		38,864
Other	16,250		11,238
Total marketable investment securities—current	603,346		612,338
Restricted marketable investment securities (1)	13,939		13,227
Total	617,285		625,565
Restricted cash and cash equivalents (1)	7,725		7,775
Investments in unconsolidated entities—noncurrent:
Cost method	81,174		81,174
Equity method	127,570		128,090
Total investments in unconsolidated entities—noncurrent	208,744		209,264
Total marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities	$	833,754	$	842,604

(1) Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash and marketable investment securities” in our condensed consolidated balance sheets.

Marketable Investment Securities

Our marketable investment securities portfolio consists of various debt and equity instruments, which generally are classified as available-for-sale or trading securities depending on our investment strategy for those securities.  The value of our investment portfolio depends on the value of such securities and other instruments comprising the portfolio.

Corporate Bonds

Our corporate bond portfolio includes debt instruments issued by individual corporations, primarily in the industrial and financial services industries.

Strategic Equity Securities

Our strategic investment portfolio consists of investments in shares of common stock of public companies, which are highly speculative and have experienced and continue to experience volatility. We did not receive any dividend income for the three months ended March 31, 2016 or 2015.

As of March 31, 2016 and December 31, 2015, our strategic equity securities included shares of common stock of one of our customers that we received in satisfaction of certain milestone payments that were required to be paid to us under an existing long-term contract. For the three months ended March 31, 2016 and 2015, “Gains on marketable investment securities, net” includes $0.2 million and zero on such common stock in our trading securities portfolio, respectively, which had a fair value of $10.6 million as of March 31, 2016.

Other

Our other current marketable investment securities portfolio includes investments in various debt instruments, including U.S. government bonds.

Restricted Cash and Marketable Investment Securities

As of March 31, 2016 and December 31, 2015, our restricted marketable investment securities, together with our restricted cash, included amounts required as collateral for our letters of credit or surety bonds.

Unrealized Gains (Losses) on Marketable Investment Securities

The components of our available-for-sale investments are summarized in the table below.

	Amortized		Unrealized					Estimated
	Cost		Gains		Losses			Fair Value
	(In thousands)
As of March 31, 2016
Debt securities:
Corporate bonds	$	552,914	$	314	$	(527	)	$	552,701
Other (including restricted)	30,171		19		(1		)	30,189
Equity securities - strategic	17,396		7,173		(732		)	23,837
Total marketable investment securities	$	600,481	$	7,506	$	(1,260	)	$	606,727
As of December 31, 2015
Debt securities:
Corporate bonds	$	562,849	$	10	$	(623	)	$	562,236
Other (including restricted)	24,495		—		(30		)	24,465
Equity securities - strategic	20,855		7,748		(82		)	28,521
Total marketable investment securities	$	608,199	$	7,758	$	(735	)	$	615,222

As of March 31, 2016, restricted and non-restricted marketable investment securities included debt securities of $481.3 million with contractual maturities of one year or less and $101.6 million with contractual maturities greater than one year.  We may realize proceeds from certain investments prior to their contractual maturity as a result of our ability to sell these securities prior to their contractual maturity.

Available-for-Sale Securities in a Loss Position

The following table reflects the length of time that our available-for-sale securities have been in an unrealized loss position.  We do not intend to sell these securities before they recover or mature, and it is more likely than not that we will hold these securities until they recover or mature.  We believe that changes in the estimated fair values of these securities are primarily related to temporary market conditions as of March 31, 2016.

	As of
	March 31, 2016					December 31, 2015
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
Less than 12 months	$	253,633	$	(1,252	)	$	364,160	$	(609	)
12 months or more	20,125		(8		)	149,889		(126		)
Total	$	273,758	$	(1,260	)	$	514,049	$	(735	)

Sales of Marketable Investment Securities

We recognized gains from the sales of our available-for-sale securities of $2.2 millionfor the three months ended March 31, 2016 and de minimis gains for the three months ended March 31, 2015. We recognized de minimis losses from the sales of our available-for-sale securities for each of the three months ended March 31, 2016 and 2015.

Proceeds from sales of our available-for-sale securities totaled $12.2 million and $87.1 million for the three months ended March 31, 2016 and 2015, respectively.

Fair Value Measurements

Our current marketable investment securities are measured at fair value on a recurring basis as summarized in the table below.  As of March 31, 2016 and December 31, 2015, we did not have investments that were categorized within Level 3 of the fair value hierarchy.

	As of
	March 31, 2016						December 31, 2015
	Total		Level 1		Level 2		Total		Level 1		Level 2
	(In thousands)
Cash equivalents (including restricted)	$	835,395	$	12,062	$	823,333	$	840,950	$	38,771	$	802,179
Debt securities:
Corporate bonds	$	552,701	$	—	$	552,701	$	562,236	$	—	$	562,236
Other (including restricted)	30,189		12,796		17,393		24,465		12,078		12,387
Equity securities - strategic	34,395		34,395		—		38,864		38,864		—
Total marketable investment securities	$	617,285	$	47,191	$	570,094	$	625,565	$	50,942	$	574,623

Investments in Unconsolidated Entities — Noncurrent

We have several strategic investments in certain non-publicly traded equity securities that are accounted for using either the equity or the cost method of accounting.  Our ability to realize value from our strategic investments in companies that are not publicly traded depends on the success of those companies’ businesses and their ability to obtain sufficient capital to execute their business plans.  Because private markets are not as liquid as public markets, there is also increased risk that we will not be able to sell these investments, or that when we desire to sell them we will not be able to obtain fair value for them.

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Trade Accounts Receivable

3 Months Ended

Mar. 31, 2016

Receivables [Abstract]

Trade Accounts Receivable

Trade Accounts Receivable

Our trade accounts receivable consisted of the following:

	As of
	March 31, 2016			December 31, 2015
	(In thousands)
Trade accounts receivable	$	159,722		$	168,714
Contracts in process, net	17,776			23,011
Total trade accounts receivable	177,498			191,725
Allowance for doubtful accounts	(13,772		)	(12,485		)
Trade accounts receivable - DISH Network	340,532			277,159
Total trade accounts receivable, net	$	504,258		$	456,399

As of March 31, 2016 and December 31, 2015, progress billings offset against contracts in process amounted to $4.9 million and $2.9 million, respectively.

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Inventory

3 Months Ended

Mar. 31, 2016

Inventory, Net [Abstract]

Inventory

Inventory

Our inventory consisted of the following:

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Finished goods	$	52,866	$	52,839
Raw materials	9,117		9,042
Work-in-process	8,153		5,129
Total inventory	$	70,136	$	67,010

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Property and Equipment

3 Months Ended

Mar. 31, 2016

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment consisted of the following:

		As of
	Depreciable Life (In Years)	March 31, 2016			December 31, 2015
		(In thousands)
Land	—	$	42,467		$	41,457
Buildings and improvements	1-40	370,450			367,947
Furniture, fixtures, equipment and other	1-12	1,268,237			1,254,325
Customer rental equipment	2-4	611,939			588,430
Satellites - owned	2-15	2,381,120			2,381,120
Satellites acquired under capital leases	10-15	665,518			665,518
Construction in progress	—	1,285,522			1,112,267
Total property and equipment		6,625,253			6,411,064
Accumulated depreciation		(3,097,803		)	(2,998,074		)
Property and equipment, net		$	3,527,450		$	3,412,990

Construction in progress consisted of the following:

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Progress amounts for satellite construction, including prepayments under capital leases and launch services costs	$	1,119,793	$	963,103
Satellite related equipment	138,735		126,373
Other	26,994		22,791
Construction in progress	$	1,285,522	$	1,112,267

Construction in progress includes the following owned and leased satellites under construction or undergoing in-orbit testing as of March 31, 2016.

Satellites	Segment	Expected Launch Date
Eutelsat 65 West A (2)	Hughes	March 2016 (1)
EchoStar XXI	Other	Third quarter of 2016
EchoStar XXIII	Other	Third quarter of 2016
EchoStar XIX	Other	Fourth quarter of 2016
EchoStar 105/SES-11	ESS	Fourth quarter of 2016
Telesat T19V (“63 West”) (2)	Hughes	Second quarter of 2018

(1) This satellite was launched in March 2016 and is expected to be placed into service during the second quarter of 2016.

(2) We entered into a satellite services agreement and made prepayments for certain capacity on this satellite once launched, but are not a party to the construction contract.

Depreciation expense associated with our property and equipment consisted of the following:

	For the Three Months Ended March 31,
	2016		2015
	(In thousands)
Satellites	$	46,965	$	49,087
Furniture, fixtures, equipment and other	30,185		30,503
Customer rental equipment	29,137		30,187
Buildings and improvements	3,086		3,395
Total depreciation expense	$	109,373	$	113,172

Satellites

As of March 31, 2016, we utilized in support of our operations, 17 of our owned and leased satellites in geosynchronous orbit, approximately 22,300 miles above the equator.  We depreciate our owned satellites on a straight-line basis over the estimated useful life of each satellite.  Two of our satellites are accounted for as capital leases and are depreciated on a straight-line basis over their respective lease terms.  We utilized one satellite that is accounted for as an operating lease and not included in property and equipment as of March 31, 2016.

Satellite Anomalies

Our satellites may experience anomalies from time to time, some of which may have a significant adverse impact on their remaining useful lives, the commercial operation of the satellites or our operating results. We are not aware of any anomalies with respect to our owned or leased satellites that have had any such material adverse effect during the three months ended March 31, 2016.  There can be no assurance, however, that anomalies will not have any such adverse impacts in the future.  In addition, there can be no assurance that we can recover critical transmission capacity in the event one or more of our in-orbit satellites were to fail.

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Goodwill, Regulatory Authorizations and Other Intangible Assets

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill, Regulatory Authorizations and Other Intangible Assets

Goodwill, Regulatory Authorizations and Other Intangible Assets

Goodwill

The excess of the cost of an acquired business over the fair values of net tangible and identifiable intangible assets at the time of the acquisition is recorded as goodwill.  Goodwill is assigned to our reporting units of our operating segments and is subject to impairment testing annually, or more frequently when events or changes in circumstances indicate the fair value of a reporting unit is more likely than not less than its carrying amount.

As of March 31, 2016 and December 31, 2015, approximately $504.2 million of our goodwill was assigned to reporting units of our Hughes segment and $6.4 million was assigned to the Move Networks reporting unit of our EchoStar Technologies segment.  We test this goodwill for impairment annually in the second quarter and third quarter, respectively. 

Regulatory Authorizations

Regulatory authorizations included amounts with finite and indefinite useful lives, as follows:

	As of December 31, 2015			Additions			Currency Translation Adjustment			As of March 31, 2016
	(In thousands)
Finite useful lives:
Cost	$	82,007		$	—		$	4,258		$	86,265
Accumulated amortization	(9,852		)	(1,121		)	(538		)	(11,511		)
Net	72,155			(1,121		)	3,720			74,754
Indefinite lives	471,657			—			—			471,657
Total regulatory authorizations, net	$	543,812		$	(1,121	)	$	3,720		$	546,411

Other Intangible Assets

Our other intangible assets, which are subject to amortization, consisted of the following:

	Weighted Average Useful Life (in Years)	As of
		March 31, 2016							December 31, 2015
		Cost		Accumulated Amortization			Carrying Amount		Cost		Accumulated Amortization			Carrying Amount
		(In thousands)
Customer relationships	8	$	293,932	$	(219,702	)	$	74,230	$	293,932	$	(213,543	)	$	80,389
Contract-based	10	255,366		(255,366		)	—		255,366		(251,493		)	3,873
Technology-based	7	137,337		(115,439		)	21,898		137,337		(111,840		)	25,497
Trademark portfolio	20	29,700		(7,178		)	22,522		29,700		(6,806		)	22,894
Favorable leases	4	4,707		(4,707		)	—		4,707		(4,707		)	—
Total other intangible assets		$	721,042	$	(602,392	)	$	118,650	$	721,042	$	(588,389	)	$	132,653

Customer relationships are amortized predominantly in relation to the expected contribution of cash flow to the business over the life of the intangible asset.  Other intangible assets are amortized on a straight-line basis over the periods the assets are expected to contribute to our cash flows.  Intangible asset amortization expense, including amortization of regulatory authorizations with finite lives and externally marketed capitalized software, was $17.4 million and $20.0 million for the three months ended March 31, 2016 and 2015, respectively.

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Debt and Capital Lease Obligations

3 Months Ended

Mar. 31, 2016

Long-term Debt and Capital Lease Obligations [Abstract]

Debt and Capital Lease Obligations

Debt and Capital Lease Obligations

The following table summarizes the carrying amounts and fair values of our debt:

		As of
		March 31, 2016					December 31, 2015
	Effective Interest Rates	Carrying Amount			Fair Value		Carrying Amount			Fair Value
		(In thousands)
6 1/2% Senior Secured Notes due 2019	6.959%	$	990,000		$	1,093,950	$	990,000		$	1,071,675
7 5/8% Senior Notes due 2021	8.062%	900,000			1,001,250		900,000			954,000
Other	12.1 - 14.3%	778			778		803			803
Less: Unamortized debt issuance costs		(29,738		)	—		(31,276		)	—
Subtotal		1,861,040			$	2,095,978	1,859,527			$	2,026,478
Capital lease obligations		325,763					332,838
Total debt and capital lease obligations		2,186,803					2,192,365
Less: Current portion		(1,896,233		)			(35,698		)
Long-term debt and capital lease obligations, net of unamortized debt issuance costs		$	290,570				$	2,156,667

The fair values of our debt are estimates categorized within Level 2 of the fair value hierarchy.

Prior to our adoption of ASU 2015-03 in the first quarter of 2016 (see Note 2), we presented unamortized debt issuance costs in “Other noncurrent assets, net.”

On May 6, 2016, we announced that HSS is offering to repurchase for cash all or any part of its outstanding 6 1/2% Senior Secured Notes due 2019 (the “Senior Secured Notes”) and its outstanding 7 5/8% Senior Notes due 2021 (the “Unsecured Notes” and, together with the “Senior Secured Notes,” the “Notes”) at a purchase price equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon to the date of repurchase.

As previously disclosed and as discussed in Note 4 herein and in our most recently filed Annual Report on Form 10-K, HSS, together with EchoStar, entered into the Satellite and Tracking Stock Transaction and issued the HSS Tracking Stock to DISH Network.

HSS recently became aware of a possible interpretation under which the Satellite and Tracking Stock Transaction may be considered to have constituted a Change of Control as defined under the respective indentures governing the Notes (the “Indentures”). Under the Indentures, a Change of Control occurs when EchoStar shall cease to beneficially own 100% of the Equity Interests (as defined in the respective Indentures) of HSS. The Indentures provide that, upon the occurrence of a Change of Control, HSS is required, within 30 days, to make an offer to each Holder (as defined in the respective Indentures) of the respective Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon to the date of repurchase.

The Notes have traded at prices well above 101% of their respective principal amounts at all times since the issuance of the HSS Tracking Stock. In addition, both prior to and following the Satellite and Tracking Stock Transaction, Mr. Charles W. Ergen held and exercised, and continues to hold and exercise, voting control over both DISH Network and EchoStar and therefore, the ultimate voting control as to all matters regarding the Equity Interests of HSS was not affected by the Satellite and Tracking Stock Transaction. Although we believe that a Change of Control or related default may not have occurred, we have nevertheless determined that it was prudent for HSS to make a Change of Control Offer as defined under each of the Indentures. Upon commencement of the Change of Control Offers on May 6, 2016, we do not believe there was any such continuing default under the Indentures.

Under the Change of Control Offers, HSS will repurchase any Notes surrendered by the Holders thereof at a purchase price of 101% of the principal amount of the Notes plus accrued and unpaid interest, notwithstanding that the Notes have traded at a significantly higher price during the entire period since the issuance of the HSS Tracking Stock as part of the Satellite and Tracking Stock Transaction. Following the launch of the Change of Control Offers, in accordance with GAAP, the Notes are reported in “Current portion of long-term debt and capital lease obligations, net of unamortized debt issuance costs” on our consolidated balance sheets as of March 31, 2016 as the Holders may require HSS to repurchase the Notes under the Change of Control Offers. Following the completion of the Change of Control Offers, which is currently expected to occur on or about June 8, 2016, but which we may extend to a date no later than July 5, 2016, any outstanding Notes are expected to again be reported in “Long-term debt and capital lease obligations, net of unamortized debt issuance costs” on our consolidated balance sheets. We expect that the Senior Secured Notes and the Unsecured Notes will remain outstanding until their maturity in 2019 and 2021, respectively.

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Income Taxes

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period.  Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to significant volatility due to several factors, including income and losses from investments for which we have a full valuation allowance, changes in tax laws and relative changes in unrecognized tax benefits.  Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income.  For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.

Income tax expense was approximately $27.7 million and $18.4 million for the three months ended March 31, 2016 and 2015, respectively.  Our estimated effective income tax rate was 36.3% and 40.0% for the three months ended March 31, 2016 and 2015, respectively.  The variations in our current year effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2016 was primarily due to the impact of state and local taxes, partially offset by research and experimentation credits. For the three months ended March 31, 2015, the variation in our effective tax rate from the U.S. federal statutory rate was primarily due to the increase in our valuation allowance associated with certain foreign losses as well as realized and unrealized losses that are capital in nature for tax purposes, partially offset by research and experimentation tax credits.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2016

Share-based Compensation [Abstract]

Stock-Based Compensation

Stock-Based Compensation

We maintain stock incentive plans to attract and retain officers, directors and key employees.  Stock awards under these plans include both performance based and non-performance based stock incentives.  We granted stock options to our employees and nonemployee directors to acquire 195,840 shares and 82,970 shares of our Class A common stock for the three months ended March 31, 2016 and 2015, respectively.

In 2015, we granted 100,000 restricted stock units (“RSUs”). The RSUs vested based on the attainment of certain quarterly company performance criteria for the second, third and fourth quarters of 2015.  During 2015, 66,666 of the RSUs vested and during the three months ended March 31, 2016, the remaining 33,334 of the RSUs vested.

Total non-cash, stock-based compensation expense for all of our employees is shown in the following table for the three months ended March 31, 2016 and 2015 and was assigned to the same expense categories as the base compensation for such employees:

	For the Three Months Ended March 31,
	2016		2015
	(In thousands)
Research and development expenses	$	908	$	762
Selling, general and administrative expenses	3,476		3,413
Total stock-based compensation	$	4,384	$	4,175

As of March 31, 2016, total unrecognized stock-based compensation cost, net of estimated forfeitures, related to our unvested stock awards was $31.5 million.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Commitments

As of March 31, 2016, our satellite-related obligations were approximately $1.18 billion.  Our satellite-related obligations primarily include payments pursuant to agreements for the construction of the EchoStar XIX, EchoStar XXI, EchoStar XXIII, EchoStar 105/SES-11, and 63 West satellites, payments pursuant to launch services contracts and regulatory authorizations, executory costs for our capital lease satellites, costs under satellite service agreements and in-orbit incentives relating to certain satellites, as well as commitments for long-term satellite operating leases and satellite service arrangements.

Contingencies

Patents and Intellectual Property

Many entities, including some of our competitors, have or may in the future obtain patents and other intellectual property rights that cover or affect products or services directly or indirectly related to those that we offer. We may not be aware of all patents and other intellectual property rights that our products and services may potentially infringe. Damages in patent infringement cases can be substantial, and in certain circumstances can be trebled. Further, we cannot estimate the extent to which we may be required in the future to obtain licenses with respect to intellectual property rights held by others and the availability and cost of any such licenses. Various parties have asserted patent and other intellectual property rights with respect to components within our direct broadcast satellite (“DBS”) products and services. We cannot be certain that these persons do not own the rights they claim, that these rights are not valid or that our products and services do not infringe on these rights. Further, we cannot be certain that we would be able to obtain licenses from these persons on commercially reasonable terms or, if we were unable to obtain such licenses, that we would be able to redesign our products and services to avoid infringement.

Separation Agreement

In connection with the Spin-off, we entered into a separation agreement with DISH Network that provides, among other things, for the division of certain liabilities, including liabilities resulting from litigation.  Under the terms of the separation agreement, we have assumed certain liabilities that relate to our business, including certain designated liabilities for acts or omissions that occurred prior to the Spin-off.  Certain specific provisions govern intellectual property related claims under which, generally, we will only be liable for our acts or omissions following the Spin-off and DISH Network will indemnify us for any liabilities or damages resulting from intellectual property claims relating to the period prior to the Spin-off, as well as DISH Network’s acts or omissions following the Spin-off.

Litigation

We are involved in a number of legal proceedings (including those described below) concerning matters arising in connection with the conduct of our business activities.  Many of these proceedings are at preliminary stages and/or seek an indeterminate amount of damages.  We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss or an additional loss may have been incurred and to determine if accruals are appropriate.  We record an accrual for litigation and other loss contingencies when we determine that a loss is probable and the amount of the loss can be reasonably estimated.  If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made.  There can be no assurance that legal proceedings against us will be resolved in amounts that will not differ from the amounts of our recorded accruals. Legal fees and other costs of defending litigation are charged to expense as incurred.

For certain cases described below, management is unable to predict with any degree of certainty the outcome or provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons, (i) the proceedings are in various stages; (ii) damages have not been sought or specified; (iii) damages are unsupported, indeterminate and/or exaggerated in management’s opinion; (iv) there is uncertainty as to the outcome of pending appeals or motions; (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties are involved (as with many patent-related cases).  For these cases, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on our financial condition, operating results or cash flows, though there is no assurance that the resolution and outcomes of these proceedings, individually or in the aggregate, will not be material to our financial condition, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period.

We intend to vigorously defend the proceedings against us. In the event that a court ultimately rules against us, we may be subject to adverse consequences, including, without limitation, substantial damages, which may include treble damages, fines, penalties, compensatory damages and/or other equitable or injunctive relief that could require us to materially modify our business operations or certain products or services that we offer to our consumers. In addition, adverse decisions against DISH Network in the proceedings described below could decrease the number of products and components we sell to DISH Network, which could have a material adverse effect on our business operations and our financial condition, results of operation and cash flows.

California Institute of Technology

On October 1, 2013, the California Institute of Technology (“Caltech”) filed suit against two of our subsidiaries, Hughes Communications, Inc. and Hughes Network Systems, LLC (“HNS”), as well as against DISH Network, DISH Network L.L.C., and dishNET Satellite Broadband L.L.C., in the United States District Court for the Central District of California alleging infringement of United States Patent Nos. 7,116,710; 7,421,032; 7,916,781; and 8,284,833, each of which is entitled “Serial Concatenation of Interleaved Convolutional Codes forming Turbo-Like Codes.”  Caltech asserted that encoding data as specified by the DVB-S2 standard infringes each of the asserted patents.  In the operative Amended Complaint, served on March 6, 2014, Caltech claims that the Hopper^TM set-top box that we design and sell to DISH Network, as well as certain of our Hughes segment’s satellite broadband products and services, infringe the asserted patents by implementing the DVB-S2 standard.  On September 26, 2014, Caltech requested leave to amend its Amended Complaint to add EchoStar Corporation and our subsidiary, EchoStar Technologies L.L.C. as defendants, as well as to allege that a number of additional set-top boxes infringe the asserted patents.  On November 7, 2014, the Court rejected that request.  Additionally, on November 4, 2014, the Court ruled that the patent claims at issue in the suit are directed to patentable subject matter.  On February 17, 2015, Caltech filed a second complaint in the same district against the same defendants alleging that HNS’ Gen4 HT1000 and HT1100 products infringe the same patents asserted in the first case.  We answered that second complaint on March 24, 2015.  The trial for the first case which was scheduled to commence on April 20, 2015, was vacated by the Court on March 16, 2015 and a new trial date has yet to be set.  On May 5, 2015, the Court granted summary judgment for us on a number of issues, finding that Caltech’s damages theory improperly apportioned alleged damages, that allegations of infringement against DISH Network, DISH Network L.L.C., and dishNET Satellite Broadband L.L.C. should be dismissed from the case, and affirming that Caltech could not assert infringement under the doctrine of equivalents.  The Court also granted motions by Caltech seeking findings that certain of its patents were not indefinite or subject to equitable estoppel.  The Court otherwise denied motions for summary judgment, including a motion by Caltech seeking summary judgment of infringement.  On May 14, 2015, the judge assigned to the case passed away.  A new judge has not yet been formally assigned. The parties are discussing resolving these cases without further litigation.  There can be no assurance that a settlement agreement will be reached.  If a settlement agreement is not reached, we cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages and we intend to vigorously defend these cases.

ClearPlay, Inc.

On March 13, 2014, ClearPlay, Inc. (“ClearPlay”) filed a complaint against EchoStar Corporation and our subsidiary, EchoStar Technologies L.L.C., as well as against DISH Network and DISH Network L.L.C. in the United States District Court for the District of Utah.  The complaint alleges infringement of United States Patent Nos. 6,898,799, entitled “Multimedia Content Navigation and Playback”; 7,526,784, entitled “Delivery of Navigation Data for Playback of Audio and Video Content”; 7,543,318, entitled “Delivery of Navigation Data for Playback of Audio and Video Content”; 7,577,970, entitled “Multimedia Content Navigation and Playback”; and 8,117,282, entitled “Media Player Configured to Receive Playback Filters From Alternative Storage Mediums.”  ClearPlay alleges that the AutoHop^TM feature of the Hopper^TM set-top box infringes the asserted patents.  On February 11, 2015, the Court stayed the case pending various third-party challenges before the United States Patent and Trademark Office regarding the validity of certain of the patents ClearPlay asserted in the case.

CRFD Research, Inc. (a subsidiary of Marathon Patent Group, Inc.)

On January 17, 2014, CRFD Research, Inc. (“CRFD”) filed a complaint against EchoStar Corporation and our subsidiary, EchoStar Technologies L.L.C., as well as against DISH Network, DISH DBS Corporation and DISH Network L.L.C., in United States District Court for the District of Delaware, alleging infringement of United States Patent No. 7,191,233 (the “233 patent”).  The 233 patent is entitled “System for Automated, Mid-Session, User-Directed, Device-to-Device Session Transfer System,” and relates to transferring an ongoing software session from one device to another.  CRFD alleges that certain of our set-top boxes infringe the 233 patent.  On the same day, CRFD filed patent infringement complaints against AT&T Inc.; Comcast Corp.; DirecTV; Time Warner Cable Inc.; Cox Communications, Inc.; Level 3 Communications, Inc.; Akamai Technologies, Inc.; Cablevision Systems Corp. and Limelight Networks, Inc.  On January 26, 2015, we and DISH Network filed a petition before the United States Patent and Trademark Office challenging the validity of the 233 patent, which was subsequently instituted along with two third-party petitions also challenging the validity of the 233 patent.  On June 4, 2015, the litigation in the District Court was ordered stayed pending resolution of our petition before the United States Patent and Trademark Office, and on January 16, 2016, the United States Patent and Trademark Office held oral arguments on the merits of the petition.  CRFD is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein.

Elbit

On January 23, 2015, Elbit Systems Land and C4I LTD and Elbit Systems of America Ltd. (together referred to as “Elbit”) filed a complaint against our subsidiary HNS, as well as against Black Elk Energy Offshore Operations, LLC, Bluetide Communications, Inc. and Helm Hotels Group, in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent Nos. 6,240,073 (the “073 patent”) and 7,245,874 (“874 patent”).  The 073 patent is entitled “Reverse Link for a Satellite Communication Network” and the 874 patent is entitled “Infrastructure for Telephony Network.”  Elbit alleges that the 073 patent is infringed by broadband satellite systems that practice the Internet Protocol Over Satellite standard.  Elbit alleges that the 874 patent is infringed by the manufacture and sale of broadband satellite systems that provide cellular backhaul service via connections to E1 or T1 interfaces at cellular backhaul base stations.  On April 2, 2015, Elbit filed an amended complaint removing Helm Hotels Group as a defendant, but making similar allegations against a new defendant, Country Home Investments, Inc.  Over November 3 and 4, 2015, and January 22, 2016, the defendants filed petitions before the United States Patent and Trademark Office challenging the validity of the patents in suit and on April 13, 2016, the defendants answered Elbit’s complaint. By April 29, 2016, three of the four petitions were denied, with a decision regarding one petition still pending.

The Hopper Litigation

On May 24, 2012, DISH Network L.L.C., filed suit in the United States District Court for the Southern District of New York against American Broadcasting Companies, Inc. (“ABC”), CBS Corporation (“CBS”), Fox Entertainment Group, Inc., Fox Television Holdings, Inc., Fox Cable Network Services, L.L.C. (collectively, “Fox”) and NBCUniversal Media, LLC (“NBC”).  The lawsuit seeks a declaratory judgment that DISH Network L.L.C is not infringing any defendant’s copyright, or breaching any defendant’s retransmission consent agreement, by virtue of the PrimeTime Anytime^TM and AutoHop^TM features of the Hopper^TM set-top boxes we design and sell to DISH Network.  A consumer can use the PrimeTime Anytime feature at his or her option, to record certain primetime programs airing on ABC, CBS, Fox, and/or NBC up to every night, and to store those recordings for up to eight days.  A consumer can use the AutoHop feature at his or her option, to watch certain recordings the subscriber made with our PrimeTime Anytime feature, commercial-free, if played back at a certain point after the show’s original airing.

Later on May 24, 2012, (i) Fox Broadcasting Company, Twentieth Century Fox Film Corp. and Fox Television Holdings, Inc. filed a lawsuit against DISH Network and DISH Network L.L.C. (collectively, “DISH”) in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature, the AutoHop feature, as well as DISH’s use of Slingbox unit’s placeshifting functionality infringe their copyrights and breach their retransmission consent agreements, (ii) NBC Studios LLC, Universal Network Television, LLC, Open 4Business Productions LLC and NBCUniversal Media, LLC filed a lawsuit against DISH in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature and the AutoHop feature infringe their copyrights, and (iii) CBS Broadcasting Inc., CBS Studios Inc. and Survivor Productions LLC filed a lawsuit against DISH in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature and the AutoHop feature infringe their copyrights.

As a result of certain parties’ competing counterclaims and venue-related motions brought in both the New York and California actions, as described below, and certain networks filing various amended complaints, the claims have proceeded in the following venues:  (1) the copyright and contract claims regarding the ABC and CBS parties in New York; and (2) the copyright and contract claims regarding the Fox and NBC parties in California.

California Actions.  On August 17, 2012, the NBC plaintiffs filed a first amended complaint in their California action adding EchoStar Corporation and our subsidiary EchoStar Technologies L.L.C. to the NBC litigation, alleging various claims of copyright infringement.  We and our subsidiary answered on September 18, 2012.

On November 7, 2012, the California court denied the Fox plaintiffs’ motion for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime Anytime and AutoHop features, and the Fox plaintiffs appealed.  On March 27, 2013, at the request of the parties, the Central District of California granted a stay of all proceedings in the action brought by the NBC plaintiffs, pending resolution of the appeal by the Fox plaintiffs.  On July 24, 2013, the United States Court of Appeals for the Ninth Circuit affirmed the denial of the Fox plaintiffs’ motion for a preliminary injunction as to the PrimeTime Anytime and AutoHop features.  On August 7, 2013, the Fox plaintiffs filed a petition for rehearing and rehearing en banc, which was denied on January 24, 2014.  The United States Supreme Court granted the Fox plaintiffs an extension until May 23, 2014 to file a petition for writ of certiorari, but they did not file.  As a result, the stay of the NBC plaintiffs’ action expired.  On August 6, 2014, at the request of the parties, the Central District of California granted a further stay of all proceedings in the action brought by the NBC plaintiffs, pending a final judgment on all claims in the Fox plaintiffs’ action.  As discussed below, the Fox action was dismissed on February 11, 2016. As a result, on March 4, 2016, at the request of the parties to the NBC action, the Central District of California granted a further stay of all proceedings in the action until September 9, 2016; provided that after May 27, 2016, any party to the action may file a motion with the Court to lift the stay. No trial date is currently set on the NBC claims.

In addition, on February 21, 2013, the Fox plaintiffs filed a second motion for preliminary injunction against: (i) DISH Network, seeking to enjoin the Hopper Transfers^TM feature in the second-generation Hopper set-top box, alleging breach of a retransmission consent agreement; and (ii) EchoStar Technologies L.L.C. and DISH Network, seeking to enjoin the Slingbox unit’s placeshifting functionality in the second-generation Hopper set-top box, alleging copyright infringement by both defendants, and breach of the earlier-mentioned retransmission consent agreement by DISH Network.  The Fox plaintiffs’ motion was denied on September 23, 2013.  The Fox plaintiffs appealed, and on July 14, 2014, the United States Court of Appeals for the Ninth Circuit affirmed the denial of the Fox plaintiffs’ motion.  On October 17, 2014, the California court heard oral argument on the Fox plaintiffs’ and our respective motions for summary judgment.  On January 12, 2015, the Court entered an order ruling on the parties’ respective summary judgment motions, holding that: (a) the Slingbox unit’s placeshifting functionality and the PrimeTime Anytime, AutoHop and Hopper Transfers features do not violate copyright law; (b) certain quality assurance copies (which were discontinued in November 2012) did violate copyright law; and (c) the Slingbox unit’s placeshifting functionality, the Hopper Transfers feature and certain quality assurance copies breach DISH’s retransmission consent agreement with Fox.  At the parties’ joint request, the Court had stayed the case until January 15, 2016. Pursuant to a settlement agreement between us, DISH Network and the Fox plaintiffs, on February 10, 2016, we, DISH Network and the Fox plaintiffs filed a motion to dismiss with prejudice all of our respective claims pending in the California Court. That motion was granted on February 11, 2016.

New York Actions.  On October 9, 2012, the ABC plaintiffs filed copyright counterclaims in the New York action against EchoStar Technologies, L.L.C., with the CBS plaintiffs filing similar copyright counterclaims in the New York action against EchoStar Technologies L.L.C. on October 12, 2012.  Additionally, the CBS plaintiffs filed a counterclaim alleging that DISH Network fraudulently concealed the AutoHop feature when negotiating the renewal of its CBS retransmission consent agreement.

On November 23, 2012, the ABC plaintiffs filed a motion for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime Anytime and AutoHop features.  On September 18, 2013, the New York court denied that motion.  The ABC plaintiffs appealed, and oral argument on the appeal was heard on February 20, 2014 before the United States Court of Appeals for the Second Circuit.  Pursuant to a settlement between us and the ABC parties, on March 4, 2014, the ABC parties withdrew their appeal to the United States Court of Appeals for the Second Circuit, and, on March 6, 2014, we and the ABC parties dismissed without prejudice all of our respective claims pending in the United States District Court for the Southern District of New York.  The CBS claims in the New York action were scheduled for trial on May 29, 2015.  However, on December 6, 2014 the parties to the CBS case reached a settlement agreement and all claims pending in New York Court were dismissed with prejudice on December 10, 2014.

Michael Heskiaoff, Marc Langenohl, and Rafael Mann

On July 10, 2015, Messrs. Michael Heskiaoff and Marc Langenohl, purportedly on behalf of themselves and all others similarly situated, filed suit against our subsidiary Sling Media, Inc. in the United States District Court for the Southern District of New York.  The complaint alleges that Sling Media Inc.’s display of advertising to its customers violates a number of state statutes dealing with consumer deception.  On September 25, 2015, the plaintiffs filed an amended complaint, and Mr. Rafael Mann, purportedly on behalf of himself and all others similarly situated, filed an additional complaint alleging similar causes of action. On November 16, 2015, the cases were consolidated.

Realtime Data LLC

On May 8, 2015, Realtime Data LLC (“Realtime”) filed suit against EchoStar Corporation and our subsidiary HNS in the United States District Court for the Eastern District of Texas alleging infringement of United States Patent Nos. 7,378,992, entitled “Content Independent Data Compression Method and System”; 7,415,530, entitled “System and Methods for Accelerated Data Storage and Retrieval”; and 8,643,513, entitled “Data Compression System and Methods.”  On September 14, 2015, Realtime amended its complaint, additionally alleging infringement of United States Patent No. 9,116,908, entitled “System and Methods for Accelerated Data Storage and Retrieval.” Realtime generally alleges that the asserted patents are infringed by certain HNS data compression products and services.  Over April 29, 2016 and May 5, 2016, the defendants filed petitions before the United States Patent and Trademark Office challenging the validity of the asserted patents. Realtime is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein.

Shareholder Derivative Litigation

On December 5, 2012, Greg Jacobi, purporting to sue derivatively on behalf of EchoStar Corporation, filed suit (the “Jacobi Litigation”) against Charles W. Ergen, Michael T. Dugan, R. Stanton Dodge, Tom A. Ortolf, C. Michael Schroeder, Joseph P. Clayton, David K. Moskowitz, and EchoStar Corporation in the United States District Court for the District of Nevada.  The complaint alleges that a March 2011 attempted grant of 1.5 million stock options to Charles Ergen breached defendants’ fiduciary duties, resulted in unjust enrichment, and constituted a waste of corporate assets.

On December 18, 2012, Chester County Employees’ Retirement Fund, derivatively on behalf of EchoStar Corporation, filed a suit (the “Chester County Litigation”) against Charles W. Ergen, Michael T. Dugan, R. Stanton Dodge, Tom A. Ortolf, C. Michael Schroeder, Anthony M. Federico, Pradman P. Kaul, Joseph P. Clayton, and EchoStar Corporation in the United States District Court for the District of Colorado.  The complaint similarly alleges that the March 2011 attempted grant of 1.5 million stock options to Charles Ergen breached defendants’ fiduciary duties, resulted in unjust enrichment, and constituted a waste of corporate assets.

On February 22, 2013, the Chester County Litigation was transferred to the District of Nevada, and on April 3, 2013, the Chester County Litigation was consolidated into the Jacobi Litigation.  Oral argument on a motion to dismiss the Jacobi Litigation was held February 21, 2014.  On April 11, 2014, the Chester County Litigation was stayed pending resolution of the motion to dismiss.  On March 30, 2015, the Court dismissed the Jacobi Litigation, with leave for Jacobi to amend his complaint by April 20, 2015.  On April 20, 2015, Jacobi filed an amended complaint, which on June 12, 2015, we moved to dismiss. On March 17, 2016, the Court dismissed the amended Jacobi Litigation, and on April 15, 2016, Jacobi filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit.

Of the attempted grant of 1.5 million options to Mr. Ergen in 2011, only 800,000 were validly granted and remain outstanding. 

Technology Development and Licensing, LLC

On January 22, 2009, Technology Development and Licensing, LLC (“TDL”) filed suit against EchoStar Corporation and DISH Network in the United States District Court for the Northern District of Illinois alleging infringement of United States Patent No. Re. 35,952, which relates to certain favorite channel features.  TDL is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein.  The case has been stayed since July 2009, pending two reexamination petitions before the United States Patent and Trademark Office, which concluded in August 2015 resulting in 42 out of the 53 claims of the 952 patent being cancelled.  As a result, the case resumed in August 2015.  A trial date has not been set.

TQ Beta LLC

On June 30, 2014, TQ Beta LLC (“TQ Beta”) filed suit against DISH Network, DISH DBS Corporation, DISH Network L.L.C., as well as EchoStar Corporation and our subsidiaries, EchoStar Technologies, L.L.C, HSS, and Sling Media, Inc., in the United States District Court for the District of Delaware, alleging infringement of United States Patent No. 7,203,456 (the “456 patent”), which is entitled “Method and Apparatus for Time and Space Domain Shifting of Broadcast Signals.”  TQ Beta alleges that the Hopper, Hopper with Sling, ViP 722 and ViP 722k DVR devices, as well as the DISH Anywhere service and DISH Anywhere mobile application, infringe the 456 patent, but has not specified the amount of damages that it seeks.  TQ Beta is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein.  During August 2015, EchoStar Corporation and DISH Network L.L.C. filed petitions before the United States Patent and Trademark Office challenging the validity of the 456 patent, and in February 2016, the United States Patent and Trademark Office agreed to institute proceedings on our petitions. On February 25, 2016, the case was stayed pending resolution of these proceedings before the United States Patent and Trademark Office, and the Court vacated all pending court dates and deadlines.

Two-Way Media Ltd

On February 17, 2016, Two-Way Media Ltd (“TWM”) filed a complaint against EchoStar Corporation and our subsidiaries EchoStar Technologies L.L.C., EchoStar Satellite Services L.L.C., and Sling Media, Inc., as well as against DISH Network Corporation, DISH DBS Corporation, DISH Network L.L.C., DISH Network Service L.L.C., Sling TV Holding L.L.C., Sling TV L.L.C., and Sling TV Purchasing L.L.C. TWM brought the suit in the United States District Court for the District of Colorado, alleging infringement of United States Patent Nos. 5,778,187; 5,983,005; 6,434,622; and 7,266,686, each entitled “Multicasting Method and Apparatus”; and 9,124,607, entitled “Methods and Systems for Playing Media.” TWM alleges that the SlingTV, Sling International, DISH Anywhere, and DISHWorld services, as well as the Slingbox units and DISH DVRs incorporating Slingbox technology, infringe the asserted patents. TWM is an entity that seeks to license a patent portfolio without itself practicing any of the claims recited therein.

Other

In addition to the above actions, we are subject to various other legal proceedings and claims, which arise in the ordinary course of our business.  As part of our ongoing operations, the Company is subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as by governmental/regulatory authorities responsible for enforcing the laws and regulations to which the Company may be subject. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the federal government. Some states have adopted similar state whistleblower and false claims provisions. In addition, the Company from time to time receives inquiries from federal, state and foreign agencies regarding compliance with various laws and regulations.

In our opinion, the amount of ultimate liability with respect to any of these actions is unlikely to materially affect our financial position, results of operations or cash flows, though the resolutions and outcomes, individually or in the aggregate, could be material to our financial position, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period.

The Company indemnifies its directors, officers and employees for certain liabilities that might arise from the performance of their responsibilities for the Company. Additionally, in the normal course of its business, the Company enters into contracts pursuant to which the Company may make a variety of representations and warranties and indemnify the counterparty for certain losses. The Company’s possible exposure under these arrangements cannot be reasonably estimated as this involves the resolution of claims made, or future claims that may be made, against the Company or its officers, directors or employees, the outcomes of which are unknown and not currently predictable or estimable.

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Segment Reporting

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Operating segments are business components of an enterprise for which separate financial information is available and regularly evaluated by the chief operating decision maker (“CODM”), who for EchoStar is the Company’s Chief Executive Officer.  Under this definition, we operate in three primary business segments, Hughes, EchoStar Technologies and EchoStar Satellite Services as described in Note 1 of these condensed consolidated financial statements.

The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, or EBITDA.  Our segment operating results do not include real estate and other activities, costs incurred in certain satellite development programs and other business development activities, expenses of various corporate departments and our centralized treasury operations, including income from our investment portfolio and interest expense on our debt.  These activities are accounted for in the “All Other and Eliminations” column in the table below.  Total assets by segment have not been reported herein because the information is not provided to our CODM on a regular basis.  The Hughes Retail Group is included in our Hughes segment and our CODM reviews separate HRG financial information only to the extent such information is included in our periodic filings with the SEC.  Therefore, we do not consider HRG to be a separate operating segment.

Transactions between segments were not significant for the three months ended March 31, 2016 or 2015.

The following table presents revenue, EBITDA, and capital expenditures for each of our operating segments.

	Hughes		EchoStar Technologies		EchoStar Satellite Services		All Other and Eliminations			Consolidated Total
	(In thousands)
For the Three Months Ended March 31, 2016
External revenue	$	325,539	$	384,939	$	102,815	$	3,066		$	816,359
Intersegment revenue	$	699	$	187	$	174	$	(1,060	)	$	—
Total revenue	$	326,238	$	385,126	$	102,989	$	2,006		$	816,359
EBITDA	$	99,468	$	28,168	$	88,186	$	6,974		$	222,796
Capital expenditures	$	104,237	$	5,341	$	24,720	$	76,838		$	211,136
For the Three Months Ended March 31, 2015
External revenue	$	324,950	$	346,033	$	125,198	$	2,472		$	798,653
Intersegment revenue	$	330	$	187	$	200	$	(717	)	$	—
Total revenue	$	325,280	$	346,220	$	125,398	$	1,755		$	798,653
EBITDA	$	91,273	$	25,561	$	106,419	$	(9,572	)	$	213,681
Capital expenditures	$	64,527	$	15,104	$	27,783	$	70,388		$	177,802

The following table reconciles total consolidated EBITDA to reported “Income before income taxes” in our condensed consolidated statements of operations and comprehensive income (loss):

	For the Three Months Ended March 31,
	2016			2015
	(In thousands)
EBITDA	$	222,796		$	213,681
Interest income and expense, net	(19,244		)	(32,697		)
Depreciation and amortization	(126,734		)	(133,185		)
Net loss attributable to noncontrolling interest in HSS Tracking Stock and other noncontrolling interests	(712		)	(1,800		)
Income before income taxes	$	76,106		$	45,999

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Related Party Transactions

3 Months Ended

Mar. 31, 2016

Related Party Transaction, Due from (to) Related Party [Abstract]

Related Party Transactions

Related Party Transactions

DISH Network

Following the Spin-off, we and DISH Network have operated as separate publicly-traded companies.  However, pursuant to the Satellite and Tracking Stock Transaction, described in Note 4 and below, DISH Network owns Hughes Retail Preferred Tracking Stock representing an aggregate 80.0% economic interest in the residential retail satellite broadband business of our Hughes segment including certain operations, assets and liabilities attributed to such business.  In addition, a substantial majority of the voting power of the shares of EchoStar and DISH Network is owned beneficially by Charles W. Ergen, our Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family.

In connection with and following the Spin-off, we and DISH Network have entered into certain agreements pursuant to which we obtain certain products, services and rights from DISH Network; DISH Network obtains certain products, services and rights from us; and we and DISH Network have indemnified each other against certain liabilities arising from our respective businesses.  We also may enter into additional agreements with DISH Network in the future.  Generally, the amounts DISH Network pays for products and services provided under the agreements are based on our cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided.

The following is a summary of the terms of our principal agreements with DISH Network that may have an impact on our financial condition and results of operations.

“Equipment revenue — DISH Network”

Receiver Agreement.  Effective January 2012, we and DISH Network entered into a receiver agreement (the “2012 Receiver Agreement”), pursuant to which DISH Network has the right, but not the obligation, to purchase digital set-top boxes, related accessories, and other equipment from us for the period from January 2012 through December 2014.  The 2012 Receiver Agreement replaced the receiver agreement we entered into with DISH Network in connection with the Spin-off.  The 2012 Receiver Agreement allows DISH Network to purchase digital set-top boxes, related accessories, and other equipment from us either: (i) at cost (decreasing as we reduce costs and increasing as costs increase) plus a dollar mark-up which will depend upon the cost of the product subject to a collar on our mark-up; or (ii) at cost plus a fixed margin, which will depend on the nature of the equipment purchased.  Under the 2012 Receiver Agreement, our margins will be increased if we are able to reduce the costs of our digital set-top boxes and our margins will be reduced if these costs increase.  We provide DISH Network with standard manufacturer warranties for the goods sold under the 2012 Receiver Agreement.  Additionally, the 2012 Receiver Agreement includes an indemnification provision, whereby the parties indemnify each other for certain intellectual property matters.  DISH Network is able to terminate the 2012 Receiver Agreement for any reason upon at least 60 days’ notice to us.  We are able to terminate the 2012 Receiver Agreement if certain entities acquire DISH Network.  DISH Network has an option, but not the obligation, to extend the 2012 Receiver Agreement for one additional year upon 180 days’ notice prior to the end of the term.  In May 2014, we received DISH Network’s notice to extend the 2012 Receiver Agreement for one year through December 2015, and in November 2015, we amended the 2012 Receiver Agreement with DISH Network to extend the term of the 2012 Receiver Agreement for one year through December 2016.

“Services and other revenue — DISH Network”

Broadcast Agreement.  Effective January 2012, we and DISH Network entered into a broadcast agreement (the “2012 Broadcast Agreement”) pursuant to which we provide certain broadcast services to DISH Network, including teleport services such as transmission and downlinking, channel origination services, and channel management services, for the period from January 2012 through December 2016.  The 2012 Broadcast Agreement replaced the broadcast agreement that we entered into with DISH Network in connection with the Spin-off.  The fees for the services provided under the 2012 Broadcast Agreement are calculated at either:  (a) our cost of providing the relevant service plus a fixed dollar fee, which is subject to certain adjustments; or (b) our cost of providing the relevant service plus a fixed margin, which will depend on the nature of the services provided.  DISH Network has the ability to terminate channel origination services and channel management services for any reason and without any liability upon at least 60 days’ notice to us.  If DISH Network terminates the teleport services provided under the 2012 Broadcast Agreement for a reason other than our breach, DISH Network generally is obligated to reimburse us for any direct costs we incur related to any such termination that we cannot reasonably mitigate.

Broadcast Agreement for Certain Sports Related Programming.  In May 2010, we and DISH Network entered into a broadcast agreement pursuant to which we provide certain broadcast services to DISH Network in connection with its carriage of certain sports related programming.  The term of this agreement is ten years.  If DISH Network terminates this agreement for a reason other than our breach, DISH Network generally is obligated to reimburse us for any direct costs we incur related to any such termination that we cannot reasonably mitigate.  The fees for the broadcast services provided under this agreement depend, among other things, upon the cost to develop and provide such services.

RUS Implementation Agreement. In September 2010, DISH Broadband L.L.C. (“DISH Broadband”), DISH Network’s indirect, wholly-owned subsidiary, was selected by the Rural Utilities Service (“RUS”) of the United States Department of Agriculture to receive up to approximately $14.1 million in broadband stimulus grant funds (the “Grant Funds”). Effective November 2011, HNS and DISH Broadband entered into a RUS Implementation Agreement (the “RUS Agreement”) pursuant to which HNS provided certain portions of the equipment and broadband service used to implement DISH Broadband’s RUS program. While the RUS Agreement expired in June 2013 when the Grant Funds were exhausted, HNS is required to continue providing services to DISH Broadband’s customers activated prior to the expiration of the RUS Agreement in accordance with the terms and conditions of the RUS Agreement.

Satellite Services Provided to DISH Network.  Since the Spin-off, we have entered into certain satellite service agreements pursuant to which DISH Network receives satellite services on certain satellites owned or leased by us.  The fees for the services provided under these satellite service agreements depend, among other things, upon the orbital location of the applicable satellite, the number of transponders that are providing services on the applicable satellite, and the length of the service arrangements.  The terms of each service arrangement is set forth below:

EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV.  As part of the Satellite and Tracking Stock Transaction discussed in Note 4, in March 2014, we began providing certain satellite services to DISH Network on the EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV satellites.  The term of each satellite services agreement generally terminates upon the earlier of:  (i) the end of life of the satellite; (ii) the date the satellite fails; or (iii) a certain date, which depends upon, among other things, the estimated useful life of the satellite.  DISH Network generally has the option to renew each satellite service agreement on a year-to-year basis through the end of the respective satellite’s life.  There can be no assurance that any options to renew such agreements will be exercised.  DISH Network elected not to renew the satellite services agreement relative to the EchoStar I satellite.  The agreement for the EchoStar I satellite expired pursuant to its terms effective November 2015. In December 2015, DISH Network renewed the satellite services agreement relative to the EchoStar VII satellite for one year to June 2017.

EchoStar VIII.  In May 2013, DISH Network began receiving satellite services from us on the EchoStar VIII satellite as an in-orbit spare.  Effective March 2014, this satellite services arrangement converted to a month-to-month service agreement with both parties having the right to terminate upon 30 days’ notice.  The agreement terminated in accordance with its terms effective November 2015.

EchoStar IX.  Effective January 2008, DISH Network began receiving satellite services from us on the EchoStar IX satellite.  Subject to availability, DISH Network generally has the right to continue to receive satellite services from us on the EchoStar IX satellite on a month-to-month basis.

EchoStar XII.  DISH Network receives satellite services from us on the EchoStar XII satellite.  The term of the satellite services agreement terminates upon the earlier of: (i) the end of life of the satellite; (ii) the date the satellite fails or the date the transponder(s) on which the service was being provided under the agreement fails; or (iii) September 2017.  DISH Network generally has the option to renew the agreement on a year-to-year basis through the end of the satellite’s life.  There can be no assurance that any options to renew this agreement will be exercised.

EchoStar XVI.  In December 2009, we entered into an initial ten-year transponder service agreement with DISH Network, pursuant to which DISH Network has received satellite services from us on the EchoStar XVI satellite since January 2013.  Effective December 2012, we and DISH Network amended the transponder service agreement to, among other things, change the initial term to generally expire upon the earlier of: (i) the end-of-life or replacement of the satellite; (ii) the date the satellite fails; (iii) the date the transponder(s) on which service is being provided under the agreement fails; or (iv) four years following the actual service commencement date.  Prior to expiration of the initial term, we, upon certain conditions, and DISH Network have the option to renew for an additional six-year period.  If either we or DISH Network exercise our respective six-year renewal options, DISH Network has the option to renew for an additional five-year period prior to expiration of the then-current term.  There can be no assurance that any option to renew this agreement will be exercised. In the event that we or DISH Network does not exercise the six-year renewal option or DISH Network does not exercise the five-year renewal option, DISH Network has the option to purchase the EchoStar XVI satellite for a certain price. If DISH Network does not elect to purchase the EchoStar XVI satellite at that time, we may sell the EchoStar XVI satellite to a third party and DISH Network is required to pay us a certain amount in the event we are not able to sell the EchoStar XVI satellite for more than a certain amount.

Nimiq 5 Agreement.  In September 2009, we entered into a fifteen-year satellite service agreement with Telesat Canada (“Telesat”) to receive service on all 32 DBS transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”).  In September 2009, we also entered into a satellite service agreement (the “DISH Nimiq 5 Agreement”) with DISH Network, pursuant to which DISH Network receives satellite services from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement.

Under the terms of the DISH Nimiq 5 Agreement, DISH Network makes certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service, and continue through the service term.  Unless earlier terminated under the terms and conditions of the DISH Nimiq 5 Agreement, the service term will expire ten years following the date the Nimiq 5 satellite was placed into service.  Upon expiration of the initial term, DISH Network has the option to renew the DISH Nimiq 5 Agreement on a year-to-year basis through the end of life of the Nimiq 5 satellite.  Upon in-orbit failure or end of life of the Nimiq 5 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite.  There can be no assurance that any options to renew the DISH Nimiq 5 Agreement will be exercised or that DISH Network will exercise its option to receive service on a replacement satellite.

QuetzSat-1 Agreement.  In November 2008, we entered into a ten-year satellite service agreement with SES Latin America, which provides, among other things, for the provision by SES Latin America to us of service on 32 DBS transponders on the QuetzSat-1 satellite.  Concurrently, in 2008, we entered into a transponder service agreement with DISH Network, pursuant to which DISH Network receives satellite services on 24 of the DBS transponders on the QuetzSat-1 satellite.  The QuetzSat-1 satellite was launched in September 2011 and was placed into service in November 2011 at the 67.1 degree west longitude orbital location.  In February 2013, we and DISH Network entered into an agreement pursuant to which we receive certain satellite services from DISH Network on five DBS transponders on the QuetzSat-1 satellite.  In January 2013, the QuetzSat-1 satellite was moved to the 77 degree west longitude orbital location and DISH Network commenced commercial operations at such location in February 2013.

Under the terms of our contractual arrangements with DISH Network, we began to provide service to DISH Network on the QuetzSat-1 satellite in February 2013 and will continue to provide service through the remainder of the service term.  Unless extended or earlier terminated under the terms and conditions of our agreement with DISH Network for the QuetzSat-1 satellite, the initial service term will expire in November 2021.  Upon expiration of the initial service term, DISH Network has the option to renew the agreement for the QuetzSat-1 satellite on a year-to-year basis through the end of life of the QuetzSat-1 satellite.  Upon an in-orbit failure or end of life of the QuetzSat-1 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite.  There can be no assurance that any options to renew this agreement will be exercised or that DISH Network will exercise its option to receive service on a replacement satellite.

103 Degree Orbital Location/SES-3.  In May 2012, we entered into a spectrum development agreement (the “103 Spectrum Development Agreement”) with Ciel Satellite Holdings Inc. (“Ciel”) to develop certain spectrum rights at the 103 degree west longitude orbital location (the “103 Spectrum Rights”).  In June 2013, we and DISH Network entered into a spectrum development agreement (the “DISH 103 Spectrum Development Agreement”) pursuant to which DISH Network may use and develop the 103 Spectrum Rights.  Unless earlier terminated under the terms and conditions of the DISH 103 Spectrum Development Agreement, the term generally will continue for the duration of the 103 Spectrum Rights.

In connection with the 103 Spectrum Development Agreement, in May 2012, we also entered into a ten-year service agreement with Ciel pursuant to which we receive certain satellite services from Ciel on the SES-3 satellite at the 103 degree orbital location.  In June 2013, we and DISH Network entered into an agreement pursuant to which DISH Network receives certain satellite services from us on the SES-3 satellite (the “DISH 103 Service Agreement”).  Under the terms of the DISH 103 Service Agreement, DISH Network makes certain monthly payments to us through the service term.  Unless earlier terminated under the terms and conditions of the DISH 103 Service Agreement, the initial service term will expire on the earlier of: (i) the date the SES-3 satellite fails; (ii) the date the transponder(s) on which service was being provided under the agreement fails; or (iii) June 2023.  Upon in-orbit failure or end of life of the SES-3 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite.  There can be no assurance that DISH Network will exercise its option to receive service on a replacement satellite.

Satellite and Tracking Stock Transaction.  In February 2014, we entered into agreements with DISH Network to implement a transaction pursuant to which, among other things: (i) in March 2014, EchoStar and HSS issued shares of the Tracking Stock to DISH Network in exchange for five satellites owned by DISH Network (EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV) (including assumption of related in-orbit incentive obligations) and approximately $11.4 million in cash; and (ii) in March 2014, DISH Network began receiving certain satellite services on these five satellites from us.  See Note 4 herein and in our most recent Form 10-K for further information.

TT&C Agreement.  Effective January 2012, we entered into a telemetry, tracking and control (“TT&C”) agreement pursuant to which we provide TT&C services to DISH Network for a period ending in December 2016 (the “2012 TT&C Agreement”).  The 2012 TT&C Agreement replaced the TT&C agreement we entered into with DISH Network in connection with the Spin-off.  The fees for services provided under the 2012 TT&C Agreement are calculated at either:  (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided.  DISH Network is able to terminate the 2012 TT&C Agreement for any reason upon 60 days’ notice.

In connection with the Satellite and Tracking Stock Transaction, in February 2014, we amended the TT&C Agreement to cease the provision of TT&C services to DISH Network for the EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV satellites.  Effective March 2014, we provide TT&C services for the D-1 and EchoStar XV satellites; however, for the period that we received satellite services on the EchoStar XV satellite from DISH Network, we waived the fees for the TT&C services on the EchoStar XV satellite.

Real Estate Lease Agreements.  We have entered into lease agreements pursuant to which DISH Network leases certain real estate from us.  The rent on a per square foot basis for each of the leases is comparable to per square foot rental rates of similar commercial property in the same geographic area at the time of the lease, and DISH Network is responsible for its portion of the taxes, insurance, utilities and maintenance of the premises.  The term of each of the leases is set forth below:

Inverness Lease Agreement.  The lease for certain space at 90 Inverness Circle East in Englewood, Colorado is for a period ending in December 2016.  This agreement can be terminated by either party upon six months’ prior notice. This agreement may be extended by mutual consent, in which case this agreement will be converted to a month-to-month lease agreement. Upon such extension, both parties have the right to terminate this agreement upon 30 days’ notice. In February 2016, DISH Network provided us notice to terminate this lease effective in August 2016.

Meridian Lease Agreement.  The lease for all of 9601 S. Meridian Blvd. in Englewood, Colorado is for a period ending in December 2016. This agreement may be extended by mutual consent, in which case this agreement will be converted to a month-to-month lease agreement. Upon extension, both parties have the right to terminate this agreement upon 30 days’ notice.

Santa Fe Lease Agreement.  The lease for all of 5701 S. Santa Fe Dr. in Littleton, Colorado is for a period ending in December 2016. This agreement may be extended by mutual consent, in which case this agreement will be converted to a month-to-month lease agreement. Upon extension, both parties have the right to terminate this agreement upon 30 days’ notice.

EchoStar Data Networks Sublease Agreement.  The sublease for certain space at 211 Perimeter Center in Atlanta, Georgia is for a period ending in October 2016. DISH Network may extend this agreement for an additional five years.

Gilbert Lease Agreement.  The original lease for certain space at 801 N. DISH Dr. in Gilbert, Arizona was a month to month lease and could be terminated by either party upon 30 days’ prior notice.  The original lease was terminated in May 2014.  Effective August 2014, we began leasing this space to DISH Network under a new lease for a period ending in July 2016.  DISH Network has renewal options for three additional one year terms.

Cheyenne Lease Agreement.  The lease for certain space at 530 EchoStar Drive in Cheyenne, Wyoming is for a period ending in December 2031. This agreement may be extended by mutual consent, in which case this agreement will be converted to a month-to-month lease agreement. Upon extension, both parties have the right to terminate this agreement upon 30 days’ notice.

Product Support Agreement.  In connection with the Spin-off, we entered into a product support agreement pursuant to which DISH Network has the right, but not the obligation, to receive product support from us (including certain engineering and technical support services) for all set-top boxes and related accessories that we have previously sold and in the future may sell to DISH Network.  The fees for the services provided under the product support agreement are calculated at cost plus a fixed margin, which varies depending on the nature of the services provided.  The term of the product support agreement is the economic life of such set-top boxes and related accessories, unless terminated earlier.  DISH Network may terminate the product support agreement for any reason upon at least 60 days’ notice.  In the event of an early termination of this agreement, DISH Network is entitled to a refund of any unearned fees paid to us for the services.

DISHOnline.com Services Agreement.  Effective January 2010, DISH Network entered into a two-year agreement with us pursuant to which DISH Network receives certain services associated with an online video portal.  The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services.  DISH Network has the option to renew this agreement for successive one year terms and the agreement may be terminated by DISH Network for any reason upon at least 120 days’ notice to us.  In October 2014, DISH Network exercised its right to renew this agreement for a one-year period ending in December 2015, and in November 2015, DISH Network exercised its right to renew this agreement for an additional one-year period ending in December 2016.

DISH Remote Access Services Agreement.  Effective February 2010, we entered into an agreement with DISH Network pursuant to which DISH Network receives, among other things, certain remote digital video recorder (“DVR”) management services.  The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services.  This agreement had an initial term of five years with automatic renewal for successive one year terms.  This agreement automatically renewed in February 2016 for an additional one-year period until February 2017.  The agreement may be terminated by DISH Network for any reason upon at least 120 days’ notice to us.

SlingService Services Agreement.  Effective February 2010, we entered into an agreement with DISH Network pursuant to which DISH Network receives certain services related to placeshifting.  The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services.  This agreement had an initial term of five years with automatic renewal for successive one year terms.  This agreement automatically renewed in February 2016 for an additional one-year period until February 2017.  The agreement may be terminated by DISH Network for any reason upon at least 120 days’ notice to us.

TerreStar Agreement.  In March 2012, DISH Network completed its acquisition of substantially all the assets of TerreStar Networks Inc. (“TerreStar”).  Prior to DISH Network’s acquisition of substantially all the assets of TerreStar and our completion of the Hughes Acquisition, TerreStar and HNS entered into various agreements pursuant to which our Hughes segment provides, among other things, hosting, operations and maintenance services for TerreStar’s satellite gateway and associated ground infrastructure.  These agreements generally may be terminated by DISH Network at any time for convenience.

Hughes Broadband Distribution Agreement.  Effective October 2012, HNS and dishNET Satellite Broadband L.L.C. (“dishNET”), a wholly-owned subsidiary of DISH Network, entered into a distribution agreement (the “Distribution Agreement”) pursuant to which dishNET has the right, but not the obligation, to market, sell and distribute the Hughes satellite internet service (the “Hughes service”).  dishNET pays HNS a monthly per subscriber wholesale service fee for the Hughes service based upon a subscriber’s service level and based upon certain volume subscription thresholds.  The Distribution Agreement also provides that dishNET has the right, but not the obligation, to purchase certain broadband equipment from us to support the sale of the Hughes service.  The Distribution Agreement had an initial term of five years with automatic renewal for successive one year terms unless terminated by either party with a written notice at least 180 days before the expiration of the then-current term.  In February 2014, HNS and dishNET entered into an amendment to the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement until March 2024.  Upon expiration or termination of the Distribution Agreement, the parties will continue to provide the Hughes service to the then-current dishNET subscribers pursuant to the terms and conditions of the Distribution Agreement.

Set-Top Box Application Development Agreement.  In November 2012, we and DISH Network entered into a set-top box application development agreement (the “Application Development Agreement”) pursuant to which we provide DISH Network with certain services relating to the development of web-based applications for set-top boxes for the period ending in February 2016.  The Application Development Agreement automatically renewed in February 2016 for a one-year period ending in February 2017, and renews automatically for successive one-year periods thereafter, unless terminated earlier by us or DISH Network at any time upon at least 90 days’ notice.  The fees for services provided under the Application Development Agreement are calculated at our cost of providing the relevant service plus a fixed margin, which will depend on the nature of the services provided.

XiP Encryption Agreement.  In July 2012, we entered into an encryption agreement with DISH Network for our whole-home HD DVR line of set-top boxes (the “XiP Encryption Agreement”) pursuant to which we provide certain security measures on our whole-home HD DVR line of set-top boxes to encrypt the content delivered to the set-top box via a smart card and secure the content between set-top boxes.  The XiP Encryption Agreement’s term ends on the same day as the 2012 Receiver Agreement and therefore was automatically extended until December 2016 when we and DISH Network extended the 2012 Receiver Agreement in November 2015.  We and DISH Network each have the right to terminate the XiP Encryption Agreement for any reason upon at least 180 days’ notice and 30 days’ notice, respectively.  The fees for the services provided under the XiP Encryption Agreement are calculated on a monthly basis based on the number of receivers utilizing such security measures each month.

DBSD North America Agreement.  In March 2012, DISH Network completed its acquisition of 100% of the equity of reorganized DBSD North America, Inc. (“DBSD North America”).  Prior to DISH Network’s acquisition of DBSD North America and our completion of the Hughes Acquisition, DBSD North America and HNS entered into an agreement pursuant to which our Hughes segment provides, among other things, hosting, operations and maintenance services of DBSD North America’s satellite gateway and associated ground infrastructure.  This agreement will expire in February 2017.

Sling TV Holding L.L.C. (formerly DISH Digital Holding L.L.C.) (“Sling TV Holding”).  Effective July 2012, we and DISH Network formed Sling TV Holding, which was owned two-thirds by DISH Network and one-third by us.  Sling TV Holding was formed to develop and commercialize certain advanced technologies.  At that time, we, DISH Network and Sling TV Holding entered into the following agreements with respect to Sling TV Holding: (i) a contribution agreement pursuant to which we and DISH Network contributed certain assets in exchange for our respective ownership interests in Sling TV Holding; (ii) a limited liability company operating agreement (“Operating Agreement”), which provides for the governance of Sling TV Holding; and (iii) a commercial agreement (“Commercial Agreement”) pursuant to which, among other things, Sling TV Holding had: (a) certain rights and corresponding obligations with respect to its business; and (b) the right, but not the obligation, to receive certain services from us and DISH Network, respectively.

Effective August 2014, we and Sling TV Holding entered into an exchange agreement (“Exchange Agreement”) pursuant to which, among other things, Sling TV Holding distributed certain assets to us and we reduced our interest in Sling TV Holding to a 10.0% non-voting interest.  As a result, DISH Network has a 90.0% equity interest and a 100% voting interest in Sling TV Holding.  In addition, we, DISH Network and Sling TV Holding amended and restated the Operating Agreement, primarily to reflect the changes implemented by the Exchange Agreement.  Finally, we, DISH Network and Sling TV Holding amended and restated the Commercial Agreement, pursuant to which, among other things, Sling TV Holding:  (1) continues to have certain rights and corresponding obligations with respect to its business; (2) continues to have the right, but not the obligation, to receive certain services from us and DISH Network; and (3) has a license from us to use certain of the assets distributed to us as part of the Exchange Agreement. 

Cost of sales — equipment and services and other — DISH Network

Remanufactured Receiver and Services Agreement.  In connection with the Spin-off, we entered into a remanufactured receiver and services agreement with DISH Network pursuant to which we have the right, but not the obligation, to purchase remanufactured receivers and related components from DISH Network at cost plus a fixed margin, which varies depending on the nature of the equipment purchased.  In November 2014, we and DISH Network extended this agreement for a one-year period ending in December 2015, and in November 2015, we and DISH Network extended this agreement for a one-year period ending in December 2016.  We may terminate the remanufactured receiver and services agreement for any reason upon at least 60 days’ notice to DISH Network.  DISH Network may also terminate this agreement if certain entities acquire DISH Network.

Satellite Services Received from DISH Network - EchoStar XV.  In May 2013, we began receiving satellite services from DISH Network on the EchoStar XV satellite and relocated the satellite to the 45 degree west longitude orbital location for testing pursuant to our Brazilian authorization.  Effective March 2014, this satellite services agreement converted to a month-to-month service agreement with both parties having the right to terminate this agreement upon 30 days’ notice.  In October 2015, we provided DISH Network a notice to terminate this agreement effective in November 2015, and the agreement was terminated according to its terms in November 2015. 

“General and administrative expenses — DISH Network”

Professional Services Agreement.  In connection with the Spin-off, we entered into various agreements with DISH Network including the Transition Services Agreement, Satellite Procurement Agreement and Services Agreement, which all expired in January 2010 and were replaced by a Professional Services Agreement.  In January 2010, we and DISH Network agreed that we shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under the Transition Services Agreement:  information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services.  Additionally, we and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage us to manage the process of procuring new satellite capacity for DISH Network (previously provided under the Satellite Procurement Agreement), receive logistics, procurement and quality assurance services from us (previously provided under the Services Agreement) and other support services.  The Professional Services Agreement automatically renewed in January 2016 for an additional one-year period until January 2017 and renews automatically for successive one-year periods thereafter, unless terminated earlier by either party upon at least 60 days’ notice.  However, either party may terminate the Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice.

Real Estate Lease Agreements.  We have entered into a lease agreement pursuant to which we lease certain real estate from DISH Network.  The rent on a per square foot basis is comparable to per square foot rental rates of similar commercial property in the same geographic area at the time of the lease, and we are responsible for our portion of the taxes, insurance, utilities and maintenance of the premises.  The lease agreement is for certain space at 1285 Joe Battle Blvd., El Paso, Texas, was for an initial period ending in August 2015, and provided us with renewal options for four consecutive three year terms.  Effective August 2015, we exercised our first renewal option for a period ending in August 2018.

“Other agreements — DISH Network”

Intellectual Property Matters Agreement. We entered into an Intellectual Property Matters Agreement with DISH Network in connection with the Spin-off. The Intellectual Property Matters Agreement governs our relationship with DISH Network with respect to patents, trademarks and other intellectual property. The Intellectual Property Matters Agreement will continue in perpetuity. Pursuant to the Intellectual Property Matters Agreement, DISH Network irrevocably assigned to us all right, title and interest in certain patents, trademarks and other intellectual property necessary for the operation of our set-top box business. In addition, the agreement permits us to use, in the operation of our set-top box business, certain other intellectual property currently owned or licensed by DISH Network. In addition, DISH Network may not use the “EchoStar” name as a trademark, except in certain limited circumstances. Similarly, the Intellectual Property Matters Agreement provides that we will not make any use of the name or trademark “DISH Network” or any other trademark owned by DISH Network, except in certain circumstances.

Tax Sharing Agreement.  In connection with the Spin-off, we entered into a tax sharing agreement with DISH Network which governs our respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off.  Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network, and DISH Network will indemnify us for such taxes.  However, DISH Network is not liable for and will not indemnify us for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code, because of:  (i) a direct or indirect acquisition of any of our stock, stock options or assets; (ii) any action that we take or fail to take; or (iii) any action that we take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions.  In such case, we will be solely liable for, and will indemnify DISH Network for, any resulting taxes, as well as any losses, claims and expenses.  The tax sharing agreement will only terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed.

In light of the tax sharing agreement, among other things, and in connection with our consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, we and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of our consolidated tax returns.  Prior to the agreement with DISH Network, the federal tax benefits of $83.2 million were reflected as a deferred tax asset for depreciation and amortization, which was netted in our noncurrent deferred tax liabilities.  The agreement requires DISH Network to pay us $83.2 million of the federal tax benefit it receives at such time as we would have otherwise been able to realize such tax benefit, which we currently estimate would be after 2016.  Accordingly, we recorded a noncurrent receivable from DISH Network for $83.2 million in “Other receivable — DISH Network” and a corresponding increase in our net noncurrent deferred tax liabilities to reflect the effects of this agreement in September 2013.  In addition, in September 2013, we and DISH Network agreed upon a tax sharing arrangement for filing certain combined state income tax returns and a method of allocating the respective tax liabilities between us and DISH Network for such combined returns, through the taxable period ending on December 31, 2017.

We and DISH Network file combined income tax returns in certain states. In 2014 and 2015, we earned and recognized a tax benefit for certain state income tax credits that we would be unable to utilize currently if we had filed separately from DISH Network. DISH Network expects to utilize these tax credits to reduce its state income tax payable. We expect to increase additional paid-in capital upon receipt of any consideration paid to us by DISH Network in exchange for these tax credits.

TiVo.  In April 2011, we and DISH Network entered into a settlement agreement with TiVo, Inc. (“TiVo”).  The settlement resolved all pending litigation between us and DISH Network, on the one hand, and TiVo, on the other hand, including litigation relating to alleged patent infringement involving certain DISH Network DVRs.  Under the settlement agreement, all pending litigation was dismissed with prejudice and all injunctions that permanently restrain, enjoin or compel any action by us or DISH Network were dissolved.  We and DISH Network are jointly responsible for making payments to TiVo in the aggregate amount of $500.0 million, including an initial payment of $300.0 million and the remaining $200.0 million in six equal annual installments between 2012 and 2017.  Pursuant to the terms and conditions of the agreements entered into in connection with the Spin-off, DISH Network made the initial payment to TiVo in May 2011, except for the contribution from us totaling approximately $10.0 million, representing an allocation of liability relating to our sales of DVR-enabled receivers to an international customer.  Subsequent payments are allocated between us and DISH Network based on historical sales of certain licensed products, with EchoStar being responsible for 5% of each annual payment.

Sling Trademark License Agreement.  In December 2014, Sling TV Holding entered into an agreement with Sling Media, Inc., our subsidiary, pursuant to which Sling TV Holding has the right, for a fixed fee, to use certain trademarks, domain names and other intellectual property related to the “Sling” trademark through December 2016.

gTLD Bidding Agreement.  In April 2015, we and DISH Network entered into a gTLD Bidding Agreement whereby, among other things: (i) DISH Network obtained rights from us to participate in a generic top level domain (“gTLD”) auction, assuming all rights and obligations from us related to our application with the Internet Corporation for Assigned Names and Numbers (“ICANN”) for a particular gTLD; (ii) DISH Network agreed to reimburse us for our ICANN application fee and certain out-of-pocket expenses related to the application and the auction; and (iii) we and DISH Network agreed to split equally the net proceeds obtained by DISH Network as the losing bidder in the auction, less such fee reimbursement and out-of-pocket expenses.

Patent Cross-License Agreements.  In December 2011, we and DISH Network entered into separate patent cross-license agreements with the same third party whereby:  (i) we and such third party licensed our respective patents to each other subject to certain conditions; and (ii) DISH Network and such third party licensed their respective patents to each other subject to certain conditions (each, a “Cross-License Agreement”).  Each Cross-License Agreement covers patents acquired by the respective party prior to January 2017 and aggregate payments under both Cross-License Agreements total less than $10.0 million.  Each Cross-License Agreement also contains an option to extend each Cross-License Agreement to include patents acquired by the respective party prior to January 2022.  If both options are exercised, the aggregate additional payments to such third party would total less than $3.0 million.  However, we and DISH Network may elect to extend our respective Cross-License Agreement independently of each other.  Since the aggregate payments under both Cross-License Agreements were based on the combined annual revenue of us and DISH Network, we and DISH Network agreed to allocate our respective payments to such third party based on our respective percentage of combined total revenue.

PMC.  In 2008, Personalized Media Communications, Inc. (“PMC”) filed suit against us, DISH Network and Motorola Inc., in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent Nos. 5,109,414; 4,965,825; 5,233,654; 5,335,277 and 5,887,243, which relate to satellite signal processing.  In May 2015, we, DISH Network and PMC entered into a settlement and release agreement that provided, among other things, for a license by PMC to us and DISH Network for certain patents and patent applications and the dismissal of all of PMC’s claims in the action against us and DISH Network with prejudice.  In June 2015, the Court dismissed all of PMC’s claims in the action against us and DISH Network with prejudice.  In June 2015, we and DISH Network agreed that we would contribute a one-time payment of $5.0 million towards the settlement under the agreements entered into in connection with the Spin-off and the 2012 Receiver Agreement.

Other Agreements

Hughes Systique Corporation (“Hughes Systique”)

We contract with Hughes Systique for software development services.  In 2008, Hughes Communications, Inc. agreed to make available to Hughes Systique a term loan facility of up to $1.5 million, and it funded an initial $0.5 million to Hughes Systique pursuant to the term loan facility.  In 2009, Hughes Communications, Inc. funded the remaining $1.0 million of its $1.5 million commitment under the term loan facility.  The initial interest rate on the outstanding loans was 6%, payable annually, and the accrued and unpaid interest is added to the principal amount outstanding under the loan facility in certain circumstances. The loans are convertible into shares of Hughes Systique upon non-payment or an event of default.  In May 2014, we amended the term loan facility to increase the interest rate from 6% to 8%, payable annually, to reflect then-current market conditions and extend the maturity date of the loans to May 1, 2015, and in April 2015, we extended the maturity date of the loans to May 1, 2016 on the same terms.  In 2015, Hughes Systique repaid $1.5 million of the outstanding principal of the loan facility.  In February 2016, Hughes Systique repaid $0.3 million of the outstanding principal of the loan facility. As of March 31, 2016, the principal outstanding amount of the loan facility was $0.3 million.  In April 2016, Hughes Systique repaid in full the outstanding principal of the loan facility. In addition to our 44.0% ownership in Hughes Systique, Mr. Pradman Kaul, the President of Hughes Communications, Inc. and a member of our board of directors and his brother, who is the CEO and President of Hughes Systique, in the aggregate, own approximately 25.8%, on an undiluted basis, of Hughes Systique’s outstanding shares as of March 31, 2016.  Furthermore, Mr. Pradman Kaul serves on the board of directors of Hughes Systique.  Hughes Systique is a variable interest entity and we are considered the primary beneficiary of Hughes Systique due to, among other factors, our ability to direct the activities that most significantly impact the economic performance of Hughes Systique.  As a result, we consolidate Hughes Systique’s financial statements in our condensed consolidated financial statements.

NagraStar L.L.C.

We own 50.0% of NagraStar L.L.C. (“NagraStar”), a joint venture that is our primary provider of encryption and related security technology used in our set-top boxes.  We account for our investment in NagraStar using the equity method.  We made purchases from NagraStar totaling approximately $6.4 million and $4.6 million for the three months ended March 31, 2016 and 2015, respectively.  As of March 31, 2016 and December 31, 2015, we had trade accounts payable to NagraStar totaling approximately $3.4 million and $2.6 million, respectively.

Dish Mexico

We own 49.0% of an entity that provides direct-to-home satellite services in Mexico known as Dish Mexico.  We provide certain broadcast services and satellite services and sell hardware such as digital set-top boxes and related equipment to Dish Mexico.

The following table summarizes revenue from sales of hardware and services we provided to Dish Mexico.

	For the Three Months Ended March 31,
	2016		2015
	(In thousands)
Digital set-top boxes and related accessories	$	22,554	$	12,828
Satellite services	$	5,837	$	5,837
Uplink services	$	1,009	$	1,542

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Due from Dish Mexico	$	35,569	$	32,906

Deluxe/EchoStar LLC

We own 50.0% of Deluxe/EchoStar LLC (“Deluxe”), a joint venture that we entered into in 2010 to build an advanced digital cinema satellite distribution network targeting delivery to digitally equipped theaters in the U.S. and Canada.  We account for our investment in Deluxe using the equity method.  We recognized revenue from Deluxe for transponder services and the sale of broadband equipment of approximately $0.7 million for each of the three months ended March 31, 2016 and 2015.  As of March 31, 2016 and December 31, 2015, we had trade accounts receivable from Deluxe of approximately $0.3 million and $0.1 million, respectively.

SmarDTV

In May 2015, we acquired a 22.5% interest in SmarDTV, which we account for using the equity method.  Pursuant to a services agreement, we purchased engineering services from SmarDTV totaling $1.7 million and zero for the three months ended March 31, 2016 and 2015, respectively.  As of March 31, 2016 and December 31, 2015, we had trade accounts payable to SmarDTV of $1.7 million and $0.9 million, respectively, and current note receivables from SmarDTV of zero and $0.5 million, respectively, arising from a working capital adjustment pursuant to the acquisition agreement. In March 2016, SmarDTV repaid $0.5 million of current note receivables.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information.  Accordingly, these financial statements do not include all of the information and notes required for complete financial statements prepared in accordance with GAAP.  In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.  For further information, refer to the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2015.

Principles of Consolidation

Principles of Consolidation

We consolidate all entities in which we have a controlling financial interest. We are deemed to have a controlling financial interest in variable interest entities where we are the primary beneficiary.  We are deemed to have a controlling financial interest in other entities when we own more than 50 percent of the outstanding voting shares and other shareholders do not have substantive rights to participate in management. For entities we control but do not wholly own, we record a noncontrolling interest within stockholders’ equity for the portion of the entity’s equity attributed to the noncontrolling ownership interests.  As of March 31, 2016 and December 31, 2015, noncontrolling interests consist primarily of HSS Tracking Stock owned by DISH Network, as described in Note 4 below.  All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheets, the reported amounts of revenue and expense for each reporting period, and certain information disclosed in the notes to our condensed consolidated financial statements.  Estimates are used in accounting for, among other things, amortization periods for deferred subscriber acquisition costs, revenue recognition using the percentage-of-completion method, allowances for doubtful accounts, allowances for sales returns and rebates, warranty obligations, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of stock-based compensation awards, fair value of assets and liabilities acquired in business combinations, lease classifications, asset impairment testing, useful lives and methods for depreciation and amortization of long-lived assets, and certain royalty obligations.  We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances.  Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated financial statements.  Changing economic conditions may increase the inherent uncertainty in the estimates and assumptions indicated above.  We review our estimates and assumptions periodically and the effects of revisions are reflected in the period they occur or prospectively if the revised estimate affects future periods.

Fair Value Measurements

Fair Value Measurements

We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.  Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs.  We utilize the highest level of inputs available according to the following hierarchy in determining fair value:

• Level 1, defined as observable inputs being quoted prices in active markets for identical assets;

• Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

• Level 3, defined as unobservable inputs for which little or no market data exists, consistent with characteristics of the asset or liability that would be considered by market participants in a transaction to purchase or sell the asset or liability.

Transfers between levels in the fair value hierarchy are considered to occur at the beginning of the quarterly accounting period.  There were no transfers between levels for each of the three months ended March 31, 2016 or 2015.

As of March 31, 2016 and December 31, 2015, the carrying amounts of our cash and cash equivalents, trade accounts receivable, net of allowance for doubtful accounts, accounts payable and accrued liabilities were equal to or approximated fair value due to their short-term nature or proximity to current market rates.

Fair values of our current marketable investment securities are based on a variety of observable market inputs.  For our investments in publicly traded equity securities and U.S. government securities, fair value ordinarily is determined based on a Level 1 measurement that reflects quoted prices for identical securities in active markets.  Fair values of our investments in other marketable debt securities generally are based on Level 2 measurements as the markets for such debt securities are less active.  Trades of identical debt securities on or near the measurement date are considered a strong indication of fair value.  Matrix pricing techniques that consider par value, coupon rate, credit quality, maturity and other relevant features also may be used to determine fair value of our investments in marketable debt securities.

Fair values for our publicly traded debt are based on quoted market prices in less active markets and are categorized as Level 2 measurements.  The fair values of our privately held debt are Level 2 measurements and are estimated to approximate their carrying amounts based on the proximity of their interest rates to current market rates.  As of March 31, 2016 and December 31, 2015, the fair values of our in-orbit incentive obligations, based on measurements categorized within Level 2 of the fair value hierarchy, approximated their carrying amounts of $78.5 million and $79.3 million, respectively.  We use fair value measurements from time to time in connection with impairment testing and the assignment of purchase consideration to assets and liabilities of acquired companies.  Those fair value measurements typically include significant unobservable inputs and are categorized within Level 3 of the fair value hierarchy.

Research and Development

Research and Development

Costs incurred in research and development activities generally are expensed as incurred. A significant portion of our research and development costs are incurred in connection with the specific requirements of a customer’s order. In such instances, the amounts for these customer funded development efforts are included in cost of sales.

Capitalized Software Costs

Capitalized Software Costs

Costs related to the procurement and development of software for internal-use and externally marketed software are capitalized and amortized using the straight-line method over the estimated useful life of the software, not in excess of five years.  Capitalized costs of internal-use software are included in “Property and equipment, net” and capitalized costs of externally marketed software are included in “Other noncurrent assets, net” in our condensed consolidated balance sheets.  Externally marketed software is generally installed in the equipment we sell to customers.  We conduct software program reviews for externally marketed capitalized software costs at least annually, or as events and circumstances warrant such a review, to determine if capitalized software development costs are recoverable and to ensure that costs associated with programs that are no longer generating revenue are expensed.

New Accounting Pronouncements

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”).  It outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance.  The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.”  In August 2015, the FASB issued Accounting Standards Update No. 2015-14, which deferred by one year the mandatory effective date of ASU 2014-09.  As a result, public entities are required to adopt the new revenue standard in annual periods beginning after December 15, 2017 and in interim periods within those annual periods.  The standard may be applied either retrospectively to prior periods or as a cumulative-effect adjustment as of the date of adoption.  Early adoption is permitted, but not before annual periods beginning after December 15, 2016.  In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Identifying Performance Obligations and Licensing, which amends guidance on identifying performance obligations and accounting for licenses of intellectual property. We have not determined when we will adopt the new revenue standard or selected the transition method that we will apply upon adoption.  We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

In February 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”).  This standard amends the consolidation guidance for variable interest entities and general partners’ investments in limited partnerships and similar entities.  ASU 2015-02 is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and requires either a retrospective or a modified retrospective approach as of the beginning of the fiscal year of adoption.  We adopted ASU 2015-02 in the first quarter of 2016. The adoption of the standard did not impact our consolidated financial statements.

In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”).  This standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums.  ASU 2015-03 is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and requires a retrospective approach to adoption.  Early adoption is permitted.  We adopted ASU 2015-03 in the first quarter of 2016. Upon adoption, we presented unamortized debt issuance cost previously reported in “Other noncurrent assets, net” with a carrying amount of $31.3 million as of December 31, 2015, as a reduction of our “Long-term debt and capital lease obligations, net of unamortized debt issuance costs” (see Note 11 for further discussion).

In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). This update substantially revises standards for the recognition, measurement and presentation of financial instruments, including requiring all equity investments to be measured at fair value with changes in the fair value recognized through net income. It also amends certain disclosure requirements associated with the fair value of financial instruments. ASU 2016-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted for certain requirements. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”). This standard requires lessees to recognize assets and liabilities for all leases with lease terms more than 12 months, including leases classified as operating leases. The standard also modifies the definition of a lease and the criteria for classifying leases as operating leases or financing leases. ASU 2016-02 is effective for annual periods beginning after December 15, 2018 and interim periods within those periods. Early adoption is permitted. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplifies the accounting for share-based payment awards. This update requires all excess tax benefits and deficiencies to be recognized as income tax expense or benefit and permits an entity to make an entity-wide policy election to either estimate forfeitures or recognize forfeitures as they occur. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those periods. The update specifies requirements for retrospective, modified retrospective or prospective application for the various amendments contained in the update. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures.

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Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Tabular disclosure of the effect of income (loss) on the entity's basic and diluted earnings per share

The following table presents basic and diluted EPS amounts for all periods and the corresponding weighted-average shares outstanding used in the calculations.

	For the Three Months Ended March 31,
	2016			2015
	(In thousands, except per share amounts)
Net income attributable to EchoStar	$	49,155		$	29,398
Less: Net loss attributable to EchoStar Tracking Stock	(1,519		)	(4,004		)
Net income attributable to EchoStar common stock	$	50,674		$	33,402
Weighted-average common shares outstanding :
Class A and B common stock:
Basic	93,331			91,969
Dilutive impact of stock awards outstanding	521			1,388
Diluted	93,852			93,357
Earnings per share:
Class A and B common stock:
Basic	$	0.54		$	0.36
Diluted	$	0.54		$	0.36

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Other Comprehensive Income (Loss) and Related Tax Effects (Tables)

3 Months Ended

Mar. 31, 2016

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of reclassifications out of accumulated other comprehensive loss

Reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2016 and 2015 were as follows:

	Affected Line Item in our Condensed Consolidated Statement of Operations	For the Three Months Ended March 31,
Accumulated Other Comprehensive Loss Components		2016			2015
		(In thousands)
Recognition of realized gains on available-for-sale securities in net income (1)	Gains on marketable investment securities, net	$	(2,247	)	$	(9	)
Total reclassifications, net of tax and noncontrolling interests		$	(2,247	)	$	(9	)

(1) When available-for-sale securities are sold, the related unrealized gains and losses that were previously recognized in other comprehensive income (loss) are reclassified and recognized as “Gains on marketable investment securities, net” in our condensed consolidated statements of operations and comprehensive income (loss).

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2016

Investments [Abstract]

Schedule of marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities

Our marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities consisted of the following:

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Marketable investment securities—current, at fair value:
Corporate bonds	$	552,701	$	562,236
Strategic equity securities	34,395		38,864
Other	16,250		11,238
Total marketable investment securities—current	603,346		612,338
Restricted marketable investment securities (1)	13,939		13,227
Total	617,285		625,565
Restricted cash and cash equivalents (1)	7,725		7,775
Investments in unconsolidated entities—noncurrent:
Cost method	81,174		81,174
Equity method	127,570		128,090
Total investments in unconsolidated entities—noncurrent	208,744		209,264
Total marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities	$	833,754	$	842,604

(1) Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash and marketable investment securities” in our condensed consolidated balance sheets.

Schedule of unrealized gains (losses) on marketable investment securities

The components of our available-for-sale investments are summarized in the table below.

	Amortized		Unrealized					Estimated
	Cost		Gains		Losses			Fair Value
	(In thousands)
As of March 31, 2016
Debt securities:
Corporate bonds	$	552,914	$	314	$	(527	)	$	552,701
Other (including restricted)	30,171		19		(1		)	30,189
Equity securities - strategic	17,396		7,173		(732		)	23,837
Total marketable investment securities	$	600,481	$	7,506	$	(1,260	)	$	606,727
As of December 31, 2015
Debt securities:
Corporate bonds	$	562,849	$	10	$	(623	)	$	562,236
Other (including restricted)	24,495		—		(30		)	24,465
Equity securities - strategic	20,855		7,748		(82		)	28,521
Total marketable investment securities	$	608,199	$	7,758	$	(735	)	$	615,222

Schedule of available-for-sale securities in continuous unrealized loss position by length of time and their fair value

The following table reflects the length of time that our available-for-sale securities have been in an unrealized loss position.  We do not intend to sell these securities before they recover or mature, and it is more likely than not that we will hold these securities until they recover or mature.  We believe that changes in the estimated fair values of these securities are primarily related to temporary market conditions as of March 31, 2016.

	As of
	March 31, 2016					December 31, 2015
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
Less than 12 months	$	253,633	$	(1,252	)	$	364,160	$	(609	)
12 months or more	20,125		(8		)	149,889		(126		)
Total	$	273,758	$	(1,260	)	$	514,049	$	(735	)

Schedule of fair value measurements

Our current marketable investment securities are measured at fair value on a recurring basis as summarized in the table below.  As of March 31, 2016 and December 31, 2015, we did not have investments that were categorized within Level 3 of the fair value hierarchy.

	As of
	March 31, 2016						December 31, 2015
	Total		Level 1		Level 2		Total		Level 1		Level 2
	(In thousands)
Cash equivalents (including restricted)	$	835,395	$	12,062	$	823,333	$	840,950	$	38,771	$	802,179
Debt securities:
Corporate bonds	$	552,701	$	—	$	552,701	$	562,236	$	—	$	562,236
Other (including restricted)	30,189		12,796		17,393		24,465		12,078		12,387
Equity securities - strategic	34,395		34,395		—		38,864		38,864		—
Total marketable investment securities	$	617,285	$	47,191	$	570,094	$	625,565	$	50,942	$	574,623

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Trade Accounts Receivable (Tables)

3 Months Ended

Mar. 31, 2016

Receivables [Abstract]

Schedule of trade accounts receivable

Our trade accounts receivable consisted of the following:

	As of
	March 31, 2016			December 31, 2015
	(In thousands)
Trade accounts receivable	$	159,722		$	168,714
Contracts in process, net	17,776			23,011
Total trade accounts receivable	177,498			191,725
Allowance for doubtful accounts	(13,772		)	(12,485		)
Trade accounts receivable - DISH Network	340,532			277,159
Total trade accounts receivable, net	$	504,258		$	456,399

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Inventory (Tables)

3 Months Ended

Mar. 31, 2016

Inventory, Net [Abstract]

Schedule of inventory

Our inventory consisted of the following:

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Finished goods	$	52,866	$	52,839
Raw materials	9,117		9,042
Work-in-process	8,153		5,129
Total inventory	$	70,136	$	67,010

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2016

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Property and equipment consisted of the following:

		As of
	Depreciable Life (In Years)	March 31, 2016			December 31, 2015
		(In thousands)
Land	—	$	42,467		$	41,457
Buildings and improvements	1-40	370,450			367,947
Furniture, fixtures, equipment and other	1-12	1,268,237			1,254,325
Customer rental equipment	2-4	611,939			588,430
Satellites - owned	2-15	2,381,120			2,381,120
Satellites acquired under capital leases	10-15	665,518			665,518
Construction in progress	—	1,285,522			1,112,267
Total property and equipment		6,625,253			6,411,064
Accumulated depreciation		(3,097,803		)	(2,998,074		)
Property and equipment, net		$	3,527,450		$	3,412,990

Depreciation expense associated with our property and equipment consisted of the following:

	For the Three Months Ended March 31,
	2016		2015
	(In thousands)
Satellites	$	46,965	$	49,087
Furniture, fixtures, equipment and other	30,185		30,503
Customer rental equipment	29,137		30,187
Buildings and improvements	3,086		3,395
Total depreciation expense	$	109,373	$	113,172

Schedule of construction in progress

Construction in progress consisted of the following:

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Progress amounts for satellite construction, including prepayments under capital leases and launch services costs	$	1,119,793	$	963,103
Satellite related equipment	138,735		126,373
Other	26,994		22,791
Construction in progress	$	1,285,522	$	1,112,267

Schedule of owned and leased satellites under construction

Construction in progress includes the following owned and leased satellites under construction or undergoing in-orbit testing as of March 31, 2016.

Satellites	Segment	Expected Launch Date
Eutelsat 65 West A (2)	Hughes	March 2016 (1)
EchoStar XXI	Other	Third quarter of 2016
EchoStar XXIII	Other	Third quarter of 2016
EchoStar XIX	Other	Fourth quarter of 2016
EchoStar 105/SES-11	ESS	Fourth quarter of 2016
Telesat T19V (“63 West”) (2)	Hughes	Second quarter of 2018

(1) This satellite was launched in March 2016 and is expected to be placed into service during the second quarter of 2016.

(2) We entered into a satellite services agreement and made prepayments for certain capacity on this satellite once launched, but are not a party to the construction contract.

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Goodwill, Regulatory Authorizations and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of regulatory authorizations with finite and indefinite useful lives

Regulatory authorizations included amounts with finite and indefinite useful lives, as follows:

	As of December 31, 2015			Additions			Currency Translation Adjustment			As of March 31, 2016
	(In thousands)
Finite useful lives:
Cost	$	82,007		$	—		$	4,258		$	86,265
Accumulated amortization	(9,852		)	(1,121		)	(538		)	(11,511		)
Net	72,155			(1,121		)	3,720			74,754
Indefinite lives	471,657			—			—			471,657
Total regulatory authorizations, net	$	543,812		$	(1,121	)	$	3,720		$	546,411

Schedule of other intangible assets subject to amortization

Our other intangible assets, which are subject to amortization, consisted of the following:

	Weighted Average Useful Life (in Years)	As of
		March 31, 2016							December 31, 2015
		Cost		Accumulated Amortization			Carrying Amount		Cost		Accumulated Amortization			Carrying Amount
		(In thousands)
Customer relationships	8	$	293,932	$	(219,702	)	$	74,230	$	293,932	$	(213,543	)	$	80,389
Contract-based	10	255,366		(255,366		)	—		255,366		(251,493		)	3,873
Technology-based	7	137,337		(115,439		)	21,898		137,337		(111,840		)	25,497
Trademark portfolio	20	29,700		(7,178		)	22,522		29,700		(6,806		)	22,894
Favorable leases	4	4,707		(4,707		)	—		4,707		(4,707		)	—
Total other intangible assets		$	721,042	$	(602,392	)	$	118,650	$	721,042	$	(588,389	)	$	132,653

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Debt and Capital Lease Obligations (Tables)

3 Months Ended

Mar. 31, 2016

Long-term Debt and Capital Lease Obligations [Abstract]

Schedule of carrying amounts and fair values of the entity's debt

The following table summarizes the carrying amounts and fair values of our debt:

		As of
		March 31, 2016					December 31, 2015
	Effective Interest Rates	Carrying Amount			Fair Value		Carrying Amount			Fair Value
		(In thousands)
6 1/2% Senior Secured Notes due 2019	6.959%	$	990,000		$	1,093,950	$	990,000		$	1,071,675
7 5/8% Senior Notes due 2021	8.062%	900,000			1,001,250		900,000			954,000
Other	12.1 - 14.3%	778			778		803			803
Less: Unamortized debt issuance costs		(29,738		)	—		(31,276		)	—
Subtotal		1,861,040			$	2,095,978	1,859,527			$	2,026,478
Capital lease obligations		325,763					332,838
Total debt and capital lease obligations		2,186,803					2,192,365
Less: Current portion		(1,896,233		)			(35,698		)
Long-term debt and capital lease obligations, net of unamortized debt issuance costs		$	290,570				$	2,156,667

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2016

Share-based Compensation [Abstract]

Schedule of allocated non-cash, stock-based compensation expense for all employees

Total non-cash, stock-based compensation expense for all of our employees is shown in the following table for the three months ended March 31, 2016 and 2015 and was assigned to the same expense categories as the base compensation for such employees:

	For the Three Months Ended March 31,
	2016		2015
	(In thousands)
Research and development expenses	$	908	$	762
Selling, general and administrative expenses	3,476		3,413
Total stock-based compensation	$	4,384	$	4,175

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Schedule of revenue, EBITDA, and capital expenditures by operating segments

The following table presents revenue, EBITDA, and capital expenditures for each of our operating segments.

	Hughes		EchoStar Technologies		EchoStar Satellite Services		All Other and Eliminations			Consolidated Total
	(In thousands)
For the Three Months Ended March 31, 2016
External revenue	$	325,539	$	384,939	$	102,815	$	3,066		$	816,359
Intersegment revenue	$	699	$	187	$	174	$	(1,060	)	$	—
Total revenue	$	326,238	$	385,126	$	102,989	$	2,006		$	816,359
EBITDA	$	99,468	$	28,168	$	88,186	$	6,974		$	222,796
Capital expenditures	$	104,237	$	5,341	$	24,720	$	76,838		$	211,136
For the Three Months Ended March 31, 2015
External revenue	$	324,950	$	346,033	$	125,198	$	2,472		$	798,653
Intersegment revenue	$	330	$	187	$	200	$	(717	)	$	—
Total revenue	$	325,280	$	346,220	$	125,398	$	1,755		$	798,653
EBITDA	$	91,273	$	25,561	$	106,419	$	(9,572	)	$	213,681
Capital expenditures	$	64,527	$	15,104	$	27,783	$	70,388		$	177,802

Schedule of reconciliation of EBITDA to reported income before income taxes

The following table reconciles total consolidated EBITDA to reported “Income before income taxes” in our condensed consolidated statements of operations and comprehensive income (loss):

	For the Three Months Ended March 31,
	2016			2015
	(In thousands)
EBITDA	$	222,796		$	213,681
Interest income and expense, net	(19,244		)	(32,697		)
Depreciation and amortization	(126,734		)	(133,185		)
Net loss attributable to noncontrolling interest in HSS Tracking Stock and other noncontrolling interests	(712		)	(1,800		)
Income before income taxes	$	76,106		$	45,999

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2016

Dish Mexico

Related party transactions

Schedule of related party transactions

The following table summarizes revenue from sales of hardware and services we provided to Dish Mexico.

	For the Three Months Ended March 31,
	2016		2015
	(In thousands)
Digital set-top boxes and related accessories	$	22,554	$	12,828
Satellite services	$	5,837	$	5,837
Uplink services	$	1,009	$	1,542

	As of
	March 31, 2016		December 31, 2015
	(In thousands)
Due from Dish Mexico	$	35,569	$	32,906

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Organization and Business Activities (Details) - segment		3 Months Ended
	Mar. 02, 2014	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of business segments		3
DISH Network | Hughes Retail Preferred Tracking Stock
Principal Business
Percentage of economic interest held	80.00%	80.00%
Hughes Retail Group | DISH Network | Satellite and Tracking Stock Transaction | Hughes Retail Preferred Tracking Stock
Principal Business
Percentage of economic interest held	80.00%	80.00%

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Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Fair value measurements
Amount of transfers between levels within the fair value hierarchy	$ 0	$ 0
Research and Development
Research and development expenses	20,442,000	17,872,000
Capitalized Software Costs
Net carrying amount of externally marketed software	66,400,000		$ 62,800,000
Capitalized costs related to development of externally marketed software	5,900,000	5,000,000
Amortization expense relating to development of externally marketed software	2,300,000	1,900,000
ASU 2015-03 | Other noncurrent assets, net
New Accounting Pronouncements
Unamortized debt issuance costs			(31,300,000)
ASU 2015-03 | Long-term debt and capital lease obligations, net of unamortized debt issuance costs
New Accounting Pronouncements
Unamortized debt issuance costs			31,300,000
Cost of Sales
Research and Development
Research and development expenses	12,000,000	14,800,000
Research and Development Expense
Research and Development
Research and development expenses	$ 20,400,000	$ 17,900,000
Maximum
Capitalized Software Costs
Software useful life	5 years
Weighted Average
Capitalized Software Costs
Software useful life	3 years
Level 2
Fair value measurements
Orbital incentive obligations	$ 78,500,000		$ 79,300,000

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Earnings per Share (Details)		3 Months Ended
	Mar. 02, 2014	Mar. 31, 2016
Satellite and Tracking Stock Transaction | Echostar Corporation | Hughes Retail Group
Earnings per Share
Percentage of economic interest held	20.00%
DISH Network | Hughes Retail Preferred Tracking Stock
Earnings per Share
Percentage of economic interest held	80.00%	80.00%
DISH Network | Echostar Corporation | Hughes Retail Group
Earnings per Share
Percentage of economic interest held		51.89%
DISH Network | Satellite and Tracking Stock Transaction | Hughes Retail Group | Hughes Retail Preferred Tracking Stock
Earnings per Share
Percentage of economic interest held	80.00%	80.00%
DISH Network | Satellite and Tracking Stock Transaction | Echostar Corporation | Hughes Retail Group
Earnings per Share
Percentage of economic interest held	51.89%	51.89%
DISH Network | Satellite and Tracking Stock Transaction | Hughes Satellite Systems Corporation (HSSC) | Hughes Retail Group
Earnings per Share
Percentage of economic interest held	28.11%	28.11%

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Earnings per Share (Details 2) - shares shares in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Stock awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share
Anti-dilutive securities excluded from computation of earnings per share (in shares)	3.3	1.2

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Earnings per Share (Details 3) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net income attributable to EchoStar
Net income attributable to EchoStar	$ 49,155	$ 29,398
Less: Net loss attributable to EchoStar Tracking Stock	(1,519)	(4,004)
Net income attributable to EchoStar common stock	$ 50,674	$ 33,402
Weighted-average common shares outstanding - Class A and B common stock:
Basic (in shares)	93,331	91,969
Dilutive impact of stock awards outstanding (in shares)	521	1,388
Diluted (in shares)	93,852	93,357
Earnings per share - Class A and B common stock:
Basic (in dollars per share)	$ 0.54	$ 0.36
Diluted (in dollars per share)	$ 0.54	$ 0.36

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Hughes Retail Preferred Tracking Stock (Details) $ in Millions			3 Months Ended
	Mar. 02, 2014 USD ($) satellite	Mar. 02, 2014 satellite	Mar. 31, 2016
Satellite and Tracking Stock Transaction | Hughes Retail Group | Echostar Corporation
Hughes Retail Group Tracking Stock
Percentage of economic interest held	20.00%
DISH Network | Echostar Corporation
Hughes Retail Group Tracking Stock
Percentage of capital stock held			6.30%
DISH Network | Hughes Satellite Systems Corporation (HSSC)
Hughes Retail Group Tracking Stock
Percentage of capital stock held			7.50%
DISH Network | Hughes Retail Preferred Tracking Stock
Hughes Retail Group Tracking Stock
Percentage of economic interest held	80.00%		80.00%
DISH Network | Hughes Retail Group | Echostar Corporation
Hughes Retail Group Tracking Stock
Percentage of economic interest held			51.89%
DISH Network | Satellite and Tracking Stock Transaction
Hughes Retail Group Tracking Stock
Cash received	$ 11.4
DISH Network | Satellite and Tracking Stock Transaction | EchoStar and HSSC
Hughes Retail Group Tracking Stock
Number of owned satellites transferred | satellite	5	5
Cash received	$ 11.4
DISH Network | Satellite and Tracking Stock Transaction | Hughes Retail Group | Echostar Corporation
Hughes Retail Group Tracking Stock
Percentage of economic interest held	51.89%		51.89%
DISH Network | Satellite and Tracking Stock Transaction | Hughes Retail Group | Hughes Satellite Systems Corporation (HSSC)
Hughes Retail Group Tracking Stock
Percentage of economic interest held	28.11%		28.11%
DISH Network | Satellite and Tracking Stock Transaction | Hughes Retail Group | Hughes Retail Preferred Tracking Stock
Hughes Retail Group Tracking Stock
Percentage of economic interest held	80.00%		80.00%

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Other Comprehensive Income (Loss) and Related Tax Effects (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Other comprehensive income, tax (expense) benefit
Tax effects on foreign currency translation adjustments	$ 0	$ 0
Tax effects on unrealized gains or losses on available-for-sale securities	0	0
Cumulative foreign currency translation losses	112,700,000		$ 124,300,000
Reclassifications out of accumulated other comprehensive loss
Recognition of realized gains on available-for-sale securities in net income	(2,247,000)	(9,000)
Total reclassifications, net of tax and noncontrolling interests	(2,247,000)	(9,000)
Gains on marketable investment securities, net
Reclassifications out of accumulated other comprehensive loss
Recognition of realized gains on available-for-sale securities in net income	$ (2,247,000)	$ (9,000)

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Investment Securities (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Marketable investment securities—current, at fair value:
Total marketable investment securities - current	$ 603,346,000		$ 612,338,000
Restricted marketable investment securities	13,939,000		13,227,000
Total	617,285,000		625,565,000
Investments in unconsolidated entities—noncurrent:
Cost method	81,174,000		81,174,000
Equity method	127,570,000		128,090,000
Total investments in unconsolidated entities-noncurrent	208,744,000		209,264,000
Total marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities	833,754,000		842,604,000
Restricted cash and marketable investment securities
Marketable investment securities—current, at fair value:
Restricted cash and cash equivalents	7,725,000		7,775,000
Corporate bonds
Marketable investment securities—current, at fair value:
Marketable investment securities, at fair value	552,701,000		562,236,000
Strategic equity securities
Marketable investment securities—current, at fair value:
Marketable investment securities, at fair value	34,395,000		38,864,000
Dividend income from strategic equity securities	0	$ 0
Fair value of trading securities	10,600,000
Strategic equity securities | Gains on marketable investment securities, net
Marketable investment securities—current, at fair value:
Unrealized holding gain on common stock in trading securities portfolio	200,000	$ 0
Other
Marketable investment securities—current, at fair value:
Marketable investment securities, at fair value	$ 16,250,000		$ 11,238,000

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Investment Securities (Details 2) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Unrealized Gains (Losses) on Marketable Investment Securities
Amortized Cost	$ 600,481	$ 608,199
Unrealized Gains	7,506	7,758
Unrealized Losses	(1,260)	(735)
Estimated Fair Value	606,727	615,222
Corporate bonds
Unrealized Gains (Losses) on Marketable Investment Securities
Amortized Cost	552,914	562,849
Unrealized Gains	314	10
Unrealized Losses	(527)	(623)
Estimated Fair Value	552,701	562,236
Other (including restricted)
Unrealized Gains (Losses) on Marketable Investment Securities
Amortized Cost	30,171	24,495
Unrealized Gains	19	0
Unrealized Losses	(1)	(30)
Estimated Fair Value	30,189	24,465
Equity securities - strategic
Unrealized Gains (Losses) on Marketable Investment Securities
Amortized Cost	17,396	20,855
Unrealized Gains	7,173	7,748
Unrealized Losses	(732)	(82)
Estimated Fair Value	$ 23,837	$ 28,521

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Investment Securities (Details 3) $ in Millions	Mar. 31, 2016 USD ($)
Investments [Abstract]
Debt securities with contractual maturities of one year or less	$ 481.3
Debt securities with contractual maturities exceeding one year	$ 101.6

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Investment Securities (Details 4) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Fair Value
Less than 12 months	$ 253,633		$ 364,160
12 months or more	20,125		149,889
Total	273,758		514,049
Unrealized Losses
Less than 12 months	(1,252)		(609)
12 months or more	(8)		(126)
Total	(1,260)		$ (735)
Sales of Marketable Investment Securities
Gains from sales of available-for-sale securities	2,200
Proceeds from sales of available-for-sale securities	$ 12,200	$ 87,100

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Investment Securities (Details 5) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Fair value of marketable securities
Total	$ 617,285,000	$ 625,565,000
Corporate bonds
Fair value of marketable securities
Debt securities	552,701,000	562,236,000
Other (including restricted)
Fair value of marketable securities
Debt securities	30,189,000	24,465,000
Equity securities - strategic
Fair value of marketable securities
Equity securities - strategic	34,395,000	38,864,000
Level 3
Fair value of marketable securities
Fair value of investments	0	0
Fair value measurements on recurring basis
Fair value of marketable securities
Cash equivalents (including restricted)	835,395,000	840,950,000
Total	617,285,000	625,565,000
Fair value measurements on recurring basis | Corporate bonds
Fair value of marketable securities
Debt securities	552,701,000	562,236,000
Fair value measurements on recurring basis | Other (including restricted)
Fair value of marketable securities
Debt securities	30,189,000	24,465,000
Fair value measurements on recurring basis | Equity securities - strategic
Fair value of marketable securities
Equity securities - strategic	34,395,000	38,864,000
Fair value measurements on recurring basis | Level 1
Fair value of marketable securities
Cash equivalents (including restricted)	12,062,000	38,771,000
Total	47,191,000	50,942,000
Fair value measurements on recurring basis | Level 1 | Corporate bonds
Fair value of marketable securities
Debt securities	0	0
Fair value measurements on recurring basis | Level 1 | Other (including restricted)
Fair value of marketable securities
Debt securities	12,796,000	12,078,000
Fair value measurements on recurring basis | Level 1 | Equity securities - strategic
Fair value of marketable securities
Equity securities - strategic	34,395,000	38,864,000
Fair value measurements on recurring basis | Level 2
Fair value of marketable securities
Cash equivalents (including restricted)	823,333,000	802,179,000
Total	570,094,000	574,623,000
Fair value measurements on recurring basis | Level 2 | Corporate bonds
Fair value of marketable securities
Debt securities	552,701,000	562,236,000
Fair value measurements on recurring basis | Level 2 | Other (including restricted)
Fair value of marketable securities
Debt securities	17,393,000	12,387,000
Fair value measurements on recurring basis | Level 2 | Equity securities - strategic
Fair value of marketable securities
Equity securities - strategic	$ 0	$ 0

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Trade Accounts Receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Trade Accounts Receivable
Total trade accounts receivable	$ 177,498	$ 191,725
Allowance for doubtful accounts	(13,772)	(12,485)
Trade accounts receivable - DISH Network	340,532	277,159
Total trade accounts receivable, net	504,258	456,399
Progress billings offset against contracts in process	4,900	2,900
Trade accounts receivables
Trade Accounts Receivable
Total trade accounts receivable	159,722	168,714
Contracts in process, net
Trade Accounts Receivable
Total trade accounts receivable	$ 17,776	$ 23,011

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Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory, Net [Abstract]
Finished goods	$ 52,866	$ 52,839
Raw materials	9,117	9,042
Work-in-process	8,153	5,129
Total inventory	$ 70,136	$ 67,010

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Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Property and equipment
Total property and equipment	$ 6,625,253	$ 6,411,064
Accumulated depreciation	(3,097,803)	(2,998,074)
Property and equipment, net	3,527,450	3,412,990
Land
Property and equipment
Total property and equipment	42,467	41,457
Buildings and improvements
Property and equipment
Total property and equipment	$ 370,450	367,947
Buildings and improvements | Minimum
Property and equipment
Depreciable Life	1 year
Buildings and improvements | Maximum
Property and equipment
Depreciable Life	40 years
Furniture, fixtures, equipment and other
Property and equipment
Total property and equipment	$ 1,268,237	1,254,325
Furniture, fixtures, equipment and other | Minimum
Property and equipment
Depreciable Life	1 year
Furniture, fixtures, equipment and other | Maximum
Property and equipment
Depreciable Life	12 years
Customer rental equipment
Property and equipment
Total property and equipment	$ 611,939	588,430
Customer rental equipment | Minimum
Property and equipment
Depreciable Life	2 years
Customer rental equipment | Maximum
Property and equipment
Depreciable Life	4 years
Satellites - owned
Property and equipment
Total property and equipment	$ 2,381,120	2,381,120
Satellites - owned | Minimum
Property and equipment
Depreciable Life	2 years
Satellites - owned | Maximum
Property and equipment
Depreciable Life	15 years
Satellites acquired under capital leases
Property and equipment
Total property and equipment	$ 665,518	665,518
Satellites acquired under capital leases | Minimum
Property and equipment
Depreciable Life	10 years
Satellites acquired under capital leases | Maximum
Property and equipment
Depreciable Life	15 years
Construction in progress
Property and equipment
Total property and equipment	$ 1,285,522	$ 1,112,267

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Property and Equipment (Details 2) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Property and equipment
Construction in progress	$ 1,285,522	$ 1,112,267
Progress amounts for satellite construction, including prepayments under capital leases and launch services costs
Property and equipment
Construction in progress	1,119,793	963,103
Satellite related equipment
Property and equipment
Construction in progress	138,735	126,373
Construction in progress: Other
Property and equipment
Construction in progress	$ 26,994	$ 22,791

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Property and Equipment (Details 3) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Depreciation expense
Total depreciation expense	$ 109,373	$ 113,172
Satellites
Depreciation expense
Total depreciation expense	46,965	49,087
Furniture, fixtures, equipment and other
Depreciation expense
Total depreciation expense	30,185	30,503
Customer rental equipment
Depreciation expense
Total depreciation expense	29,137	30,187
Buildings and improvements
Depreciation expense
Total depreciation expense	$ 3,086	$ 3,395

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Property and Equipment (Details 4) - Satellites	3 Months Ended
	Mar. 31, 2016 satellite mile
Property and equipment
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator	17
Length of satellites utilized in geosynchronous orbit above the equator (in miles) | mile	22,300
Number of satellites utilized under capital lease	2
Number of satellites utilized under operating lease	1

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Goodwill, Regulatory Authorizations and Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Goodwill
Goodwill	$ 510,630	$ 510,630
Cost
Balance at the beginning of the period	721,042
Balance at the end of the period	721,042
Accumulated amortization
Balance at the beginning of the period	(588,389)
Balance at the end of the period	(602,392)
Net
Balance at the beginning of the period	132,653
Balance at the end of the period	118,650
Total regulatory authorizations, net
Balance at the beginning of the period	543,812
Additions	(1,121)
Currency Translation Adjustment	3,720
Balance at the end of the period	546,411
Indefinite Lives
Indefinite lives
Balance at the beginning of the period	471,657
Balance at the end of the period	471,657
Finite lives
Cost
Balance at the beginning of the period	82,007
Currency Translation Adjustment	4,258
Balance at the end of the period	86,265
Accumulated amortization
Balance at the beginning of the period	(9,852)
Additions	(1,121)
Currency Translation Adjustment	(538)
Balance at the end of the period	(11,511)
Net
Balance at the beginning of the period	72,155
Additions	(1,121)
Currency Translation Adjustment	3,720
Balance at the end of the period	74,754
Hughes Business
Goodwill
Goodwill	504,200	$ 504,200
EchoStar Technologies Business
Goodwill
Goodwill	$ 6,400

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Goodwill, Regulatory Authorizations and Other Intangible Assets (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Other intangible assets
Cost	$ 721,042		$ 721,042
Accumulated Amortization	(602,392)		(588,389)
Carrying Amount	118,650		132,653
Amortization expense	17,400	$ 20,000
Customer relationships
Other intangible assets
Cost	293,932		293,932
Accumulated Amortization	(219,702)		(213,543)
Carrying Amount	$ 74,230		80,389
Customer relationships | Weighted Average
Other intangible assets
Weighted Average Useful life	8 years
Contract-based
Other intangible assets
Cost	$ 255,366		255,366
Accumulated Amortization	(255,366)		(251,493)
Carrying Amount	$ 0		3,873
Contract-based | Weighted Average
Other intangible assets
Weighted Average Useful life	10 years
Technology-based
Other intangible assets
Cost	$ 137,337		137,337
Accumulated Amortization	(115,439)		(111,840)
Carrying Amount	$ 21,898		25,497
Technology-based | Weighted Average
Other intangible assets
Weighted Average Useful life	7 years
Trademark portfolio
Other intangible assets
Cost	$ 29,700		29,700
Accumulated Amortization	(7,178)		(6,806)
Carrying Amount	$ 22,522		22,894
Trademark portfolio | Weighted Average
Other intangible assets
Weighted Average Useful life	20 years
Favorable leases
Other intangible assets
Cost	$ 4,707		4,707
Accumulated Amortization	(4,707)		(4,707)
Carrying Amount	$ 0		$ 0
Favorable leases | Weighted Average
Other intangible assets
Weighted Average Useful life	4 years

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Debt and Capital Lease Obligations (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Debt and Capital Lease Obligations
Carrying Amount	$ 1,861,040,000	$ 1,859,527,000
Fair Value	2,095,978,000	2,026,478,000
Capital lease obligations	325,763,000	332,838,000
Total debt and capital lease obligations	2,186,803,000	2,192,365,000
Less: Current portion	(1,896,233,000)	(35,698,000)
Long-term debt and capital lease obligations, net of unamortized debt issuance costs	$ 290,570,000	$ 2,156,667,000
6 1/2% Senior Secured Notes due 2019
Debt and Capital Lease Obligations
Interest rate	6.50%	6.50%
Effective Interest Rates	6.959%
Carrying Amount	$ 990,000,000	$ 990,000,000
Fair Value	$ 1,093,950,000	$ 1,071,675,000
Purchase price as a percent of the aggregate principal	101.00%
Beneficial ownership percentage required to avoid Change of Control	100.00%
Offering period after Change of Control	30 days
Minimum offering amount per holder in Change of Control	$ 2,000
Integral multiple to add to excess of the minimum offering per holder in Change of Control	$ 1,000
7 5/8% Senior Notes due 2021
Debt and Capital Lease Obligations
Interest rate	7.625%	7.625%
Effective Interest Rates	8.062%
Carrying Amount	$ 900,000,000	$ 900,000,000
Fair Value	$ 1,001,250,000	954,000,000
Purchase price as a percent of the aggregate principal	101.00%
Other
Debt and Capital Lease Obligations
Carrying Amount	$ 778,000	803,000
Fair Value	$ 778,000	803,000
Other | Minimum
Debt and Capital Lease Obligations
Effective Interest Rates	12.10%
Other | Maximum
Debt and Capital Lease Obligations
Effective Interest Rates	14.30%
Unamortized debt issuance costs
Debt and Capital Lease Obligations
Less: Unamortized debt issuance costs	$ (29,738,000)	$ (31,276,000)

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income tax expense	$ (27,663)	$ (18,401)
Effective income tax rate	36.30%	40.00%

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Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Stock-Based Compensation
Allocated share-based compensation expense	$ 4,384	$ 4,175
Research and development expenses
Stock-Based Compensation
Allocated share-based compensation expense	908	762
Selling, general and administrative expenses
Stock-Based Compensation
Allocated share-based compensation expense	$ 3,476	$ 3,413
Stock Options
Stock option activity
Stock options granted (in shares)	195,840	82,970
Restricted Stock Units | Vesting Based On Performance
Stock-Based Compensation
Granted (in shares)			100,000
Vested (in shares)	33,334		66,666
Non-Performance Based Stock Awards
Stock-Based Compensation
Unrecognized stock-based compensation cost, net of estimated forfeiture	$ 31,500

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Commitments and Contingencies (Details) $ in Millions	Mar. 31, 2016 USD ($)
Satellite-related obligations
Other Commitments [Line Items]
Satellite-related obligations	$ 1,180

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Commitments and Contingencies (Details 2) shares in Millions		1 Months Ended		3 Months Ended	12 Months Ended
	Jan. 26, 2015 petition	Aug. 31, 2015 claim	Mar. 31, 2011 shares	Jan. 22, 2016 petition	Dec. 31, 2011 shares	Apr. 29, 2016 petition	Mar. 31, 2016 shares	Oct. 01, 2013 subsidiary	Jul. 31, 2009 petition
Caltech
Commitment and Contingencies
Number of subsidiaries against which lawsuit was filed | subsidiary								2
CRFD
Commitment and Contingencies
Number of petitions challenging the validity of a patent	2
Elbit
Commitment and Contingencies
Number of petitions challenging the validity of a patent				4
Elbit | Subsequent Event
Commitment and Contingencies
Number of petitions denied						3
Number of petitions pending						1
Breach of fiduciary duties
Commitment and Contingencies
Stock option grants attempted (in shares) | shares			1.5
Stock option grants (in shares) | shares					0.8
Stock options outstanding (in shares) | shares							0.8
Technology Development and Licensing, LLC
Commitment and Contingencies
Number of reexamination petitions pending before the United States Patent and Trademark Office									2
Number of claims cancelled | claim		42
Total number of claims | claim		53

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Segment Reporting (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) segment	Mar. 31, 2015 USD ($)
Segment Reporting [Abstract]
Number of business segments | segment	3
Segment Reporting
Total revenue	$ 816,359	$ 798,653
EBITDA	222,796	213,681
Capital expenditures	211,136	177,802
Interest income and expense, net	(19,244)	(32,697)
Depreciation and amortization	(126,734)	(133,185)
Net loss attributable to noncontrolling interest in HSS Tracking Stock and other noncontrolling interests	(712)	(1,800)
Income before income taxes	76,106	45,999
Hughes Business
Segment Reporting
Total revenue	325,539	324,950
EchoStar Technologies Business
Segment Reporting
Total revenue	384,939	346,033
EchoStar Satellite Services Business
Segment Reporting
Total revenue	102,815	125,198
All Other and Eliminations
Segment Reporting
Total revenue	3,066	2,472
Intersegment Elimination | Hughes Business
Segment Reporting
Total revenue	699	330
Intersegment Elimination | EchoStar Technologies Business
Segment Reporting
Total revenue	187	187
Intersegment Elimination | EchoStar Satellite Services Business
Segment Reporting
Total revenue	174	200
Intersegment Elimination | All Other and Eliminations
Segment Reporting
Total revenue	(1,060)	(717)
Operating segments | Hughes Business
Segment Reporting
Total revenue	326,238	325,280
EBITDA	99,468	91,273
Capital expenditures	104,237	64,527
Operating segments | EchoStar Technologies Business
Segment Reporting
Total revenue	385,126	346,220
EBITDA	28,168	25,561
Capital expenditures	5,341	15,104
Operating segments | EchoStar Satellite Services Business
Segment Reporting
Total revenue	102,989	125,398
EBITDA	88,186	106,419
Capital expenditures	24,720	27,783
All Other and Eliminations | All Other and Eliminations
Segment Reporting
Total revenue	2,006	1,755
EBITDA	6,974	(9,572)
Capital expenditures	$ 76,838	$ 70,388

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Related Party Transactions (Details) $ in Millions					1 Months Ended														3 Months Ended	12 Months Ended
	Nov. 04, 2015	May. 05, 2014	Mar. 02, 2014 USD ($) satellite	Mar. 02, 2014 satellite	Feb. 29, 2016	Jan. 31, 2016	Dec. 31, 2015	Nov. 30, 2015	Nov. 30, 2014	Oct. 31, 2014	Dec. 31, 2012	Oct. 31, 2012	May. 31, 2012	May. 31, 2010	Feb. 28, 2010	Jan. 31, 2010	Sep. 30, 2009 transponder	Nov. 30, 2008 transponder	Mar. 31, 2016 renewal_option term	Dec. 31, 2009	Aug. 01, 2014	Feb. 28, 2013 transponder	Jul. 01, 2012	Mar. 31, 2012	Sep. 30, 2010 USD ($)
Sling TV Holding
Related party transactions
Equity interest in joint venture																							33.00%
Non-voting interest in joint venture																					10.00%
EchoStar XVI
Related party transactions
Term of renewal option																			6 years
Hughes Broadband Distribution Agreement
Related party transactions
Agreement term												5 years
Required minimum notice for termination of agreement																			180 days
Automatic renewal period																			1 year
DISH Network | Sling TV Holding
Related party transactions
Ownership interest acquired by related party																					90.00%		67.00%
Voting interests acquired by related party																					100.00%
DISH Network | 2012 Receiver Agreement
Related party transactions
Minimum required notice period for termination of agreement by related party																			60 days
Additional term of renewal option																			1 year
Minimum notice period required to extend the agreement term																			180 days
Agreement term	1 year	1 year
DISH Network | Broadcast Agreement
Related party transactions
Minimum required notice period for termination of agreement by related party																			60 days
DISH Network | Broadcast Agreement for Certain Sports Related Programming
Related party transactions
Agreement term														10 years
DISH Network | RUS Implementation Agreement
Related party transactions
Grants receivable | $																									$ 14.1
DISH Network | Echo Star V I I
Related party transactions
Agreement term							1 year
DISH Network | EchoStar VIII capacity leased to Dish Network
Related party transactions
Minimum required notice period for termination of agreement by related party																			30 days
Required minimum notice period for termination of agreement by the reporting entity																			30 days
DISH Network | EchoStar XVI
Related party transactions
Additional term of renewal option																			5 years
Agreement term																				10 years
Agreement term from commencement of service date											4 years
Term of renewal option																			6 years
DISH Network | DISH Telesat Agreement
Related party transactions
Agreement term from commencement of service date																	10 years
Number of DBS transponders available to receive services																	32
DISH Network | QuetzSat-1 Transponder
Related party transactions
Number of DBS transponders currently receiving services																		24
Number of DBS transponders currently receiving services subleased back from related party																						5
DISH Network | Service agreement to lease certain satellite capacity | Ciel
Related party transactions
Agreement term													10 years
DISH Network | Satellite and Tracking Stock Transaction
Related party transactions
Net proceeds from issuance of Tracking Stock | $			$ 11.4
DISH Network | Satellite and Tracking Stock Transaction | EchoStar and HSSC
Related party transactions
Number of owned satellites transferred | satellite			5	5
Net proceeds from issuance of Tracking Stock | $			$ 11.4
DISH Network | TT&C Agreement
Related party transactions
Minimum required notice period for termination of agreement by related party																			60 days
DISH Network | Inverness Lease Agreement
Related party transactions
Required minimum notice for termination of agreement																			6 months
Required minimum notice for termination or agreement if month-to-month																			30 days
DISH Network | Meridian Lease Agreement
Related party transactions
Required minimum notice for termination of agreement																			30 days
DISH Network | Santa Fe Lease Agreement
Related party transactions
Required minimum notice for termination of agreement																			30 days
DISH Network | Echostar Data Networks Sublease Agreement
Related party transactions
Term of renewal option																			5 years
DISH Network | Gilbert Lease Agreement
Related party transactions
Term of renewal option																			1 year
Required minimum notice for termination of agreement																			30 days
Number of successive one year renewal options | renewal_option																			3
DISH Network | Cheyenne Lease Agreement
Related party transactions
Required minimum notice for termination of agreement																			30 days
DISH Network | Product Support Agreement
Related party transactions
Minimum required notice period for termination of agreement by related party																			60 days
DISH Network | DISHOnline.com Services Agreement
Related party transactions
Minimum required notice period for termination of agreement by related party																			120 days
Agreement term								1 year		1 year						2 years
Automatic renewal period																			1 year
DISH Network | DISH Remote Access Services Agreement
Related party transactions
Minimum required notice period for termination of agreement by related party																			120 days
Additional term of renewal option																			1 year
Agreement term					1 year										5 years
DISH Network | SlingService Services Agreement
Related party transactions
Minimum required notice period for termination of agreement by related party																			120 days
Additional term of renewal option																			1 year
Agreement term					1 year										5 years
DISH Network | Set-Top Box Application Development Agreement
Related party transactions
Agreement term					1 year
Required minimum notice for termination of agreement																			90 days
Automatic renewal period																			1 year
DISH Network | XiP Encryption Agreement
Related party transactions
Minimum required notice period for termination of agreement by related party																			30 days
Required minimum notice period for termination of agreement by the reporting entity																			180 days
DISH Network | DBSD North America Agreement
Related party transactions
Ownership interest acquired by related party																								100.00%
DISH Network | Remanufactured Receiver Agreement
Related party transactions
Agreement term								1 year	1 year
Required minimum notice period for termination of agreement by the reporting entity																			60 days
DISH Network | EchoStar XV capacity leased from Dish Network
Related party transactions
Required minimum notice for termination of agreement																			30 days
DISH Network | Professional Services Agreement
Related party transactions
Agreement term						1 year
Required minimum notice for termination of agreement																			60 days
Automatic renewal period																			1 year
Required minimum notice for termination of individual service																			30 days
DISH Network | El Paso Lease Agreement
Related party transactions
Term of renewal option																			3 years
Number of successive three year renewal options | term																			4
Telesat Canada | Nimiq 5 Agreement
Related party transactions
Agreement term																	15 years
Number of DBS transponders available to receive services																	32
SES Latin America | QuetzSat-1 Lease Agreement
Related party transactions
Agreement term																		10 years
Number of DBS transponders expected to receive services																		32
Hughes Retail Preferred Tracking Stock | DISH Network
Related party transactions
Percentage of economic interest held			80.00%																80.00%

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Related Party Transactions (Details 2) $ in Thousands		1 Months Ended	12 Months Ended
	Apr. 29, 2011 USD ($) installment	Jun. 30, 2015 USD ($)	Dec. 31, 2011 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Sep. 30, 2013 USD ($)
Related party transactions
Net amount of the allocated tax attributes receivable				$ 91,171	$ 90,966
Patent Cross-License Agreements
Related party transactions
Maximum aggregate payments required under cross license agreements			$ 10,000
Maximum additional aggregate payments required under cross license agreements if options are exercised			$ 3,000
Personalized Media Communications, Inc.
Related party transactions
One-time payment towards settlement under the agreements		$ 5,000
DISH Network | TiVo vs. Dish Network and Echostar Corporation
Related party transactions
Settlement amount	$ 500,000
Initial settlement amount paid	300,000
Aggregate of six annual installment amounts between 2012 and 2017	$ 200,000
Litigation settlement, number of annual installments | installment	6
Portion of the $300 million initial settlement agreement payment paid by EchoStar	$ 10,000
Estimated percentage of annual future payments payable by EchoStar	5.00%
DISH Network | Tax Sharing Agreement | Noncurrent deferred tax liabilities
Related party transactions
Federal tax benefits reflected as a deferred tax asset for depreciation and amortization						$ 83,200
Net amount of the allocated tax attributes receivable						83,200
DISH Network | Tax Sharing Agreement | Other noncurrent assets, net
Related party transactions
Net amount of the allocated tax attributes receivable						$ 83,200

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Related Party Transactions (Details 3) - USD ($) $ in Thousands	1 Months Ended			3 Months Ended		12 Months Ended
	Feb. 29, 2016	May. 31, 2014	Feb. 29, 2008	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2009	May. 31, 2015
Related party transactions
Amount payable to related party				$ 25,694		$ 24,682
Amount receivable from related party				340,532		277,159
Hughes Systique Corporation
Related party transactions
Repayment of loan	$ 300					1,500
Remaining balance of loan				$ 300
Ownership interest in related party				44.00%
Ownership percentage by related party				25.80%
Hughes Systique Corporation | Hughes Communications, Inc.
Related party transactions
Amount agreed to be funded under term loan facility			$ 1,500
Amount funded			$ 500				$ 1,000
Interest rate		8.00%	6.00%
NagraStar
Related party transactions
Equity interest in joint venture				50.00%
Purchases from related party				$ 6,400	$ 4,600
Amount payable to related party				$ 3,400		2,600
Dish Mexico
Related party transactions
Equity interest in joint venture				49.00%
Digital set-top boxes and related accessories				$ 22,554	12,828
Satellite services				5,837	5,837
Uplink services				1,009	1,542
Amount receivable from related party				$ 35,569		32,906
Deluxe/EchoStar LLC
Related party transactions
Equity interest in joint venture				50.00%
Revenue recognized from equipment and services provided to related party				$ 700	700
Receivables from related party				300		100
SmarDTV SA
Related party transactions
Equity interest in joint venture								22.50%
Purchases from related party				1,700	$ 0
Amount payable to related party				1,700		900
Current note receivable from related party				0		$ 500
Proceeds from collection of current note receivables				$ 500