exv99w1

EXHIBIT 99.1

EchoStar Communications Corporation
9601 S. Meridian Blvd.
Englewood, Colorado 80112

[ ], 2007

Dear EchoStar Communications Corporation Shareholder:

We are pleased to inform you that on [ ], 2007, the Board of Directors of EchoStar Communications Corporation approved the spin-off of EchoStar Holding Corporation, a wholly-owned subsidiary of EchoStar Communications Corporation. EchoStar Holding Corporation will hold the technology and certain infrastructure assets of EchoStar Communications Corporation. EchoStar Communications Corporation will retain its consumer pay-TV business, DISH Network. We believe that our separation into two independent publicly-traded companies is in the best interests of each of the businesses. Immediately following the completion of the spin-off, EchoStar Communications Corporation intends to change its name to “DISH Network Corporation”.

The spin-off of EchoStar Holding Corporation is anticipated to occur on or about [ ], 2007 by way of a pro rata dividend to EchoStar Communications Corporation shareholders. For each share of EchoStar Communications Corporation Class A common stock or Class B common stock you hold as of 5:00 p.m., New York City time, on [ ], 2007, which is the record date of the spin-off, you will be entitled to receive a dividend of [ ] a share of the same class of EchoStar Holding Corporation common stock. Please note that if you sell your shares of Class A common stock of EchoStar Communications Corporation after the record date but before the distribution date, the buyer of those shares will be entitled to receive the shares of our Class A common stock issuable in respect of the shares sold. The distribution of shares will be made in book-entry form. No fractional shares of EchoStar Holding Corporation Class A or Class B common stock will be issued. If you would have been entitled to a fractional share of EchoStar Holding Corporation Class A common stock in the distribution, you will receive cash in lieu of a fractional share interest.

Shareholder approval of the spin-off is not required, and you are not required to take any action to receive shares of EchoStar Holding Corporation common stock.

Immediately following the spin-off, you will own shares of common stock of both EchoStar Communications Corporation and EchoStar Holding Corporation. EchoStar Communications Corporation Class A common stock will continue to trade on the Nasdaq Global Market under the symbol “DISH.” We intend to list our Class A common stock on the Nasdaq Global Market under the symbol “[ ]”.

We expect the spin-off to be tax-free for all shareholders of EchoStar Communications Corporation, except for any cash received in lieu of fractional shares. To that end, we have requested a ruling from the Internal Revenue Service confirming that the spin-off will be tax free to shareholders of EchoStar Communications Corporation for U.S. federal income tax purposes. The spin-off is subject to certain customary conditions, including the receipt of any necessary regulatory approvals.

The enclosed information statement, which is being mailed to all EchoStar Communications Corporation shareholders, describes the spin-off and contains important information about EchoStar Holding Corporation, including its historical and pro forma combined financial statements.

We look forward to your continued support as a shareholder in both EchoStar Communications Corporation and EchoStar Holding Corporation.

Sincerely,

Charles W. Ergen

Chairman and Chief Executive Officer

EchoStar Holding Corporation
90 Inverness Circle East
Englewood, Colorado 80112

[ ], 2007

Dear EchoStar Holding Corporation Shareholder:

It is my pleasure to welcome you as a shareholder of our new company, EchoStar Holding Corporation. As an independent, publicly-traded company, we believe we can more effectively focus on our objectives and satisfy the strategic needs of our company. In addition, we will have the opportunity to offer our employees incentive opportunities linked to our performance as an independent, publicly-traded company, which we believe will enhance employee performance.

EchoStar Holding Corporation intends to operate two primary businesses, a digital set-top box business and a fixed satellite services business:


•	Digital Set-Top Boxes. Our set-top box business designs, develops and distributes award-winning digital set-top boxes and related products for direct-to-home satellite service providers. In 2006, our set-top box business shipped over nine million set-top boxes. Most of these set-top boxes were sold to EchoStar Communications Corporation, but we also sold set-top boxes to Bell ExpressVu and other international customers.

•	Fixed Satellite Services. Our fixed satellite services business will be developed using the nine owned or leased in-orbit satellites and related FCC licenses, a network of seven full service digital broadcast centers, and leased fiber optic capacity with points of presence in approximately 150 cities that will be contributed to us by EchoStar Communications Corporation. We expect that our primary customer will initially be EchoStar Communications Corporation. However, we will also lease capacity in the spot market and to government and enterprise customers.

We intend to list our Class A common stock on the Nasdaq Global Market under the symbol “[ ]”. We expect that our Class A common stock will begin trading on [ ], 2007.

I invite you to learn more about EchoStar Holding Corporation by reviewing the enclosed information statement. We thank you in advance for your support as a shareholder in EchoStar Holding Corporation.

Sincerely,

Charles W. Ergen

Chairman and Chief Executive Officer

Information contained herein is subject to completion or amendment. A registration statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission.

SUBJECT TO COMPLETION, DATED NOVEMBER 6, 2007

INFORMATION STATEMENT

ECHOSTAR HOLDING CORPORATION

90 Inverness Circle E.

Englewood, Colorado 80112

Class A Common Stock

Class B Common Stock

(par value $0.001 per share)

We are sending this information statement to you to describe the spin-off of EchoStar Holding Corporation. Prior to the spin-off described in this information statement, we were a wholly-owned subsidiary of EchoStar Communications Corporation, which we refer to as ECC. We are engaged in the design, development and distribution of set-top boxes, antennae and other equipment for the “direct to home” satellite television industry. Following the spin-off, we will also be engaged in the provision of fixed satellite transmission services. We expect that the spin-off will be tax-free to ECC shareholders for U.S. federal income tax purposes, except for any cash received in lieu of fractional shares. Immediately following the spin-off, ECC intends to change its name to “DISH Network Corporation”.

For each share of ECC Class A common stock or ECC Class B common stock held by you as of 5:00 p.m., New York City time, on [ ], 2007, the record date for the spin-off, you will receive [ ] of a share of the same class of our common stock. The distribution of shares will be made in book-entry form. No fractional shares of EchoStar Holding Corporation Class A or Class B common stock will be issued. If as a result of the foregoing ratio you would be entitled to receive a fraction of a share of our Class A common stock, you will receive cash in lieu of such fractional share interest. We expect the shares of our Class A common stock and Class B common stock to be distributed by ECC to you on or about [ ], 2007, which we refer to as the distribution date.

No vote of ECC’s shareholders is required in connection with the spin-off. We are not asking you for a proxy and you are requested not to send us a proxy. No action is required of you to receive shares of our common stock, which means that:


•	you will not be required to pay for the shares of any class of our common stock that you receive in the spin-off, and

•	you do not need to surrender or exchange shares of any class of ECC common stock in order to receive shares of our common stock, or to take any other action in connection with the spin-off.

There is no current trading market for any class of our common stock. We expect, however, that a limited trading market for our Class A common stock, commonly known as a “when issued” trading market, will develop shortly after the record date for the spin-off, and we expect “regular way” trading of our Class A common stock will begin the first trading day after the distribution date. We intend to list our Class A common stock on the Nasdaq Global Market under the symbol “[ ]”. Immediately following the spin-off, all of our Class B common stock will be owned beneficially by Charles W. Ergen, our Chairman and Chief Executive Officer. Mr. Ergen will immediately after the distribution date own approximately [ ]% of our outstanding equity and possess approximately [ ]% of the total voting power represented by all of our common stock, which is equivalent to his ownership and voting interests in ECC.

In reviewing this information statement, you should carefully consider the matters described under the caption “Risk Factors” beginning on page 15.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement is not an offer to sell, or a solicitation of an offer to buy, any securities.

The date of this information statement is [ ], 2007.

SUMMARY

This summary highlights information contained elsewhere in this information statement and provides an overview of our company and the material aspects of our spin-off from ECC. It is intended for convenience only and should not be considered complete. You should read the entire information statement carefully, particularly the risk factors discussed beginning on page 14, and our combined audited and unaudited historical and unaudited pro forma financial statements and notes to those statements appearing elsewhere in this information statement. References in this information statement to (i) “EHC,” “Spinco,” “we,” “our” and “us” refer to EchoStar Holding Corporation and its consolidated subsidiaries, after giving effect to the spin-off and (ii) “EchoStar Communications Corporation”, “ECC” and “DISH Network” refer to EchoStar Communications Corporation and its consolidated subsidiaries, other than us, unless the context otherwise requires. The transaction in which we will be separated from ECC is sometimes referred to in this information statement as the “separation,” the “distribution” or the “spin-off.”’

We describe in this information statement the businesses to be transferred to us by ECC in connection with the spin-off as if the transferred businesses were our business. However, we are a newly formed entity and we have not conducted any operations prior to the spin-off. Our historical and pro forma financial data included in this information statement may not be indicative of our future performance and does not necessarily reflect what our financial condition and results of operations would have been had we operated as a separate, stand-alone entity during the periods presented, particularly since changes will occur in our operations and capitalization as a result of our spin-off from ECC.

Our historical combined financial statements reflect the historical financial position and results of operations of entities included in the consolidated financial statements of ECC, representing almost exclusively ECC’s set-top box business, using the historical results of operations and historical bases of assets and liabilities of this business. Our historical combined financial statements included herein reflect sales to ECC at cost and do not include certain satellites, uplink and satellite transmission assets, real estate and other assets and related liabilities that will be contributed to us by ECC in the spin-off. These assets and liabilities, which will primarily comprise our fixed satellite services business, have been separately audited and are included in the Statement of Net Assets to be Contributed by ECC and Unaudited Pro Forma Combined and Adjusted Financial Information included herein. The financial condition and results of operations of our fixed satellite services business have not been included in our historical combined financial statements because our fixed satellite services business was operated as an integral part of ECC’s subscription television business and did not constitute a “business” in the historical financial statements of ECC. Our historical financial data also does not include financial information of Sling Media, Inc., which was recently acquired by ECC and will be contributed to us in the spin-off. Sling Media’s audited consolidated financial statements are included elsewhere in this information statement, and its historical financial information also has been included in our Unaudited Pro Forma Combined and Adjusted Financial Information.

ECHOSTAR HOLDING CORPORATION

Our Business

We intend to operate two primary businesses, a digital set-top box business and a fixed satellite services business. We expect that the primary customer for each of these businesses initially will be ECC.

Digital Set-Top Boxes

Our set-top box business designs, develops and distributes award-winning digital set-top boxes and related products for direct-to-home satellite service providers. In 2006, our set-top box business shipped over nine million set-top boxes. Most of these set-top boxes were sold to ECC, but we also sold set-top boxes to Bell ExpressVu and other international customers. We currently employ over 700 engineers in our set-top box business.

Fixed Satellite Services

Our fixed satellite services business will be developed using the nine owned or leased in-orbit satellites and related FCC licenses, a network of seven full service digital broadcast centers, and leased fiber optic capacity with points of presence in approximately 150 cities. All of these assets and related contracted liabilities will be contributed to us in the spin-off. We expect that our primary customer initially will be ECC. However, we will also lease capacity in the spot market and to government and enterprise customers.

Other Business Opportunities

ECC has entered into agreements to construct and launch an S-band satellite and to lease its transponder capacity to a Hong Kong joint venture, which in turn will sublease a portion of the transponder capacity to an affiliate of a Chinese governmental entity to support the development of satellite-delivered mobile video services in China. ECC has also recently completed several strategic investments and we intend to evaluate strategic development and investment opportunities both in the United States and in international markets. These investments of ECC will be transferred to us as part of the spin-off, and are part of our strategy to expand our business and support the development of new satellite-delivered services, such as mobile video services. The expertise we develop through these investments may also help us to improve and expand the services that we provide to our existing customers. However, these investments involve a high degree of risk and are concentrated in a few companies. The risks of these investments include, among other things, the risks that required regulatory approvals and other conditions may not be obtained or satisfied, that these companies may not be able to enter into distribution and other relationships, and that the companies in which we invest or with whom we partner may not be able to compete effectively in their markets or that there may be insufficient demand for the new services planned by these companies.

Sling Media, Inc.

Sling Media, Inc. was acquired in October 2007 by ECC and will be transferred to us as part of the spin-off. Sling Media is the maker of the Slingbox, which allows consumers to watch and control their television programming at any time, from any location, using personal computers, personal digital assistants, smartphones and other digital media devices. This information statement includes historical financial statements and other information regarding Sling Media.

Our Strategy

We intend to pursue the following key strategies:


•	Expand set-top box business to additional customers. We believe our separation from ECC may enhance our opportunities to sell set-top boxes to a broader group of multi-channel video distributors. Historically, certain multi-channel video distributors have perceived us as a competitor due to our affiliation with ECC. After the spin-off, we believe we could have opportunities to enter into commercial relationships with these multi-channel video distributors. There can be no assurance, however, that we will be successful in entering into any of these commercial relationships, particularly if we continue to be perceived as affiliated with ECC as a result of common ownership and related management.

•	Leverage satellite capacity and related infrastructure. Our fixed satellite services business has excess satellite and leased fiber capacity that we believe was in large part created through innovation and operational efficiencies at ECC. While we expect that ECC will initially be our primary customer for fixed satellite services, we believe market opportunities exist to utilize our capacity to provide digital video distribution, satellite-delivered IP, corporate communications and government services to a broader customer base.

•	Offer comprehensive network infrastructure solutions. We intend to leverage our over 700 engineers to customize infrastructure solutions for a broader base of customers. For example, we could offer a customer the ability to deliver a fully integrated video programming delivery solution, incorporating our satellite and backhaul capacity, customized set-top boxes and network design and management services.


•	Capitalize on change in regulations. Changes in federal law and regulations applicable to the set-box industry may create opportunities for us to expand our business.


	•	Digital transition. Congress has mandated that by February 2009 all network broadcasts be transmitted digitally, which will require households that receive over-the-air broadcast signals with an analog television to obtain a digital converter device. This digital converter device is a new product and we believe that we are in a position to develop and market devices that could allow us to effectively compete in this new market.

	•	Removable security systems. The Federal Communications Commission, or FCC, mandated that by July 2007 cable providers use removable security modules to provide conditional access security for television content. The FCC intends for this regulation to spur competition in the retail cable set-top box market, providing an even playing field between leased cable set-top boxes and retail-bought, cable-ready TVs and cable set-top box equipment. We believe this new regulation may create an opportunity for us to compete on a more level field in the domestic market for cable set-top boxes.


•	Exploit international opportunities. We believe that direct-to-home satellite service is particularly well-suited for countries without extensive cable infrastructure, and we intend to continue to try to secure new customer relationships from international direct-to-home satellite service providers.

•	Pursue strategic partnerships, joint ventures and acquisitions. We intend to selectively pursue partnerships, joint ventures and strategic acquisition opportunities that we believe may allow us to expand into new markets, broaden our portfolio of products or intellectual property, and strengthen our relationships with our customers.

•	Act on the set-top box replacement cycle. The broader adoption of high definition television by consumers will require more advanced compression and security technologies within set-top boxes. This may launch a replacement cycle, particularly among subscription television providers with substantial bases of legacy equipment, which may create additional market opportunities for us.

Risk Factors

Our business, financial condition and/or results of operations could be materially adversely affected by any of the risks described under “Risk Factors” beginning on page 14, including, among others, the following risks:

General Risks Affecting Our Business


•	We may not realize the potential benefits that we expect from the spin-off. Certain of these benefits depend upon market acceptance of our separation from ECC which we cannot predict and which may be affected by significant common stock ownership by our Chairman and Chief Executive Officer as well as interlocks between our management and board of directors. In addition, we will incur significant costs as a separate company, which may exceed our estimates. We will also incur some negative effects from our separation from ECC, including loss of access to ECC’s financial resources.

•	We currently depend on ECC and Bell Express Vu for substantially all of our revenue, and the loss of, or a significant reduction in orders from, either of these two customers would significantly reduce our revenue and adversely impact our operating results. ECC accounted for over 80% of our revenue in each of the last three years and the six months ended June 30, 2007 and it is under no obligation to remain our customer in the future.

•	We currently have substantial unused satellite capacity. Future costs associated with this excess capacity will negatively impact our margins if we do not generate revenue to offset these costs. In addition, because a substantial portion of the capacity of each of our AMC-15, AMC-16 and EchoStar IX satellites remains unused, there is a significant risk that in the future we will be required to record a substantial impairment charge relating to one or more of these satellites that would likely result in a material adverse effect on our operating results.


•	Our historical combined and pro forma financial information included in this information statement are not indicative of our future financial position, future results of operations or future cash flows, nor do they reflect what our financial position, results of operations or cash flows would have been as a stand-alone company during the periods presented. We were not profitable in the six months ended June 30, 2007 and each of 2006, 2005 and 2004, as our operations have historically been dedicated primarily to support ECC and we provided our products and services to ECC at cost.

•	Our ability to decrease our losses or to generate revenues will depend in part on our ability to grow our business. This may require significant additional capital that may not be available to us. We may also use a significant portion of our existing cash and marketable securities to fund stock buyback programs. Our board of directors has approved a program in which we may repurchase up to $1.0 billion of our Class A common stock during 2008.

•	Our future success may depend on our ability to identify and successfully exploit opportunities to acquire other businesses or technologies to complement, enhance or expand our current business or products or otherwise offer us growth opportunities. We may not be able to pursue these growth opportunities successfully.

•	We have entered into certain strategic transactions and investments in Asia and elsewhere, and we may increase our strategic investment activity in the United States and in international markets. These investments, which we believe could become substantial over time, involve a high degree of risk, are concentrated in a few companies and could expose us to significant financial losses if the underlying ventures are not successful. These investments may also cause us to defer or suspend share repurchases.

•	Our business relies on intellectual property, some of which is owned by third parties, and we may inadvertently infringe their patents and proprietary rights. We may be required to cease developing or marketing infringing products, to obtain licenses from the holders of the intellectual property at a material cost, or to redesign those products in such a way as to avoid infringing the patent claims of others.

•	Our businesses change rapidly as new technologies are developed. These new technologies may cause our services and products to become obsolete. Changes in existing technologies could also cause demand for our products and services to decline.

Risks Affecting Our Set-Top Box Business


•	We depend on sales of set-top boxes for nearly all of our revenue, and if sales of our set-top boxes decline, our business and financial position will suffer. The set-top box business is highly competitive and our ability to compete in this industry will depend substantially on our ability to develop and manufacture products and services at competitive costs, successfully bring new technologies to market and penetrate new markets for set-top boxes, including among customers such as cable television operators that are competitors of DISH Network and have historically been and may continue to be reluctant to deal with us. These potential customers also have well established relationships with other set-top box providers, such as Motorola and Cisco Systems, which acquired Scientific Atlanta in 2006.

•	Our commercial success in selling our set-top boxes to cable television operators depends significantly on our ability to obtain licenses to use the conditional access systems deployed by these operators in our set-top boxes. The owners of these conditional access systems are also in many cases competitors of ours. There can be no assurance we will be able to obtain such licenses on acceptable terms or at all.

•	In order to grow our revenue and business and to build a large customer base, we believe we will be required to increase our sales of set-top boxes in international markets. We have limited experience selling our set-top boxes internationally. To succeed in expanding these sales efforts, we believe we must hire additional sales personnel and develop and manage new relationships with cable operators and other providers of digital television in international markets.


•	Our set-top boxes are extremely complex and can have defects in design, manufacture or associated software. We could incur significant expenses, lost revenue, and reputational harm if we fail to detect or effectively address such issues through design, testing or warranty repairs.

•	We obtain many components for our set-top boxes from a single supplier or a limited group of suppliers. Our reliance on a single or limited group of suppliers, particularly foreign suppliers, and our increasing reliance on subcontractors, involves several risks. These risks include a potential inability to obtain an adequate supply of required components, and reduced control over pricing, quality, and timely delivery of these components.

•	Future demand for our set-top boxes will depend significantly on the growing market acceptance of high definition television, or HDTV. The effective delivery of HDTV will depend on digital television operators developing and building infrastructure to provide wide-spread HDTV programming.

•	If the Tivo jury verdict is upheld on appeal, to the extent that ECC does not indemnify us, we will be required to pay substantial damages and/or license fees, and if we were not able to successfully implement alternative technology (including the successful defense of any challenge that such technology infringes Tivo’s patent), we could also be prohibited from distributing DVRs, or be required to modify or eliminate certain user-friendly DVR features that we currently offer to consumers.

Risks Affecting Our Fixed Satellite Services Business


•	The fixed satellite services industry is highly competitive and is characterized by long-term leases and high switching costs. Therefore, it will be difficult to displace customers from their current relationships with our well-established competitors and we may face competition from others in the future.

•	Satellites are subject to significant operational risks while in orbit. While we believe that our satellite fleet is generally in good condition, certain satellites in our fleet have experienced malfunctions or anomalies, some of which have had a significant adverse impact on their commercial operation. 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. Therefore, the loss of a satellite or other satellite malfunctions or anomalies could have a material adverse effect on us.

•	We are subject to comprehensive governmental regulation by the Federal Communications Commission, or FCC, for our domestic satellite operations. We are also regulated by other federal agencies, state and local authorities and the International Telecommunication Union. Domestic and international regulations regarding the licensing, authorization and operations of satellite communications providers may restrict our fixed satellite services operations.

•	ECC has not historically carried and we do not anticipate carrying insurance for any of the in-orbit satellites that we will own.

Risks Relating to the Spin-Off


•	The allocation of assets, liabilities, rights, indemnifications and other obligations between ECC and us under the separation agreement and the related commercial and other agreements we will enter into with ECC may not reflect what two unaffiliated parties might have agreed to.

•	ECC has applied for a private letter ruling from the Internal Revenue Service, or IRS, to the effect that, among other things, the spin-off, together with certain related transactions, will qualify for tax-free treatment under Sections 355 and 368(a)(1)(D) of the Code. Although a private letter ruling relating to the qualification of the spin-off under Sections 355 and 368(a)(l)(D) of the Internal Revenue Code of 1986, as amended, generally will be binding on the IRS, the validity of such ruling, if obtained, will be subject to the accuracy of factual representations and assumptions made in the ruling request. If the spin-off does not qualify for tax-free treatment for U.S. federal income tax purposes, then, in general, ECC would be subject to tax as if it had sold the common stock of our company in a taxable sale for its fair market value. ECC’s shareholders would be subject to tax as if they had received a distribution equal to the fair market value of


	our common stock that was distributed to them, which would be treated as a taxable dividend to the extent of ECC’s earnings and profits. It is expected that the amount of any such taxes to ECC and its shareholders would be substantial.

•

Actual or perceived conflicts of interest may arise between ECC and us in a number of areas relating to our past and ongoing relationships, including: (i) cross officerships, directorships and stock ownership, (ii) intercompany transactions, (iii) intercompany agreements and (iv) business opportunities. In particular, Charles W. Ergen will be the Chief Executive Officer and Chairman of the Board and will own approximately [ ]% of the total equity and control [ ]% of the total voting power, of each of ECC and us. Thus, Mr. Ergen will have the ability to elect a majority of ECC’s and our directors and to control all other matters requiring the approval of ECC’s and our shareholders.

Risks Relating to our Common Stock and the Securities Market


•	An active trading market may not develop or be sustained for our Class A common stock after the spin-off. In addition, the prices at which our Class A common stock may trade after the spin-off may decline or be subject to volatility.

•	We expect that some of our shareholders, including possibly some of our larger shareholders, will sell the Class A common stock that they receive in the spin-off because, among other reasons, our business profile or market capitalization as an independent, publicly-traded company does not fit their investment objectives. These sales may adversely affect the market price for our Class A common stock as well as the market perception of our business.

•	We have never declared or paid any dividends on our common stock. We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the future.

Other Information

We are a Nevada corporation. Our principal executive offices are located at 90 Inverness Circle E., Englewood, Colorado 80112. Our telephone number is (303) 723-1000. Our web site is “[ ]”. Information contained on our web site does not and will not constitute a part of this information statement or the registration statement on Form 10 of which it is a part.

Summary Historical and Unaudited Pro Forma Combined and Adjusted Financial Data

The following tables set forth our summary historical and unaudited pro forma combined and adjusted financial data. The summary historical combined financial data relating to our combined financial condition and results of operations for each of the fiscal years in the three-year period ended December 31, 2006 and the six months ended June 30, 2007 and 2006 are derived from our historical combined financial statements for the corresponding periods included elsewhere in this information statement. The historical combined financial data for the six months ended June 30, 2007 and 2006 reflects, in our opinion, all adjustments, consisting only of normal recurring adjustments, necessary to fairly present the data for such interim periods. The data should be read in conjunction with our historical combined financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this information statement.

Our historical combined financial data included in this information statement may not be indicative of our future performance and does not necessarily reflect what our financial condition and results of operations would have been had we operated as a separate, stand-alone entity during the periods presented, particularly since changes will occur in our operations and capitalization as a result of our spin-off from ECC.

The unaudited pro forma combined financial data included herein has been adjusted to give effect to, among other things, the contribution of certain net assets to us, the distribution of our common stock by ECC to its shareholders and the contribution to us of Sling Media. The assumptions used and pro forma adjustments derived from such assumptions are based on currently available information and we believe such assumptions are reasonable under the circumstances. Further information regarding the pro forma adjustments can be found under the caption “Unaudited Pro Forma Combined and Adjusted Financial Information” in this information statement.

The unaudited pro forma combined financial data presented for the year ended December 31, 2006 and as of and for the six months ended June 30, 2007 are derived from our unaudited pro forma combined and adjusted financial information. The data should be read in conjunction with our “Selected Combined Financial Data,” “Unaudited Pro Forma Combined and Adjusted Financial Information,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this information statement. The unaudited pro forma combined financial statements are not indicative of our future performance and do not necessarily reflect what our financial condition and results of operations would have been had the spin-off been completed on the dates assumed. Also, they may not reflect the results of operations or financial condition which would have resulted had we operated as a separate, stand-alone entity during the periods presented.


	For the Six Months
	Ended June 30,								For the Years Ended December 31,
	2007								2006
	Pro Forma		2007			2006			Pro Forma		2006			2005			2004
	(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
	(In thousands, except per share data)

Statements of Operations Data:
Revenue	$	1,057,384	$	778,352		$	755,616		$	2,080,259	$	1,525,320		$	1,513,691		$	1,720,091
Operating expenses		1,038,200		809,813			759,825			2,010,792		1,562,767			1,546,755			1,760,714

Operating income (loss)	$	19,184	$	(31,461	)	$	(4,209	)	$	69,467	$	(37,447	)	$	(33,064	)	$	(40,623	)

Net income (loss)	$	32,194	$	(33,293	)	$	(2,324	)	$	176,836	$	(34,162	)	$	(44,940	)	$	(43,237	)

Basic and diluted pro forma income (loss) per common share


	For the Six Months
	Ended June 30,						For the Years Ended December 31,
	2007			2006			2006			2005			2004
	(Unaudited)
	(In thousands)

Cash Flow Data:
Operating activities	$	(29,695	)	$	(5,467	)	$	(36,374	)	$	(14,193	)	$	(78,916	)
Investing activities	$	(125,244	)	$	(55,753	)	$	(54,781	)	$	(16,700	)	$	(5,619	)
Financing activities	$	153,223		$	73,291		$	104,534		$	39,782		$	69,715


	As of June 30,
	2007				As of December 31,
	Pro Forma		2007		2006		2005		2004
	(Unaudited)		(Unaudited)						(Unaudited)
	(In thousands)

Balance Sheet Data:
Cash, cash equivalents and marketable securities	$	1,347,007	$	336,183	$	323,576	$	106,109	$	143,437
Total assets	$	3,600,563	$	656,328	$	517,821	$	229,392	$	277,843
Long-term debt (including current portion)	$	397,989	$	—	$	—	$	495	$	647
Total owner’s equity (deficit)	$	2,989,974	$	634,773	$	502,283	$	217,132	$	258,452

Summary of the Spin-Off

The following is a brief summary of the terms of the spin-off.


Distributing Company		EchoStar Communications Corporation, a Nevada corporation. After the distribution, EchoStar Communications Corporation will not own any shares of common stock of EchoStar Holding Corporation.

Separated Company		EchoStar Holding Corporation, a Nevada corporation and a wholly-owned subsidiary of ECC. After the distribution, EchoStar Holding Corporation will be an independent, publicly-traded company. However, all of ECC’s directors, except James DeFranco, Cantey Ergen and Gary S. Howard, will also be directors of EHC. Charles W. Ergen, our Chairman and Chief Executive Officer, will continue to be the Chairman and Chief Executive Officer of ECC. In addition, certain executive officers of ECC will also serve as our executive officers. Based on Mr. Ergen’s ownership as of [ ], 2007, Mr. Ergen will also own approximately [ ]% of the total equity and approximately [ ]% of the total voting power of each of ECC and us.

Primary purposes of the spin-off		The board of directors of ECC believes that creating independent, focused companies is the best way to realize the full value of ECC’s businesses. The board of directors of ECC considered the following potential benefits, among others, in making its determination to consummate the spin-off:

		• Creating effective management incentives tied to each of EHC and ECC’s performance and increasing the ability to attract and retain personnel;

		• Creating opportunities to effectively develop and finance expansion plans;

		• Creating separate companies that have different financial characteristics, which may appeal to different investor bases; and

		• Allowing each company to separately pursue the business strategies that best suit its long-term interest.

Conditions to the spin-off		The spin-off is subject to the satisfaction or, if permissible under the separation agreement, waiver by ECC of the following conditions:

		• the Securities and Exchange Commission shall have declared effective our registration statement on Form 10 and no stop order shall be in effect;

		• all permits, registrations and consents required under the securities or blue sky laws in connection with the spin-off shall have been received;

		• ECC shall have received the opinion of White & Case LLP confirming the tax-free status of the spin-off and certain related transactions for U.S. federal income tax purposes;

		• the listing of our Class A common stock on the Nasdaq Global Market shall have been approved;


		• all material governmental approvals and other consents necessary to consummate the distribution shall have been received; and

		• no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing consummation of the distribution or any of the transactions related thereto shall be in effect.

		The fulfillment of the foregoing conditions will not create any obligation on ECC’s part to effect the spin-off. ECC has the right not to complete the spin-off if, at any time, ECC’s board of directors determines, in its sole discretion, that the spin-off is not in the best interests of ECC or its shareholders, or that market conditions are such that it is not advisable to separate EHC from ECC.

Securities to be Distributed		Shares of EHC Class A common stock and Class B common stock will constitute all of the outstanding shares of our common stock immediately after the distribution. We expect the shares of our Class A common stock and Class B common stock to be distributed by ECC to you, based on the same class of ECC common stock that you own, on or about [ ],2007, which we refer to as the distribution date. Immediately after the spin-off, all of our Class B common stock will be owned beneficially by Charles Ergen, our Chairman and Chief Executive Officer, who will, immediately after the distribution date, own approximately [ ]% of our equity and possess approximately [ ]% of the total voting power represented by our common stock.

Distribution Ratio		For each share of ECC Class A common stock or ECC Class B common stock held by you as of 5:00 p.m., New York City time, on [ ], 2007, the record date for the spin-off, you will receive [ ] of a share of the same class of our common stock. Please note that if you sell your shares of Class A common stock of ECC after the record date but before the distribution date, the buyer of those shares will be entitled to receive the shares of our Class A common stock issuable in respect of the shares sold, If as a result of the foregoing ratio you would be entitled to receive a fraction of a share of our Class A common stock, you will receive cash in lieu of such fractional share interest. The distribution of shares will be made in book-entry form.

Record Date		The record date is [ ], 2007.

Distribution Date		The distribution date is [ ], 2007.

Trading Market and Symbol		We intend to list our Class A common stock on the Nasdaq Global Market under the ticker symbol “[ ].” We anticipate that, on or prior to the distribution date, a limited market for our Class A common stock, commonly known as a “when issued” trading market, will develop, and we expect “regular way” trading of our Class A common stock will begin the first trading day after the distribution date.

Tax Consequences to Shareholders		ECC shareholders are not expected to recognize any gain or loss for U.S. federal income tax purposes as a result of the spin-off, except for any gain or loss attributable to the receipt of cash in lieu


		of a fractional share of our Class A common stock. See “The Spin-Off — Material U.S. Federal Income Tax Consequences of the Spin-Off” for a more detailed description of the U.S. federal income tax consequences of the spin-off.

		Each shareholder is urged to consult his, her or its tax advisor as to the specific tax consequences of the spin-off to that shareholder, including the effect of any state, local or U.S. tax laws and of changes in applicable tax laws.

Relationship with ECC after the Separation		We will enter into a separation agreement and other agreements with ECC to effect the spin-off and provide a framework for our relationship with ECC after the distribution. These agreements generally expire after two years and will govern our relationship with ECC subsequent to the completion of the spin-off and provide for the allocation between us and ECC of certain of ECC’s assets, liabilities and obligations attributable to the period prior to our separation from ECC. The separation agreement, in particular, establishes the amount of cash and indebtedness that each company initially will retain and incur. For a discussion of these arrangements, see “Certain Intercompany Agreements — Agreements with ECC,” included elsewhere in this information statement.

Dividend Policy		We presently intend to retain future earnings, if any, to finance the expansion of our businesses and to conduct a possible stock-buyback of up to $1 billion. As a result, we do not expect to pay any cash dividends for the foreseeable future. All decisions regarding the payment of dividends by our company will be made by our board of directors from time to time in accordance with applicable law.

Questions and Answers about the Spin-Off

The following is a brief summary of the terms of the spin-off. Please see “The Spin-Off” for a more detailed description of the matters described below.


Q:		*What is the spin-off?*

A:		The spin-off is the method by which ECC will separate its existing business segments into two independent, publicly-traded companies. In the spin-off, ECC will distribute to its shareholders as of the distribution date all of the shares of our Class A common stock and Class B common stock that it owns. Following the spin-off, we will be a separate company from ECC, and ECC will not retain any ownership interest in us. The number of shares of ECC common stock you own will not change as a result of the spin-off.

Q:		*What is being distributed in the spin-off?*

A:		Approximately [ ] million shares of our Class A common stock and [ ] million shares of our Class B common stock will be distributed in the spin-off, based upon the number of shares of ECC Class A common stock and ECC Class B common stock outstanding on the record date. The shares of our Class A common stock and Class B common stock to be distributed by ECC will constitute all of the issued and outstanding shares of our Class A common stock and Class B common stock immediately after the distribution. For more information on the shares being distributed in the spin-off, see “Description of Our Capital Stock — Our Class A Common Stock” and “Description of Our Capital Stock — Our Class B Common Stock” beginning on page 106 of this information statement.

Q:		*What will I receive in the spin-off?*

A:		Holders of ECC Class A common stock will receive a dividend of [ ] of a share of our Class A common stock for each share of ECC Class A common stock held by them on the record date, and holders of ECC Class B common stock will receive a dividend of [ ] of a share of our Class B common stock for every share of ECC Class B common stock held by them on the record date. As a result of the spin-off, your proportionate interest in ECC will not change and you will own the same percentage of equity securities and voting power in EHC as you previously did in ECC. For a more detailed description, see “The Spin-Off.”

Q:		*What is the record date for the distribution?*

A:		Record ownership will be determined as of 5:00 p.m., New York City time on [ ], 2007 which we refer to as the record date.

Q:		*When will the distribution occur?*

A:		We expect that shares of our Class A common stock and Class B common stock will be distributed by the distribution agent, on behalf of ECC, on or about [ ], 2007 which we refer to as the distribution date.

Q:		*What do I have to do to participate in the spin-off?*

A:		No action is required on your part. Shareholders of ECC on the record date for the distribution are not required to pay any cash or deliver any other consideration, including any shares of ECC common stock, for the shares of our common stock distributable to them in the spin-off.

Q:		If I sell, on or before the distribution date, shares of ECC common stock that I held on the record date, am I still entitled to receive shares of EHC common stock distributable with respect to the shares of ECC common stock I sold?

A:		No. No ex-dividend market will be established for any class of our common stock until the first trading day following the distribution date. Therefore, if you own shares of ECC common stock on the record date and thereafter sell those shares on or prior to the distribution date, you will also be selling the shares of


		our common stock that would have been distributed to you in the spin-off with respect to the shares of ECC common stock you sell.

Q:		*How will fractional shares be treated in the spin-off?*

A:		If you would be entitled to receive a fractional share of Class A common stock in the spin-off, you will instead receive a cash payment. See “The Spin-Off — Treatment of Fractional Shares” for an explanation of how the cash payments will be determined.

Q:		*How will ECC distribute shares of EHC common stock to me?*

A:		Holders of shares of ECC’s Class A or Class B common stock on the record date will receive shares of the same class of our common stock, in book entry form. See “The Spin-Off — Manner of Effecting the Spin-Off” for a more detailed explanation.

Q:		*What is the reason for the spin-off?*

A:		The potential benefits considered by ECC’s board of directors in making the determination to consummate the spin-off included the following:


	•	The spin-off is expected to allow the creation of effective management incentives tied to each of EHC’s and ECC’s respective performance, increasing the ability to attract and retain personnel.

	•	The spin-off is expected to create opportunities to effectively develop and finance expansion plans of each independent company.

	•	The spin-off is expected to allow each company to separately pursue the business strategies that best suit its long-term interests.

	•	The spin-off is expected to allow the creation of separate companies that have different financial characteristics, which may appeal to different investor bases, which could enhance the ability of each company to raise capital to fund its growth plans and initiatives.


Q:		*What are the federal income tax consequences to me of the spin-off?*

A:		ECC has applied for a private letter ruling from the IRS, and the spin-off is conditioned upon the receipt by ECC of the opinion of White & Case LLP, in each case, substantially to the effect that the spin-off, together with certain related transactions, will qualify as reorganizations under Sections 355 and 368(a)(l)(D) of the Code and that, accordingly, for U.S. federal income tax purposes, no gain or loss will be recognized by, and no amount will be included in the income of, a holder of ECC common stock upon the receipt of shares of our common stock pursuant to the spin-off. A holder of ECC common stock will generally recognize gain or loss with respect to cash received in lieu of a fractional share of our common stock.

Please see “The Spin-Off — Material U.S. Federal Income Tax Consequences of the Spin-Off” and “Risk Factors — Risks Relating to the Spin-Off — The spin-off could result in significant tax liability” for more information regarding the private letter ruling and the tax opinion and the potential tax consequences to you of the spin-off.


Q:		*Does EHC intend to pay cash dividends?*

A:		No. We currently intend to retain future earnings, if any, to finance the expansion of our businesses. As a result, we do not expect to pay any cash dividends for the foreseeable future. All decisions regarding the payment of dividends by our company will be made by our board of directors from time to time in accordance with applicable law.

Q:		*How will EHC common stock trade?*

A:		Currently, there is no public market for our common stock. We intend to list our Class A common stock on the Nasdaq Global Market under the symbol “[ ]”.

We anticipate that trading will commence on a when-issued basis shortly before the record date. When-issued trading in the context of a spin-off refers to a transaction effected on or before the distribution date and made conditionally because the securities of the spun off entity have not yet been distributed. When-issued trades generally settle within three days after the distribution date. On the first trading day following the distribution date, any when-issued trading in respect of our Class A common stock will end and regular way trading will begin. Regular way trading refers to trading after the security has been distributed and typically involves a trade that settles on the third full trading day following the date of the sale transaction. We cannot predict the trading prices for our common stock before or after the distribution date.


Q:		*Will the spin-off and distribution affect the trading price of my ECC Class A common stock?*

A:		Yes. After the distribution of EHC Class A common stock, the trading price of ECC Class A common stock may be lower than the trading price of the ECC Class A common stock immediately prior to the distribution. Moreover, until the market has evaluated the operations of ECC without the operations of EHC, the trading price of ECC Class A common stock may fluctuate significantly. ECC believes the separation of EHC from ECC offers its shareholders the greatest long-term value. However, the combined trading prices of ECC Class A common stock and EHC Class A common stock after the spin-off may be lower than the trading price of ECC Class A common stock prior to the spin-off. See “Risk Factors” beginning on page 14.

Q:		*Do I have appraisal rights?*

A:		No. Holders of ECC common stock are not entitled to appraisal rights in connection with the spin-off.

Q:		*Who is the transfer agent for your common stock?*

A:		[ ]

RISK FACTORS

The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that we are unaware of or that we currently believe to be immaterial also may become important factors that affect us. This information statement also contains forward-looking statements that involve risks and uncertainties. See “Cautionary Statement Concerning Forward-Looking Statements.”

If any of the following events occur, our business, financial condition or results of operation could be materially and adversely affected.

General Risks Affecting Our Business

We may not realize the potential benefits from the spin-off.

We may not realize the potential benefits that we expect from the spin-off which are described elsewhere in this information statement. Certain of these benefits depend upon market acceptance of our separation from ECC which we cannot predict and which may be affected by the significant common stock ownership by our Chairman and Chief Executive Officer, as well as interlocks between our management and board of directors. In addition, we will incur significant costs, including those described elsewhere in this information statement, which may exceed our estimates. We will also incur some negative effects from our separation from ECC, including loss of access to ECC’s financial resources.

We currently depend on ECC and Bell ExpressVu for substantially all of our revenue and ECC accounted for over 80% of our revenue in the six months ended June 30, 2007 and each of 2006, 2005 and 2004; the loss of, or a significant reduction in orders from, either of ECC or Bell ExpressVu would significantly reduce our revenue and adversely impact our operating results.

ECC accounted for approximately 87.0%, 84.5%, 85.6% and 89.7% of our revenue in the six months ended June 30, 2007 and in 2006, 2005 and 2004, respectively. In addition, Bell ExpressVu accounted for approximately 8.9%, 12.2%, 11.4% and 7.3% of our revenue in the six months ended June 30, 2007 and in 2006, 2005 and 2004, respectively. Any reduction in sales to ECC or Bell ExpressVu would have a significant negative impact on our business. Moreover, because our sales to these customers are made pursuant to standard purchase orders, these customers have no future obligation to purchase set-top boxes from us and existing orders may be cancelled or reduced on short notice. Cancellations or reductions may be more frequent once we are separated from ECC. Cancellations or reductions of customer orders could result in the loss of anticipated sales without allowing us sufficient time to reduce our inventory and operating expenses. In addition, the timing of orders from these two customers could vary significantly depending on equipment promotions these customers offer to their subscribers, changes in technology, and their use of remanufactured set-top boxes, which may cause our revenue to vary significantly quarter over quarter and could expose us to the risks of inventory shortages or excess inventory. These inventory risks are particularly acute during end product transitions in which a new generation of set-top boxes is being deployed and inventory of older generation set-top boxes is at a higher risk of obsolescence. This in turn could cause our operating results to fluctuate significantly.

In addition, because substantially all of our revenue is tied to ECC and Bell ExpressVu, our success also depends to a significant degree on the continued success of ECC and Bell ExpressVu in attracting new subscribers or in marketing programming packages to subscribers that will require the purchase of new set-top boxes.

There is a relatively small number of potential new customers for our set-top boxes and fixed satellite services, and we expect this customer concentration to continue for the foreseeable future. Therefore, our operating results will likely continue to depend on sales to a relatively small number of customers, as well as the continued success of these customers. In addition, we may from time to time enter into customer agreements providing for exclusivity periods during which we may sell a specified product only to that customer. If we do not develop relationships with new customers, we may not be able to expand our customer base or maintain or increase our revenue.

We currently have substantial unused satellite capacity; our results of operations could be materially adversely affected if we are not able to utilize all of this capacity.

While we are currently evaluating various opportunities to make profitable use of our satellite capacity (including, but not limited to, supplying satellite capacity for new international ventures), we do not have firm plans to utilize all of our satellite capacity. In addition, there can be no assurance that we can successfully develop the business opportunities we currently plan to pursue with this capacity. Future costs associated with our excess satellite capacity will negatively impact our margins if we do not generate revenue to offset the costs of this capacity.

In addition, we currently have leased minimal capacity on our two leased satellites, AMC-15 and AMC-16, and have substantial unleased capacity on one of our owned satellites, EchoStar IX. The carrying amounts of these satellites, as well as our other satellites, must be reviewed at least annually in order to determine if an impairment charge is warranted. An impairment charge may be warranted in the event that circumstances indicate that the carrying amount of these satellite assets may not be recoverable. In the event that we are unsuccessful in marketing capacity in these satellite assets and do not achieve sufficient utilization and prices, we will be required to record a substantial impairment charge that would likely result in a material adverse effect on our operating results.

Our historical combined and pro forma financial information included in this information statement are not necessarily indicative of our future financial position, future results of operations or future cash flows nor do they reflect what our financial position, results of operations or cash flows would have been as a stand-alone company during the periods presented.

The historical and pro forma combined financial information included in this information statement do not reflect the financial condition, results of operations or cash flows we would have achieved as an independent publicly-traded company during the periods presented or those results we will achieve in the future. This is primarily a result of the following factors:


•	We have never been profitable as the majority of our operations have historically been in support of ECC and we provided our products and services to ECC at cost. We cannot assure you that we can achieve or sustain profitability, or that we can grow our business profitably or at all.

•	The financial condition and results of operations of our fixed satellite services business are reflected only in our pro forma combined financial information included herein, and not in our historical combined financial information included herein, because our fixed satellite services business was operated as an integral part of ECC’s subscription television business and did not constitute a “business” in the historical financial statements of ECC.

•	Our plans with respect to the fixed satellite services business are being developed.

•	Sling Media is a recent acquisition and we have never operated that business.

•	Our historical and pro forma combined financial results reflect allocations of corporate expenses from ECC. Those allocations may be different from the comparable expenses we would have incurred had we operated as an independent publicly-traded company.

•	Our working capital requirements and capital required for our general corporate purposes historically have been satisfied as part of the corporate-wide cash management policies of ECC. Subsequent to the spin-off, ECC will not be required to provide us with funds to finance our working capital or other cash requirements. Without the opportunity to obtain financing from ECC, we may in the future need to obtain additional financing from banks, or through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements. Such financing may not be available to us on acceptable terms, or at all. We may have a credit rating that is lower than ECC’s credit rating and may incur debt on terms and at interest rates that will not be as favorable as those historically enjoyed by ECC.

•	Significant changes may occur in our cost structure, management, financing and business operations as a result of our operating as an independent public company.

We may not be able to obtain additional capital on acceptable terms or at all in order to grow and to increase earnings.

Our ability to increase earnings will depend in part on our ability to grow our business. While we expect to satisfy our need for funds to meet our growth plans to be satisfied from cash and marketable investment securities to be contributed to us in connection with the spin off, cash we generate from operations and future financings, we cannot assure you that we will generate sufficient cash from operations or that additional financing will be available on acceptable terms, or at all, if needed in the future.

In addition, we currently have contracts to construct, and conditional licenses and pending FCC applications for, a number of Ku-band, Ka-band and extended Ku-band satellites. We may need to raise additional capital to construct, launch, and insure these satellites. Depending on market conditions and our results of operations and financial condition we may not be able to raise such additional capital on acceptable terms or at all. We also periodically evaluate various strategic initiatives, the pursuit of which also could require us to raise significant additional capital. We may also use a significant portion of our existing cash to fund a potential stock buyback program during 2008 of up to $1 billion of our Class A common stock.

We also have substantial satellite-related payment obligations under our various satellite service agreements.

We could be exposed to significant financial losses if our investments are unsuccessful.

We have entered into certain strategic transactions and investments in Asia and elsewhere, and we may increase our strategic investment activity in the United States and in international markets. These investments, which we expect could become substantial over time, involve a high degree of risk and could expose us to significant financial losses if the underlying ventures are not successful. In particular, the laws, regulations and practices of certain countries may make it harder for our investments to be successful.

In addition, the companies in which we invest or with whom we partner may not be able to compete effectively or there may be insufficient demand for the services and products offered by these companies.

We may pursue new acquisitions, joint ventures and other transactions to complement or expand our business which may not be successful.

We may not be able to complete such transactions and such transactions, if executed, pose significant risks and could have a negative effect on our operations. Our future success may depend on opportunities to buy other businesses or technologies that could complement, enhance or expand our current business or products or that might otherwise offer us growth opportunities. Any transactions that we are able to identify and complete may involve a number of risks, including:


•	the diversion of our management’s attention from our existing business to integrate the operations and personnel of the acquired or combined business or joint venture;

•	possible adverse effects on our operating results during the integration process; and

•	our possible inability to achieve the intended objectives of the transaction.

In addition, we may not be able to successfully or profitably integrate, operate, maintain and manage our newly acquired operations or employees. We may not be able to maintain uniform standards, controls, procedures and policies, and this may lead to operational inefficiencies.

New acquisitions, joint ventures and other transactions may require the commitment of significant capital that would otherwise be directed to investments in our existing businesses or be distributed to shareholders. Commitment of this capital may cause us to defer or suspend any share repurchases that we otherwise may have made.

Our business relies on intellectual property, some of which is owned by third parties, and we may inadvertently infringe their patents and proprietary rights.

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 related to those that we offer. In general, if a court determines that one or more of our products infringes on intellectual property held by others, we may be required to cease developing or marketing those products, to obtain licenses from the holders of intellectual property or to redesign those products in such a way as to avoid infringing the patent claims, each of which may require material expenditures by us. If those intellectual property rights are held by a competitor, we may be unable to obtain the intellectual property at any price, which could adversely affect our competitive position.

If we fail to protect our intellectual property rights, it could harm our business and competitive position.

Our business relies on intellectual property rights to stay competitive in the market place. We rely on a combination of patent, trademark and copyright laws, trade secrets, confidentiality procedures and contractual provisions to protect our intellectual property rights and the obligations we have to third parties from whom we license intellectual property rights. Nevertheless, these afford only limited protection and policing unauthorized use of proprietary technology can be difficult and expensive. We may not be able to take appropriate steps to enforce our intellectual property rights and this could have a material adverse effect on our business, operating results and financial condition.

Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the spin-off. If we are unable to achieve and maintain effective internal controls, our business, financial position and results of operations could be adversely affected.

Our financial results previously were included within the consolidated results of ECC, and our reporting and control systems were appropriate for those of subsidiaries of a public company. However, we were not directly subject to reporting and other requirements of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act. As a result of the spin-off, we will be directly subject to these requirements, including the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which will require annual management assessments of the effectiveness of our internal controls over financial reporting and a report by our independent registered public accounting firm addressing these controls. These reporting and other obligations will place significant demands on our management and administrative and operational resources, including accounting resources. To comply with these requirements, we anticipate that we will need to upgrade our systems, including information technology, implement additional financial and management controls, reporting systems and procedures and hire additional accounting and finance staff. If we are unable to upgrade our financial and management controls, reporting systems, information technology and procedures in a timely and effective fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired.

Prior to the spin-off, we will not have been an independent company and we may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent company.

Prior to the spin-off, our business was operated by ECC as part of its broader corporate organization, rather than as an independent company. ECC’s senior management oversaw the strategic direction of our businesses and ECC performed various corporate functions for us, including, but not limited to:


•	selected human resources related functions;

•	accounting;

•	tax administration;

•	selected legal functions, as well as external reporting;

•	treasury administration, investor relations, internal audit and insurance functions; and


•	selected information technology and telecommunications services.

Following the spin-off, neither ECC nor any of its affiliates will have any obligation to provide these functions to us other than those services that will be provided for a limited period of time by ECC pursuant to the services agreement between us and ECC. See “Certain Intercompany Arrangements — Services Agreement.” If, once this services agreement terminates, we do not have in place our own systems and business functions, we do not have agreements with other providers of these services or we are not able to make these changes cost effectively, we may not be able to operate our business effectively and our profitability may decline. If ECC does not continue to perform effectively the services that are called for under the services agreement, we may not be able to operate our business effectively after the spin-off.

Changes in existing technologies or the emergence of new products or technologies could significantly harm our business.

Our businesses change rapidly as new technologies are developed. These new technologies may cause our services and products to become obsolete. Changes in existing technologies could also cause demand for our products and services to decline. For example, if changes in technology allow digital television subscribers to use devices such as personal computers, cable ready televisions and network based digital video recording services in place of set-top boxes, our customers may not need to purchase our set-top boxes to provide their digital television subscribers with digital video recording and other set-top box features. One or more new technologies also could be introduced that compete favorably with our set-top boxes or that cause our set-top boxes to no longer be of significant benefit to our customers.

We and our suppliers also may not be able to keep pace with technological developments. Alternatively, if the new technologies on which we intend to focus our research and development investments fail to achieve acceptance in the marketplace, we could suffer a material adverse effect on our future competitive position that could cause a reduction in our revenues and earnings. Our competitors could also obtain or develop proprietary technologies that are perceived by the market as being superior to ours. Further, after we have incurred substantial research and development costs, one or more of the technologies under our development, or under development by one or more of our strategic partners, could become obsolete prior to its introduction. Finally, delays in the delivery of components or other unforeseen problems may occur that could materially and adversely affect our ability to generate revenue, offer new services and remain competitive.

Technological innovation is important to our success and depends, to a significant degree, on the work of technically skilled employees. Competition for the services of these types of employees is intense. We may not be able to attract and retain these employees. If we are unable to attract and maintain technically skilled employees, our competitive position could be materially and adversely affected.

We intend to make significant investments in new products and services that may not be profitable.

We have made and will continue to make significant investments in research, development, and marketing for new products, services, and technologies, including new set-top box designs and entry into new business areas. Investments in new technology are inherently speculative and commercial success depends on many factors including novelty, service and support, and effective sales and marketing. We may not achieve significant revenue from new product and service investments for a number of years, if at all. Moreover, new products and services may not be profitable, and even if they are profitable, operating margins for new products and businesses may be minimal.

We rely on key personnel.

We believe that our future success will depend to a significant extent upon the performance of Charles W. Ergen, our Chairman and Chief Executive Officer and certain other executives. Mr. Ergen and certain of these executives will also continue to devote significant time to their employment at ECC. The loss of Mr. Ergen or of certain other key executives or their ability to devote sufficient time and effort to our business could have a material adverse effect on our business, financial condition and results of operations.

Although all of our executives will execute agreements limiting their ability to work for or consult with competitors if they leave us, we do not have employment agreements with any of them.

Risks Affecting Our Set-Top Business

We depend on sales of set-top boxes for nearly all of our revenue, and if sales of our set-top boxes decline, our business and financial position will suffer.

Our historical revenues consist primarily of sales of our set-top boxes. In addition, we currently derive, and expect to continue to derive in the near term, nearly all of our revenue from sales of our set-top boxes to ECC and Bell ExpressVu. Continued market acceptance of our set-top boxes is critical to our future success. If we are not able to expand sales of our set-top boxes to other providers of digital television, including cable operators, our growth prospects will be limited, and our revenues will be substantially impacted if sales of our set-top boxes to providers of satellite-delivered digital television decline.

Our business may suffer if direct-to-home satellite service providers, who currently comprise our customer base, do not compete successfully with existing and emerging alternative platforms for delivering digital television, including terrestrial networks, Internet protocol television and cable television operators.

Our existing customers are direct-to-home satellite video providers, which compete with cable television operators and terrestrial broadcasters for the same pool of viewers. As technologies develop, other means of delivering information and entertainment to television viewers are evolving. For example, some telecommunications companies, such as AT&T Inc. and Verizon Communications, are seeking to compete with terrestrial broadcasters, cable television network operators and direct-to-home satellite services by offering IPTV, which allows telecommunications companies to stream television programs through telephone lines or fiber optic lines. To the extent that the terrestrial television networks, telecommunications companies and cable television network operators compete successfully against direct-to-home satellite services for viewers, the ability of our existing customer base to attract and retain subscribers may be adversely affected. As a result, demand for our satellite television set-top boxes could decline and we may not be able to sustain our current revenue levels.

Our future financial performance depends on our ability to penetrate new markets for set-top boxes.

Our products were initially designed for, and have been deployed mostly by, providers of satellite-delivered digital television. To date, we have not made any sales of our set-top boxes to cable operators. In addition, the cable set-top box market is highly competitive and we expect competition to intensify in the future. This competition may make it more difficult for us to sell cable set-top boxes, and may result in pricing pressure, small profit margins, high sales and marketing expenses and failure to obtain market share, any of which would likely seriously harm our business, operating results and financial condition.

Our ability to sell our set-top boxes to cable television operators depends on our ability to obtain licenses to use the conditional access systems utilized by these cable television operators.

Our commercial success in selling our set-top boxes to cable television operators depends significantly on our ability to obtain licenses to use the conditional access systems deployed by these operators in our set-top boxes. In many cases, the intellectual property rights to these conditional access systems are owned by the set-top box manufacturer that currently provides the cable television operator with its set-top boxes. We cannot assure you that we will able to obtain any required license on commercially favorable terms, if at all. If we do not obtain the necessary licenses, we may be delayed or prevented from pursuing the development of some potential products with cable television operators. Our failure to obtain a license to any technology that we may require to develop or commercialize our set-top boxes with cable television operators will significantly and negatively affect our business.

Growth in our set-top box business likely requires expansion of our sales to international customers; we may be unsuccessful in expanding international sales.

We believe that in order to grow our set-top box revenue and business and to build a large customer base, we must increase sales of our set-top boxes in international markets. We have limited experience selling our set-top boxes internationally. To succeed in these sales efforts, we believe we must hire additional sales personnel and develop and manage new relationships with cable operators and other providers of digital television in international markets. If we do not succeed in our efforts to sell to these target markets and customers, the size of our total addressable market may be limited. This, in turn, would harm our ability to grow our customer base and revenue.

The set-top box business is extremely competitive.

Currently, there are many significant competitors in the set-top box business including several established companies who have sold set-top boxes to major cable operators in the United States for many years. These competitors include companies such as Motorola, Cisco Systems, which acquired Scientific Atlanta in 2006, and Pace. In addition, a number of rapidly growing companies have recently entered the market, many of them with set-top box offerings similar to our existing satellite set-top box products. We also expect additional competition in the future from new and existing companies who do not currently compete in the market for set-top boxes. As the set-top box business evolves, our current and potential competitors may establish cooperative relationships among themselves or with third parties, including software and hardware companies that could acquire significant market share, which could adversely affect our business. We also face competition from set-top boxes that have been internally developed by digital video providers. Any of these competitive threats, alone or in combination with others, could seriously harm our business, operating results and financial condition.

Our set-top boxes are highly complex and may experience quality or supply problems.

Our set-top boxes are extremely complex and can have defects in design, manufacture or associated software. Set-top boxes often contain “bugs” that can unexpectedly interfere with their operation. Defects may also occur in components and products that we purchase from third-parties. There can be no assurance that we will be able to detect and fix all defects in the set-top boxes that we sell. We could incur significant expenses, lost revenue, and harm to our reputation if we fail to detect or effectively address such issues through design, testing or warranty repairs.

The average selling price of our set-top boxes may decrease, which could negatively impact our operating results.

As a part of ECC, we have historically sold set-top boxes to ECC at our cost. In order to operate a profitable business we will be required to sell our set-top boxes at higher prices. It is possible that our ability to increase the average selling prices of our set-top boxes will be limited and that prices may decrease in the future in response to competitive pricing pressures, new product introductions by us or our competitors or other factors. If we are unable to increase the average selling prices of our set-top boxes, or if such selling prices decline, and we are unable to respond in a timely manner by developing and introducing new products and continually reducing our product costs, our revenues and gross margin may be negatively affected, which will harm our business and results of operations.

If significant numbers of television viewers are unwilling to pay for premium programming packages that utilize set-top boxes, we may not be able to sustain our current revenue level.

Our revenues are derived entirely from direct-to-home satellite service providers who purchase our set-top boxes for their subscribers. Therefore, we are substantially dependent upon the ability of these providers to promote the delivery of premium programming packages that utilize technology incorporated into our set-top boxes, such as DVR technology and IPTV, to generate future revenues.

However, direct-to-home satellite service providers may be unsuccessful in promoting value-added services. Subscribers of direct-to-home satellite services have historically purchased standalone satellite receivers without the advanced set-top box functionality that we offer. If direct-to-home satellite service providers are unable to develop compelling reasons for their subscribers to purchase our more advanced set-top boxes, it will be difficult for us to sustain our historical revenues.

Our reliance on several key components used in our set-top boxes could restrict production and result in higher set-top box costs.

We obtain many components for our set-top boxes from a single supplier or a limited group of suppliers. Our reliance on a single or limited group of suppliers, particularly foreign suppliers, and our increasing reliance on subcontractors, involves several risks. These risks include a potential inability to obtain an adequate supply of required components, and reduced control over pricing, quality, and timely delivery of these components. We do not generally maintain long-term agreements with any of our suppliers or subcontractors. An inability to obtain adequate deliveries or any other circumstances requiring us to seek alternative sources of supply could affect our ability to ship our set-top boxes on a timely basis, which could damage our relationships with current and prospective customers and harm our business, resulting in a loss of market share, and reduce revenues and income.

We generally maintain low inventory levels and do not make binding long-term commitments to suppliers. As a result, it may be difficult in the future to obtain components required for our products or to increase the volume of components if demand for our products increases.

Our future growth depends on market acceptance of HDTV.

Future demand for our set-top boxes will depend significantly on the growing market acceptance of high definition television, or HDTV. The effective delivery of HDTV will depend on digital television operators developing and building infrastructure to provide wide-spread HDTV programming. If the introduction or adoption of HDTV or the deployment of HDTV is not as widespread or as rapid as we or our customers expect, our revenue growth will be limited.

During April 2006, a jury concluded that certain of our digital video recorders, or DVRs, infringed a patent held by Tivo. If the verdict is upheld on appeal and we are not able to successfully implement alternative technology, we could be prohibited from distributing DVRs, or be required to modify or eliminate certain user-friendly DVR features that we currently offer to consumers.

If the Tivo jury verdict is upheld on appeal, to the extent that ECC does not indemnify us, we will be required to pay substantial damages and/or license fees, and if we were not able to successfully implement alternative technology (including the successful defense of any challenge that such technology infringes Tivo’s patent), we could also be prohibited from distributing DVRs, or be required to modify or eliminate certain user-friendly DVR features that we currently offer to consumers. In that event we would be at a significant disadvantage to our competitors who could offer this functionality and, while we would attempt to provide that functionality through other manufacturers, the adverse affect on our business could be material.

Risks Affecting Our Fixed Satellite Services Business

We currently face competition from established competitors in the fixed satellite service business and may face competition from others in the future.

In our fixed satellite services business, we will compete against larger, well-established fixed satellite service companies, such as Intelsat, SES Americom and Telesat Canada. Because the satellite services industry is relatively mature, our growth strategy depends largely on our ability to displace current incumbent providers, which often have the benefit of long-term contracts with customers. These long-term contracts and other factors result in relatively high switching costs for customers, making it more difficult for us to displace customers from their current relationships with our competitors. In addition, the supply of satellite capacity has increased in recent years, which will make it more difficult for us to sell our services in certain markets

and to price our capacity at acceptable levels. Competition may cause downward pressure on prices and further reduce the utilization of our fleet capacity, both of which would have an adverse effect on our financial performance. Our fixed satellite services business also competes with fiber optic cable and other terrestrial delivery systems, which may have a cost advantage, particularly in point-to-point applications where such delivery systems have been installed.

Our satellites are subject to significant operational risks.

Satellites are subject to significant operational risks while in orbit. These risks include malfunctions, commonly referred to as anomalies, that have occurred in our satellites and the satellites of other operators as a result of various factors, such as satellite manufacturers’ errors, problems with the power systems or control systems of the satellites and general failures resulting from operating satellites in the harsh environment of space.

Although we work closely with the satellite manufacturers to determine and eliminate the cause of anomalies in new satellites and provide for redundancies of many critical components in the satellites, we may experience anomalies in the future, whether of the types described above or arising from the failure of other systems or components.

Any single anomaly or series of anomalies could materially and adversely affect our operations and revenues and our relationship with current customers, as well as our ability to attract new customers for our satellite services. In particular, future anomalies may result in the loss of individual transponders on a satellite, a group of transponders on that satellite or the entire satellite, depending on the nature of the anomaly. Anomalies may also reduce the expected useful life of a satellite, thereby reducing the revenue that could be generated by that satellite, or create additional expenses due to the need to provide replacement or back-up satellites.

Meteoroid events pose a potential threat to all in-orbit satellites. The probability that meteoroids will damage those satellites increases significantly when the Earth passes through the particulate stream left behind by comets. Occasionally, increased solar activity also poses a potential threat to all in-orbit satellites.

Some decommissioned spacecraft are in uncontrolled orbits which pass through the geostationary belt at various points, and present hazards to operational spacecraft, including our satellites. We may be required to perform maneuvers to avoid collisions and these maneuvers may prove unsuccessful or could reduce the useful life of the satellite through the expenditure of fuel to perform these maneuvers. The loss, damage or destruction of any of our satellites as a result of an electrostatic storm, collision with space debris, malfunction or other event could have a material adverse effect on our business, financial condition and results of operations.

Our satellites have minimum design lives of 12 years, but could fail or suffer reduced capacity before then.

Our ability to earn revenue depends on the usefulness of our satellites. Each satellite has a limited useful life. A number of factors affect the useful lives of the satellites, including, among other things, the quality of their construction, the durability of their component parts, the ability to continue to maintain proper orbit and control over the satellite’s functions, the efficiency of the launch vehicle used, and the remaining on-board fuel following orbit insertion. Generally, the minimum design life of each of our satellites is 12 years. We can provide no assurance, however, as to the actual useful lives of the satellites.

In the event of a failure or loss of any of our satellites, we may relocate another satellite and use it as a replacement for the failed or lost satellite, which could have a material adverse effect on our business, financial condition and results of operations. Such a relocation would require FCC approval and, among other things, a showing to the FCC that the replacement satellite would not cause additional interference compared to the failed or lost satellite. We cannot be certain that we could obtain such FCC approval.

Our satellites are subject to risks related to launch.

Satellite launches are subject to significant risks, including launch failure, incorrect orbital placement or improper commercial operation. Certain launch vehicles that may be used by us have either unproven track records or have experienced launch failures in the past. The risks of launch delay and failure are usually greater when the launch vehicle does not have a track record of previous successful flights. Launch failures result in significant delays in the deployment of satellites because of the need both to construct replacement satellites, which can take more than two years, and to obtain other launch opportunities. Such significant delays could materially and adversely affect our ability to generate revenues. If we were unable to obtain launch insurance, or obtain launch insurance at rates we deem commercially reasonable, and a significant launch failure were to occur, it could have a material adverse effect on our ability to generate revenues and fund future satellite procurement and launch opportunities. In addition, the occurrence of launch failures whether on our satellites or those of others may significantly reduce the availability of launch insurance on our satellites or make launch insurance premiums uneconomical.

Our fixed satellite services business is subject to risks of adverse government regulation.

Our satellite services business is subject to varying degrees of regulation in the United States by the FCC, and other entities and in foreign countries by similar entities. These regulations are subject to the political process and have been in constant flux over the past decade. 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 the distribution and ownership of programming services and foreign investment in programming companies. Further material changes in law and regulatory requirements must be anticipated, and there can be no assurance that our business and the business of our affiliates will not be adversely affected by future legislation, new regulation or deregulation.

Our business depends substantially on FCC licenses that can expire or be revoked or modified and applications that may not be granted.

If the FCC were to cancel, revoke, suspend or fail to renew any of our licenses or authorizations, it could have a material adverse effect on our business, financial condition and results of operations. Specifically, loss of a frequency authorization would reduce the amount of spectrum available to us, potentially reducing the amount of services available to our customers. The materiality of such a loss of authorizations would vary based upon, among other things, the location of the frequency used or the availability of replacement spectrum. In addition, Congress often considers and enacts legislation that could affect us, and FCC proceedings to implement the Communications Act and enforce its regulations are ongoing. We cannot predict the outcomes of these legislative or regulatory proceedings or their effect on our business.

We may not be aware of certain foreign government regulations.

Because regulatory schemes vary by country, we may be subject to regulations in foreign countries of which we are not presently aware. If that were to be the case, we could be subject to sanctions by a foreign government that could materially and adversely affect our ability to operate in that country. We cannot assure you that any current regulatory approvals held by us are, or will remain, sufficient in the view of foreign regulatory authorities, or that any additional necessary approvals will be granted on a timely basis or at all, in all jurisdictions in which we wish to operate new satellites, or that applicable restrictions in those jurisdictions will not be unduly burdensome. The failure to obtain the authorizations necessary to operate satellites internationally could have a material adverse effect on our ability to generate revenue and our overall competitive position.

We, our customers and companies with which we do business may be required to have authority from each country in which we or they provide services or provide our customers use of our satellites. Because regulations in each country are different, we may not be aware if some of our customers and/or companies with which we do business do not hold the requisite licenses and approvals

Our dependence on outside contractors could result in delays related to the design, manufacture and launch of our new satellites, which could in turn adversely affect our operating results.

There are a limited number of manufacturers that are able to design and build satellites according to the technical specifications and standards of quality we require, including Astrium Satellites, Boeing Satellite Systems, Lockheed Martin, Loral and Thales Alenia Space. There are also a limited number of agencies able to launch such satellites, including International Launch Services, Arianespace, Lockheed Martin Launch Systems and Sea Launch Company. The loss of any of our manufacturers or launch agencies could result in the delay of the design, building or launch of our satellites. Even if alternate suppliers for such services are available, we may have difficulty identifying them in a timely manner, we may incur significant additional expense in changing suppliers, and this could result in difficulties or delays in the design, manufacturing or launch of our satellites. Any delays in the design, building or launch of our satellites could have a material adverse effect on our business, financial condition and results of operations.

We currently have no commercial insurance coverage on the satellites we own.

We do not insure our owned satellites against in-orbit or other failures. The loss of a satellite or other satellite malfunctions or anomalies could have a material adverse effect on our financial performance which we may not be able to mitigate by using available capacity on other satellites. In addition, the loss of a satellite or other satellite malfunctions or anomalies could affect our ability to comply with FCC regulatory obligations and our ability to fund the construction or acquisition of replacement satellites for our in-orbit fleet in a timely fashion, or at all.

Risks Relating to the Spin-Off

Our agreements with ECC may not reflect what two unaffiliated parties might have agreed to.

The allocation of assets, liabilities, rights, indemnifications and other obligations between ECC and us under the separation and ancillary agreements we will enter into with ECC do not necessarily reflect what two unaffiliated parties might have agreed to. Had these agreements been negotiated with unaffiliated third parties, their terms may have been more favorable, or less favorable, to us.

The spin-off could result in significant tax liability.

ECC has applied for a private letter ruling from the IRS to the effect that, among other things, the spin-off, together with certain related transactions, will qualify for tax-free treatment under Sections 355 and 368(a)(1)(D) of the Code. In addition, the spin-off is conditioned upon the receipt by ECC of the opinion of White & Case LLP substantially to the effect that, among other things, the spin-off, together with certain related transactions, will qualify as reorganizations for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code, and that, accordingly for U.S. federal income tax purposes, no gain or loss will be recognized by, and no amount will be included in the income of, a holder of ECC common stock upon the receipt of shares of our common stock pursuant to the spin-off, except to the extent such holder receives cash in lieu of fractional shares of our common stock. See “The Spin-Off — Material U.S. Federal Income Tax Consequences of the Spin-Off.”

Although a private letter ruling from the IRS generally is binding on the IRS, if the factual representations or assumptions made in the letter ruling request are untrue or incomplete in any material respect, we will not be able to rely on the ruling. Furthermore, the IRS will not rule on whether a distribution satisfies certain requirements necessary to obtain tax-free treatment under Section 355 of the Code. Rather, the ruling is based upon representations by ECC that these conditions have been satisfied, and any inaccuracy in such representations could invalidate the ruling. ECC has made it a condition to the spin-off that ECC obtain the opinion of counsel described above. The opinion will rely on the private letter ruling as to matters covered by the ruling. In addition, the opinion will be based on, among other things, certain assumptions and representations made by ECC and us, which if incorrect or inaccurate in any material respect would jeopardize the conclusions reached by counsel in its opinion. The opinion will not be binding on the IRS or the courts.

See “The Spin-Off — Material U.S. Federal Income Tax Consequences of the Spin-Off” for more information regarding the private letter ruling and the tax opinion.

If the spin-off does not qualify for tax-free treatment for U.S. federal income tax purposes, then, in general, ECC would be subject to tax as if it had sold the common stock of our company in a taxable sale for its fair market value. ECC’s shareholders would be subject to tax as if they had received a distribution equal to the fair market value of our common stock that was distributed to them, which would be treated as a taxable dividend to the extent of ECC’s earnings and profits. It is expected that the amount of any such taxes to ECC’s shareholders and ECC would be substantial. See “The Spin-Off — Material U.S. Federal Income Tax Consequences of the Spin-Off.”

A potential indemnity liability to ECC if the spin-off is treated as a taxable transaction could materially adversely affect our company.

In the tax sharing agreement with ECC, we have agreed to indemnify ECC for any losses, claims, and expenses (including any resulting taxes) resulting from the spin-off or certain related transactions failing to qualify as tax-free transactions pursuant to any provision of Section 355 or Section 361 of the 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. For a more detailed discussion, see “Certain Intercompany Agreements — Agreements with ECC — Tax Sharing Agreement.” Our indemnification obligations to ECC and its subsidiaries are not limited in amount or subject to any cap. If we are required to indemnify ECC and its subsidiaries under the circumstances set forth in the tax sharing agreement, we may be subject to substantial liabilities.

We will have potential conflicts of interest with ECC after the spin-off.

Questions relating to conflicts of interest may arise between ECC and us in a number of areas relating to our past and ongoing relationships. Areas in which conflicts of interest between ECC and us could arise include, but are not limited to, the following:


•	Cross officerships, directorships and stock ownership. We will continue to have significant overlap in directors and executive officers with ECC, which may lead to conflicting interests. At the time of the spin-off, certain of our executive officers, including Charles W. Ergen, our Chairman and Chief Executive Officer, will continue to serve as executive officers of ECC. Three of these individuals will provide us services pursuant to a management services agreement we will enter into with ECC. Our board of directors will include persons who are members of the board of directors of ECC, including Mr. Ergen, who will serve as the Chairman of ECC and us. The executive officers and the members of our board of directors who overlap with ECC will have fiduciary duties to ECC’s shareholders. Pursuant to the management services agreement, three of these officers will be paid by ECC even if their duties include work for ECH. Therefore, these individuals may have actual or apparent conflicts of interest with respect to matters involving or affecting each company. For example, there will be the potential for a conflict of interest when we or ECC look at acquisitions and other corporate opportunities that may be suitable for both companies. In addition, after the spin-off, many of our directors and officers will continue to own ECC stock and options to purchase ECC stock, which they acquired or were granted prior to the spin-off, including Mr. Ergen, who will immediately following the spin off own approximately [ ]% of the total equity and control approximately [ ]% of the voting power of ECC and us. These ownership interests could create actual, apparent or potential conflicts of interest when these individuals are faced with decisions that could have different implications for our company and ECC.

•	Intercompany agreements related to the spin-off. We will enter into certain agreements with ECC pursuant to which it will provide us certain management, administrative, accounting, tax, legal and other services, for which we will reimburse ECC for cost plus an agreed upon margin. In addition, we will enter into a number of intercompany agreements covering matters such as tax sharing and our responsibility for certain liabilities

previously undertaken by ECC for certain of our businesses. We will also enter into certain commercial agreements with ECC pursuant to which we will, among other things, be obligated to sell at specified prices, set-top boxes and related equipment to ECC. The terms of these agreements were established while we were a wholly-owned subsidiary of ECC and were not the result of arm’s length negotiations. In addition, conflicts could arise in the interpretation or any extension or renegotiation of these existing agreements after the completion of the spin-off.


•	Future intercompany transactions. In the future, ECC or its affiliates may enter into transactions with us or our subsidiaries or other affiliates. Although the terms of any such transactions will be established based upon negotiations between ECC and us and, when appropriate, subject to the approval of the independent directors on our board or a committee of disinterested directors, there can be no assurance that the terms of any such transactions will be as favorable to us or our subsidiaries or affiliates as may otherwise be obtained in arm’s length negotiations.

•	Business Opportunities. ECC will retain its interests in various U.S. and international companies that have subsidiaries or controlled affiliates that own or operate domestic or foreign services that may compete with services offered by our businesses. We may also compete with ECC when we participate in auctions for spectrum or orbital slots for our satellites.

We may not be able to resolve any potential conflicts, and, even if we do so, the resolution may be less favorable to us than if we were dealing with an unaffiliated party.

We do not have any agreements with ECC that restrict us from selling our products to competitors of ECC. We also do not have any agreements with ECC that would prevent us from competing with each other.

We may incur material costs and expenses as a result of our separation from ECC.

We may incur costs and expenses greater than those we currently incur as a result of our separation from ECC. These increased costs and expenses may arise from various factors, including financial reporting, costs associated with complying with federal securities laws (including compliance with the Sarbanes-Oxley Act of 2002), tax administration and human resources related functions. Although ECC will continue to provide many of these services to us under the services agreement, such services are for a limited period of time. We cannot assure you that these costs will not be material to our business.

Substantial sales of our common stock may occur in connection with or following the spin-off, which could cause our share price to decline.

The EHC Class A common stock is distributed in the spin-off generally may be sold immediately in the public market. We expect that some of our shareholders, including possibly some of our larger shareholders, will sell the Class A common stock that they receive in the spin-off because, among other reasons, our business profile or market capitalization as an independent, publicly-traded company does not fit their investment objectives. Moreover, index funds hold ECC Class A common stock. Unless we are included in these indices from the date of the spin-off, these index funds will be required to sell our Class A common stock that they receive in the distribution. The sales of significant amounts of our Class A common stock or the perception in the market that these sales will occur could adversely affect the market price of our Class A common stock.

Risks Relating to our Common Stock and the Securities Market

We cannot be certain that an active trading market will develop or be sustained after the spin-off, and following the spin-off our stock price may fluctuate significantly.

We cannot assure you that an active trading market will develop or be sustained for our common stock after the spin-off. Nor can we predict the prices at which classes of our common stock may trade after the spin-off. Similarly, we cannot predict the effect of the spin-off on the trading prices of ECC’s common stock or whether the market value of the shares of a class of our common stock and the shares of the same class of ECC’s common stock held by a shareholder after the spin-off will be less than, equal to or greater than the market value of the shares of that class of ECC’s common stock held by such shareholder prior to the spin-off.

The market price of our common stock may fluctuate significantly due to a number of factors, some of which may be beyond our control, including:


•	actual or anticipated fluctuations in our operating results;

•	changes in earnings estimated by securities analysts or our ability to meet those estimates;

•	the operating and stock price performance of comparable companies; and

•	domestic and foreign economic conditions.

If, following the spin-off, we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned and our stock price may suffer.

Section 404 of the Sarbanes-Oxley Act of 2002 requires any company subject to the reporting requirements of the U.S. securities laws to do a comprehensive evaluation of its and its consolidated subsidiaries’ internal control over financial reporting. To comply with this statute, we will eventually be required to document and test our internal control procedures, our management will be required to assess and issue a report concerning our internal control over financial reporting, and our independent auditors will be required to issue an opinion on management’s assessment of those matters. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, our management may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley Act. If our management cannot favorably assess the effectiveness of our internal control over financial reporting or our auditors identify material weaknesses in our internal controls, investor confidence in our financial results may weaken, and our stock price may suffer.

It may be difficult for a third party to acquire us, even if doing so may be beneficial to our shareholders.

Certain provisions of our certificate of incorporation and bylaws may discourage, delay or prevent a change in control of our company that a shareholder may consider favorable. These provisions include the following:


•	authorizing a capital structure with multiple classes of common stock: a Class A that entitles the holders to one vote per share, a Class B that entitles the holders to ten votes per share, a Class C that entitles the holders to one vote per share, except upon a change in control of our company in which case the holders of Class C are entitled to ten votes per share and a non-voting Class D;

•	authorizing the issuance of “blank check” preferred stock, which could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt;

•	limiting who may call special meetings of shareholders;

•	establishing advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted upon by shareholders at shareholder meetings;

•	the existence of authorized and unissued stock which would allow our board of directors to issue shares to persons friendly to current management, thereby protecting the continuity of its management, or which could be used to dilute the stock ownership of persons seeking to obtain control of us.

After the spin-off, we will be controlled by one principal shareholder.

Immediately after the spin-off, Charles W. Ergen, our Chairman and Chief Executive Officer, will beneficially own approximately [ ]% of our total equity securities and possess approximately [ ]% of the total voting power. Thus, Mr. Ergen will have the ability to elect a majority of our directors and to control all other matters requiring the approval of our shareholders. As a result of Mr. Ergen’s voting power, we will be a “controlled company” as defined in the Nasdaq listing rules and, therefore, will not be subject to Nasdaq requirements that would otherwise require us to have (i) a majority of independent directors; (ii) a nominating

committee composed solely of independent directors; (iii) compensation of our executive officers determined by a majority of the independent directors or a compensation committee composed solely of independent directors; and (iv) director nominees selected, or recommended for the Board’s selection, either by a majority of the independent directors or a nominating committee composed solely of independent directors. Mr. Ergen will also own approximately [ ]% of the total equity and [ ]% of the total voting power of ECC and will continue to be the Chairman and Chief Executive Officer of ECC, which will directly and through its subsidiaries continue to be our largest customer, accounting for a substantial majority of our revenues.

Holders of any single class of our common stock may not have any remedies if any action by our directors or officers has an adverse effect on only that series of our common stock.

Principles of Nevada law and the provisions of our certificate of incorporation may protect decisions of our board of directors that have a disparate impact upon holders of any single class of our common stock. Under Nevada law, the board of directors has a duty to act with due care and in the best interests of all of our shareholders, including the holders of all classes of our common stock. Principles of Nevada law established in cases involving differing treatment of multiple classes or series of stock provide that a board of directors owes an equal duty to all common shareholders regardless of class or series and does not have separate or additional duties to any group of shareholders. As a result, in some circumstances, our directors may be required to make a decision that is adverse to the holders of one class of our common stock. Under the principles of Nevada law referred to above, you may not be able to challenge these decisions if our board of directors is disinterested and adequately informed with respect to these decisions and acts in good faith and in the honest belief that it is acting in the best interests of all of our shareholders.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any dividends on our common stock. We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the future. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases.

If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on any research reports that securities or industry analysts publish about us or our business. After our separation from ECC, if no securities or industry analysts initiate coverage of us, the trading price for our stock may be negatively impacted. In the event securities or industry analysts cover us and one or more of these analysts downgrade our stock or publish unfavorable reports about our business, our stock price would likely decline. In addition, if any securities or industry analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This information statement contains certain forward-looking statements regarding business strategies, market potential, future financial performance and other matters. In particular, information included under the headings “The Spin-Off,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” contain forward-looking statements. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Please refer to “Risk Factors” for some but not all of the factors that could cause actual results or events to differ materially from those anticipated.

All cautionary statements made herein should be read as being applicable to all forward-looking statements wherever they appear. In this connection, investors should consider the risks described herein and should not place undue reliance on any forward-looking statements.

These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this information statement, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, or to reflect any change in our expectations with regard thereto or any other change in events, conditions or circumstances on which any such statement is based.

THE SPIN-OFF

Background

The board of directors of ECC has approved the spin-off of EchoStar Holding Corporation, a wholly owned subsidiary of ECC. EHC will hold the technology and certain infrastructure assets of ECC. ECC will retain its consumer business, including DISH Network, its U.S. consumer pay-TV business. In making its determination, the ECC board of directors met numerous times and considered, among other things, the continuation of ECC’s current operating strategy, and concluded that we and ECC would be able to compete more effectively and have the opportunity to achieve better revenue growth and profitability as a result of the spin-off.

Prior to the spin-off, we were a wholly-owned subsidiary of ECC. Following a series of distributions and contributions from ECC and its subsidiaries to us, we and the companies that will be our subsidiaries after the spin-off, which we refer to as EchoStar Holding Corporation, or EHC, will be engaged in the digital set-top box business, and the fixed satellite services business.

To accomplish the spin-off, ECC will distribute all of its equity interest in us, consisting of shares of our Class A common stock and our Class B common stock, to ECC’s shareholders on a pro rata basis based on the class of ECC common stock held by each such shareholder. Following the spin-off, ECC will cease to own any equity interest in us, and we will operate independently from ECC. No vote of ECC’s shareholders is required or being sought in connection with the spin-off, and ECC’s shareholders will not have any appraisal rights in connection with the spin-off.

The distribution of our common stock as described in this information statement is subject to the satisfaction or waiver of certain conditions. For a more detailed description of these conditions, see “Conditions to the Spin-Off.”

Reasons for the Spin-off

The ECC board of directors regularly reviews the operations that ECC conducts to ensure that ECC’s resources are being put to use in a manner that is in the best interests of ECC and its shareholders. As a result of this ongoing evaluation, ECC concluded that some of its existing non-core businesses were being undervalued by analysts and the market generally, and that these businesses would be in a better competitive position if they were operated as a separate entity from DISH Network. Neither we nor ECC can assure you that, following the spin-off, any benefits will be realized to the extent we anticipate or at all. The board of directors of ECC considered the following potential benefits in making its determination to consummate the spin-off:


•	Creating effective management incentives tied to each of EHC’s and ECC’s performance and increasing the ability to attract and retain personnel. The separation will permit the creation of equity securities, including options and restricted share units, for each of ECC and our company with a value that is expected to reflect more closely the efforts and performance of each company’s management. These equity securities will enable each separate, publicly-traded company to provide incentive compensation arrangements for its specific employee base that is directly related to the market performance of each company’s Class A common stock. ECC believes these equity-based compensation arrangements will provide enhanced incentives for performance and improve the ability for each of EHC and ECC to attract, retain and motivate qualified employees. Equity based compensation is believed to be particularly important in the case of emerging opportunities in our fixed satellite services and international opportunities divisions, which are young businesses in dynamic markets with high potential, the achievements of which we believe can be enhanced greatly through incentive compensation arrangements.

•	Creating opportunities to effectively develop and finance expansion plans. The spin-off will allow each of ECC and our company to develop financing strategies and capital structures designed to correspond better to the underlying fundamentals of its businesses and the industry in which it operates. As a separate, publicly-traded company, our capital structure is expected to facilitate selective acquisitions, joint ventures, investments and financings, possibly using our common stock as currency, as well as to facilitate strategic alliances and internal expansion that are important for us to remain competitive in our industry. Moreover,


	the spin-off may provide both ECC and EHC with greater flexibility in raising capital and responding to strategic opportunities and to avoid competing demands for capital.


•	Increasing the market value of the companies. Although there can be no assurance, ECC believes that, over time, following the separation, the common stock of the separate, publicly-traded companies should have a higher aggregate market value, on a fully distributed basis and assuming the same market conditions, than if ECC were not to complete the separation. The ECC board of directors believes that this increase in the market value of the common stock, if achieved, should permit each separate, publicly-traded company to effect acquisitions, joint ventures and investments with common stock in a manner that preserves capital with less dilution of the existing shareholders’ interests than would occur by issuing pre-distribution ECC common stock.

•	Allowing each company to separately pursue the business strategies that best suit its long-term interest. Each of ECC and EHC will be able to focus its efforts on its strategic priorities, its businesses and growth opportunities, which will allow each company to respond more quickly and efficiently to developments in the industry or industries in which it operates and which may facilitate the potential expansion and growth of each company. As a separate, publicly-traded company, the separation will permit us to focus on, among other things, our set-top box business, our international opportunities and investments, and particularly our fixed satellite services business, without the need to consider the strategic direction of ECC.

•	Creating separate companies that have different financial characteristics, which may appeal to different investor bases. Establishing separate, publicly-traded companies will allow investors to make independent investment decisions with respect to ECC and us. Investment in one or the other company may appeal to investors with different goals, interests and concerns.

The board of directors of ECC also considered the costs and risks associated with the spin-off. The board of directors of ECC considered, among other factors, any potential negative impact on ECC’s credit ratings as a result of the divestiture of our assets, the possibility that we may experience disruptions in our business as a result of the spin-off, the risk that the combined trading prices of our common stock and ECC’s common stock after the spin-off may be lower than the trading price of ECC’s common stock before the spin-off, the loss of synergies from operating as one company, and the additional legal, accounting and administrative costs associated with our becoming a separate, publicly-traded company. In view of the wide variety of factors considered in connection with the evaluation of the spin-off and the complexity of these matters, the ECC board of directors did not find it useful to, and did not attempt to quantify, rank or otherwise assign relative weights to the factors considered. The board of directors of ECC concluded, however, that the potential benefits of the spin-off outweigh the potential negative factors, and that separating the non-core business of ECC from ECC in the form of a tax-free distribution to ECC shareholders is appropriate and advisable for ECC and its shareholders.

Manner of Effecting the Spin-Off

ECC will effect the spin-off by distributing to its shareholders as a dividend:


•	[ ] of a share of our Class A common stock for every share of ECC Class A common stock,

and


•	[ ] of a share of our Class B common stock for every share of ECC Class B common stock,

in each case, owned of record by each shareholder on the record date.

Prior to the spin-off, ECC will deliver all of the issued and outstanding shares of our Class A common stock and Class B common stock to the distribution agent. On or about [ ], 2007, which we refer to as the distribution date, the distribution agent will effect delivery of the shares of our common stock issuable in the spin-off electronically, as of the distribution date, to you or to your bank or brokerage firm on your behalf by way of direct registration in book-entry form. Registration in book-entry form refers to a method of recording share ownership when no physical share certificates are issued to shareholders, as is the case in this distribution.

Commencing on or shortly after the distribution date, if you hold physical share certificates that represent your common stock of ECC and you are the registered holder of the ECC shares represented by those certificates, the distribution agent will mail to you an account statement that indicates the number of shares of our common stock that have been registered in book-entry form in your name.

Please note that if any shareholder of ECC on the record date sells shares of ECC common stock after the record date but on or before the distribution date, the buyer of those shares, and not the seller, will become entitled to receive the shares of our common stock issuable in respect of the shares sold. See “ — Trading Between the Record Date and the Distribution Date” below for more information.

Most ECC shareholders hold their common stock of ECC through a bank or brokerage firm. In such cases, the bank or brokerage firm would be said to hold the shares in “street name” and ownership would be recorded on the bank or brokerage firm’s books. If you hold your ECC common stock through a bank or brokerage firm, your bank or brokerage firm will credit your account for the common stock of our company that you are entitled to receive in the spin-off. If you have any questions concerning the mechanics of having shares held in “street name,” we encourage you to contact your bank or brokerage firm.

Shareholders of ECC are not being asked to take any action in connection with the spin-off. No shareholder approval of the spin-off is required or being sought. We are not asking you for a proxy, and you are requested not to send us a proxy. You are also not being asked to surrender any of your shares of ECC common stock for shares of our common stock. The number of outstanding shares of ECC common stock will not change as a result of the spin-off.

Treatment of Fractional Shares

The distribution agent will not distribute any fractional shares in connection with the spin-off. Instead, any shareholder who would be entitled to receive a fractional share of our Class A common stock will instead receive a cash payment in lieu of such fractional share. The distribution agent will aggregate all fractional shares into whole shares and sell the whole shares in the open market at prevailing market prices. The distribution agent will then distribute the aggregate net cash proceeds of the sales pro rata to each holder who otherwise would have been entitled to receive a fractional share. The distribution agent, in its sole discretion, without any influence by ECC or us, will determine when, how, through which broker-dealer and at what price to sell the whole shares. The distribution agent and any broker-dealer used by the distribution agent will not be an affiliate of either ECC or us. Any shareholder who would be entitled to receive a fractional share of our Class B common stock will have such fractional share rounded off and will instead receive the number of whole shares they are entitled to receive without regard to any fractional share. The elimination of fractional shares of our Class B common stock is due the limited number of Class B shareholders and the small number of fractional shares that would therefore result from the spin-off, making an aggregation and public sale of such fractional shares impractical.

The distribution agent will distribute a check to each record holder of Class A shares representing the cash amount deliverable in lieu of the record holder’s fractional share interest as soon as practicable following the calculation of these cash amounts. If you hold your shares through a bank or brokerage firm, your bank or brokerage firm will receive, on your behalf, your pro rata share of the aggregate net cash proceeds of the sales and will electronically credit your account for your share of such proceeds. No interest will be paid on any cash distributed in lieu of fractional shares. The receipt of cash in lieu of fractional shares will generally be taxable to the recipient shareholders. See “— Material U.S. Federal Income Tax Consequences of the Spin-Off” below for more information.

Treatment of ECC Stock Incentive Awards

Options to purchase shares of ECC Class A common stock, which we refer to as ECC Options, and restricted stock units with respect to shares of ECC Class A common stock, which we refer to as ECC RSUs have been granted to various directors, officers and employees of ECC and certain of its subsidiaries pursuant to the EchoStar Communications Corporation 1995 Stock Incentive Plan, the Amended and Restated EchoStar Communications Corporation 1999 Stock Incentive Plan, the Amended and Restated EchoStar

Communications 2001 Nonemployee Director Stock Option Plan and the EchoStar Communications Corporation 1995 Nonemployee Director Stock Option Plan and various other stock incentive plans administered by the compensation committee of ECC’s board of directors. Under the anti-dilution provisions of the applicable plans, the ECC compensation committee has the authority to make equitable adjustments to outstanding ECC Options and ECC RSUs in the event of certain transactions, including the distribution of our common stock in connection with the spin-off. The ECC compensation committee has determined to make various adjustments to outstanding ECC Options and ECC RSUs, as described below, to preserve the economic benefits of the original award following the spin-off. Any options to purchase, or awards relating to, shares of our common stock issued in connection with such adjustments will be obligations of our company. All options exercisable for, and all awards relating to, shares of ECC Class A common stock, regardless of any adjustment, will remain obligations of ECC.

We intend to file a registration statement with respect to shares of our common stock issuable upon exercise, or vesting, of the equity awards that we issue, as soon as practicable following the distribution date.

Option Awards

As of the record date, each ECC Option will be divided into two options as follows:


•	an option (which we refer to as an EHC Option) to purchase shares of our Class A common stock, exercisable for the number of shares of our Class A common stock that would have been issued in the spin-off in respect of the shares of ECC Class A common stock subject to the applicable ECC Option, if such ECC Option had been exercised in full immediately prior to the record date, rounded down to the nearest whole-share; and

•	an option (which we refer to as an Adjusted ECC option) to purchase shares of ECC Class A common stock, exercisable for the same number of shares of ECC Class A common stock that are exercisable with respect to the outstanding ECC Option, rounded down to the nearest whole-share.

The aggregate exercise price of each outstanding ECC option will be allocated between the EHC Option and the Adjusted ECC Option.

Each Adjusted ECC Option and EHC Option will take into account all employment with both ECC and EHC for purposes of determining when the option vests and terminates. Fractional shares will be adjusted or compensated by ECC as appropriate in the sole discretion of the ECC compensation committee. All other terms and conditions of the EHC Option and the Adjusted ECC Option will generally be the same as the outstanding ECC Option, in all material respects.

As a result of these adjustments, certain persons who are employed by or associated with ECC immediately following the distribution date will hold EHC Options, and certain persons who will be employed by or associated with our company immediately following the distribution date may hold Adjusted ECC Options. Regardless of these employment or other relationships, ECC will not be responsible for the exercise or settlement of any EHC Option, and we will not be responsible for the exercise or settlement of any option to purchase ECC common stock (including an Adjusted ECC Option). Any exercising holder of an EHC Option must exercise the security directly with us. Similarly, any exercising holder of an option to purchase ECC common stock must exercise the security directly with ECC. In this regard, we will enter into an option agreement with each holder of an EHC Option, and, if necessary, ECC will amend its existing option agreement with each holder of an outstanding ECC Option, in each case to reflect the provisions described above.

Restricted Stock Unit Awards

For each ECC RSU outstanding as of the record date, the holder of such ECC RSU will be entitled to receive, for each share of ECC Class A common stock subject thereto, an EHC RSU with respect to the number of shares our Class A common stock that would have been issued in the spin-off in respect of the shares of ECC Class A common stock subject to the applicable ECC RSU.

The distribution will not have any other effect on the outstanding ECC RSUs, and the RSUs relating to our common stock will be subject to the same terms and conditions as apply to the ECC awards with respect to which the adjustment, or distribution, as applicable, is made. Each such award will take into account all employment with both ECC and EHC for purposes of determining when the award vests or the restrictions on the award lapse, as applicable. Fractional shares will be adjusted or compensated by ECC as appropriate in the sole discretion of the ECC compensation committee.

Material U.S. Federal Income Tax Consequences of the Spin-Off

The following is a summary of certain material U.S. federal income tax consequences to the holders of ECC common stock in connection with the spin-off. The summary is based on the Code, the Treasury Regulations promulgated thereunder and judicial and administrative interpretations thereof, in each case as in effect and available as of the date of this document and all of which are subject to change at any time, possibly with retroactive effect. Any such change could affect the tax consequences described below.

This summary does not discuss all tax considerations that may be relevant to shareholders in light of their particular circumstances, nor does it address the consequences to shareholders subject to special treatment under the U.S. federal income tax laws, such as:


•	dealers or traders in securities or currencies;

•	tax-exempt entities;

•	banks, financial institutions or insurance companies;

•	real estate investment trusts, regulated investment companies or grantor trusts;

•	persons who acquired ECC common stock pursuant to the exercise of employee stock options or otherwise as compensation;

•	shareholders who own, or are deemed to own, at least 10% or more, by voting power or value, of ECC’s equity;

•	holders owning ECC common stock as part of a position in a straddle or as part of a hedging, conversion or other risk reduction transaction for U.S. federal income tax purposes;

•	certain former citizens or long-term residents of the United States;

•	holders who are subject to the alternative minimum tax;

•	persons that own ECC common stock through partnerships or other pass through entities; or

•	holders of ECC common stock who are neither citizens nor residents of the United States, or that are foreign corporations, foreign partnerships or foreign estates or trusts for U.S. federal income tax purposes.

This summary does not address the U.S. federal income tax consequences to ECC shareholders who do not hold ECC common stock as a capital asset. Moreover, this summary does not address any state, local or foreign tax consequences.

If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds ECC common stock, the tax treatment of a partner in such partnership will generally depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its own tax advisor as to its tax consequences.

You should consult your own tax advisor with respect to the U.S. federal, state, local and foreign tax consequences of the distribution.

The spin-off is conditioned upon ECC’s receipt of an opinion of White & Case LLP, substantially to the effect that the spin-off, together with certain related transactions, will qualify as reorganizations under Sections 355

and 368(a)(1)(D) of the Code. In addition, ECC has applied for a private letter ruling from the IRS that the distribution will so qualify. Assuming the spin-off so qualifies:


•	the spin-off generally will not result in any taxable income, gain or loss to ECC;

•	no gain or loss will be recognized by, or be includible in the income of, a shareholder of ECC common stock solely as the result of the receipt of our common stock in the spin-off, except, as described below, in connection with cash received in lieu of fractional shares of our Class A common stock;

•	the basis of the ECC common stock and our common stock in the hands of ECC’s shareholders immediately after the spin-off will be the same as the basis of the ECC common stock immediately before the spin-off, allocated between the common stock of ECC and us in proportion to their relative fair market values on the date of the distribution; and

•	the holding period of our common stock received by ECC shareholders will include the holding period of their ECC common stock, provided that such ECC common stock is held as a capital asset on the date of the spin-off.

ECC shareholders that have acquired different blocks of ECC common stock at different times or at different prices should consult their tax advisors regarding the allocation of their aggregate adjusted basis among, and their holding period of, shares of our common stock distributed with respect to such blocks of ECC common stock.

If you receive cash in lieu of a fractional share of Class A common stock as part of the spin-off, you will be treated as though you first received a distribution of the fractional share in the spin-off and then sold it for the amount of such cash. You will generally recognize capital gain or loss, provided that the fractional share is considered to be held as a capital asset, measured by the difference between the cash you receive for such fractional share and your tax basis in that fractional share, as determined above. Such capital gain or loss will be a long-term capital gain or loss if your holding period for your ECC common stock is more than one year on the distribution date.

Although a private letter ruling relating to the qualification of the spin-off and certain related transactions under Sections 355 and 368(a)(l)(D) of the Code will generally be binding on the IRS, the continuing validity of such ruling, if obtained, will be subject to the accuracy of factual representations and assumptions made in the ruling request. Also, as part of the IRS’s general policy with respect to rulings on spin-off transactions under Section 355 of the Code, any private letter ruling obtained by ECC will not be based upon a determination by the IRS that certain conditions which are necessary to obtain tax-free treatment under Section 355 of the Code have been satisfied. Rather, such private letter ruling will be based upon representations by ECC that these conditions have been satisfied, and any inaccuracy in such representations could invalidate the private letter ruling. As a result of this IRS policy, ECC has made it a condition to the spin-off that ECC obtain an opinion of White & Case LLP substantially to the effect, that the spin-off, together with certain related transactions, will qualify as reorganizations under Sections 355 and 368(a)(1)(D) of the Code. The opinion will be based upon various factual representations and assumptions, as well as certain undertakings made by ECC and us. If any of those factual representations or assumptions were untrue or incomplete in any material respect, any undertaking was not complied with, or the facts upon which the opinion is based were materially different from the facts at the time of the spin-off, the spin-off may not qualify for tax-free treatment. Opinions of counsel are not binding on the IRS. As a result, the conclusions expressed in the opinion of counsel could be challenged by the IRS, and if the IRS prevails in such challenge, the tax consequences to you could be materially less favorable.

The Spin-off

If the spin-off were not to qualify as a tax-free transaction, ECC would recognize taxable gain equal to the excess of the fair market value of our common stock distributed to ECC shareholders over ECC’s tax basis in our common stock. In addition, each shareholder who receives our common stock in the spin-off would

generally be treated as receiving a distribution in an amount equal to the fair market value of our common stock received, which would generally result in:


•	a taxable dividend to the extent of such shareholders’ pro rata share of ECC’s current and accumulated earnings and profits;

•	a reduction in such shareholder’s basis (but not below zero) in ECC common stock to the extent the amount received exceeds such shareholder’s share of ECC’s earnings and profits; and

•	a taxable gain from the exchange of ECC common stock to the extent the amount received exceeds both such shareholder’s share of ECC’s earnings and profits and such shareholder’s basis in ECC common stock.

Even if the spin-off otherwise qualifies for tax-free treatment under Section 355 of the Code, it may be disqualified as tax-free to ECC under Section 355(e) of the Code if 50% or more of the stock of either ECC or us is acquired as part of a plan or series of related transactions that include the distribution. For this purpose, any acquisitions of our stock or ECC’s stock within two years before or after the distribution are presumed to be part of such a plan, although ECC or we may be able to rebut that presumption. If such an acquisition of our stock or ECCs stock triggers the application of Section 355(e) of the Code, ECC would recognize taxable gain as described above with respect to the spin-off, but the spin-off would generally be tax-free to each ECC shareholder. Under the tax sharing agreement between ECC and us, we would be required to indemnify ECC against that taxable gain if it were triggered by an acquisition of our stock, stock options or assets. Additionally, pursuant to the tax sharing agreement between ECC and us, we would be required to indemnify ECC against any taxes, losses, claims and expenses resulting from the spin-off and certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Code in certain other circumstances.

ECC may incur some tax cost in connection with the spin-off (as a result of certain intercompany transactions or as a result of certain differences between federal, on the one hand, and foreign or state tax rules, on the other), whether or not the spin-off qualifies for tax-free treatment under Sections 355 and 368(a)(1)(D) of the Code.

Information Statement

U.S. Treasury Regulations require each ECC shareholder that (i) receives shares of our stock in the spin-off and (ii) immediately before the spin-off owned five percent or more (by vote or value) of the total outstanding stock of ECC, to attach to such shareholder’s U.S. federal income tax return for the year in which such stock is received a statement setting forth certain information related to the spin-off.

THE ABOVE DESCRIPTION IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSEQUENCES RELATING TO THE SPIN-OFF. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR CONCERNING THE TAX CONSEQUENCES OF YOUR PARTICULAR SITUATION.

Results of the Spin-Off

After the spin-off, we will be an independent, publicly-traded company. Immediately following the spin-off, we expect to have outstanding approximately [ ] million shares of our Class A common stock and approximately [ ] million shares of our Class B common stock, based upon the number of shares of ECC Class A common stock and ECC Class B common stock outstanding as of [ ], 2007. The actual number of shares of our Class A common stock and Class B common stock to be distributed in the spin-off will depend upon the actual number of shares of ECC Class A common stock and ECC Class B common stock outstanding on the record date and will reflect any exercise of ECC options between the date the ECC board of directors declares the dividend for the spin-off and the record date of the spin-off. In addition, no shares of our Class C common stock or Class D common stock will be outstanding immediately following the spin-off. The spin-off will not affect the number of outstanding shares of ECC common stock or any rights of ECC shareholders, although it will affect the market value of each outstanding share of ECC common stock.

Immediately following the spin-off, we expect to have approximately [ ] holders of record of shares of our Class A common stock. Mr. Ergen and entities related to Mr. Ergen will be the only holders of record of our Class B common stock following the spin-off. We will not have any holders of record of our Class C common stock or Class D common stock immediately after the spin-off.

Before the spin-off, we will enter into a Separation Agreement and other agreements with ECC to effect the spin-off and provide a framework for our relationship with ECC after the spin-off. These agreements will govern the relationships among ECC and us subsequent to the completion of the spin-off and provide for the allocation among ECC and us of ECC’s assets, liabilities and obligations attributable to periods prior to our separation from ECC. The Separation Agreement, in particular, requires ECC to assume certain of ECC’s contingent corporate liabilities and debt.

Listing and Trading of our Common Stock

On the date of this information statement, we are a wholly-owned subsidiary of ECC. Accordingly, there is currently no public market for our common stock; although a “when-issued” market in our Class A common stock may develop. See “— Trading Between the Record Date and Distribution Date” below for an explanation of a “when-issued” market. We intend to list our shares of Class A common stock on the Nasdaq Global Market under the symbol “[ ].” Following the spin-off, ECC Class A common stock will continue to trade on the Nasdaq Global Market under the symbol “DISH.”

Neither we nor ECC can assure you as to the trading price of ECC Class A common stock or our Class A common stock after the spin-off or as to whether the combined trading prices of our Class A common stock and the ECC Class A common stock after the spin-off will be less than, equal to or greater than the trading prices of ECC Class A common stock prior to the spin-off. The trading price of our Class A common stock may fluctuate significantly following the spin-off. See “Risk Factors — Risks Relating to Our Common Stock and the Securities Market.”

The shares of our common stock distributed to ECC’s shareholders will be freely transferable, except for shares received by individuals who are our affiliates and any shares distributed in respect of any ECC RSUs. Individuals who may be considered our affiliates after the spin-off include individuals who control, are controlled by or are under common control with us, as those terms generally are interpreted for federal securities law purposes. This may include some or all of our executive officers and directors. Individuals who are our affiliates will be permitted to sell their shares of our common stock only pursuant to an effective registration statement under the Securities Act of 1933, as amended, or an exemption from the registration requirements of the Securities Act, such as the exemptions afforded by Section 4(1) of the Securities Act or Rule 144 thereunder. Our affiliates will not be permitted to sell shares of our common stock under Rule 144 until 90 days after the date on which the registration statement of which this information statement forms a part is declared effective.

Trading Between the Record Date and Distribution Date

Between the record date and the distribution date, ECC Class A common stock will continue to trade on the Nasdaq Global Market in the regular way market. During this time, shares of ECC Class A common stock that trade on the regular way market will trade with an entitlement to receive shares of our Class A common stock distributable in the spin-off. No ex-dividend market will be established for any class of our common stock until the first trading day following the distribution date. Therefore, if you own shares of ECC common stock on the record date and thereafter sell those shares on or prior to the distribution date, you will also be selling the shares of our common stock that would have been distributed to you in the spin-off with respect to the shares of ECC common stock you sell. On the first trading day following the distribution date, shares of ECC Class A common stock will begin trading without any entitlement to receive shares of our common stock. Shares of ECC Class A common stock trade under the symbol “DISH.”

Between the record date and the distribution date, a when-issued trading market in our Class A common stock may develop. Our Class A common stock is expected to be listed for trading on the Nasdaq Global Market. The when-issued trading market would be a market for the shares of our Class A common stock that will be

distributed in the spin-off. If you own shares of ECC common stock on the record date (and do not sell those shares of ECC common stock on or before the distribution date), then you are entitled to a number of shares of the same class of our common stock based upon the number of shares of such class of ECC common stock you held at that time. If you own ECC Class A common stock, you may trade this entitlement to receive shares of our common stock, without the shares of ECC Class A common stock you own, on the when-issued trading market. We expect when-issued trades of our Class A common stock to settle within three trading days after the distribution date. On the first trading day following the distribution date, any when-issued trading with respect to our Class A common stock will end and regular way trading will begin. If when-issued trading occurs, the listing for our Class A common stock is expected to be under trading symbols different from our regular way trading symbols. We will announce our when-issued trading symbols when and if they become available. Following the distribution date, shares of our Class A common stock are expected to be listed on the Nasdaq Global Market under the trading symbol “[ ].” If the spin-off does not occur, all when-issued trading will be null and void.

Conditions to the Spin-Off

We expect that the spin-off will be effective on the distribution date, provided, that among other conditions described in this information statement, the following conditions shall have been satisfied or, if permissible under the Separation Agreement, waived by ECC:


•	the Securities and Exchange Commission shall have declared effective our registration statement on Form 10, of which this information statement is a part, under the Securities Exchange Act of 1934, no stop order relating to the registration statement shall be in effect and this information statement shall have been mailed to holders of ECC common stock;

•	all permits, registrations and consents required under the securities or blue sky laws in connection with the spin-off shall have been received;

•	ECC shall have received the opinion of White & Case LLP confirming the tax-free status of the spin-off and certain related transactions for U.S. federal income tax purposes;

•	the listing of our common shares on the Nasdaq Global Market shall have been approved;

•	all material governmental approvals and other consents necessary to consummate the distribution, including without limitation FCC approvals, shall have been received; and

•	no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing consummation of the distribution or any of the transactions related thereto shall be in effect.

The fulfillment of the foregoing conditions will not create any obligation on ECC’s part to effect the spin-off. ECC has the right not to complete the spin-off if, at any time, ECC’s board of directors determines, in its sole discretion, that the distribution is not in the best interests of ECC or its stockholders or that market conditions are such that it is not advisable to separate EHC from ECC.

Reasons for Furnishing this Information Statement

This information statement is being furnished solely to provide information to ECC shareholders who will receive shares of our common stock in the spin-off. It is not to be construed as an inducement or encouragement to buy or sell any of our securities or any securities of ECC. We believe that the information contained in this information statement is accurate as of the date set forth on the cover. Changes to the information contained in this information statement may occur after that date, and neither our company nor ECC undertakes any obligation to update the information except in the normal course of our respective public disclosure obligations and practices.

SELECTED HISTORICAL AND UNAUDITED PRO FORMA COMBINED
AND ADJUSTED FINANCIAL DATA

The following tables present selected historical information relating to our combined financial condition and results of operations for the six months ended June 30, 2007 and 2006 and the past five years. The financial data for the three years ended December 31, 2006 has been derived from our audited combined financial statements for the corresponding periods. Data for the other periods presented has been derived from unaudited information. The data should be read in conjunction with our combined financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere herein. Our historical and pro forma financial data included in this information statement may not be indicative of our future performance and does not necessarily reflect what our financial condition and results of operations would have been had we operated as a separate, stand-alone entity during the periods presented, particularly since changes will occur in our operations and capitalization as a result of our spin-off from ECC. Our audited combined financial statements reflect the historical financial position and results of operations of entities included in consolidated financial statements of ECC, representing almost exclusively ECC’s set-top box business, using the historical results of operations and historical bases of assets and liabilities of this business. Our historical combined financial statements reflect sales to ECC at cost and do not include certain satellites, uplink and satellite transmission assets, real estate and other assets and related liabilities that will be contributed to us by ECC in the spin-off. These assets and liabilities, which will primarily comprise our fixed satellite services business, have been separately audited and are included in the Statement of Net Assets to be Contributed by ECC and Unaudited Pro Forma Combined and Adjusted Financial Information included herein. The financial condition and results of operations of our fixed satellite services business have not been included in our historical combined financial statements because our fixed satellite services business was operated as an integral part of ECC’s subscription television business and did not constitute a “business” in the historical financial statements of ECC. Our historical financial data also does not include financial information of Sling Media, Inc., which was recently acquired by ECC and will be contributed to us in the spin-off. Sling Media’s audited consolidated financial statements are included elsewhere in this information statement, and its historical financial information also has been included in our “Unaudited Pro Forma Combined and Adjusted Financial Information.”


	For the Six Months
	Ended June 30,								For The Years Ended December 31,
Statements of	2007								2006
Operations Data:	Pro Forma		2007			2006			Pro Forma		2006			2005			2004			2003		2002
	(Unaudited)		(Unaudited)						(Unaudited)											(Unaudited)		(Unaudited)
	(In thousands)

Revenue	$	1,057,384	$	778,352		$	755,616		$	2,080,259	$	1,525,320		$	1,513,691		$	1,720,091		$	976,636	$	1,037,862
Costs and Expenses:
Cost of sales		823,328		742,290			702,773			1,609,571		1,440,178			1,438,629			1,650,775			886,665		934,996
Research and development		35,311		27,035			25,162			62,966		56,451			45,928			39,809			32,361		32,966
General and administrative, including sales and marketing		62,171		37,579			28,766			100,400		60,106			56,366			65,059			50,472		72,366
Depreciation and amortization		117,390		2,909			3,124			237,855		6,032			5,832			5,071			5,511		6,655

Total costs and expenses		1,038,200		809,813			759,825			2,010,792		1,562,767			1,546,755			1,760,714			975,009		1,046,984

Operating income (loss)	$	19,184	$	(31,461	)	$	(4,209	)	$	69,467	$	(37,447	)	$	(33,064	)	$	(40,623	)	$	1,627	$	(9,122	)

Net income (loss)	$	32,194	$	(33,293	)	$	(2,324	)	$	176,836	$	(34,162	)	$	(44,940	)	$	(43,237	)	$	4,329	$	(97,368	)


	As of
	June 30,
	2007				As of December 31,
Balance Sheet Data:	Pro Forma		2007		2006		2005		2004		2003		2002
	(Unaudited)		(Unaudited)						(Unaudited)		(Unaudited)		(Unaudited)
	(In thousands)

Cash, cash equivalents and marketable securities	$	1,347,007	$	336,183	$	323,576	$	106,109	$	143,437	$	156,814	$	52,148
Restricted cash	$	3,550	$	—	$	—	$	1,581	$	1,699	$	1,523	$	—
Total assets	$	3,600,563	$	656,328	$	517,821	$	229,392	$	277,843	$	248,811	$	228,191
Long-term debt (including current portion)	$	397,989	$	—	$	—	$	495	$	647	$	2,214	$	756
Total owner’s equity (deficit)	$	2,989,974	$	634,773	$	502,283	$	217,132	$	258,452	$	230,023	$	68,300


	For the Six Months
	Ended June 30,						For The Years Ended December 31,
Cash Flow Data:	2007			2006			2006			2005			2004			2003			2002
	(Unaudited)															(Unaudited)			(Unaudited)
	(In thousands)

Net cash flows from:
Operating activities	$	(29,695	)	$	(5,467	)	$	(36,374	)	$	(14,193	)	$	(78,916	)	$	(49,463	)	$	(2,796	)
Investing activities	$	(125,244	)	$	(55,753	)	$	(54,781	)	$	(16,700	)	$	(5,619	)	$	(12,244	)	$	(30,814	)
Financing activities	$	153,223		$	73,291		$	104,534		$	39,782		$	69,715		$	74,899		$	35,390

UNAUDITED PRO FORMA COMBINED AND ADJUSTED FINANCIAL INFORMATION

Our audited historical combined financial statements reflect the historical financial position and results of operations of entities included in the consolidated financial statements of ECC, principally representing only the digital set-top box business, using the historical results of operations and historical bases of assets and liabilities of this business. Our historical combined financial statements reflect sales to ECC at cost and do not include certain satellites, uplink and satellite transmission assets, real estate and other assets and related liabilities that will be contributed to us by ECC in the spin-off. These assets and liabilities, which will primarily comprise our fixed satellite services business, have been separately audited and are included in the Statement of Net Assets to be Contributed by ECC and Unaudited Pro Forma Combined and Adjusted Financial Information included herein. Our historical financial data also does not include financial information of Sling Media, Inc., which was recently acquired by ECC and will be contributed to us in the spin-off. Sling Media’s audited consolidated financial statements are included elsewhere in this information statement, and its historical financial information also has been included in our Unaudited Pro Forma Combined and Adjusted Financial Information included herein.

The Unaudited Pro Forma Combined and Adjusted Financial Information give effect to:


•	the contribution by ECC to us of the net assets to primarily be used in our fixed satellite services business, including $1 billion in cash;

•	the results of operations and other expenses, including depreciation expenses, related to the assets contributed to us by ECC to be used in our fixed satellite services business;

•	the impact of the transition services and commercial agreements between us and ECC;

•	the issuance by us to ECC, in consideration for the contribution, of [ ] million shares of our common stock;

•	the distribution of [ ] million shares of our common stock to holders of ECC stock; and

•	the contribution of Sling Media to us.

The share numbers are based on ECC share numbers as of June 30, 2007, and the settlement amount is based on our balances as of June 30, 2007.

The unaudited pro forma combined financial statements of EHC presented below have been derived in part from our audited combined financial statements for the year ended December 31, 2006 and from our unaudited combined financial statements as of and for the six months ended June 30, 2007.

These unaudited pro forma combined financial statements should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our combined financial statements and the notes to those statements included elsewhere in this information statement.

The unaudited pro forma combined statements of operations for the six months ended June 30, 2007 and for the year ended December 31, 2006 have been prepared as if the transactions described above occurred as of January 1, 2006. The unaudited pro forma combined balance sheet as of June 30, 2007 has been prepared as if these transactions occurred as of June 30, 2007. The pro forma adjustments are based upon available information and assumptions that management believes are reasonable based on our current plans and expectations. However, such adjustments are subject to change based on the final valuation of Sling Media and the final terms of the spin-off and the transaction agreements. Our historical financial, pro forma and other data included in this information statement are not necessarily indicative of our future financial position, future results of operations or future cash flows, nor do they reflect what our financial position, results of operations or cash flows would have been as a stand-alone company during the periods presented.

The preliminary allocation of the purchase price for Sling Media used in the unaudited pro forma combined financial information is based on preliminary estimates and currently available information. These assumptions and estimates will be revised as additional information becomes available upon final valuation of Sling Media’s assets and liabilities. The final determination of the allocation of the purchase price will be based on the actual intangible assets, and net tangible assets of Sling Media existing as of the date of the acquisition.

Our unaudited pro forma combined statements of operations do not give effect to initial expenses directly attributable to the spin-off because of their non-recurring nature. A significant portion of these non-recurring charges to effect the separation will be incurred by ECC, such as investment banker fees, outside legal and accounting fees relating to the spin-off, office move costs, costs to separate information systems and temporary consulting costs. We will incur separation costs that have a future benefit to our company such as employee compensation expenses and temporary labor used to develop ongoing processes. See “Certain Intercompany Agreements.”

ECHOSTAR HOLDING CORPORATION

UNAUDITED PRO FORMA COMBINED AND ADJUSTED STATEMENTS OF OPERATIONS


	For the Year Ended December 31, 2006
				Pro Forma			EHC						Pro Forma			Pro Forma
	EHC			Spin			Pro Forma			Sling Media			Acquisition			Combined and
	Historical			Adjustments			Adjusted			Historical			Adjustments			Adjusted
							(In thousands)

Revenue:

Equipment and other sales — ECC	$	1,288,691		$	172,418	(a)	$	1,461,109		$	—		$	—		$	1,461,109
Equipment sales		236,629			—			236,629			29,055			—			265,684
FSS — ECC		—			331,434	(b)		331,434			—			—			331,434
FSS — other		—			8,557	(c)		8,557			—			—			8,557
Other — ECC		—			13,475	(d)		13,475			—			—			13,475

Total revenue		1,525,320			525,884			2,051,204			29,055			—			2,080,259

Costs and Expenses:
Cost of equipment and other sales		1,440,178			2,876	(e)		1,443,054			20,191			—			1,463,245
FSS cost of sales		—			146,326	(f)		146,326			—			—			146,326
Research and development		56,451			—			56,451			6,515			—			62,966
General and administrative		60,106			16,166	(g)		76,272			5,573			—			81,845
Sales and marketing		—			—			—			18,555			—			18,555
Depreciation and amortization		6,032			231,823	(h)		237,855			—			—			237,855

Total costs and expenses		1,562,767			397,191			1,959,958			50,834			—			2,010,792

Operating income (loss)		(37,447	)		128,693			91,246			(21,779	)		—			69,467

Other Income (Expense):
Interest income		831			52,259	(i)		53,090			1,478			—			54,568
Interest expense, net of amounts capitalized		(1,059	)		952	(j)		(107	)		(512	)		—			(619	)
Other		6,588			(2,160	)		4,428			(45	)		—			4,383

Total other income (expense)		6,360			51,051			57,411			921			—			58,332

Income (loss) before income taxes		(31,087	)		179,744			148,657			(20,858	)		—			127,799
Income tax (provision) benefit, net		(3,075	)		39,856	(k)		36,781			(74	)(1)		12,330	(l)		49,037

Net income (loss)	$	(34,162	)	$	219,600		$	185,438		$	(20,932	)	$	12,330		$	176,836

Pro forma earnings per share:
Basic and Diluted
Pro forma shares outstanding:
Basic and Diluted

See accompanying notes.

ECHOSTAR HOLDING CORPORATION

UNAUDITED PRO FORMA COMBINED AND ADJUSTED STATEMENTS OF OPERATIONS


	For the Six Months Ended June 30, 2007
				Pro Forma									Pro Forma			Pro Forma
	EHC			Spin			EHC			Sling Media			Acquisition			Combined and
	Historical			Adjustments			Pro Forma			Historical			Adjustments			Adjusted
							(In thousands)

Revenue:
Equipment and other sales — ECC	$	677,232		$	90,557	(a)	$	767,789		$	—		$	—		$	767,789
Equipment sales		101,120			—			101,120			14,734			—			115,854
FSS — ECC		—			158,301	(b)		158,301			—			—			158,301
FSS — other		—			8,665	(c)		8,665			—			—			8,665
Other — ECC		—			6,775	(d)		6,775			—			—			6,775

Total revenue		778,352			264,298			1,042,650			14,734			—			1,057,384

Costs and Expenses:
Cost of equipment and other sales		742,290			1,077	(e)		743,367			10,317			—			753,684
FSS cost of sales		—			69,644	(f)		69,644			—			—			69,644
Research and development		27,035			—			27,035			8,276						35,311
General and administrative		37,579			11,306	(g)		48,885			2,466			—			51,351
Sales and marketing		—			—			—			10,820			—			10,820
Depreciation and amortization		2,909			114,481	(h)		117,390			—			—			117,390

Total costs and expenses		809,813			196,508			1,006,321			31,879			—			1,038,200

Operating income (loss)		(31,461	)		67,790			36,329			(17,145	)		—			19,184

Other Income (Expense):
Interest income		942			28,491	(i)		29,433			311			—			29,744
Interest expense, net of amounts capitalized		(537	)		495	(j)		(42	)		—			—			(42	)
Other		(765	)		(27	)		(792	)		(77	)		—			(869	)

Total other income (expense)		(360	)		28,959			28,599			234			—			28,833

Income (loss) before income taxes		(31,821	)		96,749			64,928			(16,911	)		—			48,017
Income tax (provision) benefit, net		(1,472	)		(23,048	)(k)		(24,520	)		(73	)		8,770	(l)		(15,823	)

Net income (loss)	$	(33,293	)	$	73,701		$	40,408		$	(16,984	)	$	8,770		$	32,194

Pro forma earnings per share:
Basic and Diluted
Pro forma shares outstanding:
Basic and Diluted

See accompanying notes.

ECHOSTAR HOLDING CORPORATION

UNAUDITED PRO FORMA COMBINED AND ADJUSTED BALANCE SHEET


	As of June 30, 2007
																	EHC
			Net Assets		EHC		Pro Forma			EHC				Pro Forma			Pro Forma
	EHC		to be		Historical		Spin			Pro Forma		Sling Media		Acquisition			Combined and
	Historical		Contributed		Combined		Adjustments			Adjusted		Historical		Adjustments			Adjusted
	(In thousands, except for per share amounts)

ASSETS
Current Assets:
Cash and cash equivalents	$	27,905	$	1,000,000	$	1,027,905	$	—		$	1,027,905	$	10,824	$	—		$	1,038,729
Marketable investment securities		308,278		—		308,278		—			308,278		—		—			308,278
Trade accounts receivable, net of allowance for doubtful accounts		25,812		1,950		27,762		—			27,762		7,872		—			35,634
Inventories, net		844		—		844		—			844		6,558		—			7,402
Current deferred tax assets		—		4,754		4,754		3,909	(m)		8,663		—		7,862	(l)		16,525
Other current assets		3,123		63,438		66,561		—			66,561		2,946		—			69,507

Total current assets		365,962		1,070,142		1,436,104		3,909			1,440,013		28,200		7,862			1,476,075
Restricted cash and marketable investment securities		—		3,150		3,150		—			3,150		400		—			3,550
Property and equipment, net		153,082		1,304,446		1,457,528		—			1,457,528		3,563		—			1,461,091
FCC authorizations		42,873		25,658		68,531		—			68,531		—		—			68,531
Intangible assets, net		11,331		151,850		163,181		—			163,181		2,670		320,813	(p)		486,664
Investments in affiliates		78,508		—		78,508		—			78,508		—		—			78,508
Other noncurrent assets, net		4,572		21,142		25,714		—			25,714		430		—			26,144

Total assets	$	656,328	$	2,576,388	$	3,232,716	$	3,909		$	3,236,625	$	35,263	$	328,675		$	3,600,563


LIABILITIES AND OWNER’S EQUITY (DEFICIT)
Current Liabilities:
Trade accounts payable	$	8,475	$	—		8,475	$	(6,965	)	$	1,510	$	4,627	$	—		$	6,137
Accrued expenses		12,783		14,524		27,307		(862	)		26,445		5,655		—			32,100
Current portion of long-term debt		—		37,146		37,146		—			37,146		950		—			38,096

Total current liabilities		21,258		51,670		72,928		(7,827	)		65,101		11,232		—			76,333

Long-term obligations, net of current portion:
Long-term debt		—		359,893		359,893		—			359,893		—		—			359,893
Deferred tax liabilities		297		228,324		228,621		(43,524	)(m)		185,097		—		(13,238	)(l)		171,859
Other long-term liabilities		—		—		—		—			—		2,504		—			2,504

Total long-term obligations, net of current portion		297		588,217		588,514		(43,524	)		544,990		2,504		(13,238	)		534,256

Total liabilities		21,555		639,887		661,442		(51,351	)		610,091		13,736		(13,238	)		610,589

ECHOSTAR HOLDING CORPORATION

UNAUDITED PRO FORMA COMBINED AND ADJUSTED BALANCE SHEET — (Continued)


	As of June 30, 2007
																		EHC
			Net Assets		EHC		Pro Forma			EHC					Pro Forma			Pro Forma
	EHC		to be		Historical		Spin			Pro Forma		Sling Media			Acquisition			Combined and
	Historical		Contributed		Combined		Adjustments			Adjusted		Historical			Adjustments			Adjusted
	(In thousands, except for per share amounts)

Net investment in EHC (Owner’s Equity (Deficit)):
Convertible Series A Preferred Stock of Sling Media $.0001 par value, 8,400,000 shares authorized, 7,759,082 shares issued and outstanding		—		—		—		—			—		1			(1	)(q)		—
Convertible Series B Preferred Stock of Sling Media $.0001 par value, 7,930,000 shares authorized, 7,694,271 shares issued and outstanding		—		—		—		—			—		1			(1	)(q)		—
Sling Media common stock, warrants and additional paid-in capital		—		—		—		—			—		64,103			(64,103	)(q)		—
Preferred Stock of EHC, $.001 par value, 20,000,000 shares authorized		—		—		—		—			—		—			—			—
EHC Class A common stock, $.001 par value, 1,600,000,000 shares authorized		—		—		—		—	(n)		—		—			—			—
EHC Class B common stock, $.001 par value, 800,000,000 shares authorized		—		—		—		—	(n)		—		—			—			—
Accumulated other comprehensive income (loss)		65,275		—		65,275		—			65,275		71			(71	)(q)		65,275
Owner’s net investment		569,498		—		569,498		1,991,761	(o)		2,561,259		(42,649	)		42,649	(q)		2,924,699
																342,340	(p)
																21,100	(1)
Net assets to be contributed		—		1,936,501		1,936,501		(1,936,501	)(o)		—		—			—			—

Total net investment in EHC (Owner’s equity (deficit))		634,773		1,936,501		2,571,274		55,260			2,626,534		21,527			341,913			2,989,974

Total liabilities and net investment in EHC (Owner’s equity (deficit))	$	656,328	$	2,576,388	$	3,232,716	$	3,909		$	3,236,625	$	35,263		$	328,675		$	3,600,563

See accompanying notes.

ECHOSTAR HOLDING CORPORATION

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

Adjustments to Pro Forma Combined Statements of Operations:

The pro forma adjustments for the spin-off represent the estimated incremental revenue and expenses of EHC associated with operating as a stand-alone company, primarily consisting of the results of operations and other expenses, including depreciation expenses, associated with the net assets contributed to us by ECC to primarily be used in our fixed satellite services business and our commercial agreements with ECC (see “Certain Intercompany Agreements”).

(a) Represents incremental revenue on equipment sales to ECC at cost plus an agreed upon margin, which we believe to be fair market value pricing.

(b) Represents revenue for sales of services to ECC related to the satellites, uplink and satellite transmission assets to be contributed to us by ECC, including uplink, telemetry, tracking and control, and professional engineering services, which we believe to be fair market value pricing.

(c) Represents revenue for sales of services to third-parties related to the satellites, uplink and satellite transmission assets to be contributed to us by ECC.

(d) Primarily represents rental revenue related to buildings contributed to us by ECC, and leased back to ECC.

(e) Represents incremental cost of sales related to the purchase of remanufactured receivers from ECC, which are resold to third parties, pursuant to our receiver agreement with ECC.

(f) Represents cost of sales related to services sold to ECC and other third-parties related to the satellites, uplink and satellite transmission assets to be contributed to us by ECC, including satellite leasing, uplink, telemetry, tracking and control services.

(g) Represents additional general and administrative expenses primarily related to corporate overhead expenses and related employee benefits charged to us by ECC.

(h) Represents additional depreciation and amortization expense primarily associated with the satellites, uplink and satellite transmission assets and certain other real estate assets to be contributed to us by ECC.

(i) Represents interest income primarily related to the $1.0 billion of cash to be contributed to us by ECC.

(j) Primarily represents the reversal of interest expense for a note payable to ECC that will be contributed to us as capital by ECC.

(k) Represents the tax effect of pro forma adjustments using our blended Federal, state and international statutory tax rate adjusted for permanent differences and the release of our valuation allowance of $93.8 million in 2006.

The pro forma adjustments for the acquisition of Sling Media are as follows:

(l) Represents the reversal of Sling Media’s deferred tax asset valuation allowance.

Adjustments to Pro Forma Combined Balance Sheet:

Further information regarding the Net Assets to be Contributed can be found in the audited Statement of Net Assets included in this information statement.

The pro forma balance sheet adjustments for the spin-off represent the following:

(m) Represents the tax effect of pro forma adjustments using our pro forma blended Federal and state statutory tax rate and the release of our valuation allowance.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together with the audited and unaudited combined financial statements and notes to the financial statements included elsewhere in this information statement. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections of this information statement entitled “Risk Factors” and“Cautionary Statement Concerning Forward-Looking Statements” and other sections in this information statement. To facilitate your understanding of our financial performance we also discuss certain pro forma financial data in this section. Our pro forma financial information is set out in more detail under the caption “Unaudited Pro Forma Combined and Adjusted Financial Information” elsewhere in this information statement.

Basis of Presentation

The combined financial statements, which are discussed below, reflect the historical financial position, results of operations and cash flows of the entities included in the consolidated financial statements and accounting records of ECC, principally representing the set-top box business, using the historical results of operations and the historical bases of assets and liabilities of this segment.

The historical combined financial statements reflect sales of set-top boxes and related components to ECC at cost. Our historical combined financial statements do not include certain satellites, uplink and satellite transmission assets, real estate and other assets and related liabilities that will be contributed to us by ECC in the spin-off. These assets and liabilities, which will primarily comprise our fixed satellite services business, have been separately audited and are included in the Statement of Net Assets to be Contributed by ECC and Unaudited Pro Forma Combined and Adjusted Financial Information included herein. Our historical financial data also does not include financial information of Sling Media, Inc., which was recently acquired by ECC and will be contributed to us in the spin-off. Sling Media’s audited consolidated financial statements are included elsewhere in this information statement, and its historical financial information also has been included in our Unaudited Pro Forma Combined and Adjusted Financial Information. We have prepared unaudited pro forma combined financial statements to make adjustments for and give effect to the spin-off. See “Unaudited Pro Forma Combined and Adjusted Financial Information” above.

In addition, the combined statements of operations include expense allocations for certain corporate functions historically provided to us by ECC, including, among other things, treasury, tax, accounting and reporting, risk management, legal, internal audit, human resources, investor relations and information technology. In certain cases, these allocations were made on a specific identification basis. Otherwise, the expenses related to services provided to us by ECC were allocated to us based on the relative percentages, as compared to ECC’s other businesses, of headcount or other appropriate methods depending on the nature of each item of cost to be allocated. Pursuant to transition services agreements we will enter into with ECC prior to the spin-off, ECC will continue to provide us with certain of these services at prices agreed upon by ECC and us for a period of two years from the date of the spin-off at cost plus an agreed upon margin, which is believed to be fair market value pricing. We will arrange to procure other services pursuant to arrangements with third parties. See “Certain Intercompany Agreements” for a description of the transition services agreements. The costs historically allocated to us by ECC may not be indicative of the costs that we will incur following the spin-off, nor are they necessarily indicative of costs that we will be charged or incur in the future. Following the spin-off, we will perform these functions using our own resources or purchased services, however, for an interim period, some of these functions will continue to be provided by ECC under the transition services agreement. In addition to the transition services agreements, we will enter into a number of commercial agreements with ECC in connection with the spin-off, many of which are expected to have terms longer than one year. See “Certain Intercompany Agreements.”

We will incur increased costs as a result of becoming an independent publicly traded company, primarily from audit fees paid to our independent public accounting firm, Public Company Accounting Oversight Board fees, Nasdaq listing fees, legal fees and stockholder communications fees. We will also bear directly the costs of certain services currently provided to us by ECC, which may be higher than the allocated cost to us as described above.

We believe the assumptions underlying the combined financial statements are reasonable. However, for the reasons discussed above, the combined financial statements included herein will not reflect our future results of operations, financial position and cash flows or reflect what our results of operations, financial position and cash flows would have been had we been a separate, stand-alone company during the periods presented.

Introduction

Management’s discussion and analysis, or “MD&A,” of our results of operations and financial condition is provided as a supplement to the audited annual financial statements and unaudited interim financial statements and footnotes thereto included elsewhere herein to help provide an understanding of our financial condition, changes in financial condition and results of our operations. The information included in MD&A should be read in conjunction with the annual and interim financial statements.

Explanation of Key Metrics and Other Items.

Equipment and other sales — ECC. “Equipment and other sales — ECC” primarily includes sales of set-top boxes and related components to ECC at cost as discussed in “Basis of Presentation” above and other services provided to ECC.

Equipment sales. “Equipment sales” primarily includes sales of set-top boxes and related components to Bell ExpressVu and other international customers.

Cost of equipment and other sales. “Cost of equipment and other sales” principally includes costs associated with set-top boxes and related components sold to ECC, Bell ExpressVu and to other international customers.

Research and development expenses. “Research and development expenses” consist primarily of all costs associated with the design and development of our set-top boxes and related components including, among other things, salaries and consulting fees.

General and administrative expenses. “General and administrative expenses” consists primarily of all other employee-related costs associated with administrative services such as legal, information systems and accounting and finance, including non-cash, stock-based compensation expense directly incurred by us. It also includes outside professional fees (i.e. legal, information systems and accounting services) and other items associated with facilities and administration. In addition, “General and administrative expenses” includes administrative support services, as discussed above, provided by ECC and charged to us as discussed in “Basis of Presentation” above.

“Other” income (expense). The main components of “Other” income and expense are gains and losses realized on the sale of investments, equity in earnings and losses of our affiliates, and impairment of marketable and non-marketable investment securities.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”). EBITDA is defined as “Net income (loss)” plus “Interest expense” net of “Interest income,” “Income taxes” and “Depreciation and amortization.” This “non-GAAP measure” is reconciled to net income in our discussion of “Results of Operations” below.

Free cash flow. We define free cash flow as “Net cash flows from operating activities” less “Purchases of property and equipment,” as shown on our Combined Statements of Cash Flows.

Results of Operations

The following discussion of combined results of operations refers to the six months ended June 30, 2007 compared to the same period in 2006, the year ended December 31, 2006 compared to the same period in 2005, and the year ended December 31, 2005 compared to the same period in 2004.

Six Months Ended June 30, 2007 Compared to the Six Months Ended June 30, 2006 (in thousands):


	For the Six Months
	Ended June 30,						Variance
	2007			2006			Amount			%
	(Unaudited)

Revenue:
Equipment and other sales — ECC	$	677,232		$	611,483		$	65,749			10.8
Equipment sales		101,120			144,133			(43,013	)		(29.8	)

Total revenue	$	778,352		$	755,616		$	22,736			3.0

Costs and Expenses:
Cost of equipment and other sales		742,290			702,773			39,517			5.6
% of Total revenue		95.4	%		93.0	%
Research and development		27,035			25,162			1,873			7.4
% of Total revenue		3.5	%		3.3	%
General and administrative		37,579			28,766			8,813			30.6
% of Total revenue		4.8	%		3.8	%
Depreciation and amortization		2,909			3,124			(215	)		(6.9	)

Total costs and expenses		809,813			759,825			49,988			6.6

Operating income (loss)		(31,461	)		(4,209	)		(27,252	)		N/M

Other Income (Expense):
Interest income		942			272			670			N/M
Interest expense, net of amounts capitalized		(537	)		(512	)		(25	)		(4.9	)
Other		(765	)		2,347			(3,112	)		N/M

Total other income (expense)		(360	)		2,107			(2,467	)		N/M

Income (loss) before income taxes		(31,821	)		(2,102	)		(29,719	)		N/M
Income tax (provision) benefit, net		(1,472	)		(222	)		(1,250	)		N/M
Effective tax rate		4.6	%		10.6	%

Net income (loss)	$	(33,293	)	$	(2,324	)	$	(30,969	)		N/M

Other Data:
EBITDA	$	(29,317	)	$	1,262		$	(30,579	)		N/M

Equipment and other sales — ECC. For the six months ended June 30, 2007, revenue from “Equipment and other sales — ECC” totaled $677.2 million, an increase of $65.7 million or 10.8% compared to the same period during 2006. This change resulted from an increase in sales of set-top boxes and related components to ECC, partially offset by a slight decrease in the average sales price per unit. As discussed in Note 2 in the Notes to Combined Financial Statements of EchoStar Holding Corporation, set-top boxes and related components were historically sold to ECC at cost.

In the near term, we expect ECC to remain the primary customer of our set-top box business and the primary source of our total revenue. Pursuant to the commercial agreements we will enter into with ECC prior to the spin-off, we will continue to be obligated to sell set-top boxes to ECC at cost plus an agreed upon margin,

which is believed to be fair market value pricing, for a period of two years from the date of the spin-off, although ECC will have no obligations to purchase set-top boxes from us during or after this two year period.

Equipment sales. For the six months ended June 30, 2007, “Equipment sales” totaled $101.1 million, a decrease of $43.0 million or 29.8% compared to the same period during 2006. This decrease principally resulted from a decline in sales of set-top boxes and related components to international customers.

While we currently have certain binding purchase orders from Bell ExpressVu through the beginning of 2008, the availability of new compression technology could impact our relationship with Bell ExpressVu, depending on its strategy to upgrade customers. There can be no assurance that Bell ExpressVu will continue to purchase set-top boxes from us.

Cost of equipment and other sales. “Cost of equipment and other sales” totaled $742.3 million during the six months ended June 30, 2007, an increase of $39.5 million or 5.6% compared to the same period in 2006. This change resulted from an increase in sales of set-top boxes and related components to ECC, partially offset by a decline in the sale of set-top boxes and related components to international customers. As discussed above, set-top boxes and related components were historically sold to ECC at cost. “Cost of equipment and other sales” represented 95.4% and 93.0% of “Total revenue” during the six months ended June 30, 2007 and 2006, respectively. The increase in the expense to revenue ratio principally related to a decline in margins on sales of set-top boxes and related components sold to international customers.

General and administrative expenses. “General and administrative expenses” totaled $37.6 million during the six months ended June 30, 2007, an increase of $8.8 million or 30.6% compared to the same period in 2006. This increase was primarily attributable to increased personnel and related costs, including non-cash, stock-based compensation expense, and increased administrative support from ECC. “General and administrative expenses” represented 4.8% and 3.8% of “Total revenue” during the six months ended June 30, 2007 and 2006, respectively. The increase in the ratio of those expenses to “Total revenue” was primarily attributable to the increases in “General and administrative expenses” discussed above.

Other. “Other” expense totaled $0.8 million during the six months ended June 30, 2007 compared to “Other” income of $2.3 million during the same period in 2006. The decrease of $3.1 million primarily resulted from an increase in losses from equity investments, partially offset by higher net realized gains on investments during the six months ended June 30, 2007 compared to 2006.

Earnings before interest, taxes, depreciation and amortization. EBITDA was negative $29.3 million during the six months ended June 30, 2007, a decrease of $30.6 million compared to the same period in 2006. The following table reconciles EBITDA to the accompanying financial statements.


	For the Six Months
	Ended June 30,
	2007			2006
	(In thousands)

EBITDA	$	(29,317	)	$	1,262
Less:
Interest expense, net		(405	)		240
Income tax provision, net		1,472			222
Depreciation and amortization		2,909			3,124

Net income (loss)	$	(33,293	)	$	(2,324	)

EBITDA is not a measure determined in accordance with accounting principles generally accepted in the United States, or GAAP, and should not be considered a substitute for operating income, net income or any other measure determined in accordance with GAAP. EBITDA is used as a measurement of operating efficiency and overall financial performance and we believe it to be a helpful measure for those evaluating companies in our industries. Conceptually, EBITDA measures the amount of income generated each period that could be used to service debt, pay taxes and fund capital expenditures. EBITDA should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Income tax (provision) benefit, net. Our income tax policy is to record the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in our accompanying combined balance sheets, as well as operating loss and tax credit carryforwards. We follow the guidelines set forth in Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”, or SFAS 109, regarding the recoverability of any tax assets recorded on the balance sheet and provide any necessary allowances as required. Determining necessary allowances requires us to make assessments about the timing of future events, including the probability of expected future taxable income and available tax planning opportunities. We currently have an approximate $84.2 million valuation allowance recorded as an offset against all of our net deferred tax assets. In accordance with SFAS 109, we have evaluated our need for a valuation allowance based on historical evidence, including trends. All or a portion of the current valuation allowance is expected to be reversed on the effective date of the spin-off since we are expected to realize sufficient profit to utilize our deferred tax benefits as a result of the commercial and transitional agreements with ECC.

Net income (loss). Net loss was $33.3 million during the six months ended June 30, 2007, an increase in net loss of $31.0 million compared to the same period in 2006. The increase in losses was primarily attributable to the changes in revenue and expenses discussed above.

Year Ended December 31, 2006 Compared to the Year Ended December 31, 2005 (in thousands):


	For the Years Ended
	December 31,						Variance
	2006			2005			Amount			%

Revenue:
Equipment and other sales — ECC	$	1,288,691		$	1,295,861		$	(7,170	)		(0.6	)
Equipment sales		236,629			217,830			18,799			8.6

Total revenue		1,525,320			1,513,691			11,629			0.8

Costs and Expenses:
Cost of equipment and other sales		1,440,178			1,438,629			1,549			0.1
% of Total revenue		94.4	%		95.0	%
Research and development		56,451			45,928			10,523			22.9
% of Total revenue		3.7	%		3.0	%
General and administrative		60,106			56,366			3,740			6.6
% of Total revenue		3.9	%		3.7	%
Depreciation and amortization		6,032			5,832			200			3.4

Total costs and expenses		1,562,767			1,546,755			16,012			1.0

Operating income (loss)		(37,447	)		(33,064	)		(4,383	)		(13.3	)

Other Income (Expense):
Interest income		831			252			579			N/M
Interest expense, net of amounts capitalized		(1,059	)		(1,088	)		29			2.7
Other		6,588			(10,109	)		16,697			N/M

Total other income (expense)		6,360			(10,945	)		17,305			N/M

Income (loss) before income taxes		(31,087	)		(44,009	)		12,922			29.4
Income tax (provision) benefit, net		(3,075	)		(931	)		(2,144	)		N/M
Effective tax rate		9.9	%		2.1	%

Net income (loss)	$	(34,162	)	$	(44,940	)	$	10,778			24.0

Other Data:
EBITDA	$	(24,827	)	$	(37,341	)	$	12,514			33.5

Equipment and other sales — ECC. For the year ended December 31, 2006, revenue from “Equipment and other sales — ECC” totaled $1.289 billion, a decrease of $7.2 million or 0.6% compared to the same period during 2005. This change resulted from a decline in sales of set-top boxes and related components to ECC, partially offset by an increase in the average sales price per set-top box as a result of increased sales of advanced products, such as receivers with multiple tuners, DVRs and HD receivers.

Equipment sales. For the year ended December 31, 2006, “Equipment sales” totaled $236.6 million, an increase of $18.8 million or 8.6% compared to the same period during 2005. This increase principally resulted from an increase in sales of set-top boxes and related components to international customers.

Cost of equipment and other sales. “Cost of equipment and other sales” totaled $1.440 billion during the year ended December 31, 2006, an increase of $1.5 million or 0.1% compared to the same period in 2005. This increase primarily resulted from an increase in the sale of set-top boxes and related components to international customers, partially offset by a decrease in sales to ECC. “Cost of equipment and other sales” represented 94.4% and 95.0% of “Total revenue” during the years ended December 31, 2006 and 2005, respectively. The decrease in the expense to revenue ratio principally related to an improvement in margins on sales to international customers. As previously discussed, set-top boxes and related components were historically sold to ECC at cost.

Research and development expenses. “Research and development expenses” totaled $56.5 million during the year ended December 31, 2006, an increase of $10.5 million or 22.9% compared to the same period in 2005. This increase was primarily attributable to increases in personnel costs and consulting fees. “Research and development expenses” represented 3.7% and 3.0% of “Total revenue” during the years ended December 31, 2006 and 2005, respectively. The increase in the ratio of those expenses to “Total revenue” was primarily attributable to an increase in expenses, discussed above.

General and administrative expenses. “General and administrative expenses” totaled $60.1 million during the year ended December 31, 2006, an increase of $3.7 million or 6.6% compared to 2005. This increase was primarily attributable to increased personnel and related costs including, among other things, non-cash, stock-based compensation expense recorded related to the adoption of SFAS 123R, outside professional fees, and administrative support from ECC. “General and administrative expenses” represented 3.9% and 3.7% of “Total revenue” during the years ended December 31, 2006 and 2005, respectively. The increase in the ratio of those expenses to “Total revenue” was primarily attributable to an increase in expenses, discussed above.

Other. “Other” income totaled $6.6 million during the year ended December 31, 2006 compared to “Other” expense of $10.1 million during 2005. The increase of $16.7 million primarily resulted from a loss in 2005 related to a $25.4 million charge to earnings for other than temporary declines in the fair value of an investment in the marketable common stock of a company in the home entertainment industry, partially offset by a $16.9 million gain related to the conversion of certain bond instruments into common stock. The increase also includes larger gains from the sale of investments in 2006 as compared to 2005.

Earnings before interest, taxes, depreciation and amortization. EBITDA was negative $24.8 million during the year ended December 31, 2006, an improvement of $12.5 million compared to the same period in 2006. The following table reconciles EBITDA to the accompanying financial statements.


	For the Years Ended
	December 31,
	2006			2005
	(In thousands)

EBITDA	$	(24,827	)	$	(37,341	)
Less:
Interest expense, net		228			836
Income tax provision, net		3,075			931
Depreciation and amortization		6,032			5,832

Net income (loss)	$	(34,162	)	$	(44,940	)

Net income (loss). Net loss was $34.2 million during the year ended December 31, 2006, compared to a $44.9 million loss in 2005. The larger loss was primarily attributable to the changes in revenue and expenses discussed above.

Year Ended December 31, 2005 Compared to the Year Ended December 31, 2004 (in thousands):


	For the Years Ended
	December 31,						Variance
	2005			2004			Amount			%

Revenue:
Equipment and other sales — ECC	$	1,295,861		$	1,543,513		$	(247,652	)		(16.0	)
Equipment sales		217,830			176,578			41,252			23.4

Total revenue		1,513,691			1,720,091			(206,400	)		(12.0	)

Costs and Expenses:
Cost of equipment and other sales		1,438,629			1,650,775			(212,146	)		(12.9	)
% of Total revenue		95.0	%		96.0	%
Research and development		45,928			39,809			6,119			15.4
% of Total revenue		3.0	%		2.3	%
General and administrative		56,366			65,059			(8,693	)		(13.4	)
% of Total revenue		3.7	%		3.8	%
Depreciation and amortization		5,832			5,071			761			15.0

Total costs and expenses		1,546,755			1,760,714			(213,959	)		(12.2	)

Operating income (loss)		(33,064	)		(40,623	)		7,559			18.6

Other Income (Expense):
Interest income		252			349			(97	)		(27.8	)
Interest expense, net of amounts capitalized		(1,088	)		(1,123	)		35			3.1
Other		(10,109	)		(1,412	)		(8,697	)		N/M

Total other income (expense)		(10,945	)		(2,186	)		(8,759	)		N/M

Income (loss) before income taxes		(44,009	)		(42,809	)		(1,200	)		(2.8	)
Income tax (provision) benefit, net		(931	)		(428	)		(503	)		N/M
Effective tax rate		2.1	%		(1.0	)%

Net income (loss)	$	(44,940	)	$	(43,237	)	$	(1,703	)		(3.9	)

Other Data:
EBITDA	$	(37,341	)	$	(36,964	)	$	(377	)		(1.0	)

Equipment and other sales — ECC. For the year ended December 31, 2005, revenue from “Equipment and other sales — ECC” totaled $1.296 billion, a decrease of $247.7 million or 16.0% compared to the same period during 2004. This change resulted from a significant decline in sales of set-top boxes and related components to ECC, partially offset by an increase in the average sales price per set-top box as a result of increased sales of advanced products, such as receivers with multiple tuners, DVRs and HD receivers.

Equipment sales. For the year ended December 31, 2005, “Equipment and other sales” totaled $217.8 million, an increase of $41.3 million or 23.4% compared to the same period during 2004. This increase principally resulted from an increase in sales of set-top boxes and related components to international customers.

Cost of equipment and other sales. “Cost of equipment and other sales” totaled $1.439 billion during the year ended December 31, 2005, a decrease of $212.1 million or 12.9% compared to the same period in 2004. This change resulted from a decline in sales of set-top boxes and related components to ECC, partially offset by an increase in the sale of set-top boxes and related components to international customers. “Cost of equipment and other sales” represented 95.0% and 96.0% of “Total revenue” during the years ended December 31, 2005 and 2004, respectively. As previously discussed, set-top boxes and related components were historically sold to ECC at cost. The decrease in the expense to revenue ratio principally resulted from a decrease from 2004 to 2005 in the relative percentage of zero-margin equipment sales to ECC versus sales to international customers.

Research and development expenses. “Research and development expenses” totaled $45.9 million during the year ended December 31, 2005, an increase of $6.1 million or 15.4% compared to the same period in 2004. This increase was primarily attributable to increase in personnel costs and consulting fees. “Research and development expenses” represented 3.0% and 2.3% of “Total revenue” during the years ended December 31, 2006 and 2005, respectively. The increase in the ratio of those expenses to “Total revenue” was primarily attributable to an increase in expenses, discussed above.

General and administrative expenses. “General and administrative expenses” totaled $56.4 million during the year ended December 31, 2005, a decrease of $8.7 million or 13.4% compared to 2004. The decrease in “General and administrative expenses” was primarily attributable to a decrease in administrative support from ECC, partially offset by an increase in personnel costs. “General and administrative expenses” represented 3.7% and 3.8% of “Total revenue” during the years ended December 31, 2005 and 2004, respectively.

Other. “Other” expense totaled $10.1 million during the year ended December 31, 2005 compared to $1.4 million during 2004. The decrease in income of $8.7 million primarily resulted from a loss in 2005 related to a $25.4 million charge to earnings for other than temporary declines in the fair value of an investment in the marketable common stock of a company in the home entertainment industry, partially offset by a $16.9 million gain related to the conversion of certain bond instruments into common stock.

Earnings before interest, taxes, depreciation and amortization. EBITDA was negative $37.3 million during the year ended December 31, 2005, a decrease of $1.0 million compared to the same period in 2004. The following table reconciles EBITDA to the accompanying financial statements.


	For the Years Ended
	December 31,
	2005			2004
	(In thousands)

EBITDA	$	(37,341	)	$	(36,964	)
Less:
Interest expense, net		836			774
Income tax provision (benefit), net		931			428
Depreciation and amortization		5,832			5,071

Net income (loss)	$	(44,940	)	$	(43,237	)

Net income (loss). Net loss was $44.9 million during the year ended December 31, 2005, compared to a $43.2 million loss in 2004. The increase was primarily attributable to the changes in revenue and expenses discussed above.

Liquidity and Capital Resources

As of June 30, 2007, our cash, cash equivalents and marketable investment securities totaled $336.2 million, compared to $323.6 million as of December 31, 2006. As discussed in Note 12 to our Combined Financial Statements, ECC has historically funded our working capital requirements. As of the effective date of the spin-off, this amount will be contributed to us as capital. In addition, in connection with the spin-off, ECC will distribute $1.0 billion in cash to us. We intend to use this cash for, among other things, future working capital needs, satellite construction and strategic initiatives as necessary, and we may also repurchase shares of our Class A common stock pursuant to the authorization from our Board of Directors to repurchase up to $1 billion of our Class A common stock

Following the spin-off, we expect that our future working capital and capital expenditure and debt service requirements will be satisfied primarily from existing cash and marketable investment securities, cash generated from operations and future financings. Our ability to generate positive future operating and net cash flows is dependent upon, among other things, our ability to retain existing customers and generate new business. There can be no assurance we will be successful in executing our business plan. The amount of capital required in 2008 will depend on our levels of investment in infrastructure necessary to support our fixed satellite service business, other strategic initiatives, including strategic investments, and research and development related to our set-top box and related component business, previously discussed. We also may use capital to fund a stock buyback program of up to $1.0 billion in 2008 primarily from our existing cash and marketable investment securities. Our capital expenditures will vary depending on the number of satellites leased or under construction at any point in time. Our working capital and capital expenditure requirements could increase materially in the event of significant satellite failures, in the event we make additional strategic investments or acquisitions, in the event that we incur losses in connection with our current and future strategic investments, or in the event of a general economic downturn, among other factors. These factors could require that we raise additional capital in the future. There can be no assurance that we could raise all required capital or that required capital would be available on acceptable terms.

From time to time we evaluate opportunities for strategic investments or acquisitions that may complement our current services and products, enhance our technical capabilities, improve or sustain our competitive position, or otherwise offer growth opportunities. We may make investments in or partner with others to expand our business. Future material investments or acquisitions may require that we obtain additional capital, assume third party debt or other long-term obligations. There can be no assurance that we could raise all required capital or that required capital would be available on acceptable terms.

Cash, Cash Equivalents and Marketable Investment Securities

We consider all liquid investments purchased within 90 days of their maturity to be cash equivalents. See “— Quantitative and Qualitative Disclosures About Market Risk” for further discussion regarding our marketable investment securities. As of June 30, 2007, our cash, cash equivalents and marketable investment securities totaled $336.2 million compared to $323.6 million as of December 31, 2006.

The following discussion highlights our free cash flow and cash flow activities during the six months ended June 30, 2007 and years ended December 31, 2006, 2005 and 2004.

Free Cash Flow

We define free cash flow as “Net cash flows from operating activities” less “Purchases of property and equipment,” as shown on our Combined Statements of Cash Flows. We believe free cash flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to repay debt obligations, make investments, fund acquisitions and for certain other activities. Free cash flow is not a measure determined in accordance with GAAP and should not be considered a substitute for “Operating

income,” “Net income,” “Net cash flows from operating activities” or any other measure determined in accordance with GAAP. Since free cash flow includes investments in operating assets, we believe this non-GAAP liquidity measure is useful in addition to the most directly comparable GAAP measure — “Net cash flows from operating activities.”

During the six months ended June 30, 2007 and years ended December 31, 2006, 2005 and 2004, free cash flow was significantly impacted by changes in operating assets and liabilities as shown in the “Net cash flows from operating activities” section of our Combined Statements of Cash Flows included herein. Operating asset and liability balances can fluctuate significantly from period to period and there can be no assurance that free cash flow will not be negatively impacted by material changes in operating assets and liabilities in future periods, since these changes depend upon, among other things, management’s timing of payments and control of inventory levels, and cash receipts. In addition to fluctuations resulting from changes in operating assets and liabilities, free cash flow can vary significantly from period to period depending upon, among other things, operating efficiencies, increases or decreases in purchases of property and equipment and other factors.

The following table reconciles free cash flow to “Net cash flows from operating activities.”


	For the Six Months
	Ended June 30,						For the Years Ended December 31,
	2007			2006			2006			2005			2004
	(Unaudited)

Free cash flow	$	(114,678	)	$	(12,641	)	$	(69,143	)	$	(18,443	)	$	(84,851	)
Add back:
Purchases of property and equipment		84,983			7,174			32,769			4,250			5,935

Net cash flows from operating activities	$	(29,695	)	$	(5,467	)	$	(36,374	)	$	(14,193	)	$	(78,916	)

Free cash flow was negative $114.7 million and negative $12.6 million for the six months ended June 30, 2007 and 2006, respectively. Free cash flow was negative $69.1 million, negative $18.4 million and negative $84.9 million for the years ended December 31, 2006, 2005 and 2004, respectively.

The decline in free cash flow during the six months ended June 30, 2007 compared to the same period in 2006 of $102.0 million resulted from an increase in “Purchases of property and equipment” of $77.8 million primarily related to satellite construction and a decrease in “Net cash flows from operating activities” of $24.2 million principally attributable to an increase in net loss.

The $50.7 million decline in free cash flow during 2006 compared to 2005 resulted from an increase in “Purchases of property and equipment” of $28.5 million primarily related to satellite construction and a decrease in “Net cash flows from operating activities” of $22.2 million principally attributable to a decrease in cash resulting from changes in operating assets and liabilities and an increase in net loss.

The $66.4 million improvement in free cash flow during 2005 compared to 2004 resulted from an increase in “Net cash flows from operating activities” of $64.7 million and a decrease in “Purchases of property and equipment” of $1.7 million. The increase in “Net cash flows from operating activities” was primarily attributable to an increase in cash resulting from changes in operating assets and liabilities, together with, a decline net loss.

Our future capital expenditures could increase or decrease depending on the strength of the economy, strategic opportunities or other factors.

Other Liquidity Items — Obligations and Future Capital Requirements

Contractual Obligations and Off-balance Sheet Arrangements — Historical

In general, we do not engage in off-balance sheet financing activities. Our contractual obligations as of December 31, 2006 are summarized as follows:


	Payments Due by Period
	Total		2007		2008		2009		2010		2011		Thereafter
	(In thousands)

Satellite-related obligations	$	98,270	$	79,530	$	18,740	$	—	$	—	$	—	$	—
Operating lease obligations		4,003		879		906		933		961		324		—
Purchase obligations		614,978		614,978		—		—		—		—		—

Total	$	717,251	$	695,387	$	19,646	$	933	$	961	$	324	$	—

CMBStar, an S-band satellite, is scheduled to be completed during the second quarter of 2008. Provided required regulatory approvals are obtained and contractual conditions are satisfied, the transponder capacity of that satellite will be leased to the affiliate of a Chinese regulatory entity.

Contractual Obligations and Off-balance Sheet Arrangements — Pro Forma Adjustments (excludes acquisition of Sling Media, Inc.)

As of the effective date of the spin-off, ECC will contribute additional contracts for satellites under construction, capital leases and other long-term obligations related to our fixed satellite services business. Commitments related to these contracts are detailed in the tables below.


	Payments Due by Period
	Total		2007		2008		2009		2010		2011		Thereafter
							(In thousands)

Satellite-related obligations	$	847,244	$	248,512	$	151,561	$	110,413	$	54,251	$	53,513	$	228,994
Purchase obligations		6,626		6,626		—		—		—		—		—

Total	$	853,870	$	255,138	$	151,561	$	110,413	$	54,251	$	53,513	$	228,994

In certain circumstances the dates on which we are obligated to make these payments could be delayed. These amounts will increase to the extent we procure insurance for our satellites or contract for the construction, launch or lease of additional satellites.

Interest on Long-Term Debt


	Payments Due by Period
	Total		2007		2008		2009		2010		2011		Thereafter
	(In thousands)

Capital lease obligations	$	160,527	$	33,843	$	30,707	$	27,216	$	23,337	$	19,032	$	26,392
Other long-term debt		4,842		722		678		630		579		524		1,709

Total	$	165,369	$	34,565	$	31,385	$	27,846	$	23,916	$	19,556	$	28,101

Satellite-Related Obligations

Satellites under Construction. As part of the spin-off, ECC will contribute several of its contracts to construct new satellites, described below, which are contractually scheduled to be completed within the next three years. Future commitments related to these satellites are included in the table above under “Satellite-related obligations.”

In addition, during 2004 and 2005, ECC entered into contracts for the construction of two additional Ka and/or Ku expanded band satellites which are expected to be completed during 2008 and 2009 and will be contributed to us in the spin-off. ECC has not yet procured launches for these satellites.

Leased Satellites. In addition to its lease of the AMC-15 and AMC-16 satellites discussed below under “Capital Lease Obligations,” ECC will also contribute satellite service agreements to lease all of the capacity on other satellites discussed below. Future commitments related to these satellites are included in the table above under “Satellite-related obligations.”

AMC-2. AMC-2 is a fixed satellite services satellite positioned at the 85 degree orbital location. Our lease of this satellite is expected to continue through 2007 and has been accounted for as an operating lease.

AMC-14. AMC-14 is a DBS satellite, which is currently expected to launch early in 2008 and commence commercial operation at an orbital location to be determined at a future date. The initial ten-year lease for all of the capacity on the satellite will be accounted for as a capital lease.

Capital Lease Obligations

As part of the spin-off, ECC will also contribute to us two ten-year satellite service agreements with SES Americom to lease all the capacity on the following satellites:

AMC-15. AMC-15, a fixed satellite services satellite, commenced commercial operation during January 2005. This lease will be renewable by us on a year to year basis following the initial term, and will provide us with certain rights to replacement satellites.

AMC-16. AMC 16, a fixed satellite services satellite, commenced commercial operation during February 2005. This lease is renewable by us on a year to year basis following the initial term, and will provide us with certain rights to replacement satellites.

In accordance with Statement of Financial Accounting Standards No. 13, “Accounting for Leases” (“SFAS 13”), we will account for the satellite component of these agreements as a capital lease. The commitment related to the present value of the net future minimum lease payments for the satellite component of the agreement is included under Capital Lease Obligations in the table above. The commitment related to future minimum payments designated for the lease of the orbital slots and other executory costs is included under Satellite-Related Obligations in the table above. The commitment related to the amount representing interest is included under Interest on Long-Term Debt in the table above.

Purchase Obligations

Our purchase obligations primarily consist of binding purchase orders for set-top boxes and related components. Our purchase obligations can fluctuate significantly from period to period due to, among other things, management’s control of inventory levels, and can materially impact our future operating asset and liability balances, and our future working capital requirements.

Satellite Insurance

We do not anticipate carrying insurance for any of the in-orbit satellites that we will own because we believe that the premium costs are uneconomic relative to the risk of satellite failure. The loss of a satellite or other satellite malfunctions or anomalies could have a material adverse effect on our financial performance which we may not be able to mitigate by using available capacity on other satellites. 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. In addition, the loss of a satellite or other satellite malfunctions or anomalies could affect our ability to comply with FCC regulatory obligations and our ability to fund the construction or acquisition of replacement satellites for our in-orbit fleet in a timely fashion, or at all.

Future Capital Requirements

From time to time we evaluate opportunities for strategic investments or acquisitions that would complement our current services and products, enhance our technical capabilities or otherwise offer growth opportunities. For example, we are exploring business plans for extended Ku-band and Ka-band satellite systems, including licenses to operate at the 97 and 113 degree orbital locations. Future material investments or acquisitions may

require that we obtain additional capital. There can be no assurance that we could raise all required capital or that required capital would be available on acceptable terms, or at all.

Critical Accounting Estimates

The preparation of the combined financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect amounts reported therein. Management bases its estimates, judgments and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. The following represent what we believe are the critical accounting policies that may involve a high degree of estimation, judgment and complexity. For a summary of our significant accounting policies, including those discussed below, see Note 2 in the “Notes to Combined Financial Statements for EchoStar Holding Corporation.”

Accounting for investments in publicly-traded securities. We hold debt and equity interests in companies, some of which are publicly traded and have highly volatile prices. We record an investment impairment charge when we believe an investment has experienced a decline in value that is judged to be other than temporary. We monitor our investments for impairment by considering current factors including economic environment, market conditions and the operational performance and other specific factors relating to the business underlying the investment. Future adverse changes in these factors could result in losses or an inability to recover the carrying value of the investments that may not be reflected in an investment’s current carrying value, thereby possibly requiring an impairment charge in the future.

Valuation of investments in non-marketable investment securities. We calculate the fair value of our interest in non-marketable investment securities either at consideration given, or for non-cash acquisitions, based on the results of valuation analyses utilizing a discounted cash flow or DCF model. The DCF methodology involves the use of various estimates relating to future cash flow projections and discount rates for which significant judgments are required.

Valuation of long-lived assets. We evaluate the carrying value of long-lived assets to be held and used, other than goodwill and intangible assets with indefinite lives, when events and circumstances warrant such a review. The carrying value of a long-lived asset or asset group is considered impaired when the anticipated undiscounted cash flow from such asset or asset group is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset or asset group. Fair value is determined primarily using the estimated cash flows associated with the asset or asset group under review, discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of by sale are determined in a similar manner, except that fair values are reduced for estimated selling costs. Changes in estimates of future cash flows could result in a write-down of the asset in a future period.

Valuation of goodwill and intangible assets with indefinite lives. We evaluate the carrying value of goodwill and intangible assets with indefinite lives annually, and also when events and circumstances warrant. We use estimates of fair value to determine the amount of impairment, if any, of recorded goodwill and intangible assets with indefinite lives. Fair value is determined primarily using the estimated future cash flows, discounted at a rate commensurate with the risk involved. Changes in our estimates of future cash flows could result in a write-down of goodwill and intangible assets with indefinite lives in a future period, which could be material to our combined results of operations and financial position.

Allowance for doubtful accounts. Management estimates the amount of required allowances for the potential non-collectibility of accounts receivable based upon past collection experience and consideration of other relevant factors. However, past experience may not be indicative of future collections and therefore additional charges could be incurred in the future to reflect differences between estimated and actual collections.

Inventory reserve. Management estimates the amount of reserve required for potential obsolete inventory based upon past experience, the introduction of new technology and consideration of other relevant factors. However, past experience may not be indicative of future reserve requirements and therefore additional

charges could be incurred in the future to reflect differences between estimated and actual reserve requirements.

Stock-based compensation. We account for stock-based compensation in accordance with the fair value recognition provisions of SFAS 123R. We use the Black-Scholes option pricing model, which requires the input of subjective assumptions. These assumptions include, among other things, estimating the length of time employees will retain their vested stock options before exercising them (expected term); the estimated volatility of our common stock price over the expected term (volatility), and the number of options that will ultimately not complete their vesting requirements (forfeitures), see Note 3 in the Notes to our Combined Financial Statements of EchoStar Holding Corporation. Changes in these assumptions can materially affect the estimate of fair value of stock-based compensation.

Income taxes. Our income tax policy is to record the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying combined balance sheets, as well as operating loss and tax credit carryforwards. We follow the guidelines set forth in Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”, or SFAS 109, regarding the recoverability of any tax assets recorded on the balance sheet and provide any necessary valuation allowances as required. Determining necessary valuation allowances requires us to make assessments about the timing of future events, including the probability of expected future taxable income and available tax planning opportunities. In accordance with SFAS 109, we periodically evaluate our need for a valuation allowance based on both historical evidence, including trends, and future expectations in each reporting period. Future performance could have a significant effect on the realization of tax benefits, or reversals of valuation allowances, as reported in our results of operations.

Contingent liabilities. A significant amount of management judgment is required in determining when, or if, an accrual should be recorded for a contingency and the amount of such accrual. Estimates generally are developed in consultation with outside counsel and are based on an analysis of potential outcomes. Due to the uncertainty of determining the likelihood of a future event occurring and the potential financial statement impact of such an event, it is possible that upon further development or resolution of a contingency matter, a charge could be recorded in a future period that would be material to our consolidated results of operations and financial position.

New Accounting Pronouncements

We adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109”, or FIN 48, on January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes,” and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements”, or SFAS 157, which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. This pronouncement applies to other accounting standards that require or permit fair value measurements. Accordingly, this statement does not require any new fair value measurement. This statement is effective for fiscal years beginning after November 15, 2007, and interim periods within that fiscal year. We are currently evaluating the impact the adoption of SFAS 157 will have on our financial position and results of operations.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”, or SFAS 159, which permits entities to choose to measure financial instruments and certain other items at fair value. This statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. We are currently evaluating the impact the adoption of SFAS 159 will have on our financial position and results of operations.

Seasonality

Our revenues vary throughout the year depending upon the seasonality of our customers in the subscription television service industry. As is typical for our customers, the first half of the year generally produces fewer new subscribers than the second half of the year.

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. We do not have any material backlog of our products.

Quantitative and Qualitative Disclosures About Market Risk

Market Risks Associated With Financial Instruments

As of June 30, 2007, our cash, cash equivalents and marketable investment securities had a fair value of $336.2 million. Of that amount, a total of $27.9 million was invested in fixed or variable rate instruments or money market type accounts. 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.

Our cash, cash equivalents and marketable investment securities had an average annual return for the six months ended June 30, 2007 of 6.7%. A hypothetical 10% decrease in interest rates would result in a decrease of approximately $0.2 million in annual interest income. The value of certain of the investments in this portfolio can be impacted by, among other things, the risk of adverse changes in securities and economic markets, as well as the risks related to the performance of the companies whose commercial paper and other instruments we hold. However, the high quality of these investments (as assessed by independent rating agencies) reduces these risks. The value of these investments can also be impacted by interest rate fluctuations.

Included in our marketable investment securities portfolio balance is debt and equity of public companies we hold for strategic and financial purposes. As of June 30, 2007, we held strategic and financial debt and equity investments of public companies with a fair value of $308.3 million. These investments are highly speculative and are concentrated in a small number of companies. We may make additional strategic and financial investments in debt and other equity securities in the future. The fair value of our strategic and financial debt and equity 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. A hypothetical 10.0% adverse change in the price of our public strategic debt and equity investments would result in approximately a $30.8 million decrease in the fair value of that portfolio. The fair value of our strategic debt investments are currently not materially impacted by interest rate fluctuations due to the nature of these investments.

We currently classify all marketable investment securities as available-for-sale. We adjust the carrying value of our available-for-sale securities to fair value and report the related temporary unrealized gains and losses as a separate component of “Accumulated other comprehensive income (loss)” within “Total owner’s equity (deficit),” net of related deferred income tax. Declines in the fair value of a marketable investment security which are estimated to be “other than temporary” are recognized in the Combined Statements of Operations and Comprehensive Income (Loss), thus establishing a new cost basis for such investment. We evaluate our marketable investment securities portfolio on a quarterly basis to determine whether declines in the fair value of these securities are other than temporary. This quarterly evaluation consists of reviewing, among other things, the fair value of our marketable investment securities compared to the carrying amount, the historical volatility of the price of each security and any market and company specific factors related to each security.

Generally, absent specific factors to the contrary, declines in the fair value of investments below cost basis for a continuous period of less than six months are considered to be temporary. Declines in the fair value of investments for a continuous period of six to nine months are evaluated on a case by case basis to determine whether any company or market-specific factors exist which would indicate that such declines are other than temporary. Declines in the fair value of investments below cost basis for a continuous period greater than nine months are considered other than temporary and are recorded as charges to earnings, absent specific factors to the contrary.

As of June 30, 2007, we had gains net of related tax effect of $65.8 million as a part of “Accumulated other comprehensive income (loss)” within “Total owner’s equity (deficit).” During the six months ended June 30, 2007, we did not record any charge to earnings for other than temporary declines in the fair value of our marketable investment securities. In addition, during the six months ended June 30, 2007, we recognized in our Combined Statements of Operations and Comprehensive Income (Loss) realized and net gains on marketable investment securities of $5.0 million. During the six months ended June 30, 2007, our strategic investments have experienced and continue to experience volatility. If the fair value of our strategic marketable investment securities portfolio does not remain above cost basis or if we become aware of any market or company specific factors that indicate that the carrying value of certain of our securities is impaired, we may be required to record charges to earnings in future periods equal to the amount of the decline in fair value.

We have several strategic investments in certain non-marketable equity securities which are included in “Investment in affiliates” on our Combined Balance Sheets. Generally, we account for our unconsolidated equity investments under either the equity method or cost method of accounting. Because these equity securities are not publicly traded, it is not practical to regularly estimate the fair value of the investments; however, these investments are subject to an evaluation for other than temporary impairment on a quarterly basis. This quarterly evaluation consists of reviewing, among other things, company business plans and current financial statements, if available, for factors that may indicate an impairment of our investment. Such factors may include, but are not limited to, cash flow concerns, material litigation, violations of debt covenants and changes in business strategy. The fair value of these equity investments is not estimated unless there are identified changes in circumstances that may indicate an impairment exists and these changes are likely to have a significant adverse effect on the fair value of the investment. As of June 30, 2007, we had $78.5 million aggregate carrying amount of non-marketable and unconsolidated strategic equity investments, of which $19.5 million is accounted for under the cost method. During the six months ended June 30, 2007, we did not record any impairment charges with respect to these investments.

In general, we do not use derivative financial instruments for hedging or speculative purposes, but we may do so in the future.

PROPERTIES

The following table sets forth certain information concerning our principal properties. We operate various facilities in the United States and abroad. We believe that our facilities are well maintained and are sufficient to meet our current and projected needs.

Approximate

Square

Owned or

Description/Use/Location

Footage

Leased

Corporate headquarters, Englewood, Colorado

476,000

Owned

Corporate facilities, Littleton, Colorado

202,000

Owned

EchoStar Technologies Corporation engineering offices and service center, Englewood, Colorado

144,000

Owned

EchoStar Technologies Corporation engineering offices, Englewood, Colorado

63,000

Owned

EchoStar Data Networks engineering offices, Atlanta, Georgia

50,000

Leased

Digital broadcast operations center, Cheyenne, Wyoming

143,000

Owned

Digital broadcast operations center, Gilbert, Arizona

124,000

Owned

Regional digital broadcast operations center, Monee, Illinois

45,000

Owned

Regional digital broadcast operations center, New Braunsfels, Texas

35,000

Owned

Regional digital broadcast operations center, Quicksberg, Virginia

35,000

Owned

Regional digital broadcast operations center, Spokane, Washington

35,000

Owned

Engineering offices and warehouse, Almelo, The Netherlands

55,000

Owned

Engineering offices, Steeton, England

43,000

Owned

Under the terms of our separation from ECC, we will lease portions of certain of our owned facilities to ECC. See “Certain Intercompany Agreements — Agreements with ECC — Leasing of Building Agreements.”

BUSINESS

Overview

We intend to operate two primary businesses, a digital set-top box business and a fixed satellite services business.

Our set-top box business designs, develops and distributes set-top boxes and related products for direct-to-home satellite service providers. In 2006, our set-top box business shipped over nine million set-top boxes. Most of these set-top boxes were sold to ECC, but we also sold set-top boxes to Bell ExpressVu and other international customers. We currently employ over 700 engineers in our set-top box and related businesses.

Our fixed satellite services business will be developed using our nine owned or leased in-orbit satellites and related FCC licenses, a network of seven full service digital broadcast centers, and leased fiber optic capacity with points of presence in approximately 150 cities. All of these assets will be contributed to us on the distribution date. We expect that our primary customer initially will be ECC. However, we also expect to lease capacity in the spot market and to government and enterprise customers.

We will enter into commercial agreements with ECC pursuant to which we will have the obligation to sell set-top boxes and related products and provide fixed satellite services to ECC at set prices for a period of two years. However, ECC is under no obligation to purchase our set-top boxes and related products during or after this two-year period and ECC may terminate the agreements to receive fixed satellite services upon 60 days notice.

As part of ECC, we competed with many of our potential customers. We believe our separation from ECC may expand our opportunities to enter into commercial relationships with these and other new customers, although there can be no assurance that we will be successful in entering into any of these commercial relationships.

Products and Services

Set-top boxes and Related Products

Our set-top boxes permit consumers to watch, control and record television programming through digital video recorder, or DVR, technology integrated with satellite receivers. Certain of our set-top boxes are also capable of incorporating internet protocol television, or IPTV, functionality, which allows consumers to download movies, music and other content from the internet through an Ethernet connection.

Our current set-top box lineup includes:


•	Standard-definition (SD) basic digital set-top boxes: These devices allow consumers who subscribe to television service from multi-channel video distributors to access encrypted digital video and audio content and make use of a variety of interactive applications. These applications include an on-screen interactive program guide, pay-per-view offerings, the ability to support V-chip type technology, games and shopping and parental control.

•	SD-DVR digital set-top boxes: In addition to the functionality of a SD basic digital set-top box, these devices enable subscribers to pause, stop, reverse, fast forward, record and replay live or recorded digital television content using a built-in hard drive capable of storing up to 200 hours of content. They also include the ability to support video-on-demand, or VOD, services.

•	High-Definition (HD) digital set-top boxes: These devices enable subscribers to access the enhanced picture quality and sound of high-definition content, in addition to the functionality of a SD digital set-top box.

•	HD-DVR digital set-top boxes: These devices combine the functionality of the HD set-top box and the DVR digital set-top box into a single device. Our most-advanced HD-DVR set-top boxes are capable of storing up to 350 hours of SD, or 55 hours of HD, content, contain IPTV functionality, and allow users to greatly increase their DVR storage capacity through the use of external hard drives.

In addition to set-top boxes we also design and develop related products such as satellite dishes, remote controls and other devices and accessories.

Fixed Satellite Services

Following the completion of the spin-off, we will operate six owned and three leased in-orbit satellites. We will also have one owned and one leased satellite under construction.

We will also operate a number of digital broadcast centers in the United States. Our principal digital broadcast centers are located in Cheyenne, Wyoming and Gilbert, Arizona. We also have five regional digital broadcast centers that allow us to utilize the spot beam capabilities of our satellites. Programming and other data is received at these centers by fiber or satellite, processed, and then “uplinked” to our satellites for transmission to consumers. Equipment at our digital broadcast centers also performs compression and encryption of our customers’ programming signals.

Our transponder capacity is currently used for a variety of applications:


•	Broadcasting Services. We lease satellite transponder capacity to broadcasters and programmers who use our satellites to deliver their programming to US cable systems and cable households. Our satellites are also used for the transmission of live sporting events and satellite news gathering services.

•	Government Services. We lease satellite capacity and provide technical services to US government agencies and contractors. We believe the U.S government may increase its use of commercial satellites for Homeland Security, emergency response, continuing education, distance learning, and training.

•	Network Services. We lease satellite transponder capacity and provide terrestrial network services to corporations. These networks are dedicated private networks that allow delivery of video and data services for corporate communications. Our satellites can be used for point to point or point to multi -point one way or two way communications.

•	Satellite IP. We currently aggregate content at our digital broadcast centers and offer transport services for over 300 channels of MPEG IV IP encapsulated standard-definition and high-definition programming from our satellite located at the 85 degree orbital location. We intend to offer these wholesale programming transport services to telecommunication companies, rural cable operators, local exchange carriers and wireless broadband providers.

Other Business Opportunities

However, these investments involve many significant risks, including, among other things, the risks that required regulatory approvals and other conditions may not be obtained or satisfied, that we may not be able to enter into necessary distribution and other relationships, and that the companies in which we invest or with whom we partner may not be able to compete effectively in their markets or that there may be insufficient demand for the new services planned by these companies.

During 2007 ECC participated in an FCC auction for licenses in the 1.4 GHz band and was the winning bidder for several licenses with total winning bids of $57 million. ECC intends to transfer these licenses to us in the spin-off subject to receipt of final FCC approvals. We are currently evaluating commercial uses for this spectrum. While its propagation characteristics are attractive, the small amount of spectrum limits its potential

commercial use. There can be no assurance that we will be able to exploit these licenses or that we could raise all capital required to develop these licenses.

Sling Media

Our Business Strategy

Expand set-top box business to additional customers. We believe our separation from ECC could enhance our opportunities to sell set-top boxes to a broader group of multi-channel video distributors. Historically, many of our potential customers have perceived us as a competitor due to our affiliation with ECC. After the spin-off, we believe we could have opportunities to enter into commercial relationships with other multi-channel video distributors. There can be no assurance, however, that we will be successful in entering into any of these commercial relationships (particulary if we continue to be perceived as affiliated with ECC as a result of common ownership and related management).

Leverage satellite capacity and related infrastructure. Our fixed satellite services business benefits from excess satellite and fiber capacity that we believe was in large part created through innovation and operational efficiencies at ECC. While we expect that ECC will initially be our primary customer for fixed satellite services, we believe market opportunities exist to utilize our capacity to provide digital video distribution, satellite-delivered IP, corporate communications and government services to a broader customer base.

Offer comprehensive network infrastructure solutions. We intend to leverage our over 700 engineers to customize infrastructure solutions for a broad base of customers. For example, we could offer a customer the ability to deliver a fully integrated video programming solution, incorporating our satellite and backhaul capacity, customized set-top boxes and network design and management.

Capitalize on change in regulations. Changes in federal law and regulations applicable to the set-box industry may create opportunities for us to expand our business.


•	Digital transition. Congress has mandated that by February 2009 all network broadcasts be transmitted digitally, which will require households that receive over-the-air broadcast signals with an analog television to obtain a digital converter device. This digital converter device is a new product and we believe that we are in a position to develop and market devices that could allow us to effectively compete in this new market.

•	Removable security systems. The Federal Communications Commission, or FCC, mandated that by July 2007 cable providers use removable security modules to provide conditional access security for television content. The FCC intends for this regulation to spur competition in the retail set-top box market, providing an even playing field between leased cable set-top boxes and retail-bought, cable-ready TVs and set-top box equipment. We believe this new regulation may create an opportunity for us to compete on a more level field in the domestic market for cable set-top boxes.

Exploit international opportunities. We believe that direct-to-home satellite service is particularly well-suited for countries without extensive cable infrastructure, and we intend to continue to try to secure new customer relationships from international direct-to-home satellite service providers.

Pursue strategic partnerships, joint ventures and acquisitions. We intend to selectively pursue partnerships, joint ventures and strategic acquisition opportunities that we believe may allow us to increase our existing market share, expand into new markets, broaden our portfolio of products or intellectual property, or strengthen our relationships with our customers.

Act on the set-top box replacement cycle. The broader adoption of high definition television by consumers will require more advanced compression (e.g., MPEG-4) and security technologies within set-top boxes. This may launch a replacement cycle, particularly among direct-to-home and cable providers with substantial bases of legacy equipment, which may create additional market opportunities for us.

Customers

Digital Set-top box business

Historically the primary customer of our digital set-top box business has been ECC. For the six month period ended June 30, 2007 and the fiscal years ended December 31, 2006, 2005 and 2004, ECC accounted for approximately 87.0%, 84.5%, 85.6% and 89.7% of our total historical revenue, respectively. In addition, Bell ExpressVu, a direct-to-home satellite service provider in Canada, accounted for 8.9%,12.2%, 11.4% and 7.3% respectively, of our historical total revenue for the six month period ended June 30, 2007 and the fiscal year ended December 31, 2006, 2005 and 2004. We also currently sell our set-top boxes to other international direct-to-home satellite service providers, although these customers do not account for a significant amount of our total revenue.

In the near term, we expect to rely on ECC to remain the primary customer of our set-top box business and the primary source of our total revenue. We will enter into commercial agreements with ECC pursuant to which we will be obligated to sell set-top boxes and related products to ECC at set prices for a period of two years. ECC is under no obligation to purchase our set-top boxes or related products during or after this two- year period. In addition, while we currently have certain binding purchase orders from Bell ExpressVu through the beginning of 2008, the availability of new compression technology could impact our relationship with Bell ExpressVu, depending on its strategy to upgrade customers. There can be no assurance that ECC or Bell ExpressVu will continue to use our set-top boxes in the future or that we will be successful in growing our set-top box business.

Fixed Satellite Services

We lease transponder capacity on our satellite fleet primarily to ECC, but also to a small number of government and enterprise customers, telecommunications companies and other users. In the near term, due to our limited base of customers, we expect to have a substantial amount of excess capacity. For the six month period ended June 30, 2007 and the fiscal year ended December 31, 2006, ECC accounted for approximately 94.8% and 97.5% of our pro forma total fixed satellite services revenue, respectively. We will enter into commercial agreements with ECC pursuant to which we will be obligated to provide ECC with fixed satellite services at fixed prices for a period of two years. ECC may terminate these agreements upon 60 days notice. Our other fixed satellite service sales are generally characterized by shorter-term contracts or spot market sales.

We currently have substantial unused satellite capacity. Future costs associated with this excess capacity will negatively impact our margins if we do not generate revenue to offset these costs. In addition, because a substantial portion of the capacity of each of our AMC-15, AMC-16 and EchoStar IX satellites remains unused, there is a significant risk that in the future we could be required to record an impairment charge relating to one or more of these satellites that would likely result in a material adverse effect on our operating results.

Marketing and Sales

Historically, our sales and marketing efforts have been limited in scope and focused on international opportunities because the majority of our products and services were provided to ECC pursuant to purchase orders and not long term contracts. Therefore, to successfully implement our business strategy we will need to significantly expand our marketing and sales capabilities both domestically and internationally.

Manufacturing and Material Sources

Although we design, engineer and distribute set-top boxes and related products, we are not generally engaged in the manufacturing process. Instead we outsource the manufacturing of our set-top boxes and related products to third party manufacturers who manufacture our products according to specifications supplied by us. We depend on a few manufacturers, and in some cases a single manufacturer, for the production of set-top boxes and related products. Although there can be no assurance, we do not believe that the loss of any single manufacturer would materially impact our business. Sanmina-SCI Corporation and Jabil Circuit, Inc. currently manufacture the majority of our set-top boxes.

Research and Development

For the fiscal years ended December 31, 2006, 2005 and 2004, we have invested approximately $56.5 million, $45.9 million and $39.8 million in research and development primarily related to our set-top box business.

Competition

Digital Set-top box Business

As we seek to establish ourselves in the digital set-top box industry as an independent business we will face substantial competition. Many of our primary competitors, such as Motorola and Cisco, which recently acquired Scientific Atlanta, have established longstanding relationships with their customers. For instance, some of these competitors own the conditional access technology deployed by their customers. We may not be able to license this technology from these competitors on favorable terms or at all. In addition, we may face competition from international developers of set-top box systems who may be able to develop and manufacture products and services at costs that are substantially lower than ours. Our ability to compete in the digital multi-media industry will also depend heavily on our ability to successfully bring new technologies to market to keep pace with our competitors.

Fixed Satellite Services Business

We compete against larger, well-established fixed satellite service companies, such as Intelsat, SES Americom and Telesat Canada, in an industry that is characterized by long-term leases and high switching costs. Therefore, it will be difficult to displace customers from their current relationships with our competitors. Intelsat and SES Americom maintain key North American orbital slots which may further limit competition and competitive pricing. In addition, our fixed satellite service business could face significant competition from suppliers of terrestrial communications capacity.

While we believe that there may be opportunities to capture new business as a result of market trends such as the digital transition and the increased communications demands of homeland security initiatives, there can be no assurance that we will be able to effectively compete against our competitors due to their significant resources and operating history.

Satellite Fleet Overview

As discussed above, we will have six owned and three leased in-orbit satellites, and we will have one owned and one leased satellite currently under construction. While we believe that overall our satellite fleet is generally in good condition, during 2007 and prior periods certain satellites in our fleet have experienced anomalies, some of which have had a significant adverse impact on their commercial operation. 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. We do not anticipate carrying insurance for any of the in-orbit satellites that we will own.

Owned Satellites

EchoStar III. EchoStar III was launched during October 1997 and currently operates at the 61.5 degree orbital location. The satellite was originally designed to operate a maximum of 32 transponders at

approximately 120 watts per channel, switchable to 16 transponders operating at over 230 watts per channel, and was equipped with a total of 44 transponders to provide redundancy. Prior to 2006, TWTA anomalies caused 22 transponders to fail. During April and October 2006, further TWTA anomalies caused the failure of four additional transponders. As a result, a maximum of 18 transponders are currently available for use on EchoStar III, but due to redundancy switching limitations and specific channel authorizations, we can only operate on 15 of the 30 FCC authorized frequencies we will have the right to utilize at the 61.5 degree location. While we do not expect a large number of additional TWTAs to fail in any year, and the failures have not reduced the original minimum 12-year design life of the satellite, it is likely that additional TWTA failures will occur from time to time in the future, and those failures will further impact commercial operation of the satellite.

EchoStar IV. EchoStar IV was launched during May 1998 and currently operates at the 77 degree orbital location. The satellite was originally designed to operate a maximum of 32 transponders at approximately 120 watts per channel, switchable to 16 transponders operating at over 230 watts per channel. As a result of past TWTA failures, only six transponders are currently available for use and the satellite has been fully depreciated on our books. There can be no assurance that further material degradation, or total loss of use, of EchoStar IV will not occur in the immediate future.

EchoStar VI. EchoStar VI was launched during July 2000 and is currently stationed at the 110 degree orbital location as an in-orbit spare. The satellite was originally equipped with 108 solar array strings, approximately 102 of which are required to assure full power availability for the original minimum 12-year design life of the satellite. Prior to 2006, EchoStar VI experienced anomalies resulting in the loss of 15 solar array strings. During 2006, two additional solar array strings failed, reducing the number of functional solar array strings to 91. While the design life of the satellite has not been affected, commercial operability has been reduced. The satellite was designed to operate 32 transponders at approximately 125 watts per channel, switchable to 16 transponders operating at approximately 225 watts per channel. The power reduction resulting from the solar array failures limits us to operation of a maximum of 26 transponders in standard power mode, or 13 transponders in high power mode currently. The number of transponders to which power can be provided is expected to continue to decline in the future at the rate of approximately one transponder every three years. See discussion of evaluation of impairment in “Long-Lived Satellite Assets” in Note 2 in the Notes to Statement of Net Assets to be Contributed by ECC.

EchoStar VIII. EchoStar VIII was launched during August 2002 and currently operates at the 110 degree orbital location. The satellite was designed to operate 32 transponders at approximately 120 watts per channel, switchable to 16 transponders operating at approximately 240 watts per channel. EchoStar VIII also includes spot-beam technology. This satellite has experienced several anomalies since launch, but none have reduced the 12-year estimated useful life of the satellite. However, there can be no assurance that future anomalies will not cause further losses which could materially impact its commercial operation, or result in a total loss of the satellite.

EchoStar IX. EchoStar IX was launched during August 2003 and currently operates at the 121 degree orbital location. The satellite was designed to operate 32 fixed satellite services transponders operating at approximately 110 watts per channel, along with transponders that can provide services in the Ka-Band (a “Ka-band payload”). The satellite also includes a C-band payload which is owned by a third party. During 2006, EchoStar IX experienced the loss of one of its three momentum wheels, two of which are utilized during normal operations. A spare wheel was switched in at the time and the loss did not reduce the 12-year estimated useful life of the satellite. During September 2007, the satellite experienced anomalies resulting in the loss of three solar array strings. An investigation of the anomalies is continuing. The anomalies have not impacted commercial operation of the satellite to date. The design life of the satellite is not expected to be impacted since the satellite is equipped with a total of 288 solar array strings, only approximately 276 of which are required to assure full power availability for the design life of the satellite. However, there can be no assurance future anomalies will not cause further losses, which could impact the remaining life or commercial operation of the satellite.

EchoStar XII. EchoStar XII was launched during July 2003 and currently operates at the 61.5 degree orbital location. The satellite was designed to operate 13 transponders at 270 watts per channel, in CONUS mode, or 22 spot beams using a combination of 135 and 65 watt TWTAs. We currently operate the satellite in CONUS mode. EchoStar XII has a total of 24 solar array circuits, approximately 22 of which are required to assure full power for the original minimum 12-year design life of the satellite. Since late 2004, eight solar array circuits on EchoStar XII have experienced anomalous behavior resulting in both temporary and permanent solar array circuit failures. The cause of the failures is still being investigated. The design life of the satellite has not been affected. However, these temporary and permanent failures have resulted in a reduction in power to the satellite which will preclude us from using the full complement of transponders on EchoStar XII for the 12-year design life of the satellite. The exact extent of this impact has not yet been determined. There can be no assurance future anomalies will not cause further losses, which could further impact commercial operation of the satellite or its useful life. See discussion of evaluation of impairment in “Long-Lived Satellite Assets” in Note 2 in the Notes to Statement of Net Assets to be Contributed by ECC.

Leased Satellites

We are currently leasing all of the capacity on an existing in-orbit fixed satellite services satellite, AMC-2, at the 85 degree orbital location. Our lease of this satellite is expected to continue through 2007 and has been accounted for as an operating lease.

AMC-15. AMC-15 commenced commercial operation during January 2005 and currently operates at the 105 degree orbital location. This SES Americom fixed satellite services satellite is equipped with 24 Ku fixed satellite services transponders that operate at approximately 120 watts per channel and a Ka fixed satellite services payload consisting of 12 spot beams. As part of the spin-off, ECC will contribute to us a ten-year satellite service agreement for this satellite which will be renewable by us on a year to year basis following the initial term, and provides us with certain rights to replacement satellites.

AMC-16. AMC-16 commenced commercial operation during February 2005 and currently operates at the 85 degree orbital location. This SES Americom fixed satellite services satellite is equipped with 24 Ku-band transponders that operate at approximately 120 watts per channel and a Ka-band payload consisting of 12 spot beams. As part of the spin-off, ECC will contribute to us a ten-year satellite service agreement for this satellite which will be renewable by us on a year to year basis following the initial term, and provides us with certain rights to replacement satellites.

Satellites Under Construction

CMBStar. The CMBStar satellite is an S-band satellite intended to be used in our mobile video project in China and is scheduled to be completed during the second quarter of 2008. If the required regulatory approvals are obtained and contractual conditions are satisfied, the transponder capacity of that satellite will be leased to Hong Kong joint venture, which in turn will sublease a portion of the transponder capacity to an affiliate of a Chinese regulatory entity.

AMC-14. AMC-14 will launch and commence commercial operation in early 2008 at an orbital location to be determined at a future date. The satellite is being equipped with transmit antennas optimized for multiple orbital locations, providing greater backup flexibility in the event certain other in-orbit satellites fail.

During 2004 and 2005, ECC entered into contracts for the construction of two additional SSL Ka and/or Ku expanded band satellites which are expected to be completed during 2008 and 2009. ECC will contribute these contracts to us as part of the spin-off.

Government Regulations

We are subject to comprehensive regulation by the FCC for our domestic operations. We are also regulated by other federal agencies, state and local authorities and the International Telecommunication Union. Depending upon the circumstances, noncompliance with legislation or regulations promulgated by these entities could

result in suspension or revocation of our licenses or authorizations, the termination or loss of contracts or the imposition of contractual damages, civil fines or criminal penalties.

The following summary of regulatory developments and legislation in the United States is not intended to describe all present and proposed government regulation and legislation affecting the satellite and set-top box equipment markets. Government regulations that are currently the subject of judicial or administrative proceedings, legislative hearings or administrative proposals could change our industry to varying degrees. We cannot predict either the outcome of these proceedings or any potential impact they might have on the industry or on our operations.

Regulations Applicable to Satellite Operations

FCC Jurisdiction over our Satellite Operations. The Communications Act gives the FCC broad authority to regulate the operations of satellite companies. Specifically, the Communications Act gives the FCC regulatory jurisdiction over the following areas relating to communications satellite operations:


•	the assignment of satellite radio frequencies and orbital locations;

•	licensing of satellites, earth stations, the granting of related authorizations, and evaluation of the fitness of a company to be a licensee;

•	approval for the relocation of satellites to different orbital locations or the replacement of an existing satellite with a new satellite;

•	ensuring compliance with the terms and conditions of such assignments and authorizations, including required timetables for construction and operation of satellites and other due diligence requirements;

•	avoiding interference with other radio frequency emitters; and

•	ensuring compliance with other applicable provisions of the Communications Act and FCC rules and regulations governing the operations of satellite communications providers.

In order to obtain FCC satellite licenses and authorizations, satellite operators must satisfy strict legal, technical and financial qualification requirements. Once issued, these licenses and authorizations are subject to a number of conditions including, among other things, satisfaction of ongoing due diligence obligations, construction milestones, and various reporting requirements. Applications for new or modified satellites and earth stations are necessary for further development and expansion of satellites services. Necessary federal approval of these applications may not be granted, or may not be granted in a timely manner.

Overview of Our Satellites Licenses and Authorizations. This overview describes the satellite licenses and authorizations that will be contributed to us in the spin-off, and it assumes for purposes of this description the completion of these contributions. However, transfer of these licenses and authorizations remains subject to receipt of all required FCC and other governmental approvals.

Our satellites are located in orbital positions, or slots, that are designated by their western longitude. An orbital position describes both a physical location and an assignment of spectrum in the applicable frequency band. Each transponder on our satellites typically exploits one frequency channel. Through digital compression technology, we can currently transmit up to 13 standard-definition digital video channels from each transponder. Several of our satellites also include spot-beam technology which enables us to provide services on a local or regional basis, but reduces the number of video channels that could otherwise be offered across the entire United States.

We have U.S. DBS licenses for 30 frequencies at the 61.5 degree orbital location, capable of providing service to the Eastern and Central United States. We are also currently operating on the two unassigned frequencies at the 61.5 orbital location under a conditional special temporary authorization. We recently sought renewal of that authority. The licensing of those two channels is under FCC review, and also subject to an FCC moratorium on new DBS applications. The FCC has previously found that existing DBS providers will not be eligible for the two unassigned channels at 61.5 degree orbital location. EchoStar Satellite L.L.C. has a pending reconsideration petition of that decision.

Following the spin-off, we will have the right to use 32 frequencies at a Mexican DBS orbital slot at the 77 degree orbital location, but it is likely to be several years before a satellite is available to exploit all of that spectrum.

We also hold licenses or have entered into agreements to lease capacity on satellites at the following fixed satellite services orbital locations including:


•	500 MHz of Ku spectrum divided into 32 frequencies at the 121 degree orbital location, capable of providing service to CONUS, plus 500 MHz of Ka spectrum at the 121 degree orbital location capable of providing service into select spot beams;

•	500 MHz of Ku spectrum divided into 24 frequencies at the 105 degree orbital location, currently capable of providing service to CONUS, Alaska and Hawaii, plus approximately 720 MHz of Ka spectrum capable of providing service through spot beams to CONUS, Alaska and Hawaii; and

•	500 MHz of Ku spectrum divided into 24 frequencies at the 85 degree orbital location, currently capable of providing service to CONUS, plus approximately 720 MHz of Ka spectrum capable of providing service through spot beams to CONUS.

We also hold authorizations to construct additional satellites at other orbital locations. Specifically, we hold Ka-band licenses at the 97 and 113 degree orbital locations. More recently, we were granted authority for a “tweener” DBS satellite at the 86.5 degree orbital location. That authorization will be conditioned on final FCC licensing and service rules in the “tweener” proceeding, in which the FCC is examining permitting satellites to operate from orbital locations 4.5 degrees (half of the usual 9 degrees) away from traditional DBS satellites. The FCC has also granted authorizations to Spectrum Five for a tweener satellite at the 114.5 degree orbital location. EchoStar Satellite L.L.C. challenged the Spectrum Five authorization, and Telesat Canada, a Canadian satellite operator, has challenged our license.

Use of these licenses and conditional authorizations is subject to certain technical and due diligence requirements, including the requirement to construct and launch satellites according to specific milestones and deadlines. There can be no assurance that we will develop acceptable plans to meet these deadlines, or that we will be able to utilize these orbital slots.

Duration of our Satellite Licenses. Generally speaking, all of our satellite licenses are subject to expiration unless renewed by the FCC. The term of each of our DBS licenses is 10 years; fixed satellite services licenses generally are for 15 year terms. In addition, our special temporary authorizations are granted for periods of only 180 days or less, subject again to possible renewal by the FCC.

Opposition and other Risks to our Licenses. Several third parties have opposed, and we expect them to continue to oppose, some of our FCC satellite authorizations and pending requests to the FCC for extensions, modifications, waivers and approvals of our licenses. In addition, we may not have fully complied with all of the FCC reporting and filing requirements in connection with our satellite authorizations. Consequently, it is possible the FCC could revoke, terminate, condition or decline to extend or renew certain of our authorizations or licenses.

FCC Rulemaking Affecting our Licenses and Applications. A number of our other applications have been denied or dismissed without prejudice by the FCC, or remain pending. We cannot be sure that the FCC will grant any of our satellite applications, or that the authorizations, if granted, will not be subject to onerous conditions. Moreover, the cost of building, launching and insuring a satellite can be as much as $300 million or more, and we cannot be sure that we will be able to construct and launch all of the satellites for which we have requested authorizations. The FCC has also imposed a $3.0 million bond requirement for our fixed satellite services satellite licenses, all or part of which would be forfeited by a licensee that does not meet its diligence milestones for a particular satellite.

Reverse Band (17/24 GHz BSS) Spectrum. The FCC has recently announced licensing and service rules for the 17/24 GHz BSS or “reverse band” spectrum, which could create substantial additional capacity for satellite providers. It could also result in additional satellite competition from new entrants. Under FCC rules, we are eligible for up to 5 orbital locations. We cannot predict when, or whether, the FCC will grant our applications.

Nor can we predict whether FCC action, or other applicants’ selected orbital locations, will limit the utility of this new spectrum for our operations.

Interference from Other Services Sharing Satellite Spectrum. The FCC has adopted rules that allow non-geostationary orbit fixed satellite services to operate on a co-primary basis in the same frequency band as DBS and Ku-band-based fixed satellite services. The FCC has also authorized the use of terrestrial communication services (MVDDS) in the DBS band. MVDDS licenses were auctioned in 2004. Despite regulatory provisions to protect DBS operations from harmful interference, there can be no assurance that operations by other satellite or terrestrial communication services in the DBS band will not interfere with our DBS operations and adversely affect our business.

International Satellite Competition and Interference. DIRECTV has obtained FCC authority to provide service to the United States from a Canadian DBS orbital slot. We have also received authority to do the same from a Mexican orbital slot at 77 degrees. The possibility that the FCC will allow service to the U.S. from additional foreign slots may permit additional competition against us from other satellite providers. It may also provide a means by which to increase our available satellite capacity in the United States. In addition, a number of administrations, such as Great Britain and the Netherlands, have requested to add orbital locations serving the U.S. close to our licensed slots. Such operations could cause harmful interference into our satellites and constrain our future operations at those slots if such “tweener” operations are approved by the FCC. The risk of harmful interference will depend upon the final rules adopted in the FCC’s “tweener” proceeding.

Emergency Alert System. The Emergency Alert System (“EAS”) requires participants to interrupt programming during nationally declared emergencies and to pass through emergency-related information. The FCC requires satellite carriers to participate in the “national” portion of EAS, and is considering whether to mandate that satellite carriers also interrupt programming for local emergencies and weather events. We cannot be sure that this requirement will not affect us adversely by requiring us to devote additional resources to complying with EAS requirements.

The International Telecommunication Union. Our satellites also must conform to the International Telecommunication Union, or ITU, requirements and regulations. We have cooperated, and continue to cooperate, with the FCC in the preparation of ITU filings and responses. Requests for modification that have been filed by the United States government for our satellites are pending or in various stages of completion. We cannot predict if all the required requests will be made or when the ITU will act upon them.

Regulations Applicable to Set-top box Operations

Plug and Play. Cable companies were required to separate the security functionality from their set-top boxes to increase competition and encourage the sale of set-top boxes in the retail market by July 1, 2007. Traditionally, cable service providers sold or leased set-top boxes to subscribers. DBS providers are not currently subject to the removable security requirements. The development of a retail market for cable set-top boxes could provide us with an opportunity to expand operations providing set-top box equipment to non-DBS households. The FCC has an open proceeding addressing the need to expand the scope of the cable “plug and play” rules, and the need for all-video provider set-top box solutions. If the FCC were to extend or expand its separate security rules to include DBS providers, sales of our set-top boxes to DBS providers may be negatively impacted. Specifically, if a retail DBS set-top box market develops capable of accepting the security modules, we risk reduced sales if competitors produce DBS set-top boxes.

NTIA Digital Converter Box Program. The Commerce Department’s National Telecommunications and Information Administration (NTIA) has established a coupon program allowing U.S. households to request up to two coupons, worth $40 each, to be used toward the purchase of up to two, digital-to-analog converter boxes as part of the February 2009 digital television transition. This program is necessary to ensure that consumers with analog televisions will continue to be able to view over-the-air broadcast signals after the digital transition. To be eligible for the coupons, converter boxes must be approved by the NTIA, and we have submitted a converter box for NTIA approval. We cannot predict when, or if, our box will be approved for the coupon program.

Export Control Regulation Applicable to Satellite and Set-top box Equipment

We are required to obtain import and export licenses from the United States government to receive and deliver components of direct-to-home satellite TV systems. In addition, the delivery of satellites and the supply of related ground control equipment, technical data, and satellite communication/control services to destinations outside the United States is subject to strict export control and prior approval requirements from the United States government (including prohibitions on the sharing of certain satellite-related goods and services with China).

Patents And Trademarks

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 related to those that EHC will offer. In general, if a court determines that one or more of our products infringes on intellectual property held by others, we may be required to cease developing or marketing those products, to obtain licenses from the holders of the intellectual property at a material cost, or to redesign those products in such a way as to avoid infringing the patent claims. If those intellectual property rights are held by a competitor, we may be unable to obtain the intellectual property at any price, which could adversely affect our competitive position.

We may not be aware of all intellectual property rights that our products may potentially infringe. In addition, patent applications in the United States are confidential until the Patent and Trademark Office issues a patent and, accordingly, our products may infringe claims contained in pending patent applications of which we are not aware. Further, the process of determining definitively whether a claim of infringement is valid often involves expensive and protracted litigation, even if we are ultimately successful on the merits.

We cannot estimate the extent to which we may be required in the future to obtain intellectual property licenses or the availability and cost of any such licenses. Those costs, and their impact on our results of operations, could be material. Damages in patent infringement cases may also include treble damages in certain circumstances. To the extent that we are required to pay unanticipated royalties to third parties, these increased costs of doing business could negatively affect our liquidity and operating results. EHC is currently defending multiple patent infringement actions. We cannot be certain the courts will conclude these companies do not own the rights they claim, that our products do not infringe on these rights, 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 to avoid infringement. See “Legal Proceedings.”

Environmental Regulations

We are subject to the requirements of federal, state, local and foreign environmental and occupational safety and health laws and regulations. These include laws regulating air emissions, water discharge and waste management. We attempt to maintain compliance with all such requirements. We do not expect capital or other expenditures for environmental compliance to be material in 2007 or 2008. Environmental requirements are complex, change frequently and have become more stringent over time. Accordingly, we cannot provide assurance that these requirements will not change or become more stringent in the future in a manner that could have a material adverse effect on our business.

Geographic Area Data and Transactions with Major Customers

For principal geographic area data and transactions with major customers for 2006, 2005 and 2004, see Note 8 in the Notes to the Combined Financial Statements of EchoStar Holding Corporation.

Employees

Upon completion of the spin-off, we will have [ ] employees. We anticipate that subsequent to the spin-off, ECC will provide us with certain management and administrative services, which will include the services of certain executive officers of ECC. See “Certain Intercompany Agreements — Management Services Agreement.”

Legal Proceedings

Separation Agreement

In connection with the spin-off, we have entered into a separation agreement with ECC, which provides for, among other things, the division of liability resulting from litigation. Under the terms of the separation agreement, we have assumed liability for any acts or omissions that relate to our business whether such acts or omissions occurred before or after the spin-off. Certain exceptions are provided, including for intellectual property related claims generally, whereby we will only be liable for our acts or omissions that occurred following the spin-off. In accordance with these terms of the separation agreement, we may be partially or completely responsible for any liability resulting from the legal proceedings described below.

Acacia

During 2004, Acacia Media Technologies, which we refer to as Acacia filed a lawsuit against us and ECC in the United States District Court for the Northern District of California. The suit also named DirecTV, Comcast, Charter, Cox and a number of smaller cable companies as defendants. Acacia is an intellectual property holding company which seeks to license the patent portfolio that it has acquired. The suit alleges infringement of United States Patent Nos. 5,132,992 (the ‘992 patent), 5,253,275 (the ‘275 patent), 5,550,863 (the ‘863 patent), 6,002,720 (the ‘720 patent) and 6,144,702 (the ‘702 patent). The ‘992, ‘863, ‘720 and ‘702 patents have been asserted against us.

The patents relate to various systems and methods related to the transmission of digital data. The ‘992 and ‘702 patents have also been asserted against several Internet content providers in the United States District Court for the Central District of California. During 2004 and 2005, the Court issued Markman rulings which found that the ‘992 and ‘702 patents were not as broad as Acacia had contended, and that certain terms in the ‘702 patent were indefinite. In April 2006, ECC and other defendants asked the Court to rule that the claims of the ‘702 patent are invalid and not infringed. That motion is pending. In June and September 2006, the Court held Markman hearings on the ‘992, ‘863, ‘720 and ‘275 patents, and issued a ruling during December 2006. Acacia’s various patent infringement cases have been consolidated for pre-trial purposes in the United States District Court for the Northern District of California.

We and ECC intend to vigorously defend this case. In the event that a Court ultimately determines that we and ECC infringe any of the patents, we may be subject to an injunction that could require us to materially modify certain user-friendly features that we currently offer to consumers. We are being indemnified by ECC for any potential liability or damages resulting from this suit relating to the period prior to the effective date of the spin-off.

Broadcast Innovation, L.L.C.

In 2001, Broadcast Innovation, L.L.C., which we refer to as Broadcast Innovation filed a lawsuit against ECC, DirecTV, Thomson Consumer Electronics and others in Federal District Court in Denver, Colorado. The suit alleges infringement of United States Patent Nos. 6,076,094 (which we refer to as the ‘094 patent) and 4,992,066 (which we refer to as the ‘066 patent). The ‘094 patent relates to certain methods and devices for transmitting and receiving data along with specific formatting information for the data. The ’066 patent relates to certain methods and devices for providing the scrambling circuitry for a pay television system on removable cards. We examined these patents and believe that they are not infringed by any of our products or services. Subsequently, DirecTV and Thomson settled with Broadcast Innovation leaving us as the only defendant.

During 2004, the judge issued an order finding the ‘066 patent invalid. Also in 2004, the Court ruled the ‘094 patent invalid in a parallel case filed by Broadcast Innovation against Charter and Comcast. In 2005, the United States Court of Appeals for the Federal Circuit overturned the ‘094 patent finding of invalidity and remanded the case back to the District Court. During June 2006, Charter filed a reexamination request with the United States Patent and Trademark Office. The Court has stayed the case pending reexamination. Our case remains stayed pending resolution of the Charter case.

Finisar Corporation

Finisar Corporation, which we refer to as Finisar, obtained a $100 million verdict in the United States District Court for the Eastern District of Texas against DirecTV for patent infringement. Finisar alleged that DirecTV’s electronic program guide and other elements of its system infringe United States Patent No. 5,404,505 (the ‘505 patent).

In July 2006, ECC, together with NagraStar LLC, filed a Complaint for Declaratory Judgment in the United States District Court for the District of Delaware against Finisar that asks the Court to declare that they and we do not infringe, and have not infringed, any valid claim of the ‘505 patent. Trial is not currently scheduled.

We and ECC intend to vigorously prosecute this case. In the event that a Court ultimately determines that we and ECC infringe any of the patents, we may be subject to an injunction that could require us to materially modify certain user-friendly features that we currently offer to consumers. We are being indemnified by ECC for any potential liability or damages resulting from this suit relating to the period prior to the effective date of the spin-off.

Global Communications

On April 19, 2007, Global Communications, Inc., which we refer to as Global, filed a patent infringement action against ECC in the United States District Court for the Eastern District of Texas. The suit alleges infringement of United States Patent No. 6,947,702 (which we refer to as the ’702 patent). This patent, which involves satellite reception, was issued in September 2005. On October 24, 2007, the United States Patent and Trademark Office granted ECC’s request for re-examination of the ‘702 patent and issued an Office Action finding that all of the claims of the ‘702 patent were invalid. Based on the PTO’s decision, ECC has asked the District Court to stay the litigation until the re-examination proceedings is concluded.

Superguide

During 2000, Superguide Corp., which we refer to as Superguide, filed suit against ECC, DirecTV, Thomson and others in the United States District Court for the Western District of North Carolina, Asheville Division, alleging infringement of United States Patent Nos. 5,038,211 (which we refer to as the ‘211 patent), 5,293,357 (which we refer to as the ‘357 patent) and 4,751,578 (which we refer to as the ‘578 patent) which relate to certain electronic program guide functions, including the use of electronic program guides to control VCRs. Superguide sought injunctive and declaratory relief and damages in an unspecified amount.

On summary judgment, the District Court ruled that none of the asserted patents were infringed by us. These rulings were appealed to the United States Court of Appeals for the Federal Circuit. During 2004, the Federal Circuit affirmed in part and reversed in part the District Court’s findings and remanded the case back to the District Court for further proceedings. In 2005, Superguide indicated that it would no longer pursue infringement allegations with respect to the ‘211 and ‘357 patents and those patents have now been dismissed from the suit. The District Court subsequently entered judgment of non-infringement in favor of all defendants as to the ‘211 and ‘357 patents and ordered briefing on Thomson’s license defense as to the ‘578 patent. During December 2006, the District Court found that there were disputed issues of fact regarding Thomson’s

license defense, and ordered a trial solely addressed to that issue. That trial took place in March 2007. In July 2007, the District Court ruled in favor of Superguide. As a result, Superguide will be able to proceed with their infringement action against us, DirecTV and Thomson.

We and ECC intend to vigorously defend this case. In the event that a Court ultimately determines that we infringe the ‘578 patent, we may be subject to a portion of the final damages, which may include treble damages and/or an injunction that could require us to materially modify certain user-friendly electronic programming guide and related features that we currently offer to consumers. We are being indemnified by ECC for any potential liability or damages resulting from this suit relating to the period prior to the effective date of the spin-off.

For alleged infringement through November 2000, Superguide’s expert opined the total damages against us to be approximately $133 million, while our expert opined that the total damages should be only $3 million. We and ECC expect Superguide’s damage demand to increase to account for additional set-top-boxes ECC has sold since November 2000. We cannot predict with any degree of certainty the outcome of the suit.

Tivo Inc.

During April 2006, a Texas jury concluded that certain of our digital video recorders, or DVRs, infringed a patent held by Tivo. The Texas court subsequently issued an injunction prohibiting us from offering DVR functionality. A Court of Appeals has stayed that injunction during the pendency of our appeal.

On July 30, 2007, the Patent and Trademark Office, which we refer to as the PTO issued a “final office action” rejecting as invalid all of the hardware claims that Tivo asserted against us and ECC at trial and which the jury found we and ECC had infringed. The PTO did not reject the two software claims that Tivo asserted against us and ECC at trial and which the jury found we and ECC had infringed. Tivo can appeal the final office action. We and ECC believe that we do not infringe any of the claims asserted against us and ECC.

Trans Video

In August 2006, Trans Video Electronic, Ltd., which we refer to as Trans Video filed a patent infringement action against ECC in the United States District Court for the Northern District of California. The suit alleges infringement of United States Patent Nos. 5,903,621 (which we refer to as the ‘621 patent) and 5,991,801 (which we refer to as the ‘801 patent). The patents relate to various methods related to the transmission of digital data by satellite. On May 14, 2007, we and ECC reached a settlement which did not have a material impact on our results of operations.

Other

In addition to the above actions, we are subject to various other legal proceedings and claims which arise in the ordinary course of business. 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 liquidity.

MANAGEMENT

Directors and Executive Officers

The following table sets forth certain information as of November 6, 2007, concerning our directors and executive officers, including a five-year employment history and any directorships held in public companies:


Name	Age		Position With the Company

Charles W. Ergen		54	Chairman of the board of directors and Chief Executive Officer
R. Stanton Dodge		39	Executive Vice President, General Counsel and Secretary
Michael T. Dugan		58	Director
Steven R. Goodbarn		50	Director
Bernard L. Han		43	Executive Vice President and Chief Financial Officer
Mark W. Jackson		46	President
David K. Moskowitz		49	Director
Tom A. Ortolf		57	Director
Steven B. Schaver		53	President -- EchoStar International Corporation
C. Michael Schroeder		59	Director
Carl E. Vogel		50	Director, Vice Chairman of the Board and Advisor

Seven of our directors, Charles W. Ergen, Michael T. Dugan, Stephen R. Goodbarn, David K. Moskowitz, Tom A. Ortolf, C. Michael Schroeder and Carl E. Vogel, currently serve on ECC’s board of directors. In addition, Mr. Ergen and Mr. Vogel currently serve as the Chairman and Chief Executive Officer and Vice-Chairman and President of ECC, respectively. We will also share three non-business executives with ECC: Bernard L. Han, R. Stanton Dodge and Paul W. Orban, as Executive Vice President and Chief Financial Officer, Executive Vice President, General Counsel and Secretary and Senior Vice President and Controller, respectively.

The following sets forth the business experience of each of our directors and executive officers over the last five years:

Charles W. Ergen. Mr. Ergen is our Chairman of the Board and Chief Executive Officer. Mr. Ergen is also the Chairman of the Board and Chief Executive Officer of ECC, positions he has held since its formation. During the past five years he has also held various executive officer and director positions with ECC’s subsidiaries.

R. Stanton Dodge. Mr. Dodge serves as our Executive Vice President, General Counsel and Secretary. Mr. Dodge also serves in the same capacity for ECC. Mr. Dodge is responsible for all legal and regulatory affairs of EHC and ECC. Since joining ECC in November 1996, he has held various positions in ECC’s legal department. Prior to joining ECC, Mr. Dodge was a law clerk to the Hon. Jose D.L. Marquez of the Colorado Court of Appeals. He received his J.D., magna cum laude, from Suffolk University Law School in 1995 and his B.S. in accounting from the University of Vermont in 1991.

Michael T. Dugan. Mr. Dugan serves as a member of our board of directors. He is currently a senior advisor to ECC and serves as a member of ECC’s board of directors. Until October 2006, Mr. Dugan was ECC’s Chief Technology Officer, and prior to 2004 was its President and Chief Operating Officer. In that capacity, Mr. Dugan had been responsible for, among other things, all operations except legal, finance and accounting at ECC. Until April 2000, Mr. Dugan had been President of EchoStar Technologies Corporation. Previously, he was the Senior Vice President of the Consumer Products Division of ECC. Mr. Dugan has been employed with ECC since 1990. Mr. Dugan has served as a director of Citizens Communications Company since October 2006.

Steven R. Goodbarn. Mr. Goodbarn serves as a member of our board of directors and is a member of our Executive Compensation Committee, Nominating Committee, and Audit Committee, where he serves as our “audit committee financial expert.” Mr. Goodbarn has also served as a member of ECC’s board of directors since December 2002, and is a member of its Executive Compensation Committee, Nominating Committee, and Audit Committee. Since July 2002, Mr. Goodbarn has served as director and president of Secure64 Software Corporation, a company he co-founded. Mr. Goodbarn was chief financial officer of Janus Capital Corporation from 1992 until late 2000. During that time, he was a member of the executive committee and served on the board of directors of many Janus corporate and investment entities. Until September 2003, Mr. Goodbarn also served as a director of Nighthawk Systems. Mr. Goodbarn is a CPA and spent 12 years at Price Waterhouse prior to joining Janus.

Bernard L. Han. Mr. Han serves as our Executive Vice President and Chief Financial Officer and is responsible for all accounting, finance and information technology functions of the Company. Mr. Han also serves in the same capacity for ECC, where he was named Executive Vice President and Chief Financial Officer of ECC in September 2006. From October 2002 to May 2005, Mr.


Cash	$	341,715
Estimated transaction costs		625

Total purchase price		342,340
Less: Sling Media net assets		(21,527	)

Preliminary excess purchase price over book value of net assets acquired	$	320,813


	Page

SUMMARY		1
RISK FACTORS		15
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS		30
THE SPIN-OFF		31
SELECTED HISTORICAL AND UNAUDITED PRO FORMA COMBINED AND ADJUSTED FINANCIAL DATA		40
UNAUDITED PRO FORMA COMBINED AND ADJUSTED FINANCIAL INFORMATION		42
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		50
PROPERTIES		66
BUSINESS		67
MANAGEMENT		81
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGMENT		96
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		99
CERTAIN INTERCOMPANY AGREEMENTS		100
DESCRIPTION OF OUR CAPITAL STOCK		106
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS		108
WHERE YOU CAN FIND MORE INFORMATION		109
INDEX TO FINANCIAL TABLES OF ECHOSTAR HOLDING CORPORATION		F-1
INDEX TO STATEMENT OF NET ASSETS TO BE CONTRIBUTED BY ECHOSTAR COMMUNICATIONS CORPORATION		F-30
INDEX TO FINANCIAL TABLES OF SLING MEDIA, INC.		F-40