Item 9A. CONTROLS AND PROCEDURES—Continued

Our internal control over financial reporting includes those policies and procedures that:

(i)

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;

(ii)

provide reasonable assurance that our transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and

(iii)

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2013.

The effectiveness of our internal control over financial reporting as of December 31, 2013 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears in Item 15(a) of this Annual Report on Form 10-K.

**Item 9B. OTHER INFORMATION **

Satellite and Tracking Stock Transaction.

On February 20, 2014, EchoStar entered into agreements with DISH Network to implement a transaction pursuant to which, among other things: (i) on March 1, 2014, EchoStar will issue two series of preferred tracking stocks in exchange for the transfer by DISH Network of five satellites (including related in-orbit incentive obligations and interest payments of approximately $58.9 million) and approximately $11.4 million in cash; and (ii) beginning on March 1, 2014, we will lease to DISH certain satellite capacity on these five satellites (collectively, the "Satellite and Tracking Stock Transaction").

Item 1.01. Entry into a Material Definitive Agreement.

Transaction Agreement. On February 20, 2014, EchoStar Corporation, Hughes Satellite Systems Corporation ("HSS"), and certain of our other subsidiaries entered into a Transaction Agreement (the "Transaction Agreement") with DISH Operating L.L.C. ("DOLLC") and DISH Network L.L.C. ("DNLLC" and, together with DOLLC, the "DISH Investors"), each an indirect wholly-owned subsidiary of DISH Network Corporation ("DISH Network"), and EchoStar XI Holding L.L.C., a wholly-owned subsidiary of DNLLC, pursuant to which on March 1, 2014, EchoStar Corporation and HSS will among other things, issue an aggregate of 6,290,499 shares (the "EchoStar Tracking Stock") and 81.128 shares (the "HSS Tracking Stock", and together with the EchoStar Tracking Stock, the "Tracking Stock"), respectively, of preferred tracking stock to the DISH Investors in exchange for the transfer by the DISH Investors and their respective subsidiaries, as applicable, to EchoStar Corporation and HSS, as applicable, five satellites (EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and