EchoStar (ECHO) 10-K risk factor changes: FY2016 vs FY2015

[removed: The] [added: If the Share Exchange is not consummated, the] loss of, or a significant reduction in, orders from, or a decrease in selling prices [removed: of digital] [added: of digital] set-top [removed: boxes, broadband] [added: boxes, broadband] equipment and services, provision of satellite services and digital broadcast services, and/or other [removed: products, components or] [added: products, components or] services to DISH Network would significantly reduce our revenue and materially adversely impact our results of operations.

DISH Network accounted for [removed: 53.5%, 57.3%] [added: 52.3%, 53.5%] and [removed: 58.8%] [added: 57.3%] of our total revenue for the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] respectively.

The average selling price and gross margins of our digital set-top boxes have been decreasing and may decrease even further [added: if the Share Exchange is not consummated] due to, among other things, an increase in the sales of lower-priced digital set-top boxes to DISH [removed: Network and] [added: Network,] increased competitive pricing pressure and production costs.

If we are unable to increase or at least maintain the average selling prices of our digital set-top boxes, or if such selling prices further decline, and we are unable to respond in a timely manner by developing and introducing new products and continually reducing our product costs, our revenue and gross margin may be negatively affected, which will harm our financial position and results of [removed: operations.][added: operations if the Share Exchange is not consummated.]

If significant numbers of television viewers are unwilling to pay for pay-TV services that utilize digital set-top boxes, we may not be able to sustain our current revenue [removed: level.][added: level if the Share Exchange is not consummated.]

[removed: As a result, our] [added: Our] customers may be unsuccessful in promoting value-added services or may promote alternative packages, such as free programming packages, in lieu of promoting packages that utilize our high-end digital set-top box offerings.

[added: To] the extent that these online platforms and other new technologies compete successfully against our customers for viewers, the ability of our existing customer base to attract and retain subscribers may be adversely affected.

We may have available satellite capacity in our [removed: EchoStar Satellite Services] [added: ESS] segment, and our results of operations may be materially adversely affected if we are not able to [removed: lease] [added: provide satellite services on] this capacity to third parties, including DISH Network.

We have available satellite capacity in our [removed: EchoStar Satellite Services] [added: ESS] segment.

If we are unable to [removed: lease] [added: utilize] our available satellite capacity [added: for providing satellite services] to third parties, including DISH Network, our margins could be negatively impacted, and we may be required to record impairments related to our satellites.

[added: | • | Commodity Price Risk. Fluctuations in pricing of raw materials can affect our product costs.] To the extent that component pricing does not decline or increases, whether due to inflation, increased demand, decreased supply or other factors, we may not be able to pass on the impact of increasing raw materials prices, component prices or labor and other costs, to our customers, and we may not be able to operate profitably. [added: Such changes could have an adverse impact on our product costs. |]

[added: | • | Manufacturing.] While we develop and manufacture prototypes for certain of our products, we use contract manufacturers to produce a significant portion of our hardware. [added: If these contract manufacturers fail to provide products that meet our specifications in a timely manner, then our customer relationships and revenue may be harmed. |]

[added: | • | Installation and customer support services .] Some of our products and services, such as our North American and international operations, utilize a network of third-party installers to deploy our hardware. [added: In addition, a portion of our customer support and management is provide |]

[added: | • | Other services. Some of our products rely on third parties to provide services necessary for the operation of functionalities of the products, such as third party cloud computing services. The failure of these services could disrupt the operation of certain functionalities of our products, which could harm our customer relationship and result in a loss of sales.] In addition, if the agreements for the provision of these services are terminated or not renewed, we could face difficulties replacing these service providers, which would adversely affect our ability to obtain and retain customers and result in reduced revenue and income. [added: |]

Our sales outside the U.S. accounted for approximately [removed: 14.6%, 14.1%] [added: 14.2%, 14.6%] and 14.1% of our revenue for the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] respectively.

Collectively, we expect our foreign operations to [added: continue to] represent a significant portion of our business.

[removed: · _Complications] [added: | • | Complications] in complying with restrictions on foreign ownership and investment and limitations on [removed: repatriation._] [added: repatriation.] We may not be permitted to own our operations in some countries and may have to enter into partnership or joint venture relationships. [added: Many foreign legal regimes restrict our repatriation of earnings to the U.S. from our subsidiaries and joint venture entities. Applicable law in such foreign countries may also limit our ability to distribute or access our assets in certain circumstances. In such event, we will not have access to the cash flow and assets of our subsidiaries and joint ventures. |]

[added: | • | Financial and legal constraints and obligations.] Operating pursuant to foreign licenses subjects us to certain financial constraints and obligations, including, but not limited to: (a) tax liabilities that may or may not be dependent on revenue; (b) the burden of creating and maintaining additional entities, branches, facilities and/or staffing in foreign jurisdictions; and (c) legal regulations requiring that we make certain satellite capacity available for “free,” which may impact our revenue. [added: In addition, if we need to pursue legal remedies against our customers or our business partners located outside of the U.S., it may be difficult for us to enforce our rights against them. |]

[removed: · _Compliance] [added: | • | Compliance] with applicable export control laws and regulations in the U.S. and other [removed: countries_.][added: countries . We must comply with all applicable export control and trade sanctions laws and regulations of the U.S. and other countries. U.S. laws and regulations applicable to us include the Arms Export Control Act, ITAR, EAR and the trade sanctions laws and regulations administered by OFAC. The export of certain hardware, technical data and services |]

[removed: The export of certain hardware, technical data and services] relating to satellites is regulated by BIS under EAR.

We cannot provide [added: equipment or] services to certain countries subject to U.S. trade sanctions unless we first obtain the necessary authorizations from OFAC.

[added: | • | Greater exposure to the possibility of economic instability, the disruption of operations from labor and political disturbances, expropriation or war.] As we conduct operations throughout the world, we could be subject to regional or national economic downturns or instability, acts of terrorism, labor or political disturbances or conflicts of various sizes, including wars. [added: Any of these disruptions could detrimentally affect our sales in the affected region or country or lead to damage to, or expropriation of, our property or danger to our personnel. |]

[added: | • | Customer credit risks.] Customer credit risks are exacerbated in foreign operations because there is often little information available about the credit histories of customers in certain of the foreign countries in which we operate. [added: |]

We may pursue [removed: acquisitions] [added: acquisitions, capital expenditures] and other strategic transactions to complement or expand our business, which may not be successful and we may lose a portion or all of our investment in these acquisitions and transactions.

Our future success may depend on the existence of, and our ability to capitalize on, opportunities to acquire [added: or develop] other businesses or technologies or partner with other companies that could complement, enhance or expand our current business, services or products or that may otherwise offer us growth opportunities.

[removed: We may pursue acquisitions, joint ventures or other] business combination [added: or development] activities to complement or expand our business.

[removed: ·] [added: | • |] the diversion of our management’s attention from our existing business to integrate the operations and personnel of the acquired or combined [removed: business] [added: business, technology] or joint venture; [added: |]

[removed: ·] [added: | • |] the ability and capacity of our management team to carry out all of our business plans, including with respect to our existing businesses and any businesses we acquire or embark on in the future; [added: |]

[removed: ·] [added: | • |] possible adverse effects on our and our targets’ and partners’ business, financial condition or operating results during the integration process; [added: |]

[removed: ·] [added: | • |] exposure to significant financial losses if the [removed: transactions] [added: transactions, investments] and/or the underlying ventures are not successful; and/or we are unable to achieve the intended objectives of the [removed: transaction;][added: transaction or investment; |]

[removed: ·] [added: | • |] the inability to obtain in the anticipated time frame, or at all, any regulatory approvals required to complete proposed acquisitions, transactions or investments; [added: |]

[removed: ·] [added: | • |] the risks associated with complying with regulations applicable to the acquired [added: or developed] business [added: or technologies] which may cause us to incur substantial expenses; [added: |]

[removed: ·] [added: | • |] the inability to realize anticipated benefits or synergies from an acquisition; and [added: |]

[removed: ·] [added: | • |] the disruption of relationships with employees, vendors or customers. [added: |]

New acquisitions, [added: investments,] joint ventures and other transactions may require the commitment of significant capital that may otherwise be directed to investments in our existing businesses or be distributed to shareholders.

[added: Commitment of] this capital may cause us to defer or suspend any share repurchases or capital expenditures that we otherwise may have made.

[removed: HSS’] [added: Our] ability to make payments on or to refinance [removed: its] [added: our] indebtedness and to fund [removed: its] [added: our] operations will depend on [removed: its] [added: our] ability to generate cash in the future, which is subject in part to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

We may not be able to generate sufficient cash flow from operations and future borrowings may not be available in amounts sufficient to enable us to service [removed: HSS’] [added: our] indebtedness or to fund [added: our] operations or other liquidity needs.

If [removed: HSS is] [added: we are] unable to generate sufficient cash, [removed: it] [added: we] may be forced to take actions such as revising or delaying [removed: its] [added: our] strategic plans, reducing or delaying capital expenditures, selling assets, restructuring or refinancing [removed: its] [added: our] debt or seeking additional equity capital.

[removed: HSS] [added: We] may not be able to implement any of these actions on satisfactory terms, or at all.

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| • | The digital set-top box market is intensely competitive, and market leadership changes frequently as a result of new products, designs, pricing and regulations. We currently face competition from well-established companies, from new, rapidly growing companies, and from digital video providers who have developed their own digital set-top boxes, and in the future we may face competition from new and existing companies that do not currently compete in the market for set-top boxes. If we do not distinguish our products, particularly our retail products, through distinctive, technologically advanced features and design, as well as build and strengthen our brand recognition, our business could be harmed as we may not be able to effectively compete on price alone against new low cost market entrants. Increased pricing pressure may also make it particularly difficult for us to make profitable sales in international markets where new competitors are present and in which we have not previously made sales of set-top boxes. In addition, it can be difficult to acquire additional market share in the digital set-top box market because gaining additional market share would require displacing well-established companies who have had long-term contracts with major cable operators in the U.S., which results in relatively high costs for cable operators to change set-top box providers making it more difficult for us to displace potential customers from their current relationships with our competitors. Any of these competitive threats, alone or in combination with others, could significantly harm our business, operating results and financial condition if the Share Exchange is not consummated. |

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| • | Our EchoStar Satellite Services segment (“ESS”) competes against larger, well-established satellite service companies, such as Intelsat, SES, Telesat, and Eutelsat. 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 costs for customers to change service providers, making it more difficult for us to displace customers from their current relationships with our competitors. In addition, the supply of satellite capacity available in the market has increased in recent years, which makes 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 capacity, both of which could have an adverse effect on our financial performance. Our ESS segment also competes with both fiber optic cable and terrestrial delivery systems, which may have a cost advantage, particularly in point-to-point applications where such delivery systems have been installed, and with new delivery systems being developed, which may have lower latency and other advantages. |

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| • | In our consumer market, we face competition primarily from DSL, fiber and cable internet service providers. Also, other telecommunications, satellite and wireless broadband companies have launched or are planning the launch of consumer internet access services in competition with our service offerings in North America and Brazil. Some of these competitors offer consumer services and hardware at lower prices than ours. In addition, terrestrial alternatives do not require our external dish, which may limit customer acceptance of our products. We may be unsuccessful in competing effectively against DSL, fiber and cable internet service providers and other satellite broadband providers, which could harm our business, operating results and financial condition. |

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| • | In our enterprise network communications market, we face competition from providers of terrestrial-based networks, such as fiber, DSL, cable modem service, multiprotocol label switching and internet protocol-based virtual private networks, which may have advantages over satellite networks for certain customer applications. Although we also sell terrestrial services to this market, we may not be as cost competitive and it may become more difficult for us to compete. The network communications industry is characterized by competitive pressures to provide enhanced functionality for the same or lower price with each new generation of technology. Terrestrial-based networks are offered by telecommunications carriers and other large companies, many of which have substantially greater financial resources and greater name recognition than us. As the prices of our products decrease, we will need to sell more products and/or reduce the per-unit costs to improve or maintain our results of operations. The costs of a satellite network may exceed those of a terrestrial-based network or other networks, especially in areas that have experienced significant DSL and cable internet build-out. It may become more difficult for us to compete with terrestrial and other providers as the number of these areas increases and the cost of their network and hardware services declines. Terrestrial networks also have a competitive edge because of lower latency for data transmission. |

Our ability to provide additional capacity for subscriber growth in our North American consumer market could also be adversely affected by regulations in the U.S. recently adopted by the FCC that enable the use of a portion of the frequency bands, including without limitation, the Ka-band, where we operate our broadband gateway earth stations, for 5G mobile terrestrial services, which could limit our flexibility to change the way in which we use the Ka-band in the future.

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| • | Components. A limited number of suppliers manufacture, and in some cases a single supplier manufactures, some of the key components required to build our products. These key components may not be continually available and we may not be able to forecast our component requirements sufficiently in advance, which may have a detrimental effect on supply. If we are required to change suppliers for any reason, we would experience a delay in manufacturing our products if another supplier is not able to meet our requirements on a timely basis. In addition, if we are unable to obtain the necessary volumes of components on favorable terms or prices on a timely basis, we may be unable to produce our products at competitive prices and we may be unable to satisfy demand from our customers. Our reliance on a single or limited group of suppliers, particularly foreign suppliers, and our reliance on subcontractors, involves several risks. These risks include a potential inability to obtain an adequate supply of required components, reduced control over pricing, quality, and timely delivery of these components, and the potential bankruptcy, lack of liquidity or operational failure of our suppliers. We do not generally maintain long-term agreements with any of our suppliers or subcontractors for our products. 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 products 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 reduced revenue and income. |

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d by offshore call centers.

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| • | Difficulties in following a variety of laws and regulations related to foreign operations. Our international operations are subject to the laws and regulations of many different jurisdictions that may differ significantly from U.S. laws and regulations. For example, local political or intellectual property law may hold us responsible for the data that is transmitted over our network by our customers. In addition, we are subject to the Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions that generally prohibit companies and their intermediaries from making improper payments or giving or promising to give anything of value to foreign officials and other individuals for the purpose of obtaining or retaining business or gaining a competitive advantage. Our policies mandate compliance with these laws. However, we operate in many parts of the world that have experienced corruption to some degree. Compliance with these laws may lead to increased operations costs or loss of business opportunities. Violations of these laws could result in fines or other penalties or sanctions, which could have a material adverse impact on our business, financial condition, and results of operations. |

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| • | Restrictions on space station landing/terrestrial rights. Satellite market access and landing rights and terrestrial wireless rights are dependent on the national regulations established by foreign governments, including, but not limited to obtaining national authorizations or approvals and meeting other regulatory, coordination and registration requirements for satellites. Because regulatory schemes vary by country, we may be subject to laws or regulations in foreign countries of which we are not presently aware. Non-compliance with these requirements may result in the loss of the authorizations and licenses to conduct business in these countries, as well as fines or other financial and non-financial penalties for non-compliance with regulations. If that were to be the case, we could be subject to sanctions and/or other actions by a foreign government that could materially and adversely affect our ability to operate in that country. There is no assurance 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. Violations of laws or regulations may result in various sanctions including fines, loss of authorizations and the denial of applications for new authorizations or for the renewal of existing authorizations, and the failure to obtain or comply with the authorizations and regulations governing our international operations could have a material adverse effect on our ability to generate revenue and our overall competitive position. |

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| • | Changes in exchange rates between foreign currencies and the U.S. dollar. We conduct our business and incur cost in the local currency of a number of the countries in which we operate. Accordingly, our applicable results of operations are reported in the relevant local currency and then translated to U.S. dollars at the applicable currency exchange rate for inclusion in our financial statements. In addition, we sell our products and services and acquire supplies and components from countries that historically have been, and may continue to be, susceptible to recessions or currency devaluation. These fluctuations in currency exchange rates, recessions and currency devaluations have affected, and may in the future affect, revenue, profits and cash earned on international sales. |

These products and services are provided pursuant to contracts that expire on December 31, 2016.

In addition, regulations designed to increase competition among set-top box providers may result in lower sales to DISH Network.

· The digital set-top box market is intensely competitive, and market leadership changes frequently as a result of new products, designs, pricing and regulations.

We currently face competition from well-established companies, from new, rapidly growing companies, and from digital video providers who have developed their own digital set-top boxes, and in the future we may face competition from new and existing companies that do not currently compete in the market for set-top boxes.

If we do not distinguish our products, particularly our retail products, through distinctive, technologically advanced features and design, as well as build and strengthen our brand recognition, our business could be harmed as we may not be able to effectively compete on price alone against new low cost market entrants.

Increased pricing pressure may also make it particularly difficult for us to make profitable sales in international markets where new competitors are present and in which we have not previously made sales of set-top boxes.

In addition, it can be difficult to acquire additional market share in the digital set-top box market because gaining additional market share would require displacing well-established companies who have had long-term contracts with major cable operators in the U.S., which results in relatively high costs for cable operators to change set-top box providers making it more difficult for us to displace potential customers from their current relationships with our competitors.

In addition, regulations designed to increase competition among set-top box providers may result in lower sales and revenue.

Any of these competitive threats, alone or in combination with others, could significantly harm our business, operating results and financial condition.

· Our EchoStar Satellite Services segment competes against larger, well-established satellite service companies, such as Intelsat, SES, Telesat, and Eutelsat.

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 costs for customers to change service providers, making it more difficult for us to displace customers from their current relationships with our competitors.

In addition, the supply of satellite capacity available in the market has increased in recent years, which makes 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 capacity, both of which could have an adverse effect on our financial performance.

Our EchoStar Satellite Services segment also competes with both fiber optic cable and terrestrial delivery systems, which may have a cost advantage, particularly in point-to-point applications where such delivery systems have been installed, and with new delivery systems being developed, which may have lower latency and other advantages.

· In our consumer market, we face competition primarily from DSL, fiber and cable internet service providers.

Also, other telecommunications, satellite and wireless broadband companies have launched or are planning the launch of consumer internet access services in competition with our service offerings in North America.

Some of these competitors offer consumer services and hardware at lower prices than ours.

In addition, terrestrial alternatives do not require our external dish, which may limit customer acceptance of our products.

We may be unsuccessful in competing effectively against DSL, fiber and cable internet service providers and other satellite broadband providers, which could harm our business, operating results and financial condition.

· In our enterprise network communications market, we face competition from providers of terrestrial-based networks, such as fiber, DSL, cable modem service, multiprotocol label switching and internet protocol-based virtual private networks, which may have advantages over satellite networks for certain customer applications.

Although we also sell terrestrial services to this market, we may not be as cost competitive and it may become more difficult for us to compete.

The network communications industry is characterized by competitive pressures to provide enhanced functionality for the same or lower price with each new generation of technology.

Terrestrial-based networks are offered by telecommunications carriers and other large companies, many of which have substantially greater financial resources and greater name recognition than us.

As the prices of our products decrease, we will need to sell more products and/or reduce the per-unit costs to improve or maintain our results of operations.

The costs of a satellite network may exceed those of a terrestrial-based network or other networks, especially in areas that have experienced significant DSL and cable internet build-out.

It may become more difficult for us to compete with terrestrial and other providers as the number of these areas increases and the cost of their network and hardware services declines.

Terrestrial networks also have a competitive edge because of lower latency for data transmission.

To

· _Components_.

A limited number of suppliers manufacture, and in some cases a single supplier manufactures, some of the key components required to build our products.

These key components may not be continually available and we may not be able to forecast our component requirements sufficiently in advance, which may have a detrimental effect on supply.

If we are required to change suppliers for any reason, we would experience a delay in manufacturing our products if another supplier is not able to meet our requirements on a timely basis.

In addition, if we are unable to obtain the necessary volumes of components on favorable terms or prices on a timely basis, we may be unable to produce our products at competitive prices and we may be unable to satisfy demand from our customers.

Our reliance on a single or limited group of suppliers, particularly foreign suppliers, and our reliance on subcontractors, involves several risks.

These risks include a potential inability to obtain an adequate supply of required components, reduced control over pricing, quality, and timely delivery of these components, and the potential bankruptcy, lack of liquidity or operational failure of our suppliers.

We do not generally maintain long-term agreements with any of our suppliers or subcontractors for our products.

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 products 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 reduced revenue and income.

· _Commodity Price Risk_.

Fluctuations in pricing of raw materials can affect our product costs.

[removed: Item 7. MANAGEMENT’S] [added: MANAGEMENT’S] DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

| | | [removed: (Dollars in thousands)] [added: (In thousands)] | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

[removed: | Revenue: | | | | | | | | | | | | |][added: Revenue Recognition]

[removed: | Services] [added: Services] and other revenue [removed: -] [added: —] DISH [removed: Network | | 918,301 | | | 828,612 | | | 89,689 | | | 10.8 | |][added: Network.]

[removed: | Services] [added: Services] and other revenue [removed: - other | | 1,103,928 | | | 1,096,938 | | | 6,990 | | | 0.6 | |][added: — other.]

[removed: | Costs] [added: Research] and [removed: Expenses: | | | | | | | | | | | | |][added: development expenses.]

[removed: | Cost] [added: Cost] of sales [removed: -] [added: —] services and [removed: other | | 856,065 | | | 838,918 | | | 17,147 | | | 2.0 | |][added: other.]

[removed: | Selling,] [added: Selling,] general and administrative [removed: expenses | | 374,116 | | | 372,010 | | | 2,106 | | | 0.6 | |][added: expenses.]

[removed: | Impairment] [added: Impairment] of [removed: long-lived asset | | 2,400 | | | — | | | 2,400 | | | * | |][added: Long-lived Assets]

[removed: | Interest] [added: Interest] expense, net of amounts [removed: capitalized | | (122,066 | | ) | (171,349 | | ) | 49,283 | | | (28.8 | ) |][added: capitalized.]

[removed: | Gains] [added: Gains] (losses) and impairment on marketable investment securities, [removed: net | | (17,669 | | ) | 41 | | | (17,710 | | ) | * | |][added: net.]

[removed: | Equity] [added: Equity] in earnings of unconsolidated affiliates, [removed: net | | 1,895 | | | 8,198 | | | (6,303 | | ) | (76.9 | ) |][added: net.]

[removed: | Other, net | | (2,006 | | ) | 4,251 | | | (6,257 | | ) | * | |][added: Other, net.]

[removed: _Services and other] [added: Equipment] revenue — DISH [removed: Network_.][added: Network.]

[removed: See] [added: For a discussion of the terms of our indebtedness, see] Note [removed: 4] [added: 11] in the notes to consolidated financial statements in Item 15 of this report [removed: for further discussion related] [added: Our liquidity requirements will be significant, primarily due] to [removed: the Satellite and Tracking][added: our debt service requirements.]

[removed: _Services and other] [added: Equipment] revenue — [removed: other_.][added: other.]

[removed: The $5.0 million] [added: Loss from partial redemption of debt. “Loss from partial redemption of debt” primarily includes the] loss from the partial redemption of the [added: 2019] Senior Secured Notes [removed: included a $3.3 million] [added: representing the] redemption premium [added: that the Company paid to the holders of its 2019 Senior Secured Notes] and [removed: a $1.7 million write off] [added: the write-off] of related unamortized [removed: financing] [added: debt issuance] costs.

[removed: | Impairment] [added: Impairment] of long-lived [removed: assets | | — | | | 38,415 | | | (38,415 | | ) | (100.0 | ) |][added: assets.]

[removed: _Cash] [added: Cash] flows from [removed: operating activities_.][added: investing activities.]

For the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] we reported net cash inflows from [removed: operating] [added: financing] activities of [removed: $776.5] [added: $1.48 billion, net cash outflows from financing activities of $120.3] million, [removed: $840.1 million and $450.5] [added: net cash outflows from financing activities of $35.1] million, respectively.

The decrease was primarily attributable to a decrease of $98.8 million resulting from [removed: changes] [added: timing differences] in operating assets and [removed: liabilities related to timing differences between the incurrence of expense and cash payments,] [added: liabilities,] partially offset by higher net income of $35.1 million adjusted to exclude: (i) “Depreciation and amortization;” (ii) [removed: “Equity in losses (earnings)] [added: “Impairment] of [removed: unconsolidated affiliates, net;”] [added: long-lived assets;”] (iii) “Loss from partial redemption of [removed: debt,”] [added: debt;”] (iv) [added: “Equity in earnings of unconsolidated affiliates, net;” (v)] “Losses (gains) and [removed: other-than-temporary] impairment on marketable investment securities, net;” [removed: (v) “Impairment of long-lived assets,”] (vi) “Stock-based compensation;” (vii) “Deferred tax provision;” and [removed: (viii) “Other,] [added: (viii)“Other,] net.”

Net cash inflows from operating activities for the year ended December 31, [removed: 2014] [added: 2016] increased by [removed: $389.6] [added: $26.9] million compared to the same period in [removed: 2013.][added: 2015.]

The increase [added: in cash inflows] was primarily attributable to [added: a decrease in cash outflows of $20.1 million resulting from timing differences in operating assets and liabilities and] higher net income of [removed: $252.9] [added: $6.8] million adjusted to exclude: (i) “Depreciation and amortization;” (ii) [added: “Impairment of long-lived assets;” (iii) “Loss from partial redemption of debt;” (iv)] “Equity in [removed: losses] [added: earnings] of unconsolidated affiliates, net;” [removed: (iii) “Gains] [added: (v) “Losses (gains) and impairment] on marketable investment securities, net;” [removed: (iv) “Impairment of long-lived asset,” (v)] [added: (vi)] “Stock-based compensation;” [removed: (vi)] [added: (vii)] “Deferred tax [removed: benefit (provision);”] [added: provision;”] and [removed: (vii)] “Other, net.” [removed: In addition, net cash inflows were increased by $136.7 million resulting from changes in operating assets and liabilities related to timing differences between the incurrence of expense and cash payments.]

[removed: _Cash] [added: Cash] flows from [removed: investing activities_.][added: financing activities.]

For the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] we reported net cash outflows from investing activities of [removed: $275.3] [added: $632.3] million, [removed: $887.6] [added: $275.3] million and [removed: $570.3] [added: $887.6] million, respectively.

The decrease in cash outflows primarily related to a decrease of $691.0 million in purchases of marketable investment securities, net of sales and maturities, a cash receipt of $105.8 million refund relating to the cancellation of an existing launch services agreement and capital contributions of $18.6 million to certain investees in 2014, partially offset by an increase in cash outflows primarily related to a $129.2 million increase in capital expenditures in 2015 when compared to the same period in 2014, a $64.7 million [removed: increase in investments] [added: investment] in [removed: OneWeb] [added: WorldVu] and [removed: SmarDTV,] [added: SmarDTV in the second quarter of 2015,] and the acquisition of a regulatory authorization in the first [removed: half] [added: quarter] of 2015 of $3.4 million.

Net cash outflows from investing activities for the year ended December 31, [removed: 2014] [added: 2016] increased by [removed: $317.3] [added: $357.0] million compared to the same period in [removed: 2013.][added: 2015.]

Our financing activities generally include proceeds related to the issuance of [removed: long-term] debt and cash used for the repurchase, redemption or payment of [removed: long-term] debt and capital lease obligations, and the proceeds from Class A common stock options exercised and stock issued under our stock incentive plans and employee stock purchase plan.

The increase in cash outflows was primarily due to the partial redemption of the [added: 2019] Senior Secured Notes of $110.0 million and related premium of $3.3 [removed: million,] [added: million in the second quarter of 2015,] and proceeds of $11.4 million, net of offering costs of $3.9 million from the issuance of our preferred tracking stock received in 2014, partially offset by a decrease of $22.7 million in capital lease obligation payments relating to the expiration of [added: the] capital [removed: leases] [added: lease] for the [added: AMC-16]

[removed: AMC-15 and AMC-16 satellites,] [added: satellite,] effective [removed: December 2014 and] February 2015, [removed: respectively,] and an increase of $11.2 million in excess tax benefits recognized on the exercise of stock options.

Net cash [removed: outflows] [added: inflows] from financing activities increased by [removed: $53.4 million] [added: $1.60 billion] for the year ended December 31, [removed: 2014] [added: 2016] compared to the same period in [removed: 2013.][added: 2015.]

[removed: _Contractual] [added: Contractual] Obligations and Off-Balance Sheet [removed: Arrangements_][added: Arrangements]

The following table summarizes our contractual obligations at December 31, [removed: 2015:][added: 2016:]

| | | Payments Due in the Year Ending December 31, | | | | | | | | | | | | | | | | | | | | | [added: | | | | | |]

| | | Total | | | [removed: 2016] | [removed: | |] 2017 | | | [added: |] 2018 | | | [added: |] 2019 | | | [added: |] 2020 | | | [added: | 2021 | | | |] Thereafter | | |

| Long-term debt | | $ | [removed: 1,890,803 | | $] [added: 3,390,000] | [removed: 803] | | $ | — | | [added: |] $ | — | | [added: |] $ | 990,000 | | [added: |] $ | — | | [added: |] $ | 900,000 | | [added: | $ | 1,500,000 | |]

“Satellite-related obligations” primarily include payments pursuant to agreements for the construction of the EchoStar XIX, EchoStar XXI, EchoStar XXIII, and EchoStar 105/SES-11 [removed: satellites,] [added: satellites;] payments pursuant to launch services contracts and regulatory [removed: authorizations,] [added: authorizations;] executory costs for our capital lease [removed: satellites,] [added: satellites;] costs under satellite service [removed: agreements] [added: agreements;] and in-orbit incentives relating to certain [removed: satellites,] [added: satellites;] as well as commitments for long-term satellite operating leases and satellite service arrangements.

[removed: _Off-Balance] [added: Off-Balance] Sheet [removed: Arrangements_][added: Arrangements]

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

As of December 31, [removed: 2015,] [added: 2016,] we had [removed: $45.0] [added: $32.9] million of letters of credit and insurance bonds.

The increase in cash outflows primarily related to an increase of $440.7 million in purchases of marketable investment securities, net of sales and maturities.

The increase in cash outflows was partially offset by a $64.7 million investment in WorldVu and SmarDTV in the second quarter of 2015, a decrease of $9.1 million in restricted cash relating to a release in funds for certain satellite slots as a result of a FCC settlement in 2016, an decrease of $5.3 million in capital expenditures, net of related refunds, in 2016 when compared to the same period in 2015 and the acquisition of a regulatory authorization in the first quarter of 2015 of $3.4 million.

The increase in cash inflows was primarily due to the proceeds of $1.5 billion from the issuance of the 2026 Notes in the third quarter of 2016, the partial redemption of the 2019 Senior Secured Notes of $110.0 million and related premium of $3.3 million in the second quarter of 2015, a decrease of $7.7 million in capital lease obligation payments relating to the expiration of the capital lease for the AMC-16 satellite, effective February 2015, partially offset by a decrease of $11.3 million in net proceeds from Class A common stock options exercised and stock issued under our stock incentive plans and employee stock purchase plan, payments of debt issuance costs of $7.1 million, and a decrease of $3.1 million in excess tax benefits recognized on the exercise of stock options.

Item 7.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Capital lease obligations | | 302,007 | | | | 37,307 | | | | 36,927 | | | | 40,370 | | | | 44,733 | | | | 46,131 | | | | 96,539 | | |

| Interest on long-term debt and capital lease obligations | | 1,487,583 | | | | 252,999 | | | | 248,428 | | | | 212,318 | | | | 175,799 | | | | 136,673 | | | | 461,366 | | |

| Satellite-related obligations | | 732,004 | | | | 220,421 | | | | 135,987 | | | | 63,499 | | | | 60,479 | | | | 45,308 | | | | 206,310 | | |

| Operating lease obligations | | 87,558 | | | | 34,974 | | | | 14,920 | | | | 11,484 | | | | 8,425 | | | | 7,385 | | | | 10,370 | | |

| Purchase and other obligations | | 105,923 | | | | 105,923 | | | | — | | | | — | | | | — | | | | — | | | | — | | |

| Total | | $ | 6,105,075 | | | $ | 651,624 | | | $ | 436,262 | | | $ | 1,317,671 | | | $ | 289,436 | | | $ | 1,135,497 | | | $ | 2,274,585 | |

Item 7.

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

Based on economic analysis of the current insurance market we have elected to obtain, subject to certain limitations on coverage, launch and in-orbit insurance for our EchoStar XIX, EchoStar XXI and EchoStar XXIII satellites and our interest in the EchoStar 105/SES-11 satellite.

All other satellites, either in orbit or under construction, are not covered by launch or in-orbit insurance.

We will continue to assess circumstances going forward and make insurance decisions on a case by case basis.

If the Share Exchange is consummated, we expect to no longer generate cash flow from our EchoStar Technologies segment.

Item 7.

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

Item 7.

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

fair value estimates are reduced for estimated selling costs.

We may bypass the quantitative impairment test when we determine based on a qualitative assessment that it is not more likely than not that an indefinite-lived intangible asset is impaired.

Item 7.

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

Item 7.

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

Item 7.

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

EchoStar Technologies Segment

Our EchoStar Technologies segment designs, develops and distributes secure end-to-end video technology solutions including digital set-top boxes and related products and technology, primarily for satellite TV service providers and telecommunication companies.

The primary customer for our digital set-top boxes is DISH Network Corporation and its subsidiaries (“DISH Network”), and we also our sell digital set-top boxes to Bell TV, a direct-to-home satellite service provider in Canada, Dish Mexico, S. de R.L. de C.V. (“Dish Mexico”), a joint venture that we entered into in 2008, and other international customers.

We depend on DISH Network for a substantial portion of our EchoStar Technologies segment revenue and we expect that DISH Network will continue to be the primary source of revenue for our EchoStar Technologies segment.

In addition, our equipment revenue from DISH Network depends on the timing of orders for set-top boxes and related accessories from DISH Network based on its actual and projected subscriber growth.

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

Our EchoStar Technologies segment also provides digital broadcast operations, including satellite uplinking/downlinking, transmission services, signal processing, conditional access management, and other services, primarily to DISH Network and Dish Mexico.

In addition, we provide our TV Anywhere technology through Slingbox units directly to consumers via retail outlets and online, as well as to the pay-TV operator market.

Prior to 2015, Move Networks, our over-the-top (“OTT”), Streaming Video on Demand (“SVOD”) platform business, including certain assets that were distributed to us in August 2014 in connection with the Exchange Agreement with DISH Digital Holding L.L.C. (“Sling TV Holding”), (see Notes 6, 10 and 19 in our notes to consolidated financial statements in Item 15 of this report), was managed separately from our operating segments and was reported within “All Other and Eliminations.” In the first quarter of 2015, we assigned management responsibility for our Move Networks business to our EchoStar Technologies segment.

We have retrospectively adjusted our segment reporting to reflect our Move Networks business as part of the EchoStar Technologies segment in prior periods (see Note 17 in our notes to the consolidated financial statements in Item 15 of this report).

During the second quarter of 2015, our EchoStar Technologies segment contributed several of its European subsidiaries to SmarDTV SA (“SmarDTV”), a Swiss subsidiary of Kudelski SA that offers set-top boxes and conditional access modules, in exchange for a 22.5% interest in the equity and subordinated debt of SmarDTV.

We and SmarDTV also entered into a services agreement pursuant to which our EchoStar Technologies segment purchases certain engineering services from SmarDTV.

We continue to focus on building and strengthening our brand recognition by providing unique and technologically advanced features and products.

Products containing new technologies and features typically have higher initial selling prices, margins and volumes.

As products mature and new products are in the late stages of development, volumes typically decrease as our customers, primarily DISH Network, increase deployment of refurbished set-top boxes as opposed to purchasing new units from us.

The market for our digital set-top boxes, like other electronic products, has also been characterized by regular reductions in selling prices and production costs.

Our ability to sustain or increase profitability also depends in large part on our ability to control or reduce our costs of producing digital set-top boxes.

Based on our experience, we expect our cost of manufacturing a specific set-top box model to decline over time as our contract manufacturers generate efficiencies with scale of production and engineering cost reductions.

Overall, our success depends heavily on our ability to bring advanced technologies to market to continue to be a market leader and innovator.

The number of potential new customers for our set-top box business in our EchoStar Technologies segment is small and may be limited as prospective customers that have been competitors of DISH Network may continue to view us as a competitor due to our common ownership with DISH Network.

Our customers face emerging competition from other providers of digital media and potential government action preventing them from using security systems in connection with set-top boxes.

In particular, programming offered over the internet has become more prevalent as the speed and quality of broadband networks have improved.

As a result, we expect that demand for our satellite television digital set-top boxes from DISH Network and other customers could decline and we may not be able to sustain our current revenue levels.

With our expertise in connectivity, security, and video, we are developing new consumer product and service offerings, including a security and home automation solution, along with other products intended to grow our EchoStar Technologies segment revenue over time.

EchoStar Satellite Services Segment

Our EchoStar Satellite Services segment operates its business using its owned and leased in-orbit satellites.

We provide satellite services on a full-time and occasional-use basis primarily to DISH Network, Dish Mexico, U.S. government service providers, internet service providers, broadcast news organizations, programmers and private enterprise customers.

We depend on DISH Network for a significant portion of the revenue for our EchoStar Satellite Services segment, and we expect that DISH Network will continue to be the primary source of revenue for our EchoStar Satellite

Services segment.

Therefore, the results of operations of our EchoStar Satellite Services segment are linked to long-term changes in DISH Network’s satellite capacity requirements.

We continue to pursue expanding our business offerings by providing value added services such as telemetry, tracking and control services to third parties.

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

Simultaneously, SES will provide to us satellite service on the entire Ku-band payload on the EchoStar 105/SES-11 satellite for an initial ten-year term, with an option for us to renew the agreement on a year-to-year basis.

Revenue growth in our EchoStar Satellite Services segment is a function of available satellite capacity to sell.

Our EchoStar 105/SES-11 satellite is currently under construction and will replace the capacity currently leased on the AMC-15 satellite.

Once launched, which is expected in the fourth quarter of 2016, and placed into operation, we expect revenue from the satellite to exceed the revenue currently serviced by the AMC-15 satellite.

Any factors that interfere with the construction and launch schedule of the EchoStar 105/SES-11 satellite could impact our expected revenue.

In addition, any disruption in planned renewals of our service arrangements could impact customer commitments and have an impact on our revenue and financial performance.

Technical issues, regulatory and licensing issues, manufacturer performance/stability and availability of capital to continue to fund our programs also are factors in achieving our business plans for this segment.

As of December 31, 2015 and 2014, our EchoStar Satellite Services segment had contracted revenue backlog attributable to satellites currently in orbit of approximately $1.41 billion and $1.71 billion, respectively.

Restricted [removed: Cash and Marketable Investment Securities] [added: cash] and [removed: Other Investments][added: marketable investment securities]

[removed: _Restricted Cash] [added: Restricted cash] and [removed: Marketable Investment Securities_][added: marketable investment securities and investments in unconsolidated entities]

As of December 31, [removed: 2015,] [added: 2016,] we had [removed: $21.0] [added: $12.9] million of restricted cash and marketable investment securities invested in: (a) cash; (b) debt instruments of the U.S. government and its agencies; (c) commercial paper and corporate notes with an overall average maturity of less than one year and rated in one of the four highest rating categories by at least two nationally recognized statistical rating organizations; [removed: and] (d) [added: mutual funds; and (e)] instruments with similar risk, duration and credit quality characteristics to the commercial paper described above.

Based on our investment portfolio as of December 31, [removed: 2015,] [added: 2016,] a hypothetical 10% increase in average interest rates would not have a material impact on the fair value of our restricted cash and marketable investment securities.

[removed: _Investments] [added: Investments] in [removed: Unconsolidated Entities_][added: unconsolidated entities]

As of December 31, [removed: 2015,] [added: 2016,] we had [removed: $209.3] [added: $197.2] million of noncurrent equity instruments that we hold for strategic business purposes and account for under the cost or equity methods of accounting.

A hypothetical [removed: 10%] adverse change [removed: in] [added: equal to 10% of] the [removed: value] [added: carrying amount] of these [removed: debt and] equity instruments would result in a decrease of approximately [removed: $20.9] [added: $19.7] million in the value of these investments.

Our ability to realize value from our strategic investments in companies that are [removed: not publicly traded] [added: privately held] depends on the success of those companies’ businesses and their ability to obtain sufficient capital to execute their business plans.

Accordingly, we may enter into foreign [removed: exchange contracts] [added: currency forward contracts, or take other measures,] to mitigate risks associated with foreign currency denominated assets, liabilities, commitments and anticipated foreign currency transactions.

As of December 31, [removed: 2015,] [added: 2016,] we had [removed: $5.3] [added: $6.5] million of net foreign currency denominated receivables and payables outstanding, and foreign currency forward contracts with a notional value of [removed: $2.6] [added: $3.0] million in place to partially mitigate foreign currency exchange risk.

The estimated fair values of the foreign exchange contracts were not material as of December 31, [removed: 2015.][added: 2016.]

The impact of a hypothetical 10% adverse change in exchange rates on the carrying amount of the net assets and liabilities of our foreign subsidiaries would be an estimated loss [added: to the cumulative translation adjustment] of [removed: $22.7] [added: $36.6] million as of December 31, [removed: 2015.][added: 2016.]

[removed: _Derivative] [added: Derivative] Financial [removed: Instruments_][added: Instruments]

Market Risks Associated with Financial Instruments and Foreign Currency

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

Cash, Cash Equivalents and Current Marketable Investment Securities

As of December 31, 2016, our cash, cash equivalents and current marketable investment securities had a fair value of $3.09 billion.

Of this amount, a total of $3.00 billion was invested in: (a) cash; (b) commercial paper and corporate notes with an overall average maturity of less than one year and rated in one of the four highest rating categories by at least two nationally recognized statistical rating organizations; (c) debt instruments of the U.S. government and its agencies; and/or (d) instruments with similar risk, duration and credit quality characteristics to the commercial paper and corporate obligations described above.

The primary purpose of these investing activities has been to preserve principal until the cash is required to, among other things, fund operations, make strategic investments and expand the business.

Consequently, the size of this portfolio fluctuates significantly as cash is received and used in our business.

The value of this portfolio may be negatively impacted by credit losses; however, this risk is mitigated through diversification that limits our exposure to any one issuer.

Interest Rate Risk

A change in interest rates would not affect the fair value of our cash, or materially affect the fair value of our cash equivalents due to their maturities of less than 90 days.

A change in interest rates would affect the fair value of our current marketable debt securities portfolio; however, we normally hold these investments to maturity.

Based on our current non-strategic investment portfolio of $3.00 billion as of December 31, 2016, a hypothetical 10% change in average interest rates during 2016 would not have a material impact on the fair value of our cash, cash equivalents and debt securities portfolio due to the limited duration of our investments.

Our cash, cash equivalents and current marketable debt securities had an average annual rate of return for the year ended December 31, 2016 of 1.0%.

A change in interest rates would affect our future annual interest income from this portfolio, since funds would be re-invested at different rates as the instruments mature.

A hypothetical 10% decrease in average interest rates during 2016 would have resulted in a decrease of approximately $2.0 million in annual interest income.

Strategic Marketable Investment Securities

As of December 31, 2016, we held current strategic investments in the publicly traded common stock of several companies with a fair value of $94.8 million.

These investments, which are held for strategic and financial purposes, are concentrated in a small number of companies, are highly speculative and have experienced and continue to experience volatility.

The fair value of these investments can be significantly impacted by the risk of adverse changes in securities markets generally, as well as risks related to the performance of the companies whose securities we have invested in, risks associated with specific industries, and other factors.

These investments are subject to significant fluctuations in fair value due to the volatility of the securities markets and of the underlying businesses.

In general, our strategic marketable investment securities portfolio is not significantly impacted by interest rate fluctuations as it currently consists solely of equity securities, the value of which is more closely related to factors specific to the underlying business.

A hypothetical 10% adverse change in the market price of our public strategic equity investments would result in a decrease of approximately $9.5 million in the fair value of these investments.

We are a global provider of satellite [added: service] operations, video delivery solutions, digital set-top boxes, [removed: and] broadband satellite technologies and [added: broadband] services for home and [removed: office, delivering innovative network technologies, managed services, and solutions for enterprises and governments.][added: small office customers.]

[removed: · _Hughes_ — which] [added: Our Hughes segment] provides satellite broadband internet access [added: and satellite technologies] to North American [removed: consumers] [added: home] and [added: office costumers, which we refer to as the consumer market, and] broadband network [removed: services and] [added: technologies, managed services,] equipment [added: and communications solutions] to domestic and international enterprise [removed: markets.][added: and government customers.]

[removed: The] [added: Our] Hughes segment also provides managed [removed: services to large enterprises] [added: services, equipment] and [added: communications] solutions to [added: large enterprise] customers for mobile satellite systems.

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

[removed: · _EchoStar] [added: | • | EchoStar] Satellite Services [removed: (“ESS”)_] [added: (“ESS”)] — which uses certain of our owned and leased in-orbit satellites and related licenses to provide satellite [removed: services] [added: service operations and video delivery solutions] on a full-time and occasional-use basis primarily to DISH Network, Dish Mexico, United States (“U.S.”) government service providers, internet service providers, broadcast news organizations, programmers, and private enterprise customers. [added: We also manage satellite operations for several satellites owned by third parties. |]

Our operations also include real estate and other activities that have not been assigned to our operating segments, [removed: including,] [added: including] costs incurred in certain satellite development programs and other business development activities, expenses of various corporate departments, and our centralized treasury operations, [removed: including,] [added: including] income from our investment portfolio and interest expense on our debt.

[removed: These activities are accounted for in] [added: For more information regarding] the [removed: “All Other and Eliminations” column in] [added: Tracking Stock, see] Note [removed: 17] [added: 4] in the notes to consolidated financial statements in Item 15 of this report.

However, as a result of the Satellite and Tracking Stock Transaction, described in Note 4 in the notes to consolidated financial statements in Item 15 of this report, DISH Network owns [removed: shares of our and our subsidiary’s] preferred tracking stock [added: in EchoStar Corporation and one of our subsidiaries] representing an aggregate 80.0% economic interest in the residential retail satellite broadband business of our Hughes segment.

In addition, a substantial majority of the voting power of the shares of [added: EchoStar and] DISH Network [removed: and EchoStar] is owned beneficially by Charles W.

[removed: _Capitalize] [added: Capitalize] on demand for broadband [removed: services_.][added: services.]

We intend to capitalize on the global demand for satellite-delivered broadband services and enterprise solutions by utilizing, among other things, our industry expertise, technology leadership, [added: increased] satellite capacity, access to spectrum resources, and high-quality, reliable service to [removed: continue] [added: drive] growth in consumer subscribers and [removed: the] enterprise [removed: market.][added: customers.]

[removed: _Expand satellite capacity and related infrastructure._] We expect that our expertise in the identification, acquisition and development of satellite spectrum and orbital rights and satellite operations, together with [removed: existing or] [added: our increased satellite capacity and existing,] acquired [added: or developed] infrastructure, will provide opportunities to enter new international markets.

We [added: also] believe market opportunities exist that will facilitate the acquisition or leasing of additional satellite capacity which will enable us to provide services to a broader customer base, including providers of pay-TV services, satellite-delivered broadband, corporate communications, and government services.

[removed: _Continue] [added: Continue] development of S-band and other hybrid spectrum [removed: resources._] [added: resources.] We believe we [removed: are] [added: remain] in a unique position to deploy a European wide mobile satellite service (“MSS”)/complementary ground component (“CGC”) network and maximize the long-term value of our S-band spectrum, in Europe and other regions within the scope of our licenses.

We will also continue to explore development of S-band similar spectrum assets in additional international [removed: markets,][added: markets.]

[removed: _Exploit] [added: Exploit] our video delivery [removed: expertise._] [added: expertise.] With our extensive experience in designing, developing, and operating video delivery systems for satellite direct-to-home (“DTH”) and internet streaming, we believe we can leverage the broader adoption of advanced technologies such as placeshifting functionality, hybrid internet offerings and other in-home solutions to create opportunities for us.

Therefore, [added: if the Share Exchange is not consummated,] we [added: will] continue to explore opportunities, including partnerships, joint ventures and strategic acquisitions, to expand our existing markets or enter new markets.

In addition, [added: if the Share Exchange is not consummated,] we intend to seek opportunities to license our technology to other original equipment manufacturers and pay-TV providers.

[removed: _Develop] [added: Develop] improved and new [removed: technologies_.][added: technologies.]

[removed: _HUGHES SEGMENT_][added: HUGHES SEGMENT]

Our Hughes segment is a global provider of broadband satellite technologies and [added: broadband] services for [removed: the] home and [removed: office, delivering innovative network technologies, managed services, and solutions for consumers, enterprises and governments.][added: small office customers.]

Our Hughes segment [added: currently] uses its two owned satellites, the SPACEWAY 3 satellite and the EchoStar XVII satellite, and additional satellite capacity acquired from multiple third-party providers, to provide satellite broadband internet access [removed: to North American consumers, which we refer to as the consumer market,] and [removed: broadband network] [added: communications] services [removed: and equipment] to [removed: domestic and international enterprise markets.][added: our customers.]

[removed: Beginning in October 2012, we introduced] [added: We currently provide] HughesNet Gen4 satellite broadband internet services to our [added: consumer market] customers in North America on the EchoStar XVII satellite.

The EchoStar XIX satellite [removed: is a next-generation, high throughput geostationary satellite that will employ] [added: employs] a multi-spot beam, bent pipe Ka-band architecture and will provide additional capacity for the Hughes broadband services to [removed: the consumer market] [added: our customers] in North [removed: America, as well as new] [added: America and added] capacity [removed: covering] [added: in] Mexico and [removed: other] [added: certain] Latin American [removed: countries.][added: countries and is expected to add capability for aeronautical, enterprise and international broadband services.]

We continue our efforts [removed: in growing] [added: to grow] our consumer satellite services business outside of the U.S. In April 2014, we entered into a satellite services agreement pursuant to which Eutelsat do Brasil [removed: will provide to] [added: provides] us [removed: fixed broadband service using the] Ka-band capacity into Brazil on the EUTELSAT 65 West A satellite for a 15-year term.

In [removed: addition, in] September 2015, we entered into satellite services agreements pursuant to which affiliates of Telesat Canada (“Telesat”) will provide to us [removed: fixed broadband service into South America using] the Ka-band capacity on a satellite to be located at the 63 degree west longitude orbital location for a 15-year term.

Our Hughes segment delivers [added: broadband] satellite [added: technologies and] broadband internet [removed: service] [added: services] to North American [removed: consumers.][added: home and small office customers.]

In addition, our Hughes segment provides [added: and installs gateway and terminal equipment and provides] satellite ground segment systems and terminals [removed: to] [added: for other satellite systems, including] mobile system operators.

DISH Network accounted for [removed: 7.8%, 8.5%] [added: 7.7%, 7.8%] and [removed: 9.3%] [added: 8.5%] of our total Hughes segment revenue for the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] respectively.

As of December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] our Hughes segment had approximately [removed: 1,035,000, 977,000] [added: 1,036,000, 1,035,000] and [removed: 860,000] [added: 977,000] broadband subscribers, respectively.

As of December 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] our Hughes segment had approximately [removed: $1.44] [added: $1.52] billion and [removed: $1.26] [added: $1.44] billion, respectively, of contracted revenue backlog.

Of the total contracted revenue backlog as of December 31, [removed: 2015,] [added: 2016,] we expect to recognize approximately [removed: $402.1] [added: $436.5] million of revenue in [removed: 2016.][added: 2017.]

[removed: This increasingly competitive] environment has put pressure on prices and margins.

[added: To compete effectively, we] emphasize our network quality, our customization capability, our offering of networks as a turnkey managed service, our position as a single point of contact for products and services and our competitive prices.

In our enterprise [removed: market,] [added: and government markets,] our principal competitors for the supply of very-small-aperture terminal (“VSAT”) satellite networks are Gilat Satellite Networks Ltd, ViaSat, SageNet LLC, Newtec and iDirect Technologies (“iDirect”).

[removed: _ECHOSTAR] [added: ECHOSTAR] TECHNOLOGIES [removed: SEGMENT_][added: SEGMENT]

[removed: _Video] [added: Video] Delivery Products and Related [removed: Technologies_.][added: Technologies.]

[added: | • | *Set-top boxes*.] Provides consumers with the ability to access the enhanced picture quality and sound of 4K, high-definition (“HD”) and/or standard definition (“SD”) content, interactive applications, broadband connectivity and Bluetooth audio streaming, depending on the type of set-top box purchased. [added: |]

[removed: · _DVR] [added: | • | *DVR] and Whole-Home HD DVR [removed: solutions._] [added: solutions.*] Provides customers with the ability to record, replay and store content and multi-room HD content sharing functionality to create a whole-home entertainment experience, including commercial skipping and sideloading technologies. [added: |]

[added: | • | *TV Anywhere “Placeshifting” Functionality*.] Provides customers with the ability to watch and control digital television content on a desktop or mobile device via a broadband internet connection. [added: Customers have these abilities when using our set-top boxes as well as our standalone Slingbox units, which are sold directly to consumers via retail outlets and online, as well as to the pay-TV operator market. |]

We deliver innovative network technologies, managed services, and various communications solutions for enterprise and government customers.

| | |

| --- | --- |

| • | Hughes — which provides broadband satellite technologies and broadband services to home and small office customers and network technologies, managed services and communication solutions to domestic and international consumers and enterprise and government customers. The Hughes segment also provides managed services, hardware, and satellite services to large enterprises and government customers, and designs, provides and installs gateway and terminal equipment to customers for other satellite systems. In addition, our Hughes segment provides satellite ground segment systems and terminals to mobile system operators. |

| | |

| --- | --- |

| | |

| --- | --- |

Following consummation of the Share Exchange described below under “Pending Share Exchange,” we will no longer operate the EchoStar Technologies business segment.

The tracking stock is an equity security and the rights of DISH Network, as the holder of the tracking stock, in our assets are subject to the claims of our creditors.

PENDING SHARE EXCHANGE

On January 31, 2017, EchoStar and certain subsidiaries of EchoStar entered into a Share Exchange Agreement (the “Share Exchange Agreement”) among DISH Network Corporation (“DISH”), DISH Network L.L.C., an indirect wholly owned subsidiary of DISH (“DNLLC”), DISH Operating L.L.C., a direct wholly owned subsidiary of DNLLC (“DOLLC” and, collectively with DISH and DNLLC, the “DISH Parties”), EchoStar, EchoStar Broadcasting Holding Parent L.L.C., a direct wholly owned subsidiary of EchoStar’s subsidiary Hughes Satellite Systems Corporation (“EB LLC”), EchoStar Broadcasting Holding Corporation, a direct wholly owned subsidiary of EB LLC (“EB Corp”), EchoStar Technologies Holding Corporation, a direct wholly owned subsidiary of EchoStar (“ET Corp”), and EchoStar Technologies L.L.C., a direct wholly owned subsidiary of EchoStar.

Pursuant to the Share Exchange Agreement, among other things: (i) EchoStar will receive all of the shares of EchoStar Tracking Stock (as defined below) owned by DNLLC in exchange for 100% of the equity interests of ET Corp, which will hold that portion of the EchoStar Technologies business segment of EchoStar that (a) designs, develops and distributes secure end-to-end video technology solutions including digital set-top boxes and related products and technology, primarily for satellite TV service providers and telecommunication companies, (b) provides TV Anywhere technology through Slingbox® units directly to consumers via retail outlets and online, as well as to the pay-TV operator market, and (c) includes our over-the-top, Streaming Video on Demand platform business, which includes assets acquired from Sling TV Holding L.L.C. (formerly DISH Digital Holding L.L.C.) and primarily provides support services to DISH’s Sling TV™ operations, and (ii) EB LLC will receive all of the shares of HSS Tracking Stock (as defined below) owned by DOLLC in exchange for 100% of the equity interests of EB Corp, which will hold EchoStar’s business of providing online video delivery and satellite video delivery for broadcasters and pay-TV operators, including satellite uplinking/downlinking, transmission services, signal processing, conditional access management and other services ((i) and (ii) collectively, the “Share Exchange”).

Pursuant to the Share Exchange Agreement, EchoStar will also transfer certain assets, investments in joint ventures, spectrum licenses and real estate properties and the DISH Parties will assume certain liabilities relating to the transferring assets and businesses.

In connection with the Share Exchange, EchoStar and DISH Network and certain of their subsidiaries will enter into certain customary agreements covering, among other things, matters relating to taxes, employees, intellectual property and the provision of transitional services.

The Share Exchange has been structured in a manner to be a tax-free exchange for each of EchoStar and DISH.

In March 2014, EchoStar and its subsidiary Hughes Satellite Systems Corporation (“HSS”) each issued shares of preferred stock (the “EchoStar Tracking Stock” and “HSS Tracking Stock,” respectively, and together, the “Tracking Stock”) to DNLLC and DOLLC, respectively.

The Tracking Stock tracks the economic performance of the residential retail satellite broadband business of our Hughes segment, including certain operations, assets and liabilities attributed to such business (collectively, the “Hughes Retail Group” or “HRG”), and represents in the aggregate an 80.0% economic interest in the Hughes Retail Group (the EchoStar Tracking Stock representing a 51.89% and the HSS Tracking Stock representing a 28.11% economic interest in the Hughes Retail Group, respectively).

Following the closing of the Share Exchange, the Tracking Stock will be retired and all agreements, arrangements and policy statements with respect to, and terms of, the Tracking Stock will terminate and be of no further effect.

The Share Exchange is expected to be consummated three business days after the satisfaction or waiver of all of the closing conditions to the transaction (other than conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction of those conditions at such time), but no earlier than February 28, 2017.

The Share Exchange Agreement provides for customary termination rights of EchoStar and DISH, including the right of either party to terminate the Share Exchange Agreement if the Share Exchange has not closed by March 31, 2017.

The closing conditions to the transaction involving third parties or governmental approvals have been satisfied (other than those that by their nature are to be satisfied at the closing).

While we currently expect the Share Exchange to be consummated on or about February 28, 2017, no assurance can be given that the Share Exchange will be consummated on the terms or within the time frame disclosed, or at all.

See “Risks Related to the Pending Share Exchange” in Item 1A Risk Factors of this Annual Report on Form 10-K.

For more information regarding the Share Exchange, see Note 20 in the notes to consolidated financial statements in Item 15 of this report and our Current Report on Form 8-K filed January 31, 2017.

Expand satellite capacity and related infrastructure. With the launch in December 2016 of the EchoStar XIX satellite and the expected start of service on the satellite late in the first quarter of 2017, we expect to significantly increase our satellite capacity in North America, Mexico and certain Latin American countries and to add capability for aeronautical, enterprise and international broadband services.

We deliver network technologies, managed services, equipment, and communications solutions for domestic and international consumers and enterprise and government customers.

Our consumer revenue growth depends on our success in adding new subscribers and driving higher average revenue per subscriber across our wholesale and retail channels.

The growth of our enterprise and equipment businesses relies heavily on global economic conditions and the competitive landscape for pricing relative to competitors and alternative technologies.

With the launch in December 2016 and expected start of service of the EchoStar XIX satellite late in the first quarter of 2017, we expect to increase our subscribers and grow our consumer, enterprise and government revenue.

In December 2016, we launched our EchoStar XIX satellite, a next-generation, high throughput geostationary satellite, which will provide significant capacity for continued subscriber growth.

EchoStar contributed the EchoStar XIX satellite to its Hughes segment in February 2017.

That satellite was launched in March 2016 and we began delivering high-speed consumer satellite broadband services in Brazil in July 2016.

We expect the satellite to be launched in the second quarter of 2018 and plan to provide service in additional markets across South America once that capacity is available for commercial use.

It also delivers network technologies, managed services, hardware, equipment and satellite communications solutions for domestic and international consumers and enterprise and government customers worldwide.

In addition, our Hughes segment provides and installs gateway and terminal equipment and provides satellite ground segment systems and terminals for other satellite systems, including mobile system operators.

Examples of our enterprise and government customers include lottery agencies, gas station operators and companies with multi-branch networks that rely on satellite or terrestrial networks for critical communication across wide geographies.

Most of our enterprise customers have contracts with us for the services they purchase.

Developments toward the launch of next-generation satellite systems including low-earth orbit (“LEO”) and geostationary systems could provide additional opportunities to drive the demand for our network equipment and services.

This increasingly competitive

· _EchoStar Technologies (“ETC”)_ — which designs, develops and distributes secure end-to-end video technology solutions including digital set-top boxes and related products and technology, primarily for satellite TV service providers and telecommunication companies.

In addition, we provide our TV Anywhere technology through Slingbox® units directly to consumers via retail outlets and online, as well as to the pay-TV operator market.

Beginning in 2015, this segment also includes Move Networks, our over-the-top (“OTT”), Streaming Video on Demand (“SVOD”) platform business, which includes assets acquired from Sling TV Holding L.L.C. (formerly DISH Digital Holding L.L.C.) (“Sling TV Holding”), and primarily provides support services to DISH Network’s Sling TV™ operations.

In 2016, we plan to introduce a security and home automation solution provided directly to consumers.

We also intend to develop and launch next generation media and content delivery platforms such as our Move Networks business and our security and home automation products and services.

Our Hughes segment also provides managed services and equipment to large enterprises and solutions to customers for mobile satellite systems.

We continue our efforts in growing our consumer revenue, which depends on our success in adding new subscribers on our Hughes segment’s satellite networks.

New satellite launches are expected to provide additional capacity for subscriber growth while we manage subscriber growth across our existing satellite platform.

In March 2013, we entered into a contract for the design and construction of the EchoStar XIX satellite, which is expected to be launched in the fourth quarter of 2016.

We expect the satellite to launch in the first quarter of 2016 and to begin delivering consumer satellite broadband services in Brazil in the second half of 2016.

We expect the satellite to be launched in the second quarter of 2018 to deliver consumer satellite broadband services into South America as well as create a platform to potentially allow for further development of our business in South America.

It also provides satellite, network products and services and managed network services and equipment to enterprises and broadband service providers worldwide.

In February 2014, we amended the Distribution Agreement which, among other things, extended the term of the agreement through March 1, 2024.

To compete effectively, we

We believe broadband networks generally have an advantage over terrestrial networks where the network must reach many locations over large distances, where the customer has a “last mile” or a congestion problem that cannot be solved easily with terrestrial facilities or where there is a need for transmission to remote locations or emerging markets.

By comparison, ground-based facilities (e.g., fiber optic cables) often have an advantage for carrying large amounts of bulk traffic between a small number of fixed locations.

Our relative competitive position is constantly changing as we and our competitors strive to improve our respective positions.

While our current competitive position provides us the opportunity to grow our business, we cannot be certain of its continuing effects on our business as our competitors modify or adapt their strategies and service offerings.

· _Set-top boxes_.

· _TV Anywhere “Placeshifting” Functionality_.

Customers have these abilities when using our set-top boxes as well as our standalone Slingbox units, which are sold directly to consumers via retail outlets and online, as well as to the pay-TV operator market.

_Other Products and Services._ With our expertise in connectivity, security, and video, we are developing new consumer product and service offerings, including a security and home automation solution that customers can control from their TV or mobile device.

We expect DISH Network will continue to be the primary customer and the key revenue contributor for our EchoStar Technologies segment.

As a result, we expect that demand for our satellite television digital set-top boxes from DISH Network and other customers could decline and we may not be able to sustain our current revenue levels.

The video delivery and broadcast, OTT, and security and home automation industries are highly competitive, and market leadership changes frequently as a result of new products, designs and pricing.

As we seek to grow our revenue and market share in these industries, we face substantial competition.

Many of our primary competitors,

As we develop new products and services for the consumer markets, we will compete with numerous established and developing companies who offer similar products, some who will have longstanding distribution outlets and relationships and established brand awareness.

Our success will depend on our ability to create distribution channels and establish consumer awareness.

· _DTH Services_.

Our satellites are also used for the transmission of live sporting events, internet access, disaster recovery, and satellite news gathering services.

· _Government Services_.

We provide satellite services and technical services to U.S. government service providers.

· _Network Services_.

We provide satellite capacity and terrestrial network services to companies.

Our satellites can be used for point-to-point or point to multi-point communications.

In 2016, we expect to retire the EchoStar I and EchoStar VIII satellites.

With regards to the Ku-band BSS spectrum, we continue to pursue various opportunities to support a Brazilian service.

| | | | | | | Nominal Degree | | Depreciable | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

[removed: Form 10-K][added: Form 10-K]

[removed: x] [added: ý] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR [removed: ENDED DECEMBER] [added: ENDED DECEMBER] 31, [removed: 2015][added: 2016]

Yes [removed: x] [added: ý] No o

Yes o No [removed: x][added: ý]

As of June 30, [removed: 2015,] [added: 2016,] the aggregate market value of Class A common stock held by non-affiliates of the registrant was [removed: $2.16] [added: $1.80] billion based upon the closing price of the Class A common stock as reported on the Nasdaq Global Select Market as of the close of business on that date.

As of February [removed: 16, 2016,] [added: 15, 2017,] the registrant’s outstanding common stock consisted of [removed: 45,563,639] [added: 46,907,032] shares of Class A common stock and 47,687,039 shares of Class B common stock, each $0.001 par value.

Portions of the registrant’s definitive Proxy Statement to be filed in connection with its [removed: 2016] [added: 2017] Annual Meeting of Shareholders are incorporated by reference in Part III.

| [Disclosure Regarding Forward Looking [removed: Statements](#DISCLOSUREREGARDINGFORWARDLOOKIN_124647 "Click to goto ")] [added: Statements](#s89D268B75FFB8A3DE743296E2F0E1C20)] | | i |

| [Item [removed: 1.](#Item1_BUSINESS_124654)] [added: 1.](#s086405526A2592E62612296E2F492F42)] | [removed: [Business](#Item1_BUSINESS_124654)] [added: [Business](#s086405526A2592E62612296E2F492F42)] | [removed: 1] [added: [1](#s086405526A2592E62612296E2F492F42)] |

| [Item [removed: 1A.](#Item1A_RISKFACTORS_121410)] [added: 1A.](#sE5196C2065307C1B24F3296E2FE3CFAF)] | [Risk [removed: Factors](#Item1A_RISKFACTORS_121410)] [added: Factors](#sE5196C2065307C1B24F3296E2FE3CFAF)] | [removed: 18] [added: [17](#sE5196C2065307C1B24F3296E2FE3CFAF)] |

| [Item [removed: 1B.](#Item1B_UNRESOLVEDSTAFFCOMMENTS_121628)] [added: 1B.](#s0226CBAC6CCD26ADAB4E296E3048C75E)] | [Unresolved Staff [removed: Comments](#Item1B_UNRESOLVEDSTAFFCOMMENTS_121628)] [added: Comments](#s0226CBAC6CCD26ADAB4E296E3048C75E)] | [removed: 37] [added: [36](#s0226CBAC6CCD26ADAB4E296E3048C75E)] |

| [Item [removed: 2.](#Item2_PROPERTIES_121631)] [added: 2.](#s04A7DDFBFCAF193636A7296E3068B750)] | [removed: [Properties](#Item2_PROPERTIES_121631)] [added: [Properties](#s04A7DDFBFCAF193636A7296E3068B750)] | [removed: 37] [added: [37](#s04A7DDFBFCAF193636A7296E3068B750)] |

| [Item [removed: 3.](#Item3_LEGALPROCEEDINGS_121633)] [added: 3.](#s824B884E262735D0F767296E30A8F64A)] | [Legal [removed: Proceedings](#Item3_LEGALPROCEEDINGS_121633)] [added: Proceedings](#s824B884E262735D0F767296E30A8F64A)] | [removed: 37] [added: [38](#s824B884E262735D0F767296E30A8F64A)] |

| [Item [removed: 4.](#Item4_MINESAFETYDISCLOSURES_121636)] [added: 4.](#s6592100297D76622748F296E30C849A8)] | [Mine Safety [removed: Disclosures](#Item4_MINESAFETYDISCLOSURES_121636)] [added: Disclosures](#s6592100297D76622748F296E30C849A8)] | [removed: 37] [added: [38](#s6592100297D76622748F296E30C849A8)] |

| [Item [removed: 5.](#Item5_MARKETFORREGISTRANTSCOMMON_121639)] [added: 5.](#s059B7A3DC15A07A147D3296E311374CC)] | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#Item5_MARKETFORREGISTRANTSCOMMON_121639)] [added: Securities](#s059B7A3DC15A07A147D3296E311374CC)] | [removed: 38] [added: [39](#s059B7A3DC15A07A147D3296E311374CC)] |

| [Item [removed: 6.](#Item6_SELECTEDFINANCIALDATA_121643)] [added: 6.](#s709A88F1A60529ECE6F0296E31440B1C)] | [Selected Financial [removed: Data](#Item6_SELECTEDFINANCIALDATA_121643)] [added: Data](#s709A88F1A60529ECE6F0296E31440B1C)] | [removed: 39] [added: [40](#s709A88F1A60529ECE6F0296E31440B1C)] |

| [Item [removed: 7.](#Item7_MANAGEMENTSDISCUSSIONANDAN_125626)] [added: 7.](#sB6C64DB33572B0130327296E34DEAD35)] | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#Item7_MANAGEMENTSDISCUSSIONANDAN_125626)] [added: Operations](#sB6C64DB33572B0130327296E34DEAD35)] | [removed: 40] [added: [41](#sA95BD216C0F462491F55296E317FCD14)] |

| [Item [removed: 7A.](#Item7A_QUANTITATIVEANDQUALITATIV_020504)] [added: 7A.](#s4D5C23C112159D80BDBC296E34F43434)] | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#Item7A_QUANTITATIVEANDQUALITATIV_020504)] [added: Risk](#s4D5C23C112159D80BDBC296E34F43434)] | [removed: 69] [added: [72](#s4D5C23C112159D80BDBC296E34F43434)] |

| [Item [removed: 8.](#Item8_FINANCIALSTATEMENTSANDSUPP_075625)] [added: 8.](#s98DBA9086EDDDE6E759A296E351C61C6)] | [Financial Statements and Supplementary [removed: Data](#Item8_FINANCIALSTATEMENTSANDSUPP_075625)] [added: Data](#s98DBA9086EDDDE6E759A296E351C61C6)] | [removed: 71] [added: [73](#s98DBA9086EDDDE6E759A296E351C61C6)] |

| [Item [removed: 9.](#Item9_CHANGESINANDDISAGREEMENTSW_075626)] [added: 9.](#s0A4763D767664D7E9150296E35352D00)] | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#Item9_CHANGESINANDDISAGREEMENTSW_075626)] [added: Disclosure](#s0A4763D767664D7E9150296E35352D00)] | [removed: 71] [added: [73](#s0A4763D767664D7E9150296E35352D00)] |

| [Item [removed: 9A.](#Item9A_CONTROLSANDPROCEDURES_075628)] [added: 9A.](#s31B0A9305976ECE620E3296E355D0E0D)] | [Controls and [removed: Procedures](#Item9A_CONTROLSANDPROCEDURES_075628)] [added: Procedures](#s31B0A9305976ECE620E3296E355D0E0D)] | [removed: 71] [added: [74](#s31B0A9305976ECE620E3296E355D0E0D)] |

| [Item [removed: 9B.](#Item9B_OTHERINFORMATION_075634)] [added: 9B.](#s2D5F2A963500D3256558296E35851ACC)] | [Other [removed: Information](#Item9B_OTHERINFORMATION_075634)] [added: Information](#s2D5F2A963500D3256558296E35851ACC)] | [removed: 72] [added: [74](#s2D5F2A963500D3256558296E35851ACC)] |

| | [PART [removed: III](#PARTIII_075636)] [added: III](#s0D7BD6975D60D4D9A278296E35A5C9CC)] | |

| [Item [removed: 10.](#Item10_DIRECTORSEXECUTIVEOFFICER_075639)] [added: 10.](#sBC1A612CF1B427AD3FD6296E35C7135E)] | [Directors, Executive Officers and Corporate [removed: Governance](#Item10_DIRECTORSEXECUTIVEOFFICER_075639)] [added: Governance](#sBC1A612CF1B427AD3FD6296E35C7135E)] | [removed: 73] [added: [75](#sBC1A612CF1B427AD3FD6296E35C7135E)] |

| [Item [removed: 11.](#Item11_EXECUTIVECOMPENSATION_075641)] [added: 11.](#s9CC077578B423AC16AD2296E35EC59D4)] | [Executive [removed: Compensation](#Item11_EXECUTIVECOMPENSATION_075641)] [added: Compensation](#s9CC077578B423AC16AD2296E35EC59D4)] | [removed: 73] [added: [75](#s9CC077578B423AC16AD2296E35EC59D4)] |

| [Item [removed: 12.](#Item12_SECURITYOWNERSHIPOFCERTAI_075643)] [added: 12.](#s6CC242D085E38D2EEBF7296E360CBD55)] | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#Item12_SECURITYOWNERSHIPOFCERTAI_075643)] [added: Matters](#s6CC242D085E38D2EEBF7296E360CBD55)] | [removed: 73] [added: [75](#s6CC242D085E38D2EEBF7296E360CBD55)] |

| [Item [removed: 13.](#Item13_CERTAINRELATIONSHIPSANDRE_075646)] [added: 13.](#sC0370EAB2589A49D572E296E3633CF82)] | [Certain Relationships and Related Transactions, and Director [removed: Independence](#Item13_CERTAINRELATIONSHIPSANDRE_075646)] [added: Independence](#sC0370EAB2589A49D572E296E3633CF82)] | [removed: 73] [added: [75](#sC0370EAB2589A49D572E296E3633CF82)] |

| [Item [removed: 14.](#Item14_PRINCIPALACCOUNTINGFEESAN_075651)] [added: 14.](#s0197A21DCBFCA1CF7DFA296E3658856E)] | [Principal Accounting Fees and [removed: Services](#Item14_PRINCIPALACCOUNTINGFEESAN_075651)] [added: Services](#s0197A21DCBFCA1CF7DFA296E3658856E)] | [removed: 73] [added: [75](#s0197A21DCBFCA1CF7DFA296E3658856E)] |

| [Item [removed: 15.](#Item15_EXHIBITSFINANCIALSTATEMEN_075656)] [added: 15.](#s18237142699C198ED790296E36BA9262)] | [Exhibits, Financial Statement [removed: Schedules](#Item15_EXHIBITSFINANCIALSTATEMEN_075656)] [added: Schedules](#s18237142699C198ED790296E36BA9262)] | [removed: 74] [added: [76](#s18237142699C198ED790296E36BA9262)] |

| | [Index to Consolidated Financial [removed: Statements](#INDEXTOCONSOLIDATEDFINANCIALSTAT_020600 "Click to goto ")] [added: Statements](#s74721D9B87BA3484602F296E374855E4)] | [removed: F-1] [added: [F-1](#s74721D9B87BA3484602F296E374855E4)] |

[removed: ·] [added: | • |] our reliance on our primary customer, DISH Network Corporation and its subsidiaries (“DISH Network”), for a significant portion of our revenue; [added: |]

[removed: ·] [added: | • |] our ability to implement our strategic initiatives; [added: |]

[removed: ·] [added: | • |] the impact of variable demand and the adverse pricing [added: and regulatory] environment for digital set-top boxes; [added: and |]

[removed: ·] [added: | • |] dependence on our ability to successfully manufacture and sell our digital set-top boxes in increasing volumes on a cost-effective basis and with acceptable [removed: quality;][added: quality. |]

[removed: ·] [added: | • |] our ability to bring advanced technologies to market to keep pace with our customers and competitors; [added: |]

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

[removed: ·] [added: | • |] significant risks related to the construction, launch and operation of our satellites, such as the risk of material malfunction on one or more of our satellites, [added: risks resulting from delays or failures of launches of our satellites and potentially missing our regulatory milestones,] changes in the space weather environment that could interfere with the operation of our satellites, and our general lack of commercial insurance coverage on our satellites; [added: |]

[removed: ·] [added: | • |] our failure to adequately anticipate the need for satellite capacity or the inability to obtain satellite capacity for our Hughes segment; [removed: and][added: |]

[removed: ·] [added: | • |] the failure of third-party providers of components, manufacturing, installation services and customer support services to appropriately deliver the contracted goods or [removed: services.][added: services; |]

Yes ý No o

Yes ý No o

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| | | | | | | |

Yes o No ý

| | [PART I](#s086405526A2592E62612296E2F492F42) | |

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| | [PART II](#s059B7A3DC15A07A147D3296E311374CC) | |

| | | |

| | | |

| | | |

| | | |

| | [PART IV](#sFB9EDE22D93F23DBDD40296E367ACF2C) | |

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| [Item 16.](#s7a55243932b344dc8da437dd6b661c48) | [Form 10-K Summary](#s7a55243932b344dc8da437dd6b661c48) | [82](#s7a55243932b344dc8da437dd6b661c48) |

| | [Signatures](#s3AB55AE49B61D08EC31E296E3713FDD3) | [83](#s3AB55AE49B61D08EC31E296E3713FDD3) |

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| • | risks and uncertainties associated with the pending Share Exchange with DISH Network (as described below); |

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Although we believe that the expectations reflected in any forward-looking statements are reasonable, we cannot guarantee future results, events, levels of activity, performance or achievements.

We do not assume responsibility for the accuracy and completeness of any forward-looking statements.

We assume no responsibility for updating forward-looking information contained or incorporated by reference herein or in any documents we file with the SEC.

10-K 1 a15-23459_310k.htm 10-K

| | [PART I](#PARTI_080151 "Click to goto ") | |

| | [PART II](#PARTII_080213 "Click to goto ") | |

| | [PART IV](#PARTIV_075654) | |

| | [Signatures](#SIGNATURES_075954 "Click to goto ") | 81 |

The following table sets forth certain information concerning our principal properties related to our Hughes segment (“Hughes”), EchoStar Technologies segment (“ETC”), EchoStar Satellite Services segment (“ESS”) and to our other operations and administrative functions (“Other”) as of December 31, [removed: 2015.][added: 2016.]

| Location (3) (4) | | Segment(s) | | [removed: Leased/ Owned] [added: Leased/ Owned] | | Function |

| Griesheim, Germany (1) [removed: (5)] | | Hughes | | [removed: Leased] [added: Owned] | | Shared hub, operations, administrative offices and warehouse |

| American Fork, Utah [added: (5)] | | Hughes/ETC | | Leased | | Office space, engineering and operations |

| Foster City, California [added: (5)] | | ETC | | Leased | | Engineering offices |

| Superior, Colorado [added: (5)] | | ETC | | Leased | | Engineering offices |

| Kharkov, Ukraine [added: (5)] | | ETC | | Leased | | Engineering office |

| Bangalore, India [added: (5)] | | ETC/Hughes | | Leased | | Engineering office and office space |

| Gilbert, Arizona (1) [added: (5)] | | ETC/ESS | | Owned | | Digital broadcast operations center |

| Mustang Ridge, Texas (1) [added: (5)] | | ETC/ESS | | Owned | | Micro digital broadcast operations center |

| Cheyenne, Wyoming (1) [added: (5)] | | ETC/ESS | | Owned | | Digital broadcast operations center |

| Englewood, Colorado [added: (5)] | | Hughes/ETC/ ESS/Other | | Owned | | Corporate headquarters, engineering offices, gateways |

[added: |] (1) [added: |] We perform network services and customer support functions 24 hours a day, 365 days a year at these locations. [added: |]

[added: |] (2) [added: |] These properties are used by subsidiaries that are less than wholly-owned by the Company. [added: |]

[added: |] (3) [added: |] In addition to the above properties, we have multiple gateways throughout the Western part of the [removed: U.S.] [added: U.S., Mexico and Canada] that support the SPACEWAY 3, EchoStar XVII, and EchoStar XIX satellites as well as multiple regional broadcast operations centers. [added: |]

[added: |] (4) [added: |] In addition to the above properties, we lease rack and roof top space in 210 designated market areas throughout the U.S. as well as San Juan, Puerto Rico to collect and broadcast local channels that are used by the ETC segment. [added: |]

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| Bangalore, India (2) | | Hughes | | Leased | | Office space |

| Mexico City, Mexico | | Hughes | | Leased | | Sales office, gateways |

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| (5) | These properties or a portion thereof will be transferred in connection with, and upon consummation of, the pending Share Exchange. Hughes and ESS may enter into agreements with DISH Network for continued use of all or a portion of some of these facilities. See Note 20 in the notes to consolidated financial statements in Item 15 for further discussion of the Share Exchange. |

(5) We purchased this property in January 2016.

[removed: _Market Information_.][added: Market Information.]

Our Class A common stock is quoted on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SATS.” The high and low closing sale prices of our Class A common stock during [removed: 2015] [added: 2016] and [removed: 2014] [added: 2015] on Nasdaq (as reported by Nasdaq) are set forth below.

| 2015 | | High | | | [added: |] Low | | |

| First Quarter | | $ | 55.31 | | [added: |] $ | 49.36 | |

| Second Quarter | | $ | 52.70 | | [added: |] $ | 47.95 | |

| Third Quarter | | $ | 49.29 | | [added: |] $ | 41.93 | |

| Fourth Quarter | | $ | 46.39 | | [added: |] $ | 36.63 | |

| [removed: 2014] [added: 2016] | | High | | | [added: |] Low | | |

[removed: _Holders._] [added: Holders.] As of February [removed: 16, 2016,] [added: 15, 2017,] there were approximately [removed: 9,366] [added: 8,919] holders of record of our Class A common stock, not including stockholders who beneficially own Class A common stock held in nominee or street name.

As of February [removed: 16, 2016, 26,804,038] [added: 15, 2017, 33,193,945] of the 47,687,039 outstanding shares of our Class B common stock were held by Charles W.

Ergen, our Chairman, and the remaining [removed: 20,883,001] [added: 14,493,094] were held in trusts established for the benefit of Mr. Ergen’s family.

[removed: _Dividends_.][added: Dividends.]

We currently intend to retain our earnings, if any, to support future growth and expansion although we [removed: expect to] [added: may] repurchase shares of our common stock from time to time.

[removed: _Securities] [added: Securities] Authorized for Issuance Under Equity Compensation [removed: Plans_.][added: Plans.]

Pursuant to a stock repurchase program approved by our board of directors, we are authorized to repurchase up to $500.0 million of our outstanding shares of Class A common stock through December 31, [removed: 2016.][added: 2017.]

For the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] we did not repurchase any common stock under this program.

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| First Quarter | | $ | 45.89 | | | $ | 33.39 | |

| Second Quarter | | $ | 43.94 | | | $ | 37.25 | |

| Third Quarter | | $ | 43.83 | | | $ | 36.91 | |

| Fourth Quarter | | $ | 53.35 | | | $ | 43.60 | |

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| First Quarter | | $ | 51.61 | | $ | 46.49 | |

| Second Quarter | | $ | 53.59 | | $ | 44.80 | |

| Third Quarter | | $ | 52.49 | | $ | 48.35 | |

| Fourth Quarter | | $ | 53.88 | | $ | 43.88 | |

The accompanying consolidated financial statements for [removed: 2015] [added: 2016] have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) included in our consolidated financial statements in Item 15 of this report.

| | | For the Years Ended December 31, | | | | | | | | | | | | | | | [added: | | | |]

| Statements of Operations Data: | | [added: 2016 | | | |] 2015 | | | [removed: 2014 (2)] | [added: 2014 (1)] | | [removed: 2013] | | [added: 2013] | [removed: 2012] | | | [removed: 2011 (1)] [added: 2012] | | |

| | | [removed: (In] [added: (In] thousands, except per share [removed: amounts)] [added: amounts)] | | | | | | | | | | | | | | | [added: | | | |]

| Total revenue | | $ | [removed: 3,143,714] [added: 3,056,730] | | [added: |] $ | [removed: 3,445,578] [added: 3,143,714] | | [added: |] $ | [removed: 3,282,452] [added: 3,445,578] | | [added: |] $ | [removed: 3,121,704] [added: 3,282,452] | | [added: |] $ | [removed: 2,761,431] [added: 3,121,704] | |

| Total costs and expenses | | [added: 2,692,332 | | | |] 2,787,681 | | | [removed: 3,117,488] | [added: 3,117,488] | | [removed: 3,178,865] | | [added: 3,178,865] | [removed: 3,021,818] | | | [removed: 2,680,593] [added: 3,021,818] | | |

| Operating income | | $ | [removed: 356,033] [added: 364,398] | | [added: |] $ | [removed: 328,090] [added: 356,033] | | [added: |] $ | [removed: 103,587] [added: 328,090] | | [added: |] $ | [removed: 99,886] [added: 103,587] | | [added: |] $ | [removed: 80,838] [added: 99,886] | |

| Net income attributable to EchoStar common stock | | $ | [removed: 163,700] [added: 181,673] | | [added: |] $ | [removed: 165,268] [added: 163,700] | | [added: |] $ | [removed: 2,525] [added: 165,268] | | [added: |] $ | [removed: 211,048] [added: 2,525] | | [added: |] $ | [removed: 3,639] [added: 211,048] | |

| Basic weighted-average common shares outstanding | | [added: 93,795 | | | |] 92,397 | | | [removed: 91,190] | [added: 91,190] | | [removed: 89,405] | | [added: 89,405] | [removed: 87,150] | | | [removed: 86,223] [added: 87,150] | | |

| Diluted weighted-average common shares outstanding | | [added: 94,410 | | | |] 93,466 | | | [removed: 92,616] | [added: 92,616] | | [removed: 90,952] | | [added: 90,952] | [removed: 87,959] | | | [removed: 87,089] [added: 87,959] | | |

| Basic earnings per share | | $ | [removed: 1.77] [added: 1.94] | | [added: |] $ | [removed: 1.81] [added: 1.77] | | [added: |] $ | [removed: 0.03] [added: 1.81] | | [added: |] $ | [removed: 2.42] [added: 0.03] | | [added: |] $ | [removed: 0.04] [added: 2.42] | |

| Diluted earnings per share | | $ | [removed: 1.75] [added: 1.92] | | [added: |] $ | [removed: 1.78] [added: 1.75] | | [added: |] $ | [removed: 0.03] [added: 1.78] | | [added: |] $ | [removed: 2.40] [added: 0.03] | | [added: |] $ | [removed: 0.04] [added: 2.40] | |

| | | As of December 31, | | | | | | | | | | | | | | | [added: | | | |]

| Balance Sheet Data: | | [added: 2016 | | | |] 2015 | | | [removed: 2014 (2)] | [added: 2014 (1)] | | [removed: 2013] | | [added: 2013] | [removed: 2012] | | | [removed: 2011] [added: 2012] | | |

| | | [removed: (In thousands)] [added: (In thousands)] | | | | | | | | | | | | | | | [added: | | | |]

| Cash, cash equivalents and current marketable securities | | $ | [removed: 1,536,578] [added: 3,093,659] | | [added: |] $ | [removed: 1,688,156] [added: 1,536,578] | | [added: |] $ | [removed: 1,620,652] [added: 1,688,156] | | [added: |] $ | [removed: 1,547,565] [added: 1,620,652] | | [added: |] $ | [removed: 1,696,442] [added: 1,547,565] | |

| Total stockholders’ equity | | $ | [removed: 3,781,642] [added: 4,006,805] | | [added: |] $ | [removed: 3,623,638] [added: 3,781,642] | | [added: |] $ | [removed: 3,226,231] [added: 3,623,638] | | [added: |] $ | [removed: 3,150,227] [added: 3,226,231] | | [added: |] $ | [removed: 3,051,626] [added: 3,150,227] | |

| Cash Flow Data: | | [added: 2016 | | | |] 2015 | | | [removed: 2014 (2)] | [added: 2014 (1)] | | [removed: 2013] | | [added: 2013] | [removed: 2012] | | | [removed: 2011] [added: 2012] | | |

| Net cash flows from: | | | | | | | | | | | | | | | | | [added: | | | |]

| Operating activities | | $ | [removed: 776,451] [added: 803,343] | | [added: |] $ | [removed: 840,131] [added: 776,451] | | [added: |] $ | [removed: 450,507] [added: 840,131] | | [added: |] $ | [removed: 505,149] [added: 450,507] | | [added: |] $ | [removed: 447,018] [added: 505,149] | |

| Investing activities | | $ | [removed: (275,311] [added: (632,267] | ) | [added: |] $ | [removed: (887,590] [added: (275,311] | ) | [added: |] $ | [removed: (570,289] [added: (887,590] | ) | [added: |] $ | [removed: (346,781] [added: (570,289] | ) | [added: |] $ | [removed: (1,888,045] [added: (346,781] | ) |

| Financing activities | | $ | [added: 1,475,689 | | | $ |] (120,257 | ) | [added: |] $ | (35,096 | ) | [added: |] $ | 18,326 | | [added: |] $ | (43,976 | ) | [removed: $ | 1,913,547 | |]

[removed: Please see] [added: See] Note [removed: 4] [added: 6] in [removed: our] [added: the notes to] consolidated financial statements in Item 15 of this [removed: report.][added: report for further discussion of the agreement.]

[removed: (3)] [added: | (2) |] In [removed: 2015] [added: 2015,] we prospectively adopted Accounting Standard Update No. 2015-17, Balance Sheet Classification of Deferred Taxes. [added: As a result, our total assets as of December 31, 2016 and 2015 is not comparable to our total assets as reported in prior years. |]

[removed: Item 7. MANAGEMENT’S] [added: MANAGEMENT’S] DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

[removed: _Unless] [added: *Unless] the context indicates otherwise, as used herein, the terms “we,” “us,” [removed: “EchoStar,”] [added: “EchoStar,”] the “Company” and “our” refer [removed: to EchoStar Corporation] [added: to* *EchoStar* *Corporation] and its subsidiaries.

The following [removed: management’s discussion] [added: management’s* *discussion] and analysis of our financial condition [removed: and results] [added: and* *results] of operations should be read in conjunction with the consolidated financial statements and notes to our financial statements included elsewhere in this Annual Report on Form 10-K.

This [removed: management’s discussion and analysis] [added: management’s* *discussion and* *analysis] is intended to help provide an understanding of our financial condition, changes in our financial condition and our results of operations.

Many of the statements in this [removed: management’s discussion and analysis] [added: management’s* *discussion and* *analysis] are forward-looking statements that involve assumptions and are subject to risks and uncertainties that are often difficult to predict and beyond our control.

Further, such forward-looking statements speak only as of the date of this Annual Report on Form 10-K and we undertake no obligation to update [removed: them._][added: them.*]

EchoStar is a global provider of satellite [added: service] operations, video delivery solutions, digital set-top boxes, [removed: and] broadband satellite technologies and [added: broadband] services for [removed: the] home and [removed: office, delivering innovative network technologies, managed services, and solutions for enterprises and governments.][added: small office customers.]

We currently operate in three business segments, which are differentiated primarily by their operational focus: Hughes, EchoStar Technologies, and EchoStar Satellite [removed: Services.][added: Services (“ESS”).]

Consolidated Results of Operations for the Year [removed: Ended December] [added: Ended December] 31, [removed: 2015][added: 2016]

[removed: ·] [added: | • |] Revenue of [removed: $3.14] [added: $3.06] billion [added: |]

[removed: ·] [added: | • |] Operating income of [removed: $356.0] [added: $364.4] million [added: |]

[removed: ·] [added: | • |] Net income attributable to EchoStar common stock of [removed: $163.7] [added: $181.7] million and basic earnings per share of common stock of [removed: $1.77][added: $1.94 |]

[removed: ·] [added: | • |] EBITDA of [removed: $865.4] [added: $883.5] million (see reconciliation of this non-GAAP measure [removed: in Note 17 to the consolidated financial statements in Item 15 of this report)][added: on page 52) |]

Consolidated Financial Condition as [removed: of December] [added: of December] 31, [removed: 2015][added: 2016]

[removed: ·] [added: | • |] Total assets of [removed: $7.24] [added: $9.01] billion [added: |]

[removed: ·] [added: | • |] Total liabilities of [removed: $3.46] [added: $5.00] billion [added: |]

Historical financial data presented below may not be indicative of future financial condition.

See Note 20 in the notes to consolidated financial statements in Item 15 of this report for further discussion of the Share Exchange transaction.

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| Total assets (2) (3) | | $ | 9,008,859 | | | $ | 7,209,486 | | | $ | 7,214,936 | | | $ | 6,657,088 | | | $ | 6,549,957 | |

| Total debt and capital lease obligations (3) | | $ | 3,660,186 | | | $ | 2,192,365 | | | $ | 2,328,625 | | | $ | 2,377,513 | | | $ | 2,438,223 | |

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| | | For the Years Ended December 31, | | | | | | | | | | | | | | | | | | |

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| (1) | In March 2014, we issued preferred tracking stock to DISH Network in exchange for five satellites and $11.4 million in cash. Please see Note 4 in the notes to consolidated financial statements in Item 15 of this report. As a result, our results of operations for the years ended December 31, 2016, 2015 and 2014 are not comparable to our results of operations for the years ended December 31, 2013 and 2012. |

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| (3) | In March 2016, we retrospectively adopted Accounting Standard Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. As a result, our total assets and total debt and capital lease obligations for all dates presented reflect the application of this Update. |

Item 7.

We deliver innovative network technologies, managed services, and various communications solutions for enterprise and government customers.

On January 31, 2017, we entered into the Share Exchange Agreement.

The Share Exchange Agreement provides that EchoStar and its subsidiaries will receive all of the shares of the EchoStar Tracking Stock and Hughes Retail Preferred Track in exchange for 100% of the equity interests of certain EchoStar subsidiaries that will hold our EchoStar Technologies businesses.

Following consummation of the Share Exchange, EchoStar will no longer operate the EchoStar Technologies business segment and the EchoStar Tracking Stock and HSS Tracking Stock will be retired and all agreements, arrangements and policy statements with respect to, and terms of, such tracking stock will terminate and be of no further effect.

See “Pending Share Exchange” in Item 1.

Business and “Risks Related to the Pending Share Exchange” in Item 1A.

Risk Factors of this Annual Report on Form 10-K.

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| • | Net income of $180.7 million |

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| Total assets (3) | | $ | 7,240,762 | | $ | 7,253,998 | | $ | 6,701,963 | | $ | 6,600,233 | | $ | 6,543,737 | |

| Total debt and capital lease obligations | | $ | 2,223,641 | | $ | 2,367,687 | | $ | 2,422,388 | | $ | 2,488,499 | | $ | 2,528,654 | |

(1) On June 8, 2011, we completed the acquisition of Hughes Communications, Inc. and its subsidiaries (“the Hughes Acquisition”).

As a result, Hughes became a new segment and our historical financial statements on and after June 9, 2011 give effect to the Hughes Acquisition.

Therefore, our results of operations for the years ended December 31, 2015, 2014, 2013 and 2012 are not comparable to our results of operations for the year ended December 31, 2011.

(2) In March 2014, we issued preferred tracking stock to DISH Network in exchange for five satellites and $11.4 million in cash.

As a result, our results of operations for the years ended December 31, 2015 and 2014 are not comparable to our results of operations for the years ended December 31, 2013, 2012 and 2011.

As a result, our total assets as of December 31, 2015 is not comparable to our total assets as reported in prior years.

We continue our efforts in growing our consumer revenue, which depends on our success in adding new subscribers on our Hughes segment’s satellite networks.

The addition of new subscribers and the performance of our consumer service offering, primarily drive the revenue growth in our consumer business.

Service costs related to ongoing support of our direct and indirect customers and partners are typically impacted most significantly by our growth.

Long-term trends continue to be influenced primarily by the subscriber growth in our consumer business.

New satellite launches are expected to provide additional capacity for subscriber growth while we manage subscriber growth across our existing satellite platform.

In March 2013, we entered into a contract for the design and construction of the EchoStar XIX satellite, which is expected to be launched in the fourth quarter of 2016.

In addition, we provide gateway and terminal equipment to customers for mobile satellite systems.

The fixed pricing nature of our long-term enterprise contracts minimizes significant quarter to quarter fluctuations; however, the growth of our enterprise business relies heavily on global economic conditions.

We expect the satellite to launch in the first quarter of 2016 and to begin delivering consumer satellite broadband services in Brazil in the second half of 2016.

We expect the satellite to be launched in the second quarter of 2018 to deliver consumer satellite broadband services into South America as well as create a platform to potentially allow for further development of our business in South America.

As a result, for the year ended December 31, 2015, net subscriber additions of approximately 56,000 were lower than for the year ended December 31, 2014 primarily due to satellite beams servicing certain areas reaching capacity and the increase in churn on the larger base of subscribers.

Subscriber additions excludes small/medium enterprise service channels.

Our consolidated financial statements are included in Item 15 of this report beginning on page [removed: F-3.][added: 4.]

Not applicable.

None.

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule [removed: 15 d-15(f)] [added: 15d-15(f)] under the Securities Exchange Act of 1934, as amended) that occurred during our fiscal quarter ended December 31, [removed: 2015] [added: 2016] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

[added: |] (i) [added: |] pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets; [added: |]

[added: |] (ii) [added: |] 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 [added: |]

[added: |] (iii) [added: |] 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. [added: |]

Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, [removed: 2015.][added: 2016.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2015] [added: 2016] 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.

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The information required by this Item with respect to the identity and business experience of our directors and corporate governance will be set forth in our Proxy Statement for the [removed: 2016] [added: 2017] Annual Meeting of Shareholders, which will be filed no later than 120 days after December 31, [removed: 2015,] [added: 2016,] under the caption “Election of Directors,” which information is hereby incorporated herein by reference.

The information required by this Item with respect to the identity and business experience of our executive officers is set forth on pages [removed: 16-17] [added: 15-16] of this report under the caption “Executive Officers of the Registrant.”

The information required by this Item will be set forth in our Proxy Statement for the [removed: 2016] [added: 2017] Annual Meeting of Shareholders, which will be filed no later than 120 days after December 31, [removed: 2015,] [added: 2016,] under the caption “Executive Compensation and Other Information,” which information is hereby incorporated herein by reference.

The information required by this Item will be set forth in our Proxy Statement for the [removed: 2016] [added: 2017] Annual Meeting of Shareholders, which will be filed no later than 120 days after December 31, [removed: 2015,] [added: 2016,] under the captions “Election of Directors,” “Equity Security Ownership” and “Equity Compensation Plan Information,” which information is hereby incorporated herein by reference.

The information required by this Item will be set forth in our Proxy Statement for the [removed: 2016] [added: 2017] Annual Meeting of Shareholders, which will be filed no later than 120 days after December 31, [removed: 2015,] [added: 2016,] under the caption “Certain Relationships and Related Party Transactions,” which information is hereby incorporated herein by reference.

The information required by this Item will be set forth in our Proxy Statement for the [removed: 2016] [added: 2017] Annual Meeting of Shareholders, which will be filed no later than 120 days after December 31, [removed: 2015,] [added: 2016,] under the caption “Principal Accountant Fees and Services,” which information is hereby incorporated herein by reference.

| [Index to Consolidated Financial [removed: Statements](#INDEXTOCONSOLIDATEDFINANCIALSTAT_020600 "Click to goto ")] [added: Statements](#s74721D9B87BA3484602F296E374855E4)] | [removed: F-1] [added: [F-1](#s74721D9B87BA3484602F296E374855E4)] |

| [Report of Independent Registered Public Accounting [removed: Firm](#REPORTOFINDEPENDENTREGISTEREDPUB_020619 "Click to goto ")] [added: Firm](#sE75ED9E7D1FFEB132B9E296E3771FFE4)] | [removed: F-2] [added: [F-2](#sE75ED9E7D1FFEB132B9E296E3771FFE4)] |

| [Consolidated Balance Sheets as of December 31, [removed: 2015] [added: 2016] and [removed: 2014](#CONSOLIDATEDBALANCESHEETS_012326 "Click to goto ")] [added: 2015](#sF72E411FD82D80163B39296DF1E66960)] | [removed: F-3] [added: [F-4](#sF72E411FD82D80163B39296DF1E66960)] |

| [Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013](#CONSOLIDATEDSTATEMENTSOFOPERATIO_012320 "Click to goto ")] [added: 2014](#s467B24399100396F8B1D296DE8842395)] | [removed: F-4] [added: [F-5](#s467B24399100396F8B1D296DE8842395)] |

| [Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013](#CONSOLIDATEDSTATEMENTSOFCHANGESI_010340 "Click to goto ")] [added: 2014](#s3E539E3FA941A55EADDF296DEE099794)] | [removed: F-5] [added: [F-6](#s3E539E3FA941A55EADDF296DEE099794)] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013](#ECHOSTARCORPORATION_010415 "Click to goto ")] [added: 2014](#s7E2919CA20E063DB1406296DE79709AE)] | [removed: F-6] [added: [F-7](#s7E2919CA20E063DB1406296DE79709AE)] |

| [Notes to Consolidated Financial [removed: Statements](#NOTESTOCONSOLIDATEDFINANCIALSTAT_073111 "Click to goto ")] [added: Statements](#sF9A1466A66569135BFCC296E3A5AD934)] | [removed: F-7] [added: [F-8](#sF9A1466A66569135BFCC296E3A5AD934)] |

| [Schedule I — Condensed Financial Information of Registrant (Parent Company Information [removed: Only)](#SCHEDULEI_123704 "Click to goto ")] [added: Only)](#s97B81F7B91F21B6290D1296DF131FECE)] | [removed: F-63] [added: [F-64](#s97B81F7B91F21B6290D1296DF131FECE)] |

| [Condensed Statements of Operations and Comprehensive Income [removed: (Loss)](#CONDENSEDSTATEMENTSOFOPERATIONSA_020539 "Click to goto ")] [added: (Loss)](#sA4BF280FA43391D712C0296DE81D8859)] | [removed: F-65] [added: [F-65](#sA4BF280FA43391D712C0296DE81D8859)] |

| [Condensed Statements of Cash [removed: Flows](#CONDENSEDSTATEMENTSOFCASHFLOWS_020548 "Click to goto ")] [added: Flows](#sB97FBB06F3A9323B573E296DEA7CEE77)] | [removed: F-66] [added: [F-66](#sB97FBB06F3A9323B573E296DEA7CEE77)] |

| [Schedule II — Valuation and Qualifying [removed: Accounts](#VALUATIONANDQUALIFYINGACCOUNTS_020605 "Click to goto ")] [added: Accounts](#s5577C06779DDAD9F1C2C296DEB1293F2)] | [removed: F-67] [added: [F-67](#s5577C06779DDAD9F1C2C296DEB1293F2)] |

| [removed: 3.2*] [added: 3.3*] | | Bylaws of EchoStar Corporation (incorporated by reference to Exhibit 3.2 to Amendment No. 1 of EchoStar Corporation’s Form 10 filed December 12, 2007, Commission File No. 001-33807). |