EchoStar (ECHO) 10-K risk factor changes: FY2019 vs FY2018

[removed: DISH Network] [added: Our sales outside the U.S.] accounted for [removed: 18.1%, 23.7%] [added: 20.4%, 19.2%] and [removed: 26.1%] [added: 22.2%] of our [removed: total] revenue for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

We intend to continue to selectively explore opportunities to pursue investments, commercial alliances, [removed: partnerships,] [added: partnerships,] joint ventures, acquisitions, dispositions and other strategic initiatives and transactions, domestically and internationally, that we believe may allow us to increase our existing market share, increase our satellite capacity, expand into new [added: markets, obtain new customers, broaden our portfolio of services, products and intellectual property, make our business more valuable, align us for future growth and expansion, maximize the return on our investments and strengthen our]

Those factors include the ability to execute such initiatives in new and existing markets, the response of existing and potential new [removed: customers,] [added: customers] and the actions or reactions of competitors.

Our business operates in an intensely competitive, [removed: consumer-driven] [added: consumer-] and [added: enterprise-driven and] rapidly changing environment and competes with a growing number of companies that provide products and services to [removed: consumers.][added: consumer and enterprise customers.]

| • | Our ESS segment competes against larger, well-established satellite service companies. Because the satellite services industry is relatively mature, our 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 [added: continue to] 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. |

| • | In our consumer market, our Hughes segment faces competition primarily from DSL, [removed: fiber] [added: fiber, fixed wireless] 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, Central and South America. Some of these competitors offer consumer services and hardware at lower [removed: prices] [added: prices, higher speeds and/or higher capacity] than ours. In addition, terrestrial alternatives do not require our external dish, which may limit customer acceptance of our products. [added: Further, government funding for competing products and services may reduce the demand for our products and services.] We may be unsuccessful in competing effectively against DSL, [removed: fiber] [added: fiber, fixed wireless] 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, our Hughes segment faces 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 [added: as other providers] 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 [removed: us.] [added: ours.] 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 continues to increase and the cost of their network and hardware [added: services continues to decline. Terrestrial networks also have a competitive edge over satellite networks because of lower latency for data transmission.] |

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

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

In addition, [added: following] the [removed: FSS industry has seen] consolidation [removed: in] [added: of] the [removed: past decade, and today,] [added: FSS industry,] the main FSS providers in North America and a number of smaller regional providers own and operate the current satellites that are available for our capacity needs.

Our business and results of operations could be adversely affected if we are not able to renew our capacity leases at economically viable rates, or if capacity is not available due to problems experienced by these FSS [removed: provider.][added: providers.]

These bands include the Ka-band, where we operate our broadband gateway earth [removed: stations,] [added: stations] and other bands in which we may operate in the future.

We are dependent upon third-party providers for components, manufacturing, installation [removed: services,] [added: services] and customer support services, and our results of operations may be materially adversely affected if any of these third-party providers fail to appropriately deliver the contracted goods or services.

| • | [removed: Components .] [added: 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, [removed: quality,] [added: quality] and timely delivery of these components, and the potential bankruptcy, lack of liquidity or operational failure of our suppliers. [added: 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. To the extent that component pricing does not decline or increases, whether due to inflation, increased demand, decreased [removed: supply] [added: supply, trade policies, tariffs] 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. Such changes could have an adverse impact on our product costs. |

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

We expect our foreign operations to [removed: continue to] represent a significant and growing portion of our business.

Over the last 10 years, we sold products in over 100 countries and began offering broadband internet services to consumers in [removed: in] several Central and South American countries.

| • | Complications in complying with restrictions on foreign ownership and investment and limitations on repatriation. We may not be permitted to own our operations in some countries and may have to enter into partnership or joint venture relationships. Many foreign legal regimes [added: and/or our contractual arrangements] 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 or offer our products and services in certain circumstances. In such event, we will not have access to the cash flow and assets of our subsidiaries and joint ventures. |

| • | 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 privacy or intellectual property laws 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, [removed: and] results of [removed: operations.] [added: operations or cash flow.] |

| • | Restrictions on space station landing/terrestrial [removed: rights .] [added: 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 [removed: are] [added: may] not [removed: presently] [added: be] 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, penalties 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 [removed: 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.] |

| • | 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 [added: regulatory requirements associated with maintaining such licenses, which may change over time, are subject to interpretation by foreign courts and regulatory bodies, and may result in additional costs to operate and/or fines, sanctions and penalties being imposed on us or our subsidiaries if found to be violating the terms of such licenses, any or all of which could be material; (c) the] burden of creating and maintaining additional entities, branches, facilities and/or staffing in foreign jurisdictions; and [removed: (c)] [added: (d)] legal regulations requiring that we make certain satellite capacity available for “free,” which may impact our revenue. 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. |

| • | Compliance with applicable export control laws and regulations in the U.S. and other 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 trade sanctions laws and regulations administered by OFAC. The export of certain hardware, technical data and services relating to satellites is regulated by BIS under EAR. Other items are controlled for export by the U.S. Department of State’s Directorate of Defense Trade Controls under ITAR. We cannot provide equipment or services to certain countries subject to U.S. trade sanctions unless we first obtain the necessary authorizations from OFAC. Violations of these laws or regulations could result in significant sanctions including fines, more onerous compliance requirements, debarments from export privileges, or loss of authorizations needed to conduct aspects of our international business. A violation of ITAR or [removed: the] other [added: export or trade-related] regulations [removed: enumerated above] could materially adversely affect our business, financial condition and results of operations. |

| • | Competition with large or state-owned enterprises and/or regulations that effectively limit our operations and favor local competitors. Many of the countries in which we conduct business have traditionally had [removed: state owned] [added: state-owned] or [removed: state granted] [added: state-granted] monopolies on telecommunications services that favor an incumbent service provider. We face competition from these favored and entrenched companies in countries that have not deregulated. The slower pace of deregulation in these countries, including in Asia, Latin America, Middle East, [added: India,] Africa and Eastern Europe, has adversely affected, and is likely to continue to adversely affect, the development and growth of our business in these regions. |

| • | Customer credit [removed: risks .] [added: 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. |

We provide access to our telecommunications networks to customers that use a variety of platforms such as satellite, wireless [removed: 3G,] 4G, [added: 5G,] cable, fiber optic and DSL.

[removed: We assume greater financial risk on these customer contracts than on other types of contracts because] if we do not estimate costs accurately and there is an increase in our subcontractors’ prices, our net profit may be significantly reduced or there may be a loss on the contracts.

In addition, the companies in which we invest or with whom we partner may not be able to compete [added: or operate] effectively or [added: may experience bankruptcy or other liquidity or other financial stress or] there may be insufficient demand for the services and products offered by these companies.

| • | the disruption of relationships with employees, vendors or customers; [added: and] |

| • | the risks associated with foreign and international operations and/or investments or [removed: dispositions; and] [added: dispositions.] |

| • | the risks associated with developing and constructing new [removed: satellites.] [added: satellites;] |

New investments, commercial alliances, partnerships, joint ventures, acquisitions, dispositions, development activities, including, without limitation, the design, development, construction and launch of new [removed: satellites,] [added: satellites] and other strategic initiatives may require the commitment of significant capital that may otherwise be directed to investments in our existing businesses or be distributed to shareholders.

As of December 31, [removed: 2018,] [added: 2019,] our total indebtedness was [removed: approximately $3.5] [added: $2.4] billion.

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

While the 2017 Tax Act [removed: generally is likely to reduce] [added: has reduced] our federal income tax obligations, if these limitations or other newly enacted provisions become applicable to us, they could minimize such reductions or otherwise require us to pay additional federal income taxes, which in turn could result in additional liquidity needs.

In addition, sustained or increased economic weaknesses or pressures or new economic conditions may limit our ability to generate sufficient internal cash to fund investments, capital expenditures, [removed: acquisitions,] [added: acquisitions] and other strategic transactions and/or the development, design, acquisition and construction of new satellites.

The indentures governing the [removed: HSS 6 1/2% Senior Secured Notes due 2019,] [added: Hughes Satellite Systems Corporation (“HSS”)] 7 5/8% Senior Notes due 2021, 5.250% Senior Secured Notes due August 1, 2026 and 6.625% Senior Unsecured Notes due August 1, 2026 contain various covenants, subject to certain exceptions, that limit HSS’ ability and/or certain of its subsidiaries’ ability to, among other things:

If [removed: an event] [added: certain events] of default [removed: occurs] [added: occur] and [removed: is] [added: are] continuing under the respective indenture, the trustee under that indenture or the requisite holders of the notes under that indenture may declare all such notes to be immediately due and payable and, in the case of the [removed: indentures] [added: indenture] governing [removed: any of] our secured notes, could proceed against the collateral that secures the [removed: applicable] secured notes.

Certain of our subsidiaries have pledged a significant portion of our assets as collateral to secure the [removed: 6 1/2% Senior Secured Notes due 2019 and the] 5.250% Senior Secured Notes due August 1, 2026.

The loss of Mr. Ergen or of certain other key [removed: executives or] [added: executives, the ability to effectively provide for the succession] of [added: our senior management, or] the ability of Mr. Ergen or [removed: certain] [added: such] other key executives to devote sufficient time and effort to our business could have a material adverse effect on our business, financial condition and results of operations.

business and relationships with our customers.

At present, until the launch and operation of additional satellites, there is limited availability of capacity on the frequencies we use in North America, including within our own fleet of satellites, which could materially and adversely affect our ability to provide services to customers and grow our revenue and business.

products that meet our specifications in a timely manner, then our customer relationships and revenue may be harmed.

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.

We assume greater financial risk on these customer contracts than on other types of contracts because

If certain other events of default occur, the indentures will become immediately due and payable.

This trade war has materially increased the cost of certain products we import, impacted the supply of such products, and may require us to change our manufacturers.

Although, the U.S. and China have agreed to a temporary trade deal, a potential long-term trade deal remains subject to ongoing trade talks while many of the tariffs remain in place.

In addition, the FCC and other regulators may make changes that could affect the use of spectrum for MSS and FSS.

Compliance with data privacy laws may be costly, and non-compliance with such laws may result in significant liability.

The personal information and data that we process and store is increasingly subject to the data security and data privacy laws of many jurisdictions.

These laws may conflict with one another, and many of them are subject to frequent modification and differing interpretations.

The laws impose a significant compliance burden and complying with them has required us to change our business practices or the functionality of our products and services.

Although we have made efforts to design our policies, procedures, and systems to comply with the current requirements of applicable state, federal, and foreign laws, changes to applicable laws and regulations and the implementation of new laws and regulations in this area could subject us to additional regulation and oversight, any of which could significantly increase our operating costs, restrict our business operations and result in changes that are adverse to our customers.

In addition, violations of these laws can result in significant fines, penalties, claims by regulators or other third parties, and damage to our brand and business.

Further, we rely on subcontractors to provide us with certain goods and services that may require their compliance with our licenses and other authorizations.

In the event that their provision of these goods and services are not in compliance with such licenses and other authorizations, we may be subject to fines or other penalties and/or the applicable regulator may cancel, revoke, suspend, or fail to renew any of our licenses or authorizations.

RISKS RELATING TO THE BSS TRANSACTION

Certain of our directors and executive officers have interests in the BSS Transaction that may be different from, or in addition to, those of our other stockholders.

Certain of our directors and executive officers have interests in the BSS Transaction that may be different from, or in addition to, the interests of our stockholders generally.

Our directors and executive officers who own shares of our common stock participated in the Distribution and the Merger on the same terms as our other stockholders.

Additionally, Mr. Ergen, director and Chairman of both us and DISH, serves as a director and executive officer of BSS Corp. following the consummation of the BSS Transaction.

The EchoStar parties that approved the BSS Transaction, as described below, were aware of and considered these interests, among other things, in deciding to approve the terms of the Master Transaction Agreement and the BSS Transaction.

The BSS Transaction was approved, in accordance with our longstanding related party transaction policy, by (i) our independent management, (ii) our non-interlocking directors (i.e., directors who are not also directors or employees of DISH Network), with our director, Mr. R. Stanton Dodge, recusing himself to avoid the appearance of any potential conflict resulting from his prior employment with DISH Network and our director, Mr. Anthony M.

Federico, recusing himself to avoid the appearance of any potential conflict resulting from his service on DISH’s special litigation committee, (iii) our audit committee, with Mr. Federico recusing himself and, after all such approvals were obtained (iv) our board of directors, with, our chairman, Mr. Ergen, recusing himself.

Applicable portions of the BSS Transaction were also approved by HSS’ board of directors.

If the Distribution and the Merger do not qualify as a tax‑free distribution and merger under the Internal Revenue Code of 1986, as amended (the “Code”), then we and/or our stockholders may be required to pay substantial U.S. federal income taxes and under certain circumstances we may have indemnification obligations to DISH Network.

The parties to the BSS Transaction received a tax opinion from their respective counsels as to the tax‑free nature of the transactions.

They did not obtain a private letter ruling from the IRS with respect to the Distribution and the Merger and instead are relying solely on their respective tax opinions for comfort that the Distribution and the Merger qualify for tax‑free treatment for U.S. federal income tax purposes under the Code.

The tax opinions were based on, among other things, certain undertakings made by us and DISH Network, as well as certain representations and assumptions as to factual matters made by us, DISH Network, and Mr. and Mrs. Ergen.

The failure of any factual representation or assumption to be true, correct and complete, or any undertaking to be fully

complied with, could affect the validity of the tax opinions.

An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the conclusions set forth in the tax opinions.

In addition, the tax opinions were based on then-current law, and cannot be relied upon if current law changes with retroactive effect.

If the Distribution does not qualify as a tax‑free distribution under Section 355 of the Code, then the Distribution would be taxable to our stockholders, we would recognize a substantial gain on the Distribution, we and our stockholders could incur significant U.S. federal income tax liabilities, and we could be required to indemnify DISH Network for the tax on such gain if the failure of the Distribution to so qualify is the result of certain actions or misrepresentations by us, but we will not be required to indemnify any of our stockholders.

In the event we are required to indemnify DISH Network for taxes incurred in connection with the BSS Transaction, the indemnification obligation could have a material adverse effect on our business, financial conditions, results or operations and cash flow.

Even if the Distribution otherwise qualifies as a tax-free distribution, the Distribution would be taxable to us (but not to our stockholders) pursuant to Section 355(e) of the Code if one or more persons acquire a 50% or greater interest (measured by vote or value) in our or BSS Corp.’s stock, directly or indirectly (including through acquisitions of the BSS Common Stock or DISH Common Stock after the completion of the BSS Transaction), as part of a plan or series of related transactions that includes the Distribution.

If there is a change of control of DISH Network or BSS Corp. after the completion of the BSS Transaction or a transfer of stock or assets of DISH Network or BSS Corp. that results in the Distribution being taxable to us under Section 355(e) of the Code, DISH Network would be required to indemnify us (but not our stockholders) for such taxes only if DISH Network took an action or knowingly facilitated, consented to or assisted with an action by a DISH shareholder that caused the Distribution to fail to qualify as a tax-free distribution.

If the Merger were taxable, our stockholders would be considered to have made a taxable sale of their BSS Common Stock to DISH Network and, consequently, our stockholders would recognize taxable gain or loss on their receipt of DISH Common Stock in the Merger.

In addition, the Merger being taxable could cause the Distribution to fail to qualify as a tax-free distribution.

We currently derive a significant portion of our revenue from DISH Network.

The loss of, or a significant reduction in, orders from, or a decrease in selling prices of satellite services, broadband equipment and/or other services or products to DISH Network would significantly reduce our revenue and materially adversely impact our results of operations.

DISH Network is the primary customer of the satellite services provided by our ESS segment.

For the years ended December 31, 2018, 2017 and 2016 DISH Network accounted for 86.5%, 87.9% and 85.7% of our total ESS segment revenue, and we expect that DISH Network will continue to be the primary source of revenue for our ESS segment as we have entered into certain commercial agreements with DISH Network pursuant to which we provide DISH Network with satellite services at fixed prices for varying lengths of time depending on the satellite.

See Note 20 in the notes to consolidated financial statements in Item 15 of this report for further discussion of our related party transactions with DISH Network.

The results of operations of our ESS segment are linked to changes in DISH Network’s satellite capacity requirements, which historically have been driven by the addition of new channels and migration of programming to high-definition TV and video on demand services.

DISH Network’s future satellite capacity requirements may change for a variety of reasons, including its ability to construct and launch or acquire its own satellites, to continue to add new channels and/or to migrate to the provision of such channels and other video on demand services through streaming and other alternative technologies.

There is no assurance that we will continue to provide satellite services to DISH Network beyond the terms of our agreements.

Any termination or reduction in the satellite services we provide to DISH Network or the prices that DISH Network pays us for such services would cause us to have unused capacity on our satellites, require us to aggressively pursue alternative sources of revenue for this business and have a material adverse effect on our business, results of operation and financial position.

If we lose DISH Network as a customer of the satellite services provided by our ESS segment, it may be difficult for us to replace, in whole or in part, our historical revenue from DISH Network because there are a relatively small number of potential customers for our specialized services, and we have had limited success in attracting such potential new customers in the past.

Historically, many potential customers of our ESS segment have perceived us as a competitor due to our affiliation with DISH Network.

There can be no assurance that we will be successful in entering into any commercial relationships with potential new customers who are competitors of DISH Network (particularly if we continue to be perceived as affiliated with DISH Network as a result of common ownership and certain shared services).

If we do not develop relationships with new customers, we may not be able to expand our customer base or maintain or increase our revenue.

Furthermore, DISH Network has transitioned from being a wholesale distributor of the satellite internet service of our Hughes segment to being a sales agent for such services.

DISH Network (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our HughesNet service and related equipment and other telecommunications services and (ii) installs HughesNet service equipment with respect to activations generated by DISH Network.

For the years ended December 31, 2018, 2017 and 2016, DISH Network accounted for 2.9%, 5.6% and 7.7% of our total Hughes segment revenue.

Any material reduction in or termination of sales generated by DISH Network in its capacity as our sale agent could have a material adverse effect on our business, results of operations, and financial position.

markets, obtain new customers, broaden our portfolio of services, products and intellectual property, make our business more valuable, align us for future growth and expansion, maximize the return on our investments and strengthen our business and relationships with our customers.

services continues to decline.

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

As capacity becomes full on our existing satellites, significant delays in the construction or launch of new satellites and/or satellite anomalies or failures could materially and adversely affect our ability to provide services to customers.

We generally only purchase satellite capacity based on existing contracts and bookings.

Therefore, capacity for certain types of coverage in the future may not be readily available to us, and we may not be able to satisfy certain needs of our customers, which could result in a loss of possible new business and could negatively impact the margins for those services.

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.

Our sales outside the U.S. accounted for approximately 17.3%, 19.3% and 18.2% of our revenue for the years ended December 31, 2018, 2017 and 2016, respectively.

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

We may be subject to risks relating to the referendum of the United Kingdom’s membership of the EU.

The formal two-year process governing the United Kingdom’s (the “U.K.”) departure from the EU, commonly referred to as the “Brexit,” began on March 29, 2017.

Discussions between the U.K. and the EU focused on finalizing withdrawal issues and transition agreements are ongoing.

However, given the limited progress to date in these negotiations and ongoing uncertainty within the U.K. Government and Parliament, it is possible that the U.K. will leave the EU on March 29, 2019 without a withdrawal agreement and associated transition period in place, which is likely to cause significant market and economic disruption.

Further, it is possible that there will be greater restrictions on imports and exports between the U.K. and EU countries.

Brexit may also cause our customers to closely monitor their costs and reduce their spending budgets.

The effects of Brexit, the uncertainty regarding the ultimate terms of Brexit and the perceptions as to the impact of the withdrawal of the U.K. from the EU have affected, and may continue to affect, business activity, political stability and economic and market conditions in the U.K., the Eurozone, the EU and elsewhere and could contribute to instability in global financial and foreign exchange markets, including volatility in the value of the Euro and the British Pound.

Additionally, with the U.K. no longer being a part of the EU, there may be certain regulatory changes that may impact the regulatory regime under which we operate in both the U.K. and the EU.

Given that a portion of our business is conducted in the EU, including the U.K., any of these and other changes, implications and consequences may adversely affect our business and results of operations.

The 2017 Tax Act contains many significant changes to U.S. tax laws, including changes in corporate tax rates, the availability of net deferred tax assets relating to our U.S. operations, the taxation and repatriation of foreign earnings, and the deductibility of expenses.

In the second half of 2018, Maxar announced that it is reviewing strategic alternatives for its geostationary communications satellite business to improve its financial performance and that it is in active discussions with potential buyers of the business.

The FCC has also authorized the use of multichannel video and data distribution service in the DBS band.

Several multichannel video and data distribution service systems are now being commercially deployed.

[removed: Impairment] [added: *Impairment] of [removed: Long-lived Assets][added: long-lived assets*]

The carrying amount of a long-lived asset or asset group is considered to not be recoverable when the estimated future undiscounted [removed: cash flows from such asset or asset group is less than its carrying amount.]

For a discussion of new accounting pronouncements, see Note 2 in [removed: the notes to] our [removed: accompanying] [added: Accompanying] Consolidated Financial [removed: Statements in Item 15 of this Form 10-K.][added: Statements.]

We are continuing to assess the impact of adopting certain recently issued accounting pronouncements on our [removed: consolidated financial statements] [added: Accompanying Consolidated Financial Statements] and related disclosures.

Services and other [removed: revenue — DISH Network.][added: revenue.]

[removed: Services] [added: Cost of sales - services] and other [removed: revenue — DISH Network] primarily includes [removed: revenue] [added: the cost of broadband services provided to our consumer and enterprise customers, maintenance and other contracted services, costs] associated with satellite and transponder leases and services, [removed: TT&C,] professional [removed: services, facilities rental revenue and other] services [removed: provided to DISH Network.][added: and facilities rental.]

[removed: Services] [added: Cost of sales - services] and [removed: other revenue —] other.

Services and other revenue [removed: — other] primarily includes the sales of [removed: enterprise and] consumer [added: and enterprise] broadband services, [removed: as well as] maintenance and other contracted [removed: services.][added: services, revenue associated with satellite and transponder leases and services, satellite uplinking/downlinking, subscriber wholesale service fees for the HughesNet service professional services and facilities rental revenue.]

Equipment revenue primarily includes broadband equipment and networks sold to customers in our [removed: enterprise and] consumer [removed: markets] and [removed: sales of satellite broadband equipment and related equipment, related to the HughesNet service, to DISH Network.][added: enterprise markets.]

Cost of sales [removed: —] [added: -] equipment.

Cost of sales [removed: —] [added: -] equipment consists primarily of the cost of broadband equipment and networks sold to customers in our [removed: enterprise and] consumer [removed: markets,] and [removed: to DISH Network.][added: enterprise markets.]

[removed: Cost of sales — equipment] [added: It] also includes certain other costs associated with the deployment of equipment to our customers.

[added: Selling, general and administrative expenses.] Selling, general and administrative expenses primarily includes selling and marketing costs and employee-related costs associated with administrative services (e.g., information systems, human resources and other services), including stock-based compensation expense.

It also includes professional fees (e.g. legal, information systems and accounting services) and other [removed: items] [added: expenses] associated with facilities and administrative [removed: services provided by DISH Network and other third parties.][added: services.]

Impairment of long-lived assets includes our impairment losses related to our property and equipment, [removed: goodwill] [added: goodwill, regulatory authorizations] and other intangible assets.

Interest income primarily includes interest earned on our cash, cash equivalents and marketable investment securities, [added: and other investments] including premium amortization and discount accretion on debt securities.

Interest expense, net of amounts capitalized primarily includes interest expense associated with our debt and [removed: capital] [added: finance] lease obligations (net of capitalized [removed: interest) and] [added: interest),] amortization of debt issuance [removed: costs.][added: costs and interest expense related to certain legal proceedings.]

It may also include realized gains and losses on the sale or exchange of our available-for-sale debt securities, other-than-temporary impairment losses on our available-for-sale securities, realized gains and losses on the sale or exchange of [removed: our investments in unconsolidated entities] [added: equity securities] and [added: debt securities without readily determinable fair value and] adjustments to the carrying amount of investments in unconsolidated [removed: entities] [added: affiliates and marketable equity securities] resulting from impairments and observable price changes.

Other, net primarily includes [removed: foreign exchange gains and losses,] dividends received from our marketable investment securities and other non-operating income [removed: or] [added: and] expense items that are not appropriately classified elsewhere in [removed: our] [added: the] Consolidated Statements of [removed: Operations.][added: Operations in our Accompanying Consolidated Financial Statements.]

Net income [added: (loss)] from discontinued operations.

Net income [added: (loss)] from discontinued operations [removed: represents net income] [added: includes the financial results] of the [added: BSS Business transferred in the BSS Transaction, except for certain real estate that transferred in the transaction, and the] EchoStar Technologies businesses and certain other assets transferred to DISH Network pursuant to the Share Exchange.

EBITDA is defined as Net income (loss) excluding Interest income and expense, net, Income tax benefit (provision), net, Depreciation and amortization, Net income [added: (loss)] from discontinued operations and Net income [added: (loss)] attributable to [removed: noncontrolling] [added: non-controlling] interests.

The following discussion highlights our cash flow activities, which include results from continuing and discontinued operations, for the years ended December 31, 2019, 2018 and 2017.

Cash flows from operating activities. We typically reinvest the cash flow from operating activities in our business.

For the years ended December 31, 2019, 2018 and 2017, we reported net cash inflows from operating activities of $656.3 million, $734.5 million and $726.9 million, respectively.

For the year ended December 31, 2019, we reported net cash inflows from operating activities of $656.3 million, a decrease of $78.2 million, compared to 2018.

The decrease in cash inflows was primarily attributable to lower net income of $141.1 million adjusted to exclude: (i) *Depreciation and amortization;* (ii) *Impairment of long-lived assets*; (iii) *Losses (gains) on investments, net;* (iv) *Equity in earnings of unconsolidated affiliates, net;* (v) *Foreign currency transaction (gains) losses, net;* (vi) *Dividend received from unconsolidated entity;* and (vii) change in *Other, net.*

For the year ended December 31, 2018, we reported net cash inflows from operating activities of $734.5 million, an increase of $7.6 million compared to 2017.

The increase in cash inflows was primarily attributable to a higher net income of $80.7 million adjusted to exclude (i) *Depreciation and amortization;* (ii) *Impairment of long-lived assets*; (iii) *Losses (gains) on investments, net;* (iv) *Foreign currency transaction (gains) losses, net;* (v) *Equity in earnings of unconsolidated affiliates, net;* (vi) *Proceeds from sale of trading securities;* (vii) *Dividend received from unconsolidated entity;* (vii) *Deferred tax provision (benefit), net;* and (ix) changes in *Other, net.* The increase in cash inflows was partially offset by a decrease in cash outflows of $73.1 million resulting from timing differences in operating assets and liabilities.

Cash flows from investing activities. Our investing activities generally include purchases and sales of marketable investment securities, capital expenditures, acquisitions and strategic investments.

For the years ended December 31, 2019, 2018 and 2017, we reported net cash inflows from investing activities of $822.0 million, net cash outflows from investing activities $2.1 billion and net cash outflows from investing activities $867.9 million, respectively.

For the year ended December 31, 2019, we had net sales and maturities of marketable investment securities of $2.4 billion, partially offset by net purchases of marketable investment securities of $993.4 million, expenditures for property and equipment of $418.6 million, and purchase of other investments of $93.7 million.

For the year ended December 31, 2018, we had net purchases of marketable investment securities of $2.97 billion, expenditures for property and equipment of $555.1 million and investments in unconsolidated affiliates of $116.0 million, partially offset by net sales and maturities of marketable investment securities of $1.5 billion, and a reimbursement of $77.5 million related to the EchoStar 105/SES-11 satellite.

For the year ended December 31, 2017, we had net purchases of marketable investment securities of $855.7 million and expenditures for property and equipment of $583.2 million, partially offset by net sales and maturities of marketable investment securities of $580.2 million and the sale of our investment in Invidi to an entity owned in part by DISH Network of $17.8 million.

Cash flows from financing activities. Our financing activities generally include proceeds related to the issuance of debt and cash used for the repurchase, redemption or payment of debt and finance lease obligations, payments relating to stock and debt repurchases and the proceeds from Class A common stock options exercised and stock issued under our stock incentive plans and employee stock purchase plan.

For the years ended December 31, 2019, 2018 and 2017, we reported net cash outflows from financing activities of $885.3 million, net cash outflows from financing activities of $136.6 million, and net cash inflows from financing activities of $0.1 million, respectively.

For the year ended December 31, 2019, we reported net cash outflows from financing activities of $885.3 million, an increase of $748.7 million compared to 2018.

Net cash outflows for the year ended December 31, 2019 included $920.9 million for the repurchasing and maturity of debt and $7.3 million for the purchase of non-controlling shareholder interests in a subsidiary of ours that were held by an unaffiliated third party.

These transactions did not occur during the year ended December 31, 2018.

Additionally, during the year ended December 31, 2019, we received $67.3 million in net proceeds from Class A common stock options exercised in 2019 compared to $4.4 million during the year ended December 31, 2018.

The change in net cash outflows was partially offset by our repurchase of $33.3 million of shares of our Class A common stock during the year ended December 31, 2018.

For the year ended December 31, 2018, we reported net cash outflows from financing activities of $136.6 million, an increase in cash outflows of $136.6 million compared to 2017.

The increase in cash outflows of was primarily due to our repurchase of $69.2 million of debt, our repurchase of $33.3 million of shares of our Class A common stock, and a decrease of $31.1 million in net proceeds from Class A common stock options exercised under our stock incentive plans in 2018.

Obligations and Future Capital Requirements

*Contractual Obligations*

The following table summarizes our contractual obligations as of December 31, 2019:

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

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

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

| | | Payments Due in the Year Ending December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | Total | | | | 2020 | | | | 2021 | | | | 2022 | | | | 2023 | | | | 2024 | | | | Thereafter | | |

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

| Long-term debt | | $ | 2,400,000 | | | $ | — | | | $ | 900,000 | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,500,000 | |

| Finance lease obligations | | 1,212 | | | | 629 | | | | 487 | | | | 96 | | | | — | | | | — | | | | — | | |

| Interest on long-term debt | | 726,377 | | | | 157,688 | | | | 123,375 | | | | 89,063 | | | | 89,063 | | | | 89,063 | | | | 178,125 | | |

| Satellite-related obligations | | 419,033 | | | | 192,869 | | | | 31,036 | | | | 18,479 | | | | 18,004 | | | | 17,620 | | | | 141,025 | | |

| Operating lease obligations | | 152,722 | | | | 20,884 | | | | 17,648 | | | | 15,384 | | | | 14,373 | | | | 13,286 | | | | 71,147 | | |

| Total | | $ | 3,699,344 | | | $ | 372,070 | | | $ | 1,072,546 | | | $ | 123,022 | | | $ | 121,440 | | | $ | 119,969 | | | $ | 1,890,297 | |

The table above does not include amounts related to deferred tax liabilities, unrecognized tax positions and certain other amounts recorded in our non-current liabilities as the timing of any payments is uncertain.

The table also excludes long-term deferred revenue and other long-term liabilities that do not require future cash payments.

Additionally, our satellite-related obligations primarily include payments pursuant to agreements for the construction of the EchoStar XXIV satellite, payments pursuant to regulatory authorizations, non-lease costs associated with our finance lease satellites, in-orbit incentives relating to certain satellites and commitments for satellite service arrangements.

In certain circumstances, the dates on which we are obligated to pay our contractual obligations could change.

Services and other revenue — DISH Network also includes subscriber wholesale service fees for the HughesNet service sold to DISH Network.

Services and other revenue — other also includes revenue associated with satellite and transponder leases and services, satellite uplinking/downlinking and other services provided to customers other than DISH Network.

Cost of sales — services and other.

Cost of sales — services and other primarily includes the cost of broadband services provided to our enterprise and consumer customers, and to DISH Network, as well as the cost of providing maintenance and other contracted services.

Cost of sales — services and other also includes the costs associated with satellite and transponder leases and services, TT&C, professional services, facilities rental costs and other services provided to our customers, including DISH Network.

Selling, general and administrative expenses.

As of December 31, [removed: 2018,] [added: 2019,] our cash, cash equivalents and current marketable investment securities had a fair value of [removed: $3.2] [added: $2.5] billion.

Of this amount, a total of [removed: $3.1] [added: $2.4] 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 United States (“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.

Based on our cash, cash equivalents and current marketable debt securities investment portfolio of [removed: $3.1] [added: $2.4] billion as of December 31, [removed: 2018,] [added: 2019,] a hypothetical 10% change in average interest rates during [removed: 2018] [added: 2019] would not have had 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, [removed: 2018] [added: 2019] of [removed: 2.4%.][added: 2.72%.]

A hypothetical 10% decrease in average interest rates during [removed: 2018] [added: 2019] would have resulted in a decrease of [removed: approximately $8] [added: $7.5] million in annual interest income.

As of December 31, [removed: 2018,] [added: 2019,] we held [removed: current strategic] investments in the publicly traded securities of several companies with a fair value of [removed: $91] [added: $35.6] million.

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

The fair value of these investments [added: are subject to significant fluctuations in fair value and] 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.

A hypothetical 10% adverse change in the market price of our public strategic equity investments during [removed: 2018] [added: 2019] would have resulted in a decrease of [removed: approximately $9] [added: $3.6] million in the fair value of these investments.

As of December 31, [removed: 2018,] [added: 2019,] we had [removed: investments with an aggregate carrying amount of $262] [added: $159.2] million [removed: in securities] of [added: other equity investments and other debt investments of] privately held companies that we hold for strategic business purposes.

We periodically review these investments and [removed: we] may [removed: estimate fair value and] adjust the carrying amount [added: to their estimated fair value] when there are indications of [removed: impairment or] [added: impairment,] observable prices changes for the [added: investments or observable transactions of the same] investments.

A hypothetical adverse change equal to 10% of the carrying amount of these equity instruments during [removed: 2018] [added: 2019] would have resulted in a decrease of [removed: approximately $26] [added: $15.9] million in the value of these investments.

Because private markets are not as liquid as public markets, there is also increased risk that we will not be able to sell these investments, or that when we [removed: desire to] sell [removed: them] [added: them,] we will not be able to [removed: obtain fair value for them.][added: recover our investment.]

Our international business is conducted in a variety of foreign currencies with our largest exposures being to the Brazilian real, the Indian [removed: rupee] [added: rupee, European euro] and the British pound.

Our objective in managing our exposure to foreign currency changes is to reduce earnings and cash flow volatility associated with foreign [added: currency] exchange rate [removed: fluctuations.][added: fluctuations, primarily resulting from loans to foreign subsidiaries in U.S. dollars.]

As of December 31, [removed: 2018,] [added: 2019,] we had [removed: $8 million of net] foreign currency [removed: denominated receivables and payables outstanding and foreign currency] forward contracts with a notional value of [removed: $7] [added: $12.1] million in place to partially mitigate foreign currency exchange risk.

The estimated fair values of the foreign [removed: exchange] [added: currency] contracts were not material as of December 31, [removed: 2018.][added: 2019.]

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 during [removed: 2018] [added: 2019] would have been an estimated loss to the cumulative translation adjustment of [removed: $23] [added: $44.6] million as of December 31, [removed: 2018.][added: 2019.]

We evaluate our derivative financial instruments from time to time but there can be no assurance that we will not enter into additional foreign currency forward contracts, or take other measures, in the future to mitigate our foreign [added: currency] exchange risk.

Other Investments

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

*Investments in Unconsolidated Entities*

EchoStar Corporation (which, together with its subsidiaries, is referred to as “EchoStar,” the “Company,” “we,” “us” [removed: and/or] [added: and] “our”) is a holding company that was organized in October 2007 as a corporation under the laws of the State of Nevada and has operated as a separately traded public company from [removed: Dish] [added: DISH] Network Corporation (“DISH”) since 2008.

Ergen, our Chairman, and by certain entities established [removed: by Mr. Ergen] for the benefit of his family.

We are a global provider of broadband satellite technologies, broadband internet services for [added: consumer customers, which include] home and small [removed: office customers, satellite operations] [added: to medium-sized businesses,] and satellite services.

We also deliver innovative network technologies, managed services and [removed: various] communications solutions for [removed: aeronautical,] enterprise [added: customers, which include aeronautical] and government [removed: customers.][added: enterprises.]

In addition to fiber and wireless systems, other technologies such as geostationary high throughput satellites, low-earth orbit (“LEO”) networks, medium-earth orbit (“MEO”) systems, balloons and High Altitude Platform Systems are [removed: playing] [added: expected to play] significant roles in enabling global broadband access, networks and services.

We intend to use our expertise, technologies, capital, investments, global presence, relationships and other capabilities to continue to provide broadband internet systems, equipment, networks and services for information, the internet-of-things, entertainment and commerce in North America and internationally for [removed: consumers as well as aeronautical, enterprise] [added: consumer] and [removed: government] [added: enterprise] customers.

We are closely tracking the developments in next-generation satellite businesses, and we are seeking to utilize our services, [removed: technologies] [added: technologies, licenses] and expertise to find new commercial opportunities for our business.

We currently operate in two business segments: Hughes and [removed: EchoStar Satellite Services (“ESS”), as discussed below.][added: ESS.]

[removed: Our corporate department operations] [added: These activities, costs and income,] as well as [removed: activities that have not been assigned to our operating segments and] eliminations of intersegment [removed: transactions] [added: transactions,] are [removed: all] accounted for in [removed: Corporate] [added: *Corporate] and [removed: Other] [added: Other*] in our segment reporting.

During 2017, we and certain of our subsidiaries entered into a share exchange agreement [added: (the “Share Exchange Agreement”)] with DISH and certain of its subsidiaries.

We, and certain of our subsidiaries, received all [removed: of] the shares of the Hughes Retail Preferred Tracking Stock previously issued by us and one of our subsidiaries (together, the “Tracking Stock”) in exchange for 100% of the equity interests of certain of our subsidiaries that held substantially all of our former EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”).

As a result of the Share Exchange, the [removed: operating] [added: financial] results of the EchoStar Technologies businesses [removed: have been] [added: are] presented as discontinued operations [removed: and] [added: and,] as such, have been excluded from continuing operations and segment results for all periods presented in our [removed: accompanying] [added: Accompanying] Consolidated Financial [removed: Statements in Item 15 of this Annual Report on Form 10-K (“Form 10-K”).][added: Statements.]

See Note [removed: 4] [added: 5 in our Accompanying Consolidated Financial Statements] for further [removed: discussion] [added: detail] of our discontinued operations.

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

Expand satellite capacity and related infrastructure. During [removed: 2018,] [added: 2019,] we continued the design and construction of a new, next-generation, high throughput geostationary satellite, with a planned 2021 launch, that is primarily intended to provide additional capacity for our HughesNet satellite internet service (the “HughesNet service”) in North, Central and South America as well as [removed: aeronautical and] enterprise services.

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

We currently provide satellite broadband internet service in several Central and South American [removed: countries, and expect to continue to launch similar services in other Central and South American] countries.

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

We intend to continue to selectively explore opportunities to pursue investments, commercial alliances, partnerships, joint ventures, acquisitions, dispositions and other strategic initiatives and transactions, domestically and internationally, that we believe may allow us to increase our existing market share, increase our satellite capacity, expand into new markets and new customers, broaden our portfolio of services, products and intellectual property, [added: make our business more valuable, align us for future growth] and [added: expansion, maximize the return on our investments and] strengthen our [added: business and] relationships with our customers.

Our engineering capabilities provide us with the opportunity to develop and deploy cutting edge technologies, license our technologies to [removed: others,] [added: others] and maintain a leading technological position in the industries in which we are active.

Our Hughes segment is a global provider of broadband satellite technologies and broadband internet services to [removed: home and small office] [added: consumer] customers and broadband network technologies, managed services, equipment, hardware, satellite services and communications solutions to [removed: consumers, aeronautical, enterprise] [added: consumer] and [removed: government] [added: enterprise] customers.

The growth of our enterprise [removed: businesses, including aeronautical,] [added: businesses] relies heavily on global economic conditions and the competitive landscape for pricing relative to competitors and alternative technologies.

[added: Service costs related] to ongoing support for our direct and indirect customers and partners are typically impacted most significantly by our growth.

Our Hughes segment currently uses capacity from three of our satellites (the SPACEWAY 3 satellite, the EchoStar XVII satellite and the EchoStar XIX [removed: satellite)] [added: satellite), our Al Yah 3 Brazilian payload] and additional satellite capacity acquired from [removed: multiple] third-party providers to provide services to our customers.

In August 2017, we entered into a contract for the design and construction of the EchoStar [removed: XXIV,] [added: XXIV satellite,] a new, next-generation, high throughput geostationary satellite, with a planned 2021 launch.

The EchoStar XXIV satellite is primarily intended to provide additional capacity for our HughesNet service in North, Central and South America as well as [removed: aeronautical and] enterprise broadband services.

[removed: However, if SSL or any potential successor fails to meet or] [added: If the manufacture and/or delivery of the EchoStar XXIV satellite] is [removed: delayed in meeting these obligations for any reason, including if Maxar decides to discontinue, wind down] [added: not met] or [removed: otherwise significantly modify its geostationary communications satellite business,] [added: is delayed,] such failure could have a material adverse impact on our business operations, future revenues, financial position and [removed: prospects, completing the manufacture of the EchoStar XXIV satellite] [added: prospects] and our planned expansion of satellite broadband services throughout North, South and Central America.

Capital expenditures associated with the construction and launch of [removed: this] [added: the EchoStar XXIV] satellite are included in Corporate and Other in our segment reporting.

We continue our efforts to expand our consumer satellite services business outside of the U.S. We [removed: currently provide] [added: have been delivering high-speed consumer] satellite broadband [added: services in Brazil since July 2016 and are also providing satellite broadband] internet service in several [removed: Central and South American countries, and expect to continue to launch similar services in] other Central and South American countries.

Additionally, in September 2015, we entered into 15-year agreements [removed: pursuant to which] [added: with] affiliates of Telesat Canada [removed: (“Telesat”) provide us] [added: for] Ka-band capacity on [removed: a] [added: the Telesat T19V] satellite located at the 63 degree west longitude orbital [removed: location.][added: location, which was launched in July 2018.]

[removed: This satellite] [added: Telesat T19V] was [removed: launched in July 2018,] placed in service during the fourth quarter of 2018 and [removed: augments] [added: augmented] the capacity being provided by the EUTELSAT 65 West A [added: satellite] and [added: the] EchoStar XIX [removed: satellites] [added: satellite] in Central and South America.

In August 2018, we entered into an agreement with [removed: Al Yah Satellite Communications Company PrJSC (“Yahsat”)] [added: Yahsat] to establish a new entity, Broadband Connectivity Solutions (Restricted) Limited (together with its subsidiaries, “BCS”), to provide commercial Ka-band satellite broadband services across Africa, the Middle East and southwest Asia operating over Yahsat's Al Yah 2 and Al Yah 3 Ka-band satellites.

The transaction was consummated in December 2018 when we invested [removed: $100] [added: $100.0] million in cash in exchange for a 20% interest in BCS.

Our [removed: enterprise, government and aeronautical] [added: enterprise] customers include, but are not limited to, lottery agencies, gas station operators, aircraft connectivity providers and companies with multi-branch networks that rely on satellite or terrestrial networks for critical communication across wide geographies.

In our [removed: aeronautical,] enterprise [removed: and government] markets, we compete against providers of satellite-based and terrestrial-based networks, including fiber, DSL, cable modem service, multiprotocol label switching and interest protocol-based virtual private networks.

Our principal competitors for the supply of very-small-aperture terminal satellite networks are Gilat Satellite Networks Ltd, ViaSat, [removed: Newtec Cy N.V.] and [removed: VT] [added: ST Engineering] iDirect, Inc. To differentiate ourselves from our competitors, we emphasize particular technological features of our products and services, our ability to customize networks and perform desired development work and the quality of our customer service.

Our ESS segment, like others in the fixed satellite services [removed: (“FSS”)] industry, has encountered, and may continue to encounter, negative pressure on transponder rates and demand.

[removed: We provide satellite operations and] [added: Our ESS segment provides] satellite services on a full-time and/or occasional-use basis [removed: primarily] to [removed: DISH and its subsidiaries (“DISH Network”), Dish Mexico, S. de R.L. de C.V., a joint venture we entered into in 2008 (“Dish Mexico”),] U.S. government service providers, internet service providers, broadcast news organizations, content providers and private enterprise customers.

| • | [removed: DTH Services.] [added: Fixed Satellite Services (“FSS”).] We provide satellite [removed: operations and satellite] services to broadcast news organizations, internet service providers and content providers who use our satellites to deliver programming and internet. Our satellites are also used for the transmission of live sporting events, internet access, disaster [removed: recovery,] [added: recovery] and satellite news gathering services. |

| • | Network Services. We provide satellite [removed: operations and satellite] services to companies for private networks that allow delivery of video and data services for corporate communications. Our satellites can be used for point-to-point or point to multi-point communications. |

These segments are consistent with the way we make decisions regarding the allocation of resources, as well as how operating results are reviewed by our chief operating decision maker, who is the Company’s Chief Executive Officer.

Our operations also include various corporate departments (primarily Executive, Treasury, Strategic Development, Human Resources, IT, Finance, Accounting, Real Estate and Legal) and other activities that have not been assigned to our operating segments such as costs incurred in certain satellite development programs and other business development activities, and gains or losses from certain of our investments.

In May 2019, we and one of our former subsidiaries, EchoStar BSS Corporation (“BSS Corp.”), entered into a master transaction agreement (the “Master Transaction Agreement”) with DISH and a wholly-owned subsidiary of DISH (“Merger Sub”).

Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) we transferred to BSS Corp. certain real property and the various businesses, products, licenses, technology, revenues, billings, operating activities, assets and liabilities primarily relating to the former portion of our ESS segment that managed, marketed and provided (1) broadcast satellite services primarily to DISH and its subsidiaries (together with DISH, “DISH Network”) and our joint venture Dish Mexico, S. de R.L. de C.V., (“Dish Mexico”) and its subsidiaries and (2) telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network and a portion of our other businesses (collectively, the “BSS Business”); (ii) we distributed to each holder of shares of our Class A or Class B common stock entitled to receive consideration in the transaction an amount of shares of common stock of BSS Corp., par value $0.001 per share (“BSS Common Stock”), equal to one share of BSS Common Stock for each share of our Class A or Class B common stock owned by such stockholder (the “Distribution”); and (iii) immediately after the Distribution, (1) Merger Sub merged with and into BSS Corp. (the “Merger”), such that BSS Corp. became a wholly-owned subsidiary of DISH and DISH owns and operates the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”).

In connection with the BSS Transaction, we and DISH Network agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively.

Additionally, we and DISH and certain of our and their subsidiaries (i) entered into certain customary

agreements covering, among other things, matters relating to taxes, employees, intellectual property and the provision of transitional services; (ii) terminated certain previously existing agreements; and (iii) amended certain existing agreements and entered into certain new agreements pursuant to which we and DISH Network will obtain and provide certain products, services and rights from and to each other.

The BSS Transaction was structured in a manner intended to be tax-free to us and our stockholders for U.S. federal income tax purposes and was accounted for as a spin-off to our shareholders as we did not receive any consideration.

Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment.

As a result of the BSS Transaction, the financial results of the BSS Business, except for certain real estate that transferred in the transaction, are presented as discontinued operations and, as such, excluded from continuing operations and segment results for all periods presented in our accompanying Consolidated Financial Statements and notes thereto in Item 15 of this Form 10-K (“Accompanying Consolidated Financial Statements”).

*The Accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).

All amounts reference results from continuing operations unless otherwise noted and are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted.

Additionally, certain prior period amounts have been adjusted to conform to the current period presentation.*

us to increase our existing market share, increase our satellite capacity, expand into new markets and new customers, broaden our portfolio of services, products and intellectual property and strengthen our relationships with our customers.

For example, our joint ventures with Al Yah Satellite Communications Company PrJSC (“Yahsat”) enable us to provide satellite broadband services across Africa, the Middle East and southwest Asia and expand our broadband internet services and enterprise solutions in Brazil.

Continue development of S-band and other hybrid spectrum resources. We intend to continue to explore the development and deployment of S-band technologies that we expect will reduce the cost of satellite communications for internet of things, machine-to-machine communications, public protection, disaster relief and other end-to-end services worldwide and the integration of our products and services into new global, hybrid networks that leverage multiple satellites and terrestrial technologies.

We believe we remain in a unique position to deploy a mobile satellite service (“MSS”)/complementary ground component (“CGC”) network in the European Union and its member states (“EU”) through our EchoStar XXI satellite, which was placed into service in November 2017, and the EUTELSAT 10A (“W2A”) payload.

We have further aligned ourselves to continue to develop the S-band spectrum globally by acquiring Sirion Global Pty Ltd., which we have renamed EchoStar Global Australia Pty Ltd (“EchoStar Global”), which holds global S-band non-geostationary satellite spectrum rights for MSS, and entering into a contract with Tyvak Nano-Satellite Systems, Inc. for the design and construction of S-band nano-satellites, with expected launches in the first half of 2020.

In addition, in November 2019, we were granted an S-band spectrum license for terrestrial rights in Mexico.

Growth of our consumer subscriber base continues to be constrained in areas where we are nearing or have reached maximum capacity.

While these constraints are expected to be resolved when we launch new satellites, we continue to focus on revenue growth in all areas and consumer subscriber growth in the areas where we have available capacity.

In May 2019, we entered into an agreement with Al Yah Satellite Communications Company PrJSC (“Yahsat”) pursuant to which, in November 2019, Yahsat contributed its satellite communications services business in Brazil to us in

exchange for a 20% ownership interest in our existing Brazilian subsidiary that conducts our satellite communications services business in Brazil.

The combined business provides broadband internet services and enterprise solutions in Brazil using the Telesat T19V satellite, the Eutelsat 65W satellite and Yahsat’s Al Yah 3 satellite.

Under the terms of the agreement, Yahsat may also acquire, for further cash investments, additional minority ownership interests in the business in the future provided certain conditions are met.

In May 2019, we also entered into an agreement with Bharti Airtel Limited (“BAL”) and its subsidiary, Bharti Airtel Services Limited (together with BAL, “Bharti”), pursuant to which Bharti will contribute its very small aperture terminal (“VSAT”) telecommunications services and hardware business in India to our two existing Indian subsidiaries that conduct our VSAT services and hardware business.

The combined entities will provide broadband satellite and hybrid solutions for enterprise networks.

Upon consummation of the transaction, Bharti will have a 33% ownership interest in the combined business.

The completion of the transaction is subject to customary regulatory approvals and closing conditions.

No assurance can be given that the transaction will be consummated on the terms agreed to or at all.

In March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”).

Pursuant to the Hughes Broadband MSA, DISH Network, among other things, (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our HughesNet service and related equipment and other telecommunication services; and (ii) installs HughesNet service equipment with respect to activations generated by DISH Network.

As a result of the Hughes Broadband MSA, we have not earned, and do not expect to earn in the future, significant equipment revenue from our distribution agreement with DISH Network.

We expect churn in the existing wholesale subscribers to continue to reduce *Services and other revenue* in the future.

ViaSat has also announced plans to enter the South and Central American consumer markets.

We operate our ESS business using primarily the EchoStar IX satellite and the EchoStar 105/SES-11 satellite and related infrastructure.

| Al Yah 3 (2) | | Hughes | | January 2018 | | 20 W | | 7 |

| | | | | | | | | |

| Finance leases: | | | | | | | | |

(2) Upon consummation of our joint venture with Yahsat in Brazil in November 2019, we acquired the Brazilian Ka-band payload on this satellite.

We also continued to increase our satellite capacity in certain Central and South American countries and added capability for aeronautical, enterprise and international broadband internet services.

For example, our current agreement with WorldVu Satellites Limited (“OneWeb”), a global LEO satellite service company, enables us to provide certain equipment and services in connection with the ground network system for OneWeb’s LEO satellites.

Continue development of S-band and other hybrid spectrum resources. Commercial service has been available to customers on our EchoStar XXI satellite since the fourth quarter of 2017, and we believe we 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.

Additionally, we intend to seek additional licenses in the S-band spectrum and opportunities to align ourselves with other licensees for a coordinated development of the spectrum.

We also intend to continue to explore development of S-band similar spectrum assets in additional international markets.

Service costs related

In December 2016, we launched our EchoStar XIX satellite, a high throughput geostationary satellite employing a multi-spot beam, bent pipe Ka-band architecture, which provides capacity for the Hughes broadband services to our current and future customers in North America and certain Central and South American countries and our aeronautical and enterprise broadband services.

Until new satellite launches or acquisitions provide additional capacity for subscriber growth, we manage subscriber growth across our existing satellite platform.

The Federal Communications Commission (“FCC”) granted authorization to construct, deploy and operate the EchoStar XXIV satellite.

In the second half of 2018, Maxar Technologies Inc. (“Maxar”), the parent company of Space Systems/Loral (“SSL”), the manufacturer of our EchoStar XXIV satellite, announced that it was reviewing strategic alternatives for its geostationary communications satellite business to improve its financial performance and that it was in active discussions with potential buyers of the business.

SSL has indicated to us that it intends to meet its contractual obligations regarding the timely manufacture and delivery of the EchoStar XXIV satellite.

In April 2014, we entered into a 15-year agreement with Eutelsat do Brasil for Ka-band capacity into Brazil on the EUTELSAT 65 West A satellite, which was launched in March 2016.

We began delivering high-speed consumer satellite broadband services in Brazil in July 2016.

As of December 31, 2018, 2017 and 2016, we had approximately 1,361,000, 1,208,000 and 1,036,000 broadband subscribers, respectively.

These broadband subscribers include customers that subscribe to our HughesNet services in North, Central and South America through retail, wholesale and small/medium enterprise service channels.

As of December 31, 2018 and 2017, our Hughes segment had approximately $1.4 billion and $1.6 billion, respectively, of contracted revenue backlog.

We define Hughes contracted revenue backlog as our expected future revenue, including lease revenue, under customer contracts that are non-cancelable, excluding agreements with customers in our consumer market.

Of the total contracted revenue backlog as of December 31, 2018, we expect to recognize approximately $430 million of revenue in 2019.

Our ESS segment is a global provider of satellite operations and satellite services.

We operate our business using our owned and leased in-orbit satellites and related licenses.

We are also pursuing other opportunities such as providing value added services such as telemetry, tracking and control services to third parties, which leverage the ground monitoring networks and personnel currently within our ESS segment.

For the years ended December 31, 2018, 2017 and 2016 DISH Network accounted for 86.5%, 87.9% and 85.7% of our total ESS segment revenue, and we expect that DISH Network will continue to be the primary source of revenue for our ESS segment as we have entered into certain commercial agreements with DISH Network pursuant to which we provide DISH Network with satellite services at fixed prices for varying lengths of time depending on the satellite.

Therefore, the results of operations of our ESS segment are linked to changes in DISH Network’s satellite capacity requirements, which historically have been driven by the addition of new channels and migration of programming to high-definition television and video on demand services.

DISH Network’s future satellite capacity requirements may change for a variety of reasons, including its ability to construct and launch or acquire its own satellites, to continue to add new channels and/or to migrate to the provision of such channels and other video on demand services through streaming and other alternative technologies.

There is no assurance that we will continue to provide satellite services to DISH Network beyond the terms of our agreements.

Any termination or reduction in the satellite services we provide to DISH Network would cause us to have unused capacity on our satellites and require that we aggressively pursue alternative sources of revenue for this business.

The agreement with DISH Network to lease satellite capacity on the EchoStar VII satellite expired in June 2018.

As a result, we expect a $43 million annualized decrease in our revenue.

We are exploring other opportunities to utilize this satellite in the future.

See Note 20 in the notes to consolidated financial statements in Item 15 of this Form 10-K for further discussion of our related party transactions with DISH Network.

At each of December 31, 2018 and 2017, our ESS segment had contracted revenue backlog of approximately $832 million and $1.2 billion, respectively.

We define contracted revenue backlog for our ESS segment as contracted future satellite lease revenue.

Of the total contracted revenue backlog as of December 31, 2018, we expect to recognize approximately $288 million of revenue in 2019.

more valuable, align us for future growth and expansion, maximize the return on our investments and strengthen our business and relationships with our customers.

In December 2013, we acquired an entity based in Dublin, Ireland, which we subsequently renamed EchoStar Mobile Limited (“EML”).

EML is licensed by the European Union and its member states (“EU”) to provide MSS and CGC services covering the entire EU using S-band spectrum.

Our EchoStar XXI satellite, which provides space segment capacity to EML in the EU, was launched in June 2017 and placed into service in November 2017.

Commercial service has been available on our EchoStar XXI satellite since the fourth quarter of 2017.

EML is focused on expanding its MSS operations in the EU through development of innovative mobile and machine-to-machine products and services.

We believe we are in a unique position to deploy a European wide MSS and CGC network and maximize the long-term value of our S-band spectrum in Europe and other regions within the scope of our licenses.

For a discussion of legal proceedings, see Note [removed: 17] [added: 20] in [removed: the notes to] our [removed: accompanying] [added: Accompanying] Consolidated Financial [removed: Statements in Item 15 of this Annual Report on Form 10-K.][added: Statements.]

[removed: ý ANNUAL] [added: ☒ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, [removed: 2018.][added: 2019.]

[removed: o TRANSITION] [added: ☐TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO .

Commission File [removed: Number: 001-33807][added: Number: 001-33807]

| Nevada | | [added: | |] 26-1232727 |

| (State or other jurisdiction of incorporation or organization) | | [added: | |] (I.R.S. Employer Identification No.) |

| 100 Inverness Terrace [removed: East, Englewood, Colorado] [added: East,] | [added: Englewood,] | [added: Colorado | |] 80112-5308 |

| (Address of principal executive offices) | | [added: | |] (Zip Code) |

[added: |] Securities registered pursuant to Section 12(b) of the Act: [added: | | | | |]

| [removed: Title] [added: (Title] of each [removed: class] [added: class)] | | [removed: Name] [added: | | (Name] of each exchange on which [removed: registered] [added: registered)] |

| [removed: Class] [added: Class] A common [removed: stock, $0.001] [added: stock | $0.001] par [removed: value] [added: value] | | [removed: The] [added: | The] NASDAQ Stock Market [removed: LLC] [added: LLC] |

Yes [removed: ý] [added: ☒] No [removed: o][added: ☐]

Yes [removed: o] [added: ☐] No [removed: ý][added: ☒]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such [removed: reports),] [added: reports)] and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T [removed: (§232.405 of this chapter)] during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

| Large accelerated filer [removed: x] | [added: ☒] | Accelerated filer [removed: o] | [added: ☐] | [removed: Non-accelerated filer o] [added: Emerging growth company] | [added: ☐ |]

As of June 30, [removed: 2018,] [added: 2019,] the aggregate market value of Class A common stock held by non-affiliates of the registrant was $2.1 billion based upon the closing price of the Class A common stock as reported on the [removed: Nasdaq] [added: NASDAQ] Global Select Market as of the close of business on that date.

As of February [removed: 11, 2019,] [added: 10, 2020,] the registrant’s outstanding common stock consisted of [removed: 47,658,409] [added: 50,115,719] 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: 2019] [added: 2020] Annual Meeting of Shareholders are incorporated by reference in Part III.

| [Disclosure Regarding Forward Looking [removed: Statements](#sB057AFAEC3DC55149D72C26425569DAC)] [added: Statements](#sA3149AF7298A515B8AF75CE8BE98802F)] | | [removed: i] [added: [i](#sA3149AF7298A515B8AF75CE8BE98802F)] |

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| | [PART [removed: III](#s511DEA38CD575BB3B607ECA2111950F3)] [added: III](#s1DE5DFA5024853DCACA2A5AA221E2CBF)] | |

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| | | | | |

| | | | | |

| (303) | 706-4000 | | | Not Applicable |

| (Registrant’s telephone number, including area code) | | | | (Former name, former address and former fiscal year, if changed since last report) |

| | | | | |

| SATS | | | | |

| (Ticker symbol) | | | | |

Yes ☒ No ☐

Yes ☒ No ☐

| | | | | | |

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

| | | | | | |

| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | | |

Yes ☐ No ☒

| | [PART I](#s655703FA1483558C9584DB514367636E) | |

| | [PART II](#s831C2A5F640F59188A8A50FC1411ED04) | |

| | [PART IV](#sC4A509379B0E5D978B0B5226FF343A9E) | |

| | [Signatures](#sE3494408A27C51C7ACBABBF4D8752E27) | [74](#sE3494408A27C51C7ACBABBF4D8752E27) |

| • | lawsuits relating to the BSS Transaction could result in substantial costs; |

| | | |

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

Registrant’s telephone number, including area code: (303) 706-4000

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

| Smaller reporting company o | | Emerging growth company o | | |

The following documents are incorporated into this Form 10-K by reference:

| | [PART I](#sEC37B86081CB541A90081AF6607F66EA) | |

| | [PART II](#sAAF6E9EA3FAA50ADBF92BAE4FAE8EF7E) | |

| | [PART IV](#s3C71B906103E5F4EB3636F041BB951D3) | |

| | [Signatures](#s5A1B7DA38B355964BB513566FFDF8FB4) | [76](#s5A1B7DA38B355964BB513566FFDF8FB4) |

| • | our reliance on DISH Network Corporation and its subsidiaries for a significant portion of our revenue; |

The following table sets forth certain information concerning our principal properties related to our Hughes segment (“Hughes”) and EchoStar Satellite Services segment (“ESS”) and to our other operations and administrative functions [removed: (“Other”)] [added: (“Corporate and Other”)] as of December 31, [removed: 2018.][added: 2019.]

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

| San Diego, California | | Hughes | | [removed: Leased | |] Engineering and sales offices |

| Englewood, Colorado [removed: (1)(4)] | | Hughes | | [removed: Leased | |] Gateways [added: and equipment] |

| Gaithersburg, Maryland | | Hughes | | [removed: Leased | |] Manufacturing and testing [removed: facilities, engineering] [added: facilities] and logistics [removed: and administrative] offices |

| Southfield, Michigan [removed: (1)] | | Hughes | | [removed: Leased | |] Shared hub and regional network management center |

| Las Vegas, Nevada [removed: (1)] | | Hughes | | [removed: Leased | |] Shared hub, antennae yards, gateway, backup network operation and control center for Hughes corporate headquarters |

| Sao Paulo, Brazil | | Hughes | | [removed: Leased | |] Hughes Brazil corporate headquarters, sales offices and warehouse |

| Bangalore, India [removed: (2)] | | Hughes | | [removed: Leased | |] Engineering office and office space |

| Gurgaon, India [removed: (1)(2)] | | Hughes | | [removed: Leased | |] Administrative offices, shared hub, operations, warehouse, and development center |

| New Delhi, India | | Hughes | | [removed: Leased | |] Hughes India corporate headquarters |

| Milton Keynes, United Kingdom [removed: (3)] | | Hughes | | [removed: Leased | |] Hughes Europe corporate headquarters and operations |

| Germantown, Maryland [removed: (1)] | | Hughes | | [removed: Owned | |] Hughes corporate headquarters, engineering offices, network operations and shared hubs |

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

| Cheyenne, Wyoming [removed: (1)] | | Hughes/ESS | | [removed: Leased | | Spacecraft operations center, satellite] [added: Satellite] access [removed: center] [added: center, gateways] and [removed: gateway] [added: equipment] |

| Barueri, Brazil [removed: (1)] | | [removed: Hughes/Other | | Leased] [added: Hughes/Corporate and Other] | | Shared hub, warehouse, operations center and spacecraft operations center |

| Englewood, Colorado | | [removed: ESS/Other | | Owned] [added: ESS/Corporate and Other] | | Corporate [removed: headquarters,] [added: headquarters and] engineering offices |

| | | | | |

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

| | | | | |

| | | | | |

| Owned: | | | | |

| | | | | |

| Leased: | | | | |

| Gilbert, Arizona | | Hughes | | Gateways |

| Gaithersburg, Maryland | | Hughes | | Engineering and administrative offices |

| | | | | | | |

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

| American Fork, Utah | | Hughes | | Leased | | Office space, engineering offices |

| Gilbert, Arizona (1) | | Hughes/ESS | | Leased | | Spacecraft operations center, satellite access center and gateway |

| Black Hawk, South Dakota (1) | | ESS | | Owned | | Spacecraft auto-track operations center |

| Campinas, Brazil | | Other | | Leased | | Uplink facility |

| Cheyenne, Wyoming | | Other | | Owned | | Data Center |

_______________________________________________________

| | |

| --- | --- |

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

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

| (3) | We also have multiple gateways throughout the European Union that support the EchoStar XXI satellite. |

| (4) | We have multiple gateways throughout the Western part of the United States, Mexico and Canada that support the SPACEWAY 3, EchoStar XVII and EchoStar XIX satellites. |

Holders. As of February [removed: 11, 2019,] [added: 10, 2020,] there were [removed: approximately 8,086] [added: 50,115,719 shares of our Class A common stock outstanding held by 7,907] 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: 11, 2019,] [added: 10, 2020,] there were 47,687,039 shares [removed: outstanding] of our Class B common stock [added: outstanding,] of which [removed: 5,895,972] [added: 1,348,249] shares were held by Charles W.

Ergen, our Chairman and [removed: 41,791,067] [added: 46,338,790] shares were held in trusts and entities established for the benefit of Mr. Ergen’s family.

[removed: —] Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources in this [removed: Annual Report on] Form 10-K.

[removed: —] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters in this [removed: Annual Report on] Form 10-K.

[removed: Pursuant to a stock repurchase program approved by our board] [added: Our Board] of [removed: directors, we are] [added: Directors previously] authorized [removed: to repurchase] [added: stock repurchases of] up to [removed: $500] [added: $500.0] million of our Class A common stock through [added: and including] December 31, 2019.

During the year ended December 31, [removed: 2017,] [added: 2019,] we did not repurchase any common stock under this program.

[removed: (1)] On October [removed: 30, 2018,] [added: 29, 2019,] our Board of Directors [removed: extended our] [added: terminated its prior] authorization [added: and authorized us] to repurchase [added: under this authorization] up to [removed: $500] [added: $500.0] million of our Class A common stock through and including December 31, [removed: 2019.][added: 2020.]

The following table provides information regarding repurchases of our Class A common stock during the year ended December 31, 2018.

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

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

| Period | | Total Number of Shares (or Units) Purchased | | | Average Price Paid Per Share (Or Unit) | | | | Total Number of Shares (or Units) Purchased As Part of Publicly Announced Plans or Program | | | Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under The Plans or Program (1) | | |

| | | (Dollars in thousands, except per share amounts and per unit amounts) | | | | | | | | | | | | |

| October 1 - 31 | | — | | | $ | — | | | | | | $ | 500,000 | |

| November 1 - 30 | | 848,863 | | | $ | 35.00 | | | 848,863 | | | $ | 470,292 | |

| December 1 - 31 | | 103,740 | | | $ | 34.54 | | | 103,740 | | | $ | 466,708 | |

| Total | | 952,603 | | | $ | 34.95 | | | 952,603 | | | $ | 466,708 | |

All shares repurchased reflected in the table above have been converted to treasury shares.

The [removed: selected] [added: following management’s discussion and analysis of our] financial [removed: data] [added: condition and results of operations] should be read in conjunction with our [removed: accompanying] [added: Accompanying] Consolidated Financial Statements and [removed: related] notes [removed: thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Form 10-K.][added: thereto.]

| Statements of Operations Data: | | [removed: 2018] [added: 2019] | | | | [removed: 2017(1)] [added: 2018] | | | | [removed: 2016] [added: 2017(1)] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Net income (loss) from continuing operations [added: attributable] to EchoStar common stock | | $ | [removed: (40,475] [added: (102,318] | ) | | $ | [removed: 385,261] [added: (134,204] | [added: )] | | $ | [removed: 137,353] [added: 123,188] | | | $ | [removed: 102,421] [added: 43,886] | | | $ | [removed: 73,151] [added: 59,189] | |

| Balance Sheet Data: | | [removed: 2018] [added: 2019] | | | | [removed: 2017(1)] [added: 2018] | | | | [removed: 2016] [added: 2017(1)] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Cash, cash equivalents and current marketable [added: investments] securities | | $ | [removed: 3,210,458] [added: 2,460,054] | | | $ | [removed: 3,245,617] [added: 3,210,458] | | | $ | [removed: 3,092,881] [added: 3,245,617] | | | $ | [removed: 1,527,883] [added: 3,092,881] | | | $ | [removed: 1,669,590] [added: 1,527,883] | |

| Total assets [removed: (4)] | | $ | [removed: 8,661,294] [added: 7,154,298] | | | $ | [removed: 8,750,014] [added: 8,661,294] | | | $ | [removed: 9,008,859] [added: 8,750,014] | | | $ | [removed: 6,572,463] [added: 9,008,859] | | | $ | [removed: 6,601,292] [added: 6,572,463] | |

| Total stockholders’ equity | | $ | [removed: 4,155,474] [added: 3,745,553] | | | $ | [removed: 4,177,385] [added: 4,155,474] | | | $ | [removed: 4,006,805] [added: 4,177,385] | | | $ | [removed: 3,781,642] [added: 4,006,805] | | | $ | [removed: 3,623,638] [added: 3,781,642] | |

| Cash Flow Data: | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Operating activities | | $ | [removed: 734,522] [added: 656,322] | | | $ | [removed: 726,892] [added: 734,522] | | | $ | [removed: 803,343] [added: 726,892] | | | $ | [removed: 776,451] [added: 803,343] | | | $ | [removed: 840,131] [added: 776,451] | |

| Investing activities | | $ | [removed: (2,098,480] [added: 821,958] | [removed: )] | | $ | [removed: (867,932] [added: (2,098,480] | ) | | $ | [removed: (632,199] [added: (867,932] | ) | | $ | [removed: (275,311] [added: (632,199] | ) | | $ | [removed: (887,590] [added: (275,311] | ) |

| Financing activities | | $ | [removed: (136,563] [added: (885,311] | ) | | $ | [removed: 72] [added: (136,563] | [added: )] | | $ | [removed: 1,475,689] [added: 72] | | | $ | [removed: (120,257] [added: 1,475,689] | [removed: )] | | $ | [removed: (35,096] [added: (120,257] | ) |

| (1) | The [added: 2017] Tax [removed: Cuts and Jobs] Act [removed: of 2017] increased the complexity of our income tax accounting and resulted in significant adjustments to our deferred income tax accounts in 2017. As a result, our results of operations and balance sheet data for the years ended December 31, [added: 2019,] 2018 and 2017 are not comparable to our results of operations for the years ended December 31, [removed: 2016, 2015] [added: 2016] and [removed: 2014.] [added: 2015.] See Note [removed: 13] [added: 16] to our [removed: accompanying] [added: Accompanying] Consolidated Financial Statements [removed: in Item 15 of this Form 10-K] for further information. |

[removed: | (2) |] As a result of the Share Exchange, the [removed: consolidated] financial [removed: statements] [added: results] of the EchoStar Technologies businesses [removed: have been] [added: are] presented as discontinued operations and, as such, have been excluded from [removed: the selected financial data presented above] [added: continuing operations and segment results] for all periods [removed: presented. See Note] [added: presented] in [removed: the notes to] our [removed: accompanying] [added: Accompanying] Consolidated Financial [removed: Statements in Item 15 of this Form 10-K for further discussion of our discontinued operations. |][added: Statements.]

| [removed: (3)] [added: (2)] | On January 1, 2018, we adopted Topic 606, [removed: R*evenue] [added: *Revenue] from Contracts with Customers,* using the modified retrospective approach. As a result, total revenues for the year ended December 31, [added: 2019 and] 2018 may not be comparable to prior years. [removed: See Note 2 in the notes to our accompanying Consolidated Financial Statements in Item 15 of this Form 10-K for further discussion of the adoption of this standard.] |

[removed: The following management’s* *discussion] [added: Management’s Discussion] and [removed: analysis] [added: Analysis] of [removed: our financial condition and* *results] [added: Financial Condition and Results] of [removed: operations should be read in conjunction with] [added: Operations and] our [removed: accompanying] [added: Accompanying] Consolidated Financial [removed: Statements and notes thereto included elsewhere in this Annual Report on Form 10-K (“Form 10-K”).][added: Statements.]

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.

For a discussion of additional risks, uncertainties and other factors that could impact our results of operations or financial condition, see [removed: the caption Risk Factors in] Item [removed: 1A of this Form 10-K.][added: 1A.]

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

EchoStar is a global provider of broadband satellite technologies, broadband internet services for [added: consumer customers, which include] home and small [removed: office customers, satellite operations] [added: to medium-sized businesses,] and satellite services.

We also deliver innovative network technologies, managed services and [removed: various] communications solutions for [removed: aeronautical,] enterprise [added: customers, which include aeronautical] and government [removed: customers.][added: enterprises.]

Prior to March 2017, we operated in three primary business segments: Hughes, EchoStar Technologies and [removed: EchoStar Satellite Services (“ESS”).][added: ESS.]

On January 31, 2017, EchoStar Corporation and certain of our subsidiaries entered into a share exchange agreement with DISH [removed: Network Corporation (“DISH”)] and certain of its subsidiaries.

[removed: We, and certain of our subsidiaries,] [added: We] received all [removed: of] the shares of the [removed: Hughes Retail Preferred] Tracking Stock [removed: previously issued by us and one of our subsidiaries (together, the “Tracking Stock”)] in exchange for 100% of the equity interests of certain of our subsidiaries that held substantially all of our former EchoStar Technologies businesses and certain other [removed: assets (collectively, the “Share Exchange”).][added: assets.]

See Note [removed: 4] [added: 5] in [removed: the notes to] our [removed: accompanying] [added: Accompanying] Consolidated Financial Statements [removed: in Item 15 of this Form 10-K] for further discussion of our discontinued operations.

Our operations also include various corporate departments (primarily Executive, Treasury, Strategic Development, Human Resources, IT, Finance, [added: Accounting,] Real [removed: Estate, Accounting] [added: Estate] and Legal) and other activities that have not been assigned to our operating segments such as costs incurred in certain satellite development programs and other business development activities, and gains or losses from certain of our investments.

These activities, costs and income, as well as eliminations of intersegment transactions, are accounted for in [removed: Corporate] [added: *Corporate] and [removed: Other] [added: Other*] in our segment reporting.

Consolidated Results of Operations for the Year Ended December 31, [removed: 2018][added: 2019]

| • | Revenue of [removed: $2.1] [added: $1.9] billion |

| • | Operating income of [removed: $183] [added: $73.1] million |

| • | Net loss from continuing operations of [removed: $39] [added: $113.7] million |

| • | Net loss attributable to EchoStar common stock of [removed: $40] [added: $62.9] million and basic loss per share of common stock of [removed: $(0.42)] [added: $0.65] |

| • | Earnings before interest, taxes, depreciation and amortization (“EBITDA”) of [removed: $757] [added: $577.6] million (see reconciliation of this non-GAAP measure [removed: on page 48)] [added: in Results of Operations)] |

Consolidated Financial Condition as of December 31, [removed: 2018][added: 2019]

| • | Total assets of [removed: $8.7] [added: $7.2] billion |

| • | Total liabilities of [removed: $4.5] [added: $3.4] billion |

| • | Total stockholders’ equity of [removed: $4.2] [added: $3.7] billion |

| • | Cash, cash equivalents and current marketable investment securities of [removed: $3.2] [added: $2.5] billion |

Our Hughes segment is a global provider of broadband satellite technologies and broadband internet services to [removed: home and small office] [added: consumer] customers and broadband network technologies, managed services, equipment, hardware, satellite services and communications solutions to [removed: consumers, aeronautical, enterprise] [added: consumer] and [removed: government] [added: enterprise] customers.

The growth of our enterprise [removed: businesses, including aeronautical,] [added: businesses] relies heavily on global economic conditions and the competitive landscape for pricing relative to competitors and alternative technologies.

The selected financial data should be read in conjunction with Item 7.

| Total revenue (2) (3) | | $ | 1,886,081 | | | $ | 1,762,638 | | | $ | 1,525,155 | | | $ | 1,447,223 | | | $ | 1,485,942 | |

| Total costs and expenses | | 1,813,004 | | | | 1,726,501 | | | | 1,494,593 | | | | 1,325,364 | | | | 1,380,939 | | |

| Operating income (loss) | | $ | 73,077 | | | $ | 36,137 | | | $ | 30,562 | | | $ | 121,859 | | | $ | 105,003 | |

| Basic earnings (losses) per share - continuing operations | | $ | (1.06 | ) | | $ | (1.39 | ) | | $ | 1.29 | | | $ | 0.47 | | | $ | 0.64 | |

| Diluted earnings (losses) per share - continuing operations | | $ | (1.06 | ) | | $ | (1.39 | ) | | $ | 1.27 | | | $ | 0.46 | | | $ | 0.63 | |

| Total debt and finance lease obligations | | $ | 2,390,219 | | | $ | 3,305,784 | | | $ | 3,371,961 | | | $ | 3,360,387 | | | $ | 1,861,384 | |

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

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

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

| (3) | On January 1, 2019, we adopted Topic 842, *Leases,* using the modified retrospective approach. As a result, total revenues for the year ended December 31, 2019 may not be comparable to prior years. |

Risk Factors of this Form 10-K.

In May 2019, we and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction.

Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) we transferred the BSS Business to BSS Corp.; (ii) we completed the Distribution and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.23523769 shares of DISH Common Stock.

In connection with the BSS Transaction, we and DISH Network agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively.

Additionally, we and DISH and certain of our and their subsidiaries (i) entered into certain customary agreements covering, among other things, matters relating to taxes, employees, intellectual property and the provision of transitional services; (ii) terminated certain previously existing agreements; and (iii) amended certain existing agreements and entered into certain new agreements pursuant to which we and DISH Network will obtain and provide certain products, services and rights from and to each other.

The BSS Transaction was structured in a manner intended to be tax-free to us and our stockholders for U.S. federal income tax purposes and was accounted for as a spin-off to our shareholders as we did not receive any consideration.

Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment.

As a result of the BSS Transaction, the financial results of the BSS Business, except for certain real estate that transferred in the transaction, are presented as discontinued operations and, as such, excluded from continuing operations and segment results for all periods presented in our Accompanying Consolidated Financial Statements.

from third-party providers to provide services to our customers.

Growth of our consumer subscriber base continues to be constrained in areas where we are nearing or have reached maximum capacity.

While these constraints are expected to be resolved when we launch new satellites, we continue to focus on revenue growth in all areas and consumer subscriber growth in the areas where we have available capacity.

In May 2019, we entered into an agreement with Yahsat pursuant to which, in November 2019, Yahsat contributed its satellite communications services business in Brazil to us in exchange for a 20% ownership interest in our existing Brazilian subsidiary that conducts our satellite communications services business in Brazil.

The combined business provides broadband internet services and enterprise solutions in Brazil using the Telesat T19V satellite, the Eutelsat 65W satellite and Yahsat’s Al Yah 3 satellite.

Under the terms of the agreement, Yahsat may also acquire, for further cash investments, additional minority ownership interests in the business in the future provided certain conditions are met.

In May 2019, we also entered into an agreement with Bharti, pursuant to which Bharti will contribute its VSAT telecommunications services and hardware business in India to our two existing Indian subsidiaries that conduct our VSAT services and hardware business.

The combined entities will provide broadband satellite and hybrid solutions for enterprise networks.

Upon consummation of the transaction, Bharti will have a 33% ownership interest in the combined business.

The completion of the transaction is subject to customary regulatory approvals and closing conditions.

No assurance can be given that the transaction will be consummated on the terms agreed to or at all.

We continue our efforts to expand our consumer satellite services business outside of the U.S. We have been delivering high-speed consumer satellite broadband services in Brazil since July 2016 and are also providing satellite broadband internet service in several other Central and South American countries.

Our approximate subscriber numbers as of December 31, 2019, 2018 and 2017 are as follows:

| | | | | | | | | | |

As of December 31, 2019, approximately 237,000 of our subscribers were in South and Central America.

During the fourth quarter of 2019, we acquired approximately 20,000 new subscribers in connection with the consummation of our joint venture with Yahsat in Brazil (the “Acquired Subscribers”).

The approximate subscriber net additions for each quarter in 2019 are as follows:

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

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

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

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

The accompanying consolidated financial statements for 2018 included in our accompanying Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K (“Form 10-K”) have been prepared in accordance with generally accepted accounting principles in the United States.

Certain prior period amounts have been adjusted to conform to the current period presentation.

See Notes 1, 4 and 20 in the notes to consolidated financial statements in Item 15 of this Form 10-K for further discussion of the Share Exchange transaction.

| | | (In thousands, except per share amounts) | | | | | | | | | | | | | | | | | | |

| Total revenue (2, 3) | | $ | 2,091,363 | | | $ | 1,885,508 | | | $ | 1,810,466 | | | $ | 1,848,857 | | | $ | 1,822,238 | |

| Total costs and expenses (2) | | 1,908,120 | | | | 1,689,201 | | | | 1,514,303 | | | | 1,575,092 | | | | 1,611,678 | | |

| Operating income (2) | | $ | 183,243 | | | $ | 196,307 | | | $ | 296,163 | | | $ | 273,765 | | | $ | 210,560 | |

| Basic earnings per share - continuing operations | | $ | (0.42 | ) | | $ | 4.04 | | | $ | 1.46 | | | $ | 1.11 | | | $ | 0.80 | |

| Diluted earnings per share - continuing operations | | $ | (0.42 | ) | | $ | 3.98 | | | $ | 1.45 | | | $ | 1.10 | | | $ | 0.79 | |

| | | (In thousands) | | | | | | | | | | | | | | | | | | |

| Total debt and capital lease obligations | | $ | 3,532,781 | | | $ | 3,634,844 | | | $ | 3,655,447 | | | $ | 2,185,272 | | | $ | 2,326,143 | |

(4) In 2015, we prospectively adopted *Accounting Standard Update No. 2015-17, Balance Sheet Classification of Deferred Taxes*.

As a result, our total assets as of December 31, 2018, 2017, 2016 and 2015 are not comparable to our total assets as reported in prior years.

ITEM 7.

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

References to “$” are to United States (“U.S.”) dollars.

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

In December 2016, we launched our EchoStar XIX satellite, a high throughput geostationary satellite employing a multi-spot beam, bent pipe Ka-band architecture, which provides capacity for the Hughes broadband services to our current and future customers in North America and certain Central and South American countries and our aeronautical and enterprise broadband services.

Until new satellite launches or acquisitions provide additional capacity for subscriber growth, we manage subscriber growth across our existing satellite platform.

In March 2018, the Federal Communications Commission (“FCC”) granted authorization to construct, deploy and operate the EchoStar XXIV satellite.

In the second half of 2018, Maxar Technologies Inc. (“Maxar”), the parent company of Space Systems/Loral (“SSL”), the manufacturer of our EchoStar XXIV satellite, announced that it was reviewing strategic alternatives for its geostationary communications satellite business to improve its financial performance and that it was in active discussions with potential buyers of the business.

SSL has indicated to us that it intends to meet its contractual obligations regarding

the timely manufacture and delivery of the EchoStar XXIV satellite.

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

In June 2015, we made an equity investment in WorldVu Satellites Limited (“OneWeb”), a global LEO satellite service company.

The investment is reflected in Corporate and Other.

In addition, we have an agreement with OneWeb to provide certain equipment and services in connection with the ground network system for OneWeb’s LEO satellites.

We expect to continue delivering additional equipment and services to OneWeb.

We continue our efforts to expand our consumer satellite services business outside of the U.S. In April 2014, we entered into a 15-year agreement with Eutelsat do Brasil for Ka-band capacity into Brazil on the EUTELSAT 65 West A satellite, which was launched in March 2016.

We began delivering high-speed consumer satellite broadband services in Brazil in July 2016.

We currently provide satellite broadband internet service in several Central and South American countries, and expect to continue to launch similar services in other Central and South American countries.

Our subscriber metrics as of December 31, 2018 and for the quarter then ended are as follows were:

| | | | | | | |

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

Our total gross subscriber additions for the fourth quarter of 2018 decreased by approximately 7,000 compared to the third quarter of 2018 primarily due to reduced satellite capacity available for sale.

Our total net subscriber additions for the quarter ended December 31, 2018 decreased by approximately 4,000 compared to the quarter ended September 30, 2018 primarily due to lower gross consumer subscriber additions, partially offset by a lower average monthly subscriber churn percentage.

As of December 31, 2018 and 2017, our Hughes segment had The decrease in our contracted revenue backlog reflects our recognition of revenue in excess of additions to backlog resulting from new orders from our customers.

Of tapproximately $1.4 billion The decrease in our contracted revenue backlog reflects our recognition of revenue in excess of additions to backlog resulting from new orders from our customers.

anThe decrease in our contracted revenue backlog reflects our recognition of revenue in excess of additions to backlog resulting from new orders from our customers.

Of the total contracted rd $1.6 billion, respectively, of contracted revenue backlog.

Our [removed: accompanying] [added: Accompanying] Consolidated Financial Statements are included in Item 15 of this [removed: Annual Report on] Form [removed: 10-K beginning on page F-4.][added: 10-K.]

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this [removed: Annual Report on] Form [removed: 10-K (“Form 10-K).][added: 10-K.]

[removed: There] [added: Except as noted above, there] has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during the three months ended December 31, [removed: 2018] [added: 2019] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, [removed: 2018.][added: 2019.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2018] [added: 2019] 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 Form 10-K.

In November 2019, we consummated our joint venture with Yahsat in Brazil.

As a result of the transaction, we are reviewing the internal controls of the business we acquired from Yahsat in the transaction and we may make appropriate changes as deemed necessary.

Management’s assessment of our internal control over financial reporting did not include the internal controls of the business we acquired from Yahsat in Brazil in November 2019.

The amount of total assets and revenue acquired that is included in our Accompanying Consolidated Financial Statements as of and for the year ended December 31, 2019 was $108.6 million and $0.8 million, respectively.

On February [removed: 21, 2019,] [added: 20, 2020,] we issued a press release (the “Press Release”) announcing our financial results for the quarter and year ended December 31, [removed: 2018.][added: 2019 and a supplemental investor information presentation (the “Presentation”) providing unaudited pro forma financial information.]

A copy of the Press Release [removed: is] [added: and Presentation are] furnished herewith as Exhibit [removed: 99.1.][added: 99.1 and Exhibit 99.2, respectively.]

Financial Results

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: 2019] [added: 2020] Annual Meeting of Shareholders, which will be filed no later than 120 days after December 31, [removed: 2018,] [added: 2019,] 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 [removed: on pages 12-13] [added: in Part I] of this [removed: Annual Report on] Form 10-K under the caption [removed: “Executive Officers of the Registrant.”][added: Item 1.]

The information required by this Item with respect to our code of ethics is contained in Part I of this [removed: Annual Report on] Form 10-K under the caption [removed: “Item] [added: Item] 1.

[removed: —] Business — Website [removed: Access.”][added: Access.]

Business — Information about our Executive Officers.

The information required by this Item will be set forth in our Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Shareholders, which will be filed no later than 120 days after December 31, [removed: 2018,] [added: 2019,] under the caption “Executive Compensation and Other Information,” which information is hereby incorporated herein by reference.

| | |

| --- | --- |

| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |

The information required by this Item will be set forth in our Proxy Statement for the 2020 Annual Meeting of Shareholders, which will be filed no later than 120 days after December 31, 2019, 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: 2019] [added: 2020] Annual Meeting of Shareholders, which will be filed no later than 120 days after December 31, [removed: 2018,] [added: 2019,] 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: 2019] [added: 2020] Annual Meeting of Shareholders, which will be filed no later than 120 days after December 31, [removed: 2018,] [added: 2019,] under the caption “Principal Accountant Fees and Services,” which information is hereby incorporated herein by reference.

| [Index to Consolidated Financial [removed: Statements](#s7308964E7A395C9EA3BD100545137EDC)] [added: Statements](#s02ECDB05CF69517783249936449EC63A)] | [removed: [F-1](#s7308964E7A395C9EA3BD100545137EDC)] [added: [F-1](#s02ECDB05CF69517783249936449EC63A)] |

| [Report of Independent Registered Public Accounting [removed: Firm](#s6D18D5600E76557E9ACE57FAEA7D9F94)] [added: Firm](#s01AA84FBB39D5C0DBF6829F7FF2325B3)] | [removed: [F-2](#s6D18D5600E76557E9ACE57FAEA7D9F94)] [added: [F-2](#s01AA84FBB39D5C0DBF6829F7FF2325B3)] |

| [Consolidated Balance Sheets as of December 31, [removed: 2018] [added: 2019] and [removed: 2017](#s43853B22C2D759009FE3CF485230FB3B)] [added: 2018](#s36C80E8AF1B45902BCA77B863424F9DB)] | [removed: [F-4](#s43853B22C2D759009FE3CF485230FB3B)] [added: [F-5](#s36C80E8AF1B45902BCA77B863424F9DB)] |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#s5ACD389C7F2856D9AF22866435FEB822)] [added: 2017](#sFE9BC90CDC845D1CB8E2A58F3329EE32)] | [removed: [F-5](#s5ACD389C7F2856D9AF22866435FEB822)] [added: [F-7](#sFE9BC90CDC845D1CB8E2A58F3329EE32)] |

| [Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#s68FF3FA03EEA5F4DA4F00AF21273B110)] [added: 2017](#s5C42E6B6F2E551979002C00F45B35A20)] | [removed: [F-6](#s68FF3FA03EEA5F4DA4F00AF21273B110)] [added: [F-8](#s5C42E6B6F2E551979002C00F45B35A20)] |

| [Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#sF5046B08F0665F058FAF191837514316)] [added: 2017](#s3BD8BBC25E295570885FFB9EF1E4C1ED)] | [removed: [F-7](#sF5046B08F0665F058FAF191837514316)] [added: [F-9](#s3BD8BBC25E295570885FFB9EF1E4C1ED)] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#sE65C9040D3285381A792437291EA4E18)] [added: 2017](#s86CB97C1565B5DF7B5BBADC50AE94186)] | [removed: [F-8](#sE65C9040D3285381A792437291EA4E18)] [added: [F-10](#s86CB97C1565B5DF7B5BBADC50AE94186)] |

| [Notes to Consolidated Financial [removed: Statements](#s615870B8F3E45D9A8AE40E4E1E0EBC9C)] [added: Statements](#sEC4045F595B95EF09D9FB7064A25FA34)] | [removed: [F-9](#s615870B8F3E45D9A8AE40E4E1E0EBC9C)] [added: [F-12](#sEC4045F595B95EF09D9FB7064A25FA34)] |

[removed: (3)] [added: (2)] Exhibits

| [removed: [4.2*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d1.htm)] [added: [4.2*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d2.htm)] | | [Indenture relating to the EH Holding Corporation (currently known as Hughes Satellite Systems Corporation) [removed: 6 1/2%] [added: 7 5/8%] Senior [removed: Secured] [added: Unsecured] Notes due [removed: 2019,] [added: 2021,] dated as of June 1, 2011, by and among EH Holding Corporation, the guarantors listed on the signature page thereto, and Wells Fargo Bank, National Association, as [removed: collateral agent and] trustee (incorporated by reference to Exhibit [removed: 4.1] [added: 4.2] to EchoStar Corporation’s Current Report on Form 8-K filed June 2, 2011, Commission File No. [removed: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d1.htm)] [added: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d2.htm)] |

| [removed: [4.3*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d2.htm)] [added: [4.3*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911033872/a11-14479_1ex4d3.htm)] | | [removed: [Indenture] [added: [Supplemental Indenture] relating to the [added: 7 5/8% Senior Unsecured Notes due 2021 of] EH Holding Corporation (currently known as Hughes Satellite Systems [removed: Corporation) 7 5/8% Senior Unsecured Notes due 2021,] [added: Corporation),] dated as of June [removed: 1,] [added: 8,] 2011, by and among EH Holding Corporation, the guarantors listed on the signature page thereto, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit [removed: 4.2] [added: 4.3] to EchoStar Corporation’s Current Report on Form 8-K filed June [removed: 2,] [added: 9,] 2011, Commission File No. [removed: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d2.htm)] [added: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911033872/a11-14479_1ex4d3.htm)] |

| [removed: [4.4*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911033872/a11-14479_1ex4d2.htm)] [added: [4.5*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911033872/a11-14479_1ex4d1.htm)] | | [removed: [Supplemental Indenture relating to the 6 1/2% Senior Secured Notes due 2019] [added: [Security Agreement, dated as] of [added: June 8, 2011, among] EH Holding Corporation (currently known as Hughes Satellite Systems Corporation), [removed: dated as of June 8, 2011, by and among EH Holding Corporation,] the guarantors listed on the signature [removed: page] [added: pages] thereto, and [removed: Wells Fargo Bank,] [added: U.S. Bank] National Association, as [added: successor] collateral agent [removed: and trustee] (incorporated by reference to Exhibit [removed: 4.2] [added: 4.1] to EchoStar Corporation’s Current Report on Form 8-K filed June 9, 2011, Commission File No. [removed: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911033872/a11-14479_1ex4d2.htm)] [added: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911033872/a11-14479_1ex4d1.htm)] |

| [removed: [4.5*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911033872/a11-14479_1ex4d3.htm)] [added: [4.24*](http://www.sec.gov/Archives/edgar/data/1415404/000141540419000033/ex44-fifthsupplemental.htm)] | | [removed: [Supplemental] [added: [Fifth Supplemental] Indenture relating to [removed: the 7 5/8% Senior Unsecured Notes due 2021 of EH Holding Corporation (currently known as] Hughes Satellite Systems [removed: Corporation),] [added: Corporation’s 7⅝% Senior Notes due 2021,] dated [removed: as of] June [removed: 8, 2011,] [added: 12, 2019,] by and among [removed: EH Holding] [added: Hughes Satellite Systems] Corporation, the guarantors [added: and the supplemental guarantors] listed on the signature [removed: page thereto,] [added: pages thereto] and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit [removed: 4.3] [added: 4.4] to EchoStar Corporation’s [removed: Current] [added: Quarterly] Report on Form [removed: 8-K filed] [added: 10-Q for the quarter ended] June [removed: 9, 2011,] [added: 30, 2019, filed August 8, 2019,] Commission File No. [removed: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911033872/a11-14479_1ex4d3.htm)] [added: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000141540419000033/ex44-fifthsupplemental.htm)] |

| [removed: [4.6*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d3.htm)] [added: [4.4*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d3.htm)] | | [Registration Rights Agreement, dated as of June 1, 2011, among EH Holding Corporation (currently known as Hughes Satellite Systems Corporation), the guarantors listed on the signature page thereto and Deutsche Bank Securities Inc. (incorporated by reference to Exhibit 4.3 to EchoStar Corporation’s Current Report on Form 8-K filed June 2, 2011, Commission File No. 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d3.htm) |

| [removed: [4.7*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911033872/a11-14479_1ex4d1.htm)] [added: [4.8*](http://www.sec.gov/Archives/edgar/data/1415404/000110465916134602/a16-15573_1ex4d1.htm)] | | [removed: [Security Agreement,] [added: [Indenture, relating to the 5.250% Senior Secured Notes,] dated as of [removed: June 8, 2011,] [added: July 27, 2016,] among [removed: EH Holding Corporation (currently known as] Hughes Satellite Systems [removed: Corporation),] [added: Corporation,] the guarantors [removed: listed on the signature pages] [added: party] thereto, [removed: and Wells Fargo Bank,] [added: U.S. Bank] National Association, as [added: trustee and successor] collateral agent (incorporated by reference to Exhibit 4.1 to EchoStar Corporation’s Current Report on Form 8-K filed [removed: June 9, 2011,] [added: on July 27, 2016,] Commission File No. [removed: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911033872/a11-14479_1ex4d1.htm)] [added: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465916134602/a16-15573_1ex4d1.htm)] |

| [removed: [4.8*](http://www.sec.gov/Archives/edgar/data/1415404/000110465914036637/a14-8954_1ex4d1.htm)] [added: [4.6*](http://www.sec.gov/Archives/edgar/data/1415404/000110465914036637/a14-8954_1ex4d2.htm)] | | [Second Supplemental Indenture relating to the [removed: 6 1/2%] [added: 7 5/8%] Senior [removed: Secured] [added: Unsecured] Notes due [removed: 2019] [added: 2021] of Hughes Satellite Systems Corporation, dated as of March 28, 2014, by and among Hughes Satellite Systems Corporation, the guarantors and the supplemental guarantors listed on the signature pages thereto, and Wells Fargo Bank, National Association, as [removed: collateral agent and] trustee (incorporated by reference to Exhibit [removed: 4.1] [added: 4.2] to EchoStar Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed May 9, 2014, Commission File No. [removed: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465914036637/a14-8954_1ex4d1.htm)] [added: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465914036637/a14-8954_1ex4d2.htm)] |

| [removed: [4.9*](http://www.sec.gov/Archives/edgar/data/1415404/000110465914036637/a14-8954_1ex4d2.htm)] [added: [4.23*](http://www.sec.gov/Archives/edgar/data/1415404/000141540419000033/ex43-thirdsupplemental.htm)] | | [removed: [Second] [added: [Third] Supplemental Indenture relating to [removed: the 7 5/8% Senior Unsecured Notes due 2021 of] Hughes Satellite Systems [removed: Corporation,] [added: Corporation’s 6.625% Senior Notes due 2026,] dated as of [removed: March 28, 2014,] [added: June 12, 2019,] by and among Hughes Satellite Systems Corporation, the guarantors and the supplemental guarantors listed on the signature pages [removed: thereto,] [added: thereto] and [removed: Wells Fargo Bank,] [added: U.S. Bank] National Association, as trustee (incorporated by reference to Exhibit [removed: 4.2] [added: 4.3] to EchoStar Corporation’s Quarterly Report on Form 10-Q for the quarter ended [removed: March 31, 2014,] [added: June 30, 2019,] filed [removed: May 9, 2014,] [added: August 8, 2019,] Commission File No. [removed: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465914036637/a14-8954_1ex4d2.htm)] [added: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000141540419000033/ex43-thirdsupplemental.htm)] |

| [removed: [4.10*](http://www.sec.gov/Archives/edgar/data/1415404/000110465914036637/a14-8954_1ex4d3.htm)] [added: [4.21*](http://www.sec.gov/Archives/edgar/data/1415404/000141540419000033/ex41-joinderagreement.htm)] | | [Joinder Agreement, dated as of [removed: March 28, 2014,] [added: June 12, 2019,] to the Security Agreement dated as of June 8, 2011, by and [removed: among] [added: between] EchoStar [removed: XI Holding L.L.C.,] [added: BSS Corporation,] EchoStar [removed: XIV Holding L.L.C.,] [added: FSS L.L.C.] and [removed: Wells Fargo Bank,] [added: U.S. Bank] National Association, as [added: successor] collateral agent (incorporated by reference to Exhibit [removed: 4.3] [added: 4.1] to EchoStar Corporation’s Quarterly Report on Form 10-Q for the quarter ended [removed: March 31, 2014,] [added: June 30, 2019,] filed [removed: May 9, 2014,] [added: August 8, 2019,] Commission File No. [removed: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465914036637/a14-8954_1ex4d3.htm)] [added: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000141540419000033/ex41-joinderagreement.htm)] |

| [removed: [4.11*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d1.htm)] [added: [4.7*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d2.htm)] | | [Form of Note for [removed: 6 1/2%] [added: 7 5/8%] Senior [removed: Secured] [added: Unsecured] Notes due [removed: 2019] [added: 2021] (included as part of Exhibit [removed: 4.2).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d1.htm)] [added: 4.3).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d2.htm)] |

| [removed: [4.12*](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d2.htm)] [added: [4.13*](http://www.sec.gov/Archives/edgar/data/1415404/000110465916134602/a16-15573_1ex4d2.htm)] | | [Form of [removed: Note for 7 5/8%] [added: 6.625%] Senior Unsecured [removed: Notes] [added: Note] due [removed: 2021] [added: 2026] (included as part of Exhibit [removed: 4.3).](http://www.sec.gov/Archives/edgar/data/1415404/000110465911032702/a11-13614_1ex4d2.htm)] [added: 4.14).](http://www.sec.gov/Archives/edgar/data/1415404/000110465916134602/a16-15573_1ex4d2.htm)] |

| [removed: [4.13*](http://www.sec.gov/Archives/edgar/data/1415404/000110465916134602/a16-15573_1ex4d1.htm)] [added: [4.9*](http://www.sec.gov/Archives/edgar/data/1415404/000110465916134602/a16-15573_1ex4d2.htm)] | | [Indenture, relating to the [removed: 5.250%] [added: 6.625%] Senior [removed: Secured] [added: Unsecured] Notes, dated as of July 27, 2016, among Hughes Satellite Systems Corporation, the guarantors party [removed: thereto,] [added: thereto and] U.S. Bank National Association, as [removed: trustee, and Wells Fargo Bank, National Association, as collateral agent] [added: trustee] (incorporated by reference to Exhibit [removed: 4.1] [added: 4.2] to EchoStar Corporation’s Current Report on Form 8-K filed on July 27, 2016, Commission File No. [removed: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465916134602/a16-15573_1ex4d1.htm)] [added: 001-33807).](http://www.sec.gov/Archives/edgar/data/1415404/000110465916134602/a16-15573_1ex4d2.htm)] |