Table	of	Contents

# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

# (Mark	One)

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

# FOR	THE	FISCAL	YEAR	ENDED	DECEMBER	31,	2011

# TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF

# DISH	Network	Corporation

(Exact	name	of	registrant	as	specified	in	its	charter)

Nevada

(State	or	other	jurisdiction	of	incorporation	or	organization)

9601	South	Meridian	Boulevard

Englewood,	Colorado

(Address	of	principal	executive	offices)

(I.R.S.	Employer	Identification	No.)

(Zip	Code)

Registrant's	telephone	number,	including	area	code:	(303)	723-1000

Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

Securities	registered	pursuant	to	Section	12(g)	of	the	Act:		None

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.		Yes	x	No	o Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.		Yes	o	No	x Indicate	by	check	mark	whether	the	registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during	the preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past	90 days.		Yes	x		No	o

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

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.		x

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

Large	accelerated	filer	x

Non-accelerated	filer	o

Accelerated	filer	o

Smaller	reporting	company	o

(Do	not	check	if	a	smaller	reporting

company)

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

As	of	June	30,	2011,	the	aggregate	market	value	of	Class	A	common	stock	held	by	non-affiliates	of	the	registrant	was	$6.2	billion	based	upon	the	closing	price	of	the Class	A	common	stock	as	reported	on	the	Nasdaq	Global	Select	Market	as	of	the	close	of	business	on	that	date.

# DOCUMENTS	INCORPORATED	BY	REFERENCE

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

Portions	of	the	registrant's	definitive	Proxy	Statement	to	be	filed	in	connection	with	its	2012	Annual	Meeting	of	Shareholders	are	incorporated	by	reference	in	Part	III.

# PART	I

|  | Disclosure	Regarding	Forward-Looking	Statements | i |
| :--- | :--- | :--- |
| Item\t1. | Business | 1 |
| Item\t1A. | Risk\tFactors | 19 |
| Item\t1B. | Unresolved\tStaff\tComments | 36 |
| Item\t2. | Properties | 37 |
| Item\t3. | Legal\tProceedings | 37 |
| Item\t4. | Mine\tSafety\tDisclosures | 44 |

# PART	II

| Item	5. | Market	for	Registrant's	Common	Equity,	Related	Stockholder	Matters	and	Issuer	Purchases	of	Equity	Securities | 44 |
| :--- | :--- | :--- |
| Item\t6. | Selected\tFinancial\tData | 46 |
| Item\t7. | Management's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 47 |
| Item\t7A. | Quantitative\tand\tQualitative\tDisclosures\tAbout\tMarket\tRisk | 71 |
| Item\t8. | Financial\tStatements\tand\tSupplementary\tData | 72 |
| Item\t9. | Changes\tin\tand\tDisagreements\tWith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | 72 |
| Item\t9A. | Controls\tand\tProcedures | 73 |
| Item\t9B. | Other\tInformation | 74 |
|  | PART\tIII |  |
| Item\t10. | Directors,\tExecutive\tOfficers\tand\tCorporate\tGovernance | 74 |
| Item\t11. | Executive\tCompensation | 74 |
| Item\t12. | Security\tOwnership\tof\tCertain\tBeneficial\tOwners\tand\tManagement\tand\tRelated\tStockholder\tMatters | 74 |
| Item\t13. | Certain\tRelationships\tand\tRelated\tTransactions,\tand\tDirector\tIndependence | 74 |
| Item\t14. | Principal\tAccounting\tFees\tand\tServices | 74 |
|  | PART\tIV |  |
| Item\t15. | Exhibits,\tFinancial\tStatement\tSchedules | 74 |
|  | Signatures | 82 |
|  | Index\tto\tConsolidated\tFinancial\tStatements | F-1 |

# PART	IV

# DISCLOSURE	REGARDING	FORWARD-LOOKING	STATEMENTS

We	make	"forward-looking	statements"	within	the	meaning	of	the	Private	Securities	Litigation	Reform	Act	of	1995	throughout	this	report.		Whenever	you	read	a statement	that	is	not	simply	a	statement	of	historical	fact	(such	as	when	we	describe	what	we	"believe,"	"intend,"	"plan,"	"estimate,"	"expect"	or	"anticipate"	will	occur and	other	similar	statements),	you	must	remember	that	our	expectations	may	not	be	achieved,	even	though	we	believe	they	are	reasonable.		We	do	not	guarantee	that any	future	transactions	or	events	described	herein	will	happen	as	described	or	that	they	will	happen	at	all.		You	should	read	this	report	completely	and	with	the understanding	that	actual	future	results	may	be	materially	different	from	what	we	expect.		Whether	actual	events	or	results	will	conform	with	our	expectations	and predictions	is	subject	to	a	number	of	risks	and	uncertainties.		For	further	discussion	see	"Item	1A.		Risk	Factors."		The	risks	and	uncertainties	include,	but	are	not	limited to,	the	following:

# Competition	and	Economic	Risks	Affecting	our	Business

·																		We	face	intense	and	increasing	competition	from	satellite	television	providers,	cable	companies	and	telecommunications	companies,	especially	as	the	pay- TV	industry	matures,	which	may	require	us	to	increase	subscriber	acquisition	and	retention	spending	or	accept	lower	subscriber	activations	and	higher subscriber	churn.

·																		Competition	from	digital	media	companies	that	provide	or	facilitate	the	delivery	of	video	content	via	the	Internet	may	reduce	our	gross	new	subscriber activations	and	may	cause	our	subscribers	to	purchase	less	services	from	us	or	to	cancel	our	services	altogether,	resulting	in	less	revenue	to	us.

·																		Economic	weakness,	including	higher	unemployment	and	reduced	consumer	spending,	may	adversely	affect	our	ability	to	grow	or	maintain	our	business.

·																		Our	competitors	may	be	able	to	leverage	their	relationships	with	programmers	so	that	they	are	able	to	reduce	their	programming	costs	and	offer	exclusive content	that	will	place	them	at	a	competitive	advantage	to	us.

·																		We	face	increasing	competition	from	other	distributors	of	foreign	language	programming	that	may	limit	our	ability	to	maintain	our	foreign	language programming	subscriber	base.

# Operational	and	Service	Delivery	Risks	Affecting	our	Business

·																		If	we	do	not	continue	improving	our	operational	performance	and	customer	satisfaction,	our	gross	new	subscriber	activations	may	decrease	and	our subscriber	churn	may	increase.

·																		If	our	gross	new	subscriber	activations	decrease,	or	if	subscriber	churn,	subscriber	acquisition	costs	or	retention	costs	increase,	our	financial	performance will	be	adversely	affected.

·																		Programming	expenses	are	increasing	and	could	adversely	affect	our	future	financial	condition	and	results	of	operations.

·																		We	depend	on	others	to	provide	the	programming	that	we	offer	to	our	subscribers	and,	if	we	lose	access	to	this	programming,	our	gross	new	subscriber activations	may	decline	and	subscriber	churn	may	increase.

·																		We	may	be	required	to	make	substantial	additional	investments	to	maintain	competitive	programming	offerings.

·																		Any	failure	or	inadequacy	of	our	information	technology	infrastructure	could	harm	our	business.

·																		We	rely	on	EchoStar	Corporation,	or	EchoStar,	to	design	and	develop	all	of	our	new	set-top	boxes	and	certain	related	components,	and	to	provide transponder	capacity,	digital	broadcast	operations	and	other	services	to	us.		Our	business	would	be	adversely	affected	if	EchoStar	ceases	to	provide	these products	and	services	to	us	and	we	are	unable	to	obtain	suitable	replacement	products	and	services	from	third	parties.

·																		We	operate	in	an	extremely	competitive	environment	and	our	success	may	depend	in	part	on	our	timely	introduction	and	implementation	of,	and	effective investment	in,	new	competitive	products	and	services,	the	failure	of	which	could	negatively	impact	our	business.

·																		Technology	in	our	industry	changes	rapidly	and	our	inability	to	offer	new	subscribers	and	upgrade	existing	subscribers	with	more	advanced	equipment could	cause	our	products	and	services	to	become	obsolete.

·																		We	rely	on	a	single	vendor	or	a	limited	number	of	vendors	to	provide	certain	key	products	or	services	to	us	such	as	information	technology	support,	billing systems,	and	security	access	devices,	and	the	inability	of	these	key	vendors	to	meet	our	needs	could	have	a	material	adverse	effect	on	our	business.

·																		Our	sole	supplier	of	new	set-top	boxes,	EchoStar,	relies	on	a	few	suppliers	and	in	some	cases	a	single	supplier,	for	many	components	of	our	new	set-top boxes,	and	any	reduction	or	interruption	in	supplies	or	significant	increase	in	the	price	of	supplies	could	have	a	negative	impact	on	our	business.

·																		Our	programming	signals	are	subject	to	theft,	and	we	are	vulnerable	to	other	forms	of	fraud	that	could	require	us	to	make	significant	expenditures	to remedy.

·																		We	depend	on	third	parties	to	solicit	orders	for	DISH	services	that	represent	a	significant	percentage	of	our	total	gross	new	subscriber	activations.

·																		Our	local	programming	strategy	faces	uncertainty	because	we	may	not	be	able	to	obtain	necessary	retransmission	consent	agreements	at	acceptable	rates from	local	network	stations.

·																		We	have	limited	owned	and	leased	satellite	capacity	and	failures	or	reduced	capacity	could	adversely	affect	our	business.

·																		Our	owned	and	leased	satellites	are	subject	to	construction,	launch,	operational	and	environmental	risks	that	could	limit	our	ability	to	utilize	these	satellites.

·																		We	generally	do	not	have	commercial	insurance	coverage	on	the	satellites	we	use	and	could	face	significant	impairment	charges	if	one	of	our	satellites fails.

·																		We	may	have	potential	conflicts	of	interest	with	EchoStar	due	to	our	common	ownership	and	management.

·																		We	rely	on	key	personnel	and	the	loss	of	their	services	may	negatively	affect	our	businesses.

# Acquisition	and	Capital	Structure	Risks	Affecting	our	Business

·																		We	have	agreed	to	acquire	certain	spectrum	and	other	assets	from	DBSD	North	America	and	TerreStar	and	we	have	paid	substantially	all	of	the	purchase price	for	these	acquisitions.		If	we	are	unable	to	obtain	certain	regulatory	approvals	and	waivers,	or	they	are	granted	in	a	manner	that	varies	from	the	form we	have	requested,	the	value	of	these	assets	may	be	impaired.	To	the	extent	we	receive	these	approvals	and	waivers,	we	will	be	required	to	make significant	additional	investments	or	partner	with	others	to	commercialize	these	assets.

·																		We	have	made	a	substantial	investment	in	certain	700	MHz	wireless	licenses	and	will	be	required	to	make	significant	additional	investments	or	partner	with others	to	commercialize	these	licenses.

·																		Our	Blockbuster	business,	and	retail	stores	in	particular,	face	risks,	including,	among	other	things,	operational	challenges	and	increasing	competition	from video	rental	kiosk,	streaming	and	mail	order	businesses	that	may	negatively	impact	the	business,	financial	condition	or	results	of	operations	of Blockbuster.

·																		We	may	pursue	acquisitions	and	other	strategic	transactions	to	complement	or	expand	our	business	that	may	not	be	successful	and	we	may	lose	up	to	the entire	value	of	our	investment	in	these	acquisitions	and	transactions.

·																		We	may	need	additional	capital,	which	may	not	be	available	on	acceptable	terms	or	at	all,	to	continue	investing	in	our	business	and	to	finance	acquisitions and	other	strategic	transactions.

·																		A	portion	of	our	investment	portfolio	is	invested	in	securities	that	have	experienced	limited	or	no	liquidity	and	may	not	be	immediately	accessible	to support	our	financing	needs.

·																		We	have	substantial	debt	outstanding	and	may	incur	additional	debt.

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

·																		We	are	controlled	by	one	principal	stockholder	who	is	also	our	Chairman.

# Legal	and	Regulatory	Risks	Affecting	our	Business

·																		If	Voom	prevails	in	its	breach	of	contract	suit	against	us,	we	could	be	required	to	pay	substantial	damages,	which	would	have	a	material	adverse	affect	on our	financial	position	and	results	of	operations.

·																		Our	business	depends	on	certain	intellectual	property	rights	and	on	not	infringing	the	intellectual	property	rights	of	others.

·																		We	are	party	to	various	lawsuits	which,	if	adversely	decided,	could	have	a	significant	adverse	impact	on	our	business,	particularly	lawsuits	regarding intellectual	property.

·																		Increased	distribution	of	video	content	via	the	Internet	could	expose	us	to	regulatory	risk.

·																		We	depend	on	the	Cable	Act	for	access	to	programming	from	cable-affiliate	programmers	at	non-discriminatory	rates.

·																		The	injunction	against	our	retransmission	of	distant	networks,	which	is	currently	waived,	may	be	reinstated.

·																		We	are	subject	to	significant	regulatory	oversight,	and	changes	in	applicable	regulatory	requirements,	including	any	adoption	or	modification	of	laws	or regulations	relating	to	the	Internet,	could	adversely	affect	our	business.

·																		Our	business	depends	on	Federal	Communications	Commission,	or	FCC,	licenses	that	can	expire	or	be	revoked	or	modified	and	applications	for	FCC licenses	that	may	not	be	granted.

·																		We	are	subject	to	digital	high-definition	("HD")	"carry-one,	carry-all"	requirements	that	cause	capacity	constraints.

·																		There	can	be	no	assurance	that	there	will	not	be	deficiencies	leading	to	material	weaknesses	in	our	internal	control	over	financial	reporting.

·																		We	may	face	other	risks	described	from	time	to	time	in	periodic	and	current	reports	we	file	with	the	Securities	and	Exchange	Commission,	or	SEC.

All	cautionary	statements	made	herein	should	be	read	as	being	applicable	to	all	forward-looking	statements	wherever	they	appear.		Investors	should	consider	the	risks described	herein	and	should	not	place	undue	reliance	on	any	forward-looking	statements.		We	assume	no	responsibility	for	updating	forward-looking	information contained	or	incorporated	by	reference	herein	or	in	other	reports	we	file	with	the	SEC.

In	this	report,	the	words	"DISH	Network,"	the	"Company,"	"we,"	"our"	and	"us"	refer	to	DISH	Network	Corporation	and	its	subsidiaries,	unless	the	context	otherwise requires.		"EchoStar"	refers	to	EchoStar	Corporation	and	its	subsidiaries.		"DDBS"	refers	to	DISH	DBS	Corporation	and	its	subsidiaries,	a	wholly	owned,	indirect subsidiary	of	DISH	Network.

# OVERVIEW

DISH	Network	Corporation	is	the	nation's	third	largest	pay-TV	provider,	with	approximately	13.967	million	customers	across	the	United	States	as	of	December	31, 2011	(the	"DISH"	pay-TV	service).		We	were	organized	in	1995	as	a	corporation	under	the	laws	of	the	State	of	Nevada	and	started	offering	the	DISH	pay-TV	service	in March	1996.

Our	common	stock	is	publicly	traded	on	the	Nasdaq	Global	Select	Market	under	the	symbol	"DISH."		Our	principal	executive	offices	are	located	at	9601	South Meridian	Boulevard,	Englewood,	Colorado	80112	and	our	telephone	number	is	(303)	723-1000.

On	April	26,	2011,	we	completed	the	acquisition	of	most	of	the	assets	of	Blockbuster,	Inc.	(the	"Blockbuster	Acquisition").		We	acquired	Blockbuster	operations	in	the United	States	and	in	certain	foreign	countries.		Blockbuster	primarily	offers	movies	and	video	games	for	sale	and	rental	through	multiple	distribution	channels	such	as retail	stores,	by-mail,	digital	devices,	the	blockbuster.com	website	and	the	BLOCKBUSTER	On	Demand	service.

During	the	first	half	of	2011,	we	entered	into	a	transaction	to	acquire	100%	of	the	equity	of	reorganized	DBSD	North	America	Inc.	("DBSD	North	America")	for approximately	$1.4	billion	upon	DBSD	North	America's	emergence	from	bankruptcy.		In	addition,	in	June	2011,	we	entered	into	a	transaction	to	acquire	substantially	all of	the	assets	of	TerreStar	Networks,	Inc.	("TerreStar")	for	a	purchase	price	of	$1.375	billion	(the	"TerreStar	Transaction").		These	acquisitions	are	subject	to	certain conditions,	including	approval	by	the	FCC.		Additionally,	during	the	fourth	quarter	2011,	we	and	Sprint	Nextel	Corporation	("Sprint")	entered	into	a	mutual	release	and settlement	agreement	("Sprint	Settlement	Agreement")	pursuant	to	which	all	disputed	issues	relating	to	our	acquisition	of	DBSD	North	America	and	the	TerreStar Transaction	were	resolved	between	us	and	Sprint,	including,	but	not	limited	to,	issues	relating	to	costs	allegedly	incurred	by	Sprint	to	relocate	users	from	the	spectrum now	licensed	to	DBSD	North	America	and	TerreStar.		Pursuant	to	the	Sprint	Settlement	Agreement,	we	made	a	net	payment	of	approximately	$114	million	to	Sprint. For	more	information,	see	"New	Business	Opportunities	—	Spectrum	Investments"	of	this	annual	report	on	Form	10-K.

# Business	Strategy

Our	business	strategy	is	to	be	the	best	provider	of	video	services	in	the	United	States	by	providing	high-quality	products,	outstanding	customer	service,	and	great	value. television	providers.		We	believe	that	there	continues	to	be	unsatisfied	demand	for	high-quality,	reasonably	priced	television	programming	services. We	promote	DISH ®	programming	packages	as	providing	our	subscribers	with	a	better	"price-to-value"	relationship	than	those	available	from	other	subscription

·																		High-Quality	Products.		We	offer	a	wide	selection	of	local	and	national	programming,	featuring	more	national	and	local	HD	channels	than	most	pay-TV providers.		We	have	been	a	technology	leader	in	our	industry,	introducing	award-winning	DVRs,	dual	tuner	receivers,	1080p	video	on	demand,	and	external allows,	among	other	things,	recorded	programming	to	be	viewed	in	HD	in	multiple	rooms.		We	are	also	promoting	a	suite	of	integrated	products	designed	to access	and	Slingbox	"placeshifting"	technology. hard	drives.		To	maintain	and	enhance	our	competitiveness	over	the	long	term,	we	recently	introduced	a	new	whole-home	HD	DVR	receiver	(the	Hopper ™)	that maximize	the	convenience	and	ease	of	watching	TV	anytime	and	anywhere,	which	we	refer	to	as	TV	Everywhere ™	which	utilizes,	among	other	things,	online

·																		Outstanding	Customer	Service.		We	strive	to	provide	outstanding	customer	service	by	improving	the	quality	of	the	initial	installation	of	subscriber	equipment, improving	the	reliability	of	our	equipment,	better	educating	our	customers	about	our	products	and	services,	and	resolving	customer	problems	promptly	and effectively	when	they	arise.

·																		Great	Value.		We	have	historically	been	viewed	as	the	low-cost	provider	in	the	pay-TV	industry	in	the	U.S.	because	we	seek	to	offer	the	lowest	everyday	prices available	to	consumers	after	introductory	promotions	expire.

Programming.		We	provide	programming	that	includes	more	than:	(i)	230	basic	video	channels,	(ii)	60	Sirius	Satellite	Radio	music	channels,	(iii)	30	premium	movie channels,	(iv)	35	regional	and	specialty	sports	channels,	(v)	3,200	standard	definition	and	high	definition	local	channels,	(vi)	275	Latino	and	international	channels,	and (vii)	70	channels	of	pay-per-view	content.		Although	we	distribute	over	3,200	local	channels,	a	subscriber	typically	may	only	receive	the	local	channels	available	in	the subscriber's	home	market.		As	of	December	31,	2011,	we	provided	local	channels	in	standard	definition	in	all	210	TV	markets	in	the	U.S.	and	local	channels	in	HD	in more	than	170	markets	in	the	U.S.,	serving	approximately	97%	of	TV	households.

Receiver	Systems.		Our	subscribers	receive	programming	via	equipment	that	includes	a	small	satellite	dish,	digital	set-top	receivers,	and	remote	controls.		Some	of	our advanced	receiver	models	feature	DVRs,	HD	capability,	multiple	tuners	(which	allow	independent	viewing	on	separate	televisions)	and	Internet-protocol	compatibility (which	allows	consumers	to	view	movies	and	other	content	on	their	televisions	via	the	Internet	and	a	broadband	connection).		We	rely	on	EchoStar	to	design	and manufacture	all	of	our	new	receivers	and	certain	related	components.		See	"Item	1A	—	Risk	Factors."

DISHOnline.com.		DISHOnline.com	gives	DISH	subscribers	the	ability	to	watch	television	programs,	movies,	and	clips	online	at	no	additional	charge	with	their	paid

subscription	to	qualifying	programming	and	compatible	equipment.		DISHOnline.com	offers	more	than	270,000	movies,	television	shows,	clips	and	trailers.

Blockbuster@Home.		Blockbuster@Home	gives	DISH	subscribers	access	to	more	than	100,000	DVD	movies,	TV	shows	and	games	by	mail	with	unlimited	in-store exchanges,	streaming	access	to	more	than	10,000	movies	and	TV	shows	via	their	TV	and	online	access	to	more	than	25,000	movies	and	TV	shows	via	their	computer.

DISH	Remote	Access.		DISH's	free	remote	access	("DISH	Remote	Access")	gives	subscribers	the	ability	to	remotely	control	certain	features	of	their	DVRs	using compatible	devices	such	as	smartphones,	tablets,	laptops	and	home	computers.

# Content	Delivery

Digital	Broadcast	Operations	Centers.		The	principal	digital	broadcast	operations	facilities	we	use	are	EchoStar's	facilities	located	in	Cheyenne,	Wyoming	and	Gilbert, Arizona.		We	also	use	four	regional	digital	broadcast	operations	facilities	and	four	micro	digital	broadcast	operations	facilities	owned	and	operated	by	EchoStar	that allow	us	to	maximize	the	use	of	the	spot	beam	capabilities	of	certain	owned	and	leased	satellites.		Programming	content	is	delivered	to	these	facilities	by	fiber	or	satellite and	processed,	compressed,	encrypted	and	then	uplinked	to	satellites	for	delivery	to	consumers.		EchoStar	provides	certain	broadcast	services	to	us,	including	teleport services	such	as	transmission	and	downlinking,	channel	origination	services,	and	channel	management	services	pursuant	to	a	broadcast	agreement	for	a	period	ending	on December	31,	2016.		See	Note	20	in	the	Notes	to	our	Consolidated	Financial	Statements	in	Item	15	of	this	Annual	Report	on	Form	10-K	for	further	discussion	of	our Related	Party	Transactions	with	EchoStar.

Satellites.		Our	DISH	programming	is	currently	delivered	to	customers	using	satellites	that	operate	in	the	"Ku"	band	portion	of	the	microwave	radio	spectrum.		The	Ku- band	is	divided	into	two	spectrum	segments.		The	portion	of	the	Ku-band	that	allows	the	use	of	higher	power	satellites	–	12.2	to	12.7	GHz	over	the	United	States	–	is known	as	the	Broadcast	Satellite	Service	band,	which	is	also	referred	to	as	the	Direct	Broadcast	Satellite	("DBS")	band.		The	portion	of	the	Ku-band	that	utilizes	lower power	satellites	–	11.7	to	12.2	GHz	over	the	United	States	–	is	known	as	the	Fixed	Satellite	Service	("FSS")	band.

Most	of	our	programming	is	currently	delivered	using	DBS	satellites.		To	accommodate	more	bandwidth-intensive	HD	programming	and	other	needs,	we	continue	to explore	opportunities	to	expand	our	satellite	capacity	through	the	acquisition	of	new	spectrum,	the	launching	of	more	technologically	advanced	satellites,	and	the	more efficient	use	of	existing	spectrum	via,	among	other	things,	better	modulation	and	compression	technologies.

We	own	or	lease	capacity	on	13	satellites	in	geostationary	orbit	approximately	22,300	miles	above	the	equator.		For	further	information	concerning	these	satellites	and satellite	anomalies,	please	see	the	table	and	discussion	under	"Satellites"	below.

Conditional	Access	System.		Our	conditional	access	system	secures	our	programming	content	using	encryption	so	that	only	authorized	customers	can	access	our programming.		We	use	microchips	embedded	in	credit	card-sized	access	cards,	called	"smart	cards,"	or	security	chips	in	our	receiver	systems	to	control	access	to authorized	programming	content	("Security	Access	Devices").

Our	signal	encryption	has	been	compromised	in	the	past	and	may	be	compromised	in	the	future	even	though	we	continue	to	respond	with	significant	investment	in security	measures,	such	as	Security	Access	Device	replacement	programs	and	updates	in	security	software,	that	are	intended	to	make	signal	theft	more	difficult.		It	has been	our	prior	experience	that	security	measures	may	only	be	effective	for	short	periods	of	time	or	not	at	all	and	that	we	remain	susceptible	to	additional	signal	theft. During	2009,	we	completed	the	replacement	of	our	Security	Access	Devices	and	re-secured	our	system.		We	expect	additional	future	replacements	of	these	devices	will be	necessary	to	keep	our	system	secure.		We	cannot	ensure	that	we	will	be	successful	in	reducing	or	controlling	theft	of	our	programming	content	and	we	may	incur additional	costs	in	the	future	if	our	system's	security	is	compromised.

# Distribution	Channels

While	we	offer	receiver	systems	and	programming	through	direct	sales	channels,	a	majority	of	our	new	subscriber	activations	are	generated	through	independent	third parties	such	as	small	satellite	retailers,	direct	marketing	groups,	local	and	regional	consumer	electronics	stores,	nationwide	retailers,	and	telecommunications companies.		In	general,	we	pay	these	independent	third	parties	a	mix	of	upfront	and	monthly	incentives	to	solicit	orders	for	our	services.		In	addition,	we	partner	with certain	telecommunications	companies	to	bundle	DISH	programming	with	broadband	and	voice	services	on	a	single	bill.

# Competition

As	of	December	31,	2011,	our	13.967	million	subscribers	represent	approximately	14%	of	pay-TV	subscribers	in	the	United	States.		We	face	substantial	competition from	established	pay-TV	providers	and	increasing	competition	from	companies	providing/facilitating	the	delivery	of	video	content	via	the	Internet	to	computers, televisions,	and	mobile	devices.		As	of	September	30,	2011,	more	than	99	million	households	subscribe	to	a	pay-TV	service.

·																		Other	Direct	Broadcast	Satellite	Operators.		We	compete	directly	with	the	DirecTV	Group,	Inc.,	or	DirecTV,	the	largest	satellite	TV	provider	in	the	U.S.	which had	19.8	million	subscribers	as	of	September	30,	2011,	representing	approximately	20%	of	pay-TV	subscribers.

·																		Cable	Television	Companies.		We	encounter	substantial	competition	in	the	pay-TV	industry	from	numerous	cable	television	companies	that	operate	via franchise	licenses	across	the	U.S.		According	to	the	National	Cable	&	Telecommunications	Association,	98%	of	U.S.	housing	units	are	passed	by	cable.		As	of September	30,	2011,	cable	television	companies	have	more	than	58.3	million	subscribers,	representing	approximately	58%	of	pay-TV	subscribers.		Cable companies	are	typically	able	to	bundle	their	video

services	with	broadband	Internet	access	and	voice	services	and	many	have	significant	investments	in	companies	that	provide	programming	content.

·																		Telecommunications	Companies.		Large	telecommunications	companies	have	upgraded	older	copper	wire	lines	with	fiber	optic	lines	in	certain	markets.		These fiber	optic	lines	provide	high	capacity	bandwidth,	enabling	telecommunications	companies	to	offer	video	content	that	can	be	bundled	with	their	broadband Internet	access	and	voice	services.		In	particular,	AT&T	and	Verizon	have	built	fiber-optic	based	networks	to	provide	video	services	in	substantial	portions	of their	service	areas.		As	of	September	30,	2011,	AT&T	and	Verizon	had	approximately	3.6	million	U-verse	and	4.0	million	FiOS	TV	subscribers,	respectively. These	telecommunications	companies	represent	approximately	8%	of	pay-TV	subscribers.

·																		Internet	Delivered	Video.		We	face	competition	from	content	providers	who	distribute	video	directly	to	consumers	over	the	Internet.		Programming	offered	over the	Internet	has	become	more	prevalent	as	the	speed	and	quality	of	broadband	networks	have	improved.		Significant	changes	in	consumer	behavior	with	regard to	the	means	by	which	they	obtain	video	entertainment	and	information	in	response	to	this	emerging	digital	media	competition	could	materially	adversely	affect our	business,	results	of	operations	and	financial	condition	or	otherwise	disrupt	our	business.

·																		Wireless	Mobile	Video.		We	also	expect	to	face	increasing	competition	from	wireless	telecommunications	providers	who	offer	mobile	video	offerings.		We expect	mobile	video	offerings	will	likely	become	more	prevalent	in	the	marketplace	as	wireless	telecommunications	providers	implement	and	expand	the	fourth generation	of	wireless	communications.

# Acquisition	of	New	Subscribers

We	incur	significant	upfront	costs	to	acquire	subscribers,	including	advertising,	retailer	incentives,	equipment	subsidies	and	installation.		In	addition,	customer promotions	to	acquire	new	subscribers	result	in	less	revenue	to	us	over	the	promotional	period.		While	we	attempt	to	recoup	these	upfront	costs	over	the	lives	of	their subscriptions,	there	can	be	no	assurance	that	we	will.		We	employ	business	rules	such	as	credit	requirements	and	contractual	commitments,	and	we	strive	to	provide outstanding	customer	service,	to	increase	the	likelihood	of	customers	keeping	their	DISH	service	over	longer	periods	of	time.		Our	subscriber	acquisition	costs	may	vary significantly	from	period	to	period.

Advertising.		We	use	print,	radio,	television	and	Internet	media,	on	a	local	and	national	basis	to	motivate	potential	subscribers	to	call	DISH,	visit	our	website	or	contact independent	third	party	retailers.

Retailer	Incentives.		We	pay	retailers	an	upfront	incentive	for	each	new	subscriber	they	bring	to	DISH	that	results	in	the	activation	of	qualified	programming	and generally	pay	retailers	small	monthly	incentives	for	up	to	60	months;	provided,	among	other	things,	the	customer	continuously	subscribes	to	qualified	programming.

Equipment.		We	incur	significant	upfront	costs	to	provide	our	new	subscribers	with	in-home	equipment,	including	advanced	HD	and	DVR	receivers,	which	most	of	our new	subscribers	lease	from	us.		While	we	seek	to	recoup	these	upfront	equipment	costs	mostly	through	monthly	fees,	there	can	be	no	assurance	that	we	will	be successful	in	achieving	that	objective.		In	addition,	upon	deactivation	of	a	subscriber	we	may	refurbish	and	redeploy	their	equipment	which	lowers	future	upfront	costs. However,	our	ability	to	capitalize	on	these	cost	savings	may	be	limited	as	technological	advances	and	consumer	demand	for	new	features	may	render	the	returned equipment	obsolete.

Installation.		We	incur	significant	upfront	costs	to	install	satellite	dishes	and	receivers	in	the	homes	of	our	new	customers.

New	Customer	Promotions.		We	often	offer	programming	at	no	additional	charge	and/or	promotional	pricing	during	introductory	periods	for	new	subscribers.		While such	promotional	activities	have	an	economic	cost	and	reduce	our	subscriber-related	revenue,	they	are	not	included	in	our	definitions	of	subscriber	acquisition	costs	or the	SAC	metric.

# Customer	Retention

We	incur	significant	costs	to	retain	our	existing	customers,	mostly	by	upgrading	their	equipment	to	HD	and	DVR	receivers.		As	with	our	subscriber	acquisition	costs, our	retention	upgrade	spending	includes	the	cost	of	equipment	and	installation.		In	certain	circumstances,	we	also	offer	programming	at	no	additional	charge	and/or promotional	pricing	for	limited	periods	for	existing	customers	in	exchange	for	a	contractual	commitment.		A	component	of	our	retention	efforts	includes	the	installation of	equipment	for	customers	who	move.		Our	subscriber	retention	costs	may	vary	significantly	from	period	to	period.

# Customer	Service

Customer	Service	Centers.		We	use	both	internally-operated	and	outsourced	customer	service	centers	to	handle	calls	from	prospective	and	existing	customers.		We	strive to	answer	customer	calls	promptly	and	to	resolve	issues	effectively	on	the	first	call.		We	intend	to	better	use	the	Internet	and	other	applications	to	provide	our	customers with	more	self-service	capabilities	over	time.

Installation	and	Other	In-Home	Service	Operations.		High-quality	installations,	upgrades,	and	in-home	repairs	are	critical	to	providing	good	customer	service.		Such	in- home	service	is	performed	by	both	DISH	employees	and	a	network	of	independent	contractors	and	includes,	among	other	things,	priority	technical	support,	replacement equipment,	cabling	and	power	surge	repairs	for	a	monthly	fee.

Subscriber	Management.		We	presently	use,	and	depend	on,	CSG	Systems	International,	Inc.'s	("CSG")	software	system	for	the	majority	of	DISH	subscriber	billing and	related	functions.		During	2011,	we	implemented	new	interactive	voice	response	and	in-home	appointment	scheduling	systems.		Also	during	2011,	we	began developing	and	testing	a	new	CSG	billing	system	as	well	as	new	sales	and	customer	care	systems	that	are	likely	to	be	implemented	in	2012.

# New	Business	Opportunities

From	time	to	time	we	evaluate	opportunities	for	strategic	investments	or	acquisitions	that	may	complement	our	current	services	and	products,	enhance	our	technical capabilities,	improve	or	sustain	our	competitive	position,	or	otherwise	offer	growth	opportunities.		We	may	make	investments	in	or	partner	with	others	to	expand	our business	into	mobile	and	portable	video,	data	and	voice	services.

We	are	currently	promoting	a	suite	of	integrated	products	designed	to	maximize	the	convenience	and	ease	of	watching	TV	anytime	and	anywhere,	which	we	refer	to	as TV	Everywhere	which	utilizes,	among	other	things,	online	access	and	Slingbox	"placeshifting"	technology.		There	can	be	no	assurance	that	these	integrated	products will	positively	affect	our	results	of	operations	or	our	gross	new	subscriber	activations.

# Blockbuster

On	April	26,	2011,	we	completed	the	Blockbuster	Acquisition.		We	acquired	Blockbuster	operations	in	the	United	States	and	in	certain	foreign	countries.		Blockbuster primarily	offers	movies	and	video	games	for	sale	and	rental	through	multiple	distribution	channels	such	as	retail	stores,	by-mail,	digital	devices,	the	blockbuster.com website	and	the	BLOCKBUSTER	On	Demand	service.		The	Blockbuster	Acquisition	complements	our	core	business	of	delivering	high-quality	video	entertainment	to consumers.		We	are	promoting	our	new	Blockbuster	offerings	including	Blockbuster@Home	which	provides	movies,	games	and	TV	shows	through	Internet	streaming, mail	and	in-store	exchanges	and	online.		This	offering	is	only	available	to	DISH	subscribers.

# Spectrum	Investments

In	2008,	we	paid	$712	million	to	acquire	certain	700	MHz	wireless	licenses,	which	were	granted	to	us	by	the	FCC	in	February	2009.		Part	or	all	of	these	licenses	may	be terminated	if	the	associated	FCC	build-out	requirements	are	not	satisfied.

During	the	first	half	of	2011,	we	entered	into	a	transaction	to	acquire	100%	of	the	equity	of	reorganized	DBSD	North	America	for	approximately	$1.4	billion	upon DBSD	North	America's	emergence	from	bankruptcy,	which

included	capital	stock	and	convertible	securities	of,	and	certain	claims	related	to,	DBSD	North	America.		In	addition,	in	June	2011,	we	entered	into	the	TerreStar Transaction	for	a	purchase	price	of	$1.375	billion.	We	have	paid	all	but	$30	million	of	the	purchase	price	for	the	TerreStar	Transaction,	which	will	be	paid	upon	closing of	the	TerreStar	Transaction,	or	upon	certain	other	conditions	being	met	under	the	asset	purchase	agreement.		Additionally,	during	the	fourth	quarter	2011,	we	and	Sprint entered	into	the	Sprint	Settlement	Agreement	pursuant	to	which	all	disputed	issues	relating	to	our	acquisition	of	DBSD	North	America	and	the	TerreStar	Transaction were	resolved	between	us	and	Sprint,	including,	but	not	limited	to,	issues	relating	to	costs	allegedly	incurred	by	Sprint	to	relocate	users	from	the	spectrum	now	licensed to	DBSD	North	America	and	TerreStar.		Pursuant	to	the	Sprint	Settlement	Agreement,	we	made	a	net	payment	of	approximately	$114	million	to	Sprint.		Our	ultimate acquisition	of	100%	of	the	equity	of	reorganized	DBSD	North	America	and	consummation	of	the	TerreStar	Transaction	are	subject	to	certain	conditions,	including approval	by	the	FCC.

Under	our	agreements	to	acquire	DBSD	North	America	and	purchase	TerreStar's	assets,	we	paid	substantially	all	of	the	purchase	price	for	both	transactions	prior	to	the receipt	of	certain	regulatory	approvals	(the	FCC	with	respect	to	DBSD	North	America,	and	the	FCC	and	the	Canadian	federal	Department	of	Industry	("Industry Canada")	with	respect	to	TerreStar).		On	February	7,	2012,	Industry	Canada	approved	the	transfer	of	the	Canadian	spectrum	licenses	held	by	TerreStar	to	us.		If	the remaining	required	approvals	are	not	obtained,	subject	to	certain	exceptions,	we	have	the	right	to	require	and	direct	the	sale	of	some	or	all	of	the	assets	of	the	relevant company	to	a	third	party	and	we	would	be	entitled	to	the	proceeds	from	such	a	sale.		These	proceeds	could,	however,	be	substantially	less	than	amounts	we	have	paid	in the	respective	transactions.

In	addition,	our	consolidated	FCC	applications	for	approval	of	the	license	transfers	from	DBSD	North	America	and	TerreStar	were	accompanied	by	requests	for	waiver of	the	integrated	service	requirement,	the	spare	satellite	requirement	and	various	technical	provisions.		Waiver	of	the	integrated	service	requirement	would	allow	DISH to	offer	single-mode	terrestrial	terminals	to	customers	who	do	not	desire	satellite	functionality.		The	spectrum	licenses	currently	held	by	DBSD	North	America	and TerreStar	do	not	include	a	waiver	of	this	integrated	service	requirement.		Our	integrated	service	requirement	waiver	request	has	been	opposed	by	certain	parties,	and there	can	be	no	assurance	that	the	FCC	will	approve	it.		If	our	FCC	applications	and	waiver	requests	are	not	granted	by	the	FCC,	or	are	granted	in	a	manner	that	varies from	the	form	we	have	requested,	it	could	cause	the	value	of	these	assets	to	be	impaired,	potentially	requiring	us	to	take	significant	write-downs	on	these	assets.		We assess	potential	impairments	to	these	assets	annually,	or	more	often	if	indicators	of	impairment	arise,	to	determine	whether	an	impairment	condition	may	exist.		We	use	a probability	weighted	analysis	considering	estimated	future	cash	flows	discounted	at	a	rate	commensurate	with	the	risk	involved	and	market	based	data	to	assess	potential impairments.

To	the	extent	we	receive	these	approvals	and	waivers,	there	can	be	no	assurance	that	we	will	be	able	to	develop	and	implement	a	business	model	that	will	realize	a	return on	these	spectrum	investments	or	that	we	will	be	able	to	profitably	deploy	the	assets	represented	by	these	spectrum	investments.		We	will	likely	be	required	to	make significant	additional	investments	or	partner	with	others	to	commercialize	these	licenses.		Because	we	have	not	received	approval	from	the	FCC,	we	do	not	yet	know	the full	costs	(including	any	build-out	requirements)	associated	with	complying	with	regulations	applicable	to	our	acquisition	of	DBSD	North	America	or	the	TerreStar Transaction.		Depending	on	the	nature	and	scope	of	such	commercialization	and	build-out,	any	such	investment	or	partnership	could	vary	significantly,	which	may	affect the	carrying	value	of	our	investments	and	our	future	financial	condition	or	results	of	operations.

# Transactions	with	EchoStar

On	January	1,	2008,	we	completed	the	distribution	of	our	technology	and	set-top	box	business	and	certain	infrastructure	assets	(the	"Spin-off")	into	a	separate	publicly- traded	company,	EchoStar.		DISH	Network	and	EchoStar	operate	as	separate	publicly-traded	companies,	and	neither	entity	has	any	ownership	interest	in	the	other. However,	a	substantial	majority	of	the	voting	power	of	the	shares	of	both	DISH	Network	and	EchoStar	is	owned	beneficially	by	Charles	W.	Ergen,	our	Chairman,	or	by certain	trusts	established	by	Mr.	Ergen	for	the	benefit	of	his	family.

# SATELLITES

Most	of	our	programming	is	currently	delivered	using	DBS	satellites.		We	continue	to	explore	opportunities	to	expand	our	available	satellite	capacity	through	the	use	of other	available	spectrum.		Increasing	our	available	spectrum	is	particularly	important	as	more	bandwidth	intensive	HD	programming	is	produced	and	to	address	new video	and	data	applications	consumers	may	desire	in	the	future.		We	currently	utilize	satellites	in	geostationary	orbit	approximately	22,300	miles	above	the	equator detailed	in	the	table	below.

|  |  | Degree | Useful |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Launch | Orbital | Life | Lease\tTerm |
| Satellites | Date | Location | (Years) | (Years) |
| Owned: |  |  |  |  |
| EchoStar\tI\t(1) | December\t1995 | 77 | 12 |  |
| EchoStar\tVII | February\t2002 | 119 | 12 |  |
| EchoStar\tX | February\t2006 | 110 | 12 |  |
| EchoStar\tXI | July\t2008 | 110 | 12 |  |
| EchoStar\tXIV | March\t2010 | 119 | 15 |  |
| EchoStar\tXV | July\t2010 | 61.5 | 15 |  |
| Leased\tfrom\tEchoStar: |  |  |  |  |
| EchoStar\tVI\t(1) | July\t2000 | 77 | 12 |  |
| EchoStar\tVIII\t(1)(2) | August\t2002 | 77 | 12 |  |
| EchoStar\tIX\t(1)(2)(3) | August\t2003 | 121 | 12 |  |
| EchoStar\tXII\t(1) | July\t2003 | 61.5 | 10 |  |
| Nimiq\t5\t(1)(2) | September\t2009 | 72.7 | 10 | 10 |
| Leased\tfrom\tOther\tThird\tParty: |  |  |  |  |
| Anik\tF3 | April\t2007 | 118.7 | 15 | 15 |
| Ciel\tII | December\t2008 | 129 | 10 | 10 |
| Under\tConstruction: |  |  |  |  |
| Leased\tfrom\tEchoStar: |  |  |  |  |
| EchoStar\tXVI | 2012 | 61.5 | 10 | 10 |

(1)										See	Note	20	in	the	Notes	to	our	Consolidated	Financial	Statements	in	Item	15	of	this	Annual	Report	on	Form	10-K	for	further	discussion	of	our	Related	Party Transactions	with	EchoStar.

(2)										We	lease	a	portion	of	the	capacity	on	these	satellites.

Recent	Developments

# Recent	developments	with	respect	to	certain	of	our	satellites	are	discussed	below.

QuetzSat-1.		During	2008,	we	entered	into	a	transponder	service	agreement	with	EchoStar	expiring	in	November	2021,	which	will	be	accounted	for	as	an	operating lease.		We	will	lease	24	DBS	transponders	on	QuetzSat-1	when	the	satellite	is	placed	into	commercial	operation	at	the	77	degree	orbital	location.		QuetzSat-1	was launched	on	September	29,	2011	and	was	placed	into	service	during	the	fourth	quarter	2011	at	the	67.1	degree	orbital	location	while	we	and	EchoStar	explore	alternative uses	for	the	QuetzSat-1	satellite.		In	the	interim,	EchoStar	is	providing	us	with	alternate	capacity	at	the	77	degree	orbital	location.		See	Note	20	in	the	Notes	to	our Consolidated	Financial	Statements	in	Item	15	of	this	Annual	Report	on	Form	10-K.

# Satellites	Under	Construction

We	have	agreed	to	lease	capacity	on	one	satellite	from	EchoStar	that	is	currently	under	construction.

·																		EchoStar	XVI.		During	December	2009,	we	entered	into	a	ten-year	transponder	service	agreement	with	EchoStar	to	lease	all	of	the	capacity	on	EchoStar	XVI,	a DBS	satellite.		EchoStar	XVI	will	replace	the	satellites	currently	at	the	61.5	degree	orbital	location	and	will	allow	us	to	offer	other	value-added	services.		We will	lease	certain	satellite	capacity	from	EchoStar	on	EchoStar	XVI	after	its	service	commencement	date	and	this	lease	generally	terminates	upon	the	earlier of:		(i)	the	end	of	life	or	replacement	of	the	satellite;	(ii)	the	date	the	satellite	fails;	(iii)	the	date	the	transponder(s)	on	which	service	is	being	provided	under	the agreement	fails;	or	(iv)	ten	years	following	the	actual	service	commencement	date.		Upon	expiration	of	the	initial	term,	we	have	the	option	to	renew	on	a	year- to-year	basis	through	the	end	of	life	of	the	satellite.		There	can	be	no	assurance	that	any	options	to	renew	this	agreement	will	be	exercised.		EchoStar	XVI	is expected	to	be	launched	during	the	second	half	of	2012.

# Satellite	Anomalies

Operation	of	our	pay-TV	service	requires	that	we	have	adequate	satellite	transmission	capacity	for	the	programming	we	offer.		Moreover,	current	competitive	conditions require	that	we	continue	to	expand	our	offering	of	new	programming,	particularly	by	expanding	local	HD	coverage	and	offering	more	HD	national	channels.		While	we generally	have	had	in-orbit	satellite	capacity	sufficient	to	transmit	our	existing	channels	and	some	backup	capacity	to	recover	the	transmission	of	certain	critical programming,	our	backup	capacity	is	limited.

In	the	event	of	a	failure	or	loss	of	any	of	our	satellites,	we	may	need	to	acquire	or	lease	additional	satellite	capacity	or	relocate	one	of	our	other	satellites	and	use	it	as	a replacement	for	the	failed	or	lost	satellite.		Such	a	failure	could	result	in	a	prolonged	loss	of	critical	programming	or	a	significant	delay	in	our	plans	to	expand programming	as	necessary	to	remain	competitive	and	thus	may	have	a	material	adverse	effect	on	our	business,	financial	condition	and	results	of	operations.

Prior	to	2011,	certain	satellites	in	our	fleet	experienced	anomalies,	some	of	which	have	had	a	significant	adverse	impact	on	their	remaining	useful	life	and/or	commercial operation.		There	can	be	no	assurance	that	future	anomalies	will	not	further	impact	the	remaining	useful	life	and/or	commercial	operation	of	any	of	these	satellites.		See "Long-Lived	Satellite	Assets"	below	for	further	discussion	of	evaluation	of	impairment	and	Note	7	in	the	Notes	to	our	Consolidated	Financial	Statements	in	Item	15	of this	Annual	Report	on	Form	10-K.		There	can	be	no	assurance	that	we	can	recover	critical	transmission	capacity	in	the	event	one	or	more	of	our	in-orbit	satellites	were to	fail.		We	do	not	anticipate	carrying	insurance	for	any	of	the	in-orbit	satellites	that	we	use,	and	we	will	bear	the	risk	associated	with	any	in-orbit	satellite	failures. Recent	developments	with	respect	to	certain	of	our	satellites	are	discussed	below.

# Owned	Satellites

EchoStar	XIV.		EchoStar	XIV	was	designed	to	meet	a	minimum	15-year	useful	life.		During	September	2011,	we	determined	that	EchoStar	XIV	experienced	a	solar array	anomaly	that	reduced	the	total	power	available	for	use	by	the	spacecraft.		While	this	anomaly	did	not	reduce	the	estimated	useful	life	of	the	satellite	to	less	than	15 years	or	impact	commercial	operation	of	the	satellite,	there	can	be	no	assurance	that	future	anomalies	will	not	reduce	its	useful	life	or	impact	its	commercial	operation.

# Leased	Satellites

EchoStar	VIII.		EchoStar	VIII	was	designed	to	operate	32	DBS	transponders	with	the	ability	to	provide	service	to	the	entire	continental	United	States	("CONUS")	at approximately	120	watts	per	channel,	switchable	to	16	DBS	transponders	operating	at	approximately	240	watts	per	channel.		EchoStar	VIII	was	also	designed	with	spot- beam	technology.		This	satellite	has	experienced	several	anomalies	prior	to	2011,	and	during	January	2011	the	satellite	experienced	an	anomaly	that	temporarily disrupted	electrical	power	to	some	components	causing	an	interruption	of	broadcast	service.		In	addition,	it	has	now	been	determined	one	of	the	two	on-board	computers used	to	control	the	satellite	failed	in	connection	with	the	January	2011	anomaly.		None	of	these	anomalies	has	impacted	the	commercial	operation	or	estimated	useful life	of	the	satellite.		However,	if	the	remaining	on-board	computer	fails,	the	commercial	operation	of	the	satellite	would	likely	be	substantially	impacted	and	may	result in	an	impairment	of	the	satellite.		There	can	also	be	no	assurance	that	this	anomaly	or	any	future	anomalies	will	not	reduce	its	useful	life	or	impact	its	commercial operation.

# Long-Lived	Satellite	Assets

We	evaluate	our	satellite	fleet	for	impairment	as	one	asset	group	and	test	for	recoverability	whenever	events	or	changes	in	circumstances	indicate	that	its	carrying amount	may	not	be	recoverable.		While	certain	of	the	anomalies	discussed	above,	and	previously	disclosed,	may	be	considered	to	represent	a	significant	adverse	change in	the	physical	condition	of	an	individual	satellite,	based	on	the	redundancy	designed	within	each	satellite	and	considering	the	asset	grouping,	these	anomalies	are	not considered	to	be	significant	events	that	would	require	evaluation	for	impairment	recognition.		Unless	and	until	a	specific	satellite	is	abandoned	or	otherwise	determined to	have	no	service	potential,	the	net	carrying	amount	related	to	the	satellite	would	not	be	written	off.

# GOVERNMENT	REGULATIONS

DBS	operators	are	subject	to	significant	government	regulation,	primarily	by	the	FCC	and,	to	a	certain	extent,	by	Congress,	other	federal	agencies	and	foreign,	state	and local	authorities.		Depending	upon	the	circumstances,	noncompliance	with	legislation	or	regulations	promulgated	by	these	entities	could	result	in	the	suspension	or revocation	of	our	licenses	or	registrations,	the	termination	or	loss	of	contracts	or	the	imposition	of	contractual	damages,	civil	fines	or	criminal	penalties,	any	of	which could	have	a	material	adverse	effect	on	our	business,	financial	condition	and	results	of	operations.		Furthermore,	the	adoption	or	modification	of	laws	or	regulations relating	to	video	programming,	satellite	services,	the	Internet	or	other	areas	of	our	business	could	limit	or	otherwise	adversely	affect	the	manner	in	which	we	currently conduct	our	business.		If	we	become	subject	to	new	regulations	or	legislation	or	new	interpretations	of	existing	regulations	or	legislation	that	govern	Internet	network neutrality,	we	may	be	required	to	incur	additional	expenses	or	alter	our	business	model.		The	manner	in	which	legislation	governing	Internet	network	neutrality	may	be interpreted	and	enforced	cannot	be	precisely	determined,	which	in	turn	could	have	an	adverse	effect	on	our	business,	financial	condition	and	results	of	operations.

The	following	summary	of	regulatory	developments	and	legislation	in	the	United	States	is	not	intended	to	describe	all	present	and	proposed	government	regulation	and

legislation	affecting	the	satellite	and	video	programming	distribution	industries.		Government	regulations	that	are	currently	the	subject	of	judicial	or	administrative proceedings,	legislative	hearings	or	administrative	proposals	could	change	our	industry	to	varying	degrees.		We	cannot	predict	either	the	outcome	of	these	proceedings or	any	potential	impact	they	might	have	on	the	industry	or	on	our	operations.

# FCC	Regulation	under	the	Communications	Act

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

·																		the	assignment	of	satellite	radio	frequencies	and	orbital	locations,	the	licensing	of	satellites	and	earth	stations,	the	granting	of	related	authorizations, and	evaluation	of	the	fitness	of	a	company	to	be	a	licensee;

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

·																		ensuring	compliance	with	the	terms	and	conditions	of	such	assignments,	licenses,	authorizations	and	approvals;	including	required	timetables	for construction	and	operation	of	satellites;

·																		avoiding	interference	with	other	radio	frequency	emitters;	and

·																		ensuring	compliance	with	other	applicable	provisions	of	the	Communications	Act	and	FCC	rules	and	regulations.

To	obtain	FCC	satellite	licenses	and	authorizations,	satellite	operators	must	satisfy	strict	legal,	technical	and	financial	qualification	requirements.		Once	issued,	these licenses	and	authorizations	are	subject	to	a	number	of	conditions	including,	among	other	things,	satisfaction	of	ongoing	due	diligence	obligations,	construction milestones,	and	various	reporting	requirements.		Necessary	federal	approval	of	these	applications	may	not	be	granted,	may	not	be	granted	in	a	timely	manner,	or	may	be granted	subject	to	conditions	which	may	be	cumbersome.

Overview	of	our	Satellites,	Authorizations	and	Contractual	Rights	for	Satellite	Capacity.		Our	satellites	are	located	in	orbital	positions,	or	slots,	that	are	designated	by their	western	longitude.		An	orbital	position	describes	both	a	physical	location	and	an	assignment	of	spectrum	in	the	applicable	frequency	band.		Each	DBS	orbital position	has	500	MHz	of	available	Ku-band	spectrum	that	is	divided	into	32	frequency	channels.		Through	digital	compression	technology,	we	can	currently	transmit between	nine	and	13	standard	definition	digital	video	channels	per	DBS	frequency	channel.		Several	of	our	satellites	also	include	spot-beam	technology	that	enables	us to	increase	the	number	of	markets	where	we	provide	local	channels,	but	reduces	the	number	of	video	channels	that	could	otherwise	be	offered	across	the	entire	United States.

The	FCC	has	licensed	us	to	operate	a	total	of	82	DBS	frequency	channels	at	the	following	orbital	locations:

·																		21	DBS	frequency	channels	at	the	119	degree	orbital	location,	capable	of	providing	service	to	CONUS;

·																		29	DBS	frequency	channels	at	the	110	degree	orbital	location,	capable	of	providing	service	to	CONUS;	and

·																		32	DBS	frequency	channels	at	the	148	degree	orbital	location,	capable	of	providing	service	to	the	Western	United	States.

We	currently	do	not	have	any	satellites	positioned	at	the	148	degree	orbital	location	as	a	result	of	the	retirement	of	EchoStar	V.		While	we	have	requested	approval	from the	FCC	for	the	future	use	of	this	orbital	location,	there	can	be	no	assurance	that	the	FCC	will	determine	that	our	proposed	future	use	of	this	orbital	location	complies fully	with	all	licensing	requirements.		If	we	do	not	use	this	orbital	location,	we	could	lose	the	associated	FCC	license.

In	addition,	we	currently	lease	or	have	entered	into	agreements	to	lease	capacity	on	satellites	using	the	following	spectrum	at	the	following	orbital	locations:

·																		500	MHz	of	Ku-band	FSS	spectrum	that	is	divided	into	32	frequency	channels	at	the	118.7	degree	orbital	location,	which	is	a	Canadian	FSS	slot	that	is capable	of	providing	service	to	the	continental	United	States,	Alaska	and	Hawaii;

·																		32	DBS	frequency	channels	at	the	129	degree	orbital	location,	which	is	a	Canadian	DBS	slot	that	is	capable	of	providing	service	to	most	of	the	United States;

·																		32	DBS	frequency	channels	at	the	61.5	degree	orbital	location,	capable	of	providing	service	to	most	of	the	United	States;

·																		24	DBS	frequency	channels	at	the	77	degree	orbital	location,	which	is	a	Mexican	DBS	slot	that	is	capable	of	providing	service	to	most	of	the	United States	and	Mexico;	and

·																		32	DBS	frequency	channels	at	the	72.7	degree	orbital	location,	which	is	a	Canadian	DBS	slot	that	is	capable	of	providing	service	to	the	United	States.

We	also	have	month-to-month	FSS	capacity	available	from	EchoStar	on	a	satellite	located	at	the	121	degree	orbital	location.

Mobile-Satellite	Service	("MSS")	and	Ancillary	Terrestrial	Component	("ATC").		In	2011,	we	entered	into	transactions	to	acquire	DBSD	North	America	and	purchase TerreStar's	assets,	the	two	FCC	2GHz	MSS	licensees.		Both	DBSD	North	America	and	TerreStar	have	authority	to	offer	an	ATC	service	with	their	MSS	services.		We currently	have	consolidated	applications	pending	with	the	FCC	to	approve	the	license	transfers	accompanied	by	requests	for	waiver	of	the	integrated	service	requirement, the	spare	satellite	requirement	and	various	technical	provisions.		If	the	applications	are	approved,	we	will	become	subject	to	FCC	regulation	regarding	wireless operations	of	these	licenses	and	may	be	subject	to	certain	conditions	stemming	from	the	FCC's	grant	of	the	application.		For	more	information,	see	"New	Business Opportunities	—	Spectrum	Investments"	of	this	annual	report	on	Form	10-K.

700	MHz	Spectrum.		In	2008,	we	paid	$712	million	to	acquire	certain	700	MHz	wireless	licenses,	which	were	granted	to	us	by	the	FCC	in	February	2009.		To commercialize	these	licenses	and	satisfy	the	associated	FCC	build-out	requirements,	we	will	be	required	to	make	significant	additional	investments	or	partner	with others.		Depending	on	the	nature	and	scope	of	such	commercialization	and	build-out,	any	such	investment	or	partnership	could	vary	significantly.		Part	or	all	of	these licenses	may	be	terminated	if	the	associated	FCC	build-out	requirements	are	not	satisfied.

Multichannel	Video	Distribution	&	Data	Service	("MVDDS").		In	2010,	we	purchased	all	of	South.com	L.L.C.,	which	is	an	entity	that	holds	MVDDS	licenses	in	37 markets	in	the	United	States.		We	are	subject	to	certain	FCC	build-out	requirements	for	these	licenses.		Part	or	all	of	our	MVDDS	licenses	may	be	terminated	if	those FCC	build-out	requirements	are	not	satisfied.

Duration	of	our	DBS	Satellite	Licenses.		Generally	speaking,	all	of	our	satellite	licenses	are	subject	to	expiration	unless	renewed	by	the	FCC.		The	term	of	each	of	our DBS	licenses	is	ten	years.		Our	licenses	are	currently	set	to	expire	at	various	times.		In	addition,	we	currently	operate	at	the	118.7	degree	orbital	location	under	a	special temporary	authorization.		A	special	temporary	authorization	is	granted	for	a	period	of	only	180	days	or	less,	subject	again	to	possible	renewal	by	the	FCC.		Generally, our	FCC	licenses	and	special	temporary	authorization	have	been	renewed	by	the	FCC	on	a	routine	basis,	but	there	can	be	no	assurance	that	the	FCC	will	continue	to	do so.

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

4.5	Degree	Spacing	Tweener	Satellites.		The	FCC	has	proposed	to	allow	so-called	"tweener"	DBS	operations	—	DBS	satellites	operating	at	orbital	locations	4.5 degrees	(half	of	the	usual	nine	degrees)	away	from	other	DBS	satellites.		The	FCC	granted	authorizations	to	Spectrum	Five	and	EchoStar	for	tweener	satellites	at	the 86.5	and	114.5	degree	orbital	locations.		Even	though	these	authorizations	were	subsequently	cancelled	because	the	FCC	determined	that	the	licensees	did	not	meet certain	milestone	requirements,	Spectrum	Five	and	EchoStar	have	requested	reconsideration	of	the	FCC's	determinations	for	both	of	these	licensees.		Tweener	operations close	to	our	licensed	orbital	locations	(including	Spectrum	Five's	proposed	use	at	the	114.5	degree	orbital	location)	could	cause	harmful	interference	to	our	service	and constrain	our	future	operations.		The	FCC	has	not	completed	its	rulemaking	on	the	operating	and	service	rules	for	tweener	satellites.

Interference	from	Other	Services	Sharing	Satellite	Spectrum.		The	FCC	has	adopted	rules	that	allow	non-geostationary	orbit	fixed	satellite	services	to	operate	on	a	co- primary	basis	in	the	same	frequency	band	as	DBS	and	FSS.		The	FCC	has	also	authorized	the	use	of	MVDDS	in	the	DBS	band.		MVDDS	licenses	were	auctioned	in 2004.		While	we	are	not	aware	of	any	MVDDS	systems	having	been	commercially	deployed,	several	systems	are	currently	being	tested	and	may	soon	be	deployed. Despite	regulatory	provisions	intended	to	protect	DBS	and	FSS	operations	from	harmful	interference,	there	can	be	no	assurance	that	operations	by	other	satellites	or terrestrial	communication	services	in	the	DBS	and	FSS	bands	will	not	interfere	with	our	DBS	and	FSS	operations	and	adversely	affect	our	business.

International	Satellite	Competition	and	Interference.		DirecTV	has	obtained	FCC	authority	to	provide	service	to	the	United	States	from	a	Canadian	DBS	orbital	slot, and	EchoStar	has	obtained	authority	to	provide	service	to	the	United	States	from	both	a	Mexican	and	a	Canadian	DBS	orbital	slot.		Further,	we	have	also	received authority	to	do	the	same	from	a	Canadian	DBS	orbital	slot	at	129	degrees	and	a	Canadian	FSS	orbital	slot	at	118.7	degrees.		The	possibility	that	the	FCC	will	allow service	to	the	U.S.	from	additional	foreign	slots	may	permit	additional	competition	against	us	from	other	satellite	providers.		It	may	also	provide	a	means	by	which	to increase	our	available	satellite	capacity	in	the	United	States.		In	addition,	a	number	of	administrations,	such	as	Great	Britain	and	the	Netherlands,	have	requested	to	add orbital	locations	serving	the	U.S.	close	to	our	licensed	slots.		Such	operations	could	cause	harmful	interference	to	our	satellites	and	constrain	our	future	operations.

Rules	Relating	to	Broadcast	Services.		The	FCC	imposes	different	rules	for	"subscription"	and	"broadcast"	services.		We	believe	that	because	we	offer	a	subscription programming	service,	we	are	not	subject	to	many	of	the	regulatory	obligations	imposed	upon	broadcast	licensees.		However,	we	cannot	be	certain	whether	the	FCC	will find	in	the	future	that	we	must	comply	with	regulatory	obligations	as	a	broadcast	licensee,	and	certain	parties	have	requested	that	we	be	treated	as	a	broadcaster.		If	the FCC	determines	that	we	are	a	broadcast	licensee,	it	could	require	us	to	comply	with	all	regulatory	obligations	imposed	upon	broadcast	licensees,	which	in	certain respects	are	subject	to	more	burdensome	regulation	than	subscription	television	service	providers.

Public	Interest	Requirements.		The	FCC	imposes	certain	public	interest	obligations	on	our	DBS	licenses.		These	obligations	require	us	to	set	aside	four	percent	of	our channel	capacity	exclusively	for	noncommercial	programming	for	which	we	must	charge	programmers	below-cost	rates	and	for	which	we	may	not	impose	additional charges	on	subscribers.		The	Satellite	Television	Extension	and	Localism	Act	of	2010	("STELA")	requires	the	FCC	to	decrease	this	set-aside	to	3.5	percent	for	satellite carriers	who	provide	retransmission	of	state	public	affairs	networks	in	15	states	and	are	otherwise	qualified.		The	FCC,	however,	has	not	yet	determined	whether	we qualify	for	this	decrease	in	set-aside.		The	obligation	to	provide	noncommercial	programming	may	displace	programming	for	which	we	could	earn	commercial	rates	and could	adversely	affect	our	financial	results.		We	cannot	be	sure	that,	if	the	FCC	were	to	review	our	methodology	for	processing	public	interest	carriage	requests, computing	the	channel	capacity	we	must	set	aside	or	determining	the	rates	that	we	charge	public	interest	programmers,	it	would	find	them	in	compliance	with	the	public interest	requirements.

Separate	Security,	Plug	and	Play.		Cable	companies	are	required	by	law	to	separate	the	security	from	the	other	functionality	of	their	set-top	boxes.		Set-top	boxes	used by	DBS	providers	are	not	currently	subject	to	such	separate	security	requirement.		However,	the	FCC	is	considering	a	possible	expansion	of	that	requirement	to	DBS set-top	boxes.		Also,	the	FCC	has	adopted	the	so-called	"plug	and	play"	standard	for	compatibility	between	digital	television	sets	and	cable	systems.		That	standard	was developed	through	negotiations	involving	the	cable	and	consumer	electronics	industries,	but	not	the	satellite	television	industry.		The	FCC's	adoption	of	the	standard was	accompanied	by	certain	rules	regarding	copy	protection	measures	that	are	applicable	to	us.		While	we	have	appealed	the	FCC's	decision	regarding	the	copy protection	measures	to	the	U.S.	Court	of	Appeals	for	the	D.C.	Circuit	("D.C.	Circuit"),	there	can	be	no	assurance	that	the	D.C.	Circuit	will	set	aside	or	remand	that decision.		The	FCC	is	also	considering	various	proposals	to	establish	two-way	digital	cable	"plug	and	play"	rules.		That	proceeding	also	asks	about	means	to	incorporate all	pay-TV	providers	into	its	"plug	and	play"	rules.		The	cable	industry	and	consumer	electronics	companies	have	reached	a	"tru2way"	commercial	arrangement	to resolve	many	of	the	outstanding	issues	in	this	docket.		We	cannot	predict	whether	the	FCC	will	impose	rules	on	our	DBS	operations	that	are	based	on	cable	system architectures	or	the	private	cable/consumer	electronics	tru2way	commercial	arrangement.		Complying	with	the	separate	security	and	other	"plug	and	play"	requirements would	require	potentially	costly	modifications	to	our	set-top	boxes	and	operations.		We	cannot	predict	the	timing	or	outcome	of	this	FCC	proceeding.

Retransmission	Consent.		The	Copyright	Act	generally	gives	satellite	companies	a	statutory	copyright	license	to	retransmit	local	broadcast	channels	by	satellite	back into	the	market	from	which	they	originated,	subject	to	obtaining	the	retransmission	consent	of	local	network	stations	that	do	not	elect	"must	carry"	status,	as	required	by the	Communications	Act.		If	we	fail	to	reach	retransmission	consent	agreements	with	such	broadcasters,	we	cannot	carry	their	signals.		This	could	have	an	adverse	effect on	our	strategy	to	compete	with	cable	and	other	satellite	companies	that	provide	local	signals.		While	we	have	been	able	to	reach	retransmission	consent	agreements	with most	of	these	local	network	stations,	there	remain	stations	with	which	we	have	not	been	able	to	reach	an	agreement.	We	cannot	be	sure	that	we	will	secure	these agreements	or	that	we	will	secure	new	agreements	on	acceptable	terms	(or	at	all)	upon	the	expiration	of	our	current	retransmission	consent	agreements,	some	of	which are	short-term.		In

recent	years,	national	broadcasters	have	used	their	ownership	of	certain	local	broadcast	stations	to	attempt	to	require	us	to	carry	additional	cable	programming	in exchange	for	retransmission	consent	of	their	local	broadcast	stations.		These	requirements	may	place	constraints	on	available	capacity	on	our	satellites	for	other programming.		Furthermore,	the	rates	we	are	charged	for	retransmitting	local	channels	have	been	increasing.		We	may	be	unable	to	pass	these	increased	programming costs	on	to	our	customers,	which	could	have	a	material	adverse	effect	on	our	financial	condition	and	results	of	operations.		The	FCC	is	currently	considering	changes	to its	rules	governing	retransmission	consent	disputes	that	are	designed	to	provide	more	guidance	to	the	negotiating	parties	on	good-faith	negotiation	requirements	and	to improve	notice	to	consumers	in	advance	of	possible	service	disruptions.		We	cannot	predict	the	timing	or	outcome	of	this	FCC	proceeding.

Digital	HD	Carry-One,	Carry-All	Requirement.		To	provide	any	full-power	local	broadcast	signal	in	any	market,	we	are	required	to	retransmit	all	qualifying	broadcast signals	in	that	market	("carry-one,	carry-all").		The	FCC	has	adopted	digital	carriage	rules	that	require	DBS	providers	to	phase	in	carry-one,	carry-all	obligations	with respect	to	the	carriage	of	full-power	broadcasters'	HD	signals	by	February	2013	in	markets	in	which	DISH	elects	to	provide	local	channels	in	HD.		In	addition,	STELA has	imposed	accelerated	HD	carriage	requirements	for	noncommercial	educational	stations	on	DBS	providers	that	do	not	have	a	certain	contractual	relationship	with	a certain	number	of	such	stations.		DISH	Network	has	entered	into	an	agreement	with	a	number	of	PBS	stations	to	comply	with	the	requirements.		The	carriage	of additional	HD	signals	on	our	pay-TV	service	could	cause	us	to	experience	significant	capacity	constraints	and	prevent	us	from	carrying	additional	popular	national programs	and/or	carrying	those	national	programs	in	HD.

In	addition,	there	is	a	pending	rulemaking	before	the	FCC	regarding	whether	to	require	DBS	providers	to	carry	all	broadcast	stations	in	a	local	market	in	both	standard

definition	and	HD	if	they	carry	any	station	in	that	market	in	both	standard	definition	and	HD.		If	we	were	required	to	carry	multiple	versions	of	each	broadcast	station, we	would	have	to	dedicate	more	of	our	finite	satellite	capacity	to	each	broadcast	station.		We	cannot	predict	the	outcome	or	timing	of	that	rulemaking	process.

Distant	Signals.		Pursuant	to	STELA,	we	have	been	able	to	obtain	a	waiver	of	a	court	injunction	that	previously	prevented	us	from	retransmitting	certain	distant network	signals	under	a	statutory	copyright	license.		Because	of	that	waiver,	we	may	once	again	provide	distant	network	signals	to	eligible	subscribers.		To	qualify	for that	waiver,	we	are	required	to	provide	local	service	in	all	210	local	markets	in	the	U.S.	on	an	ongoing	basis.		This	condition	poses	a	significant	strain	on	our	capacity. Moreover,	we	may	lose	that	waiver	if	we	are	found	to	have	failed	to	provide	local	service	in	any	of	the	210	local	markets.		If	we	lose	the	waiver,	the	injunction	could	be reinstated.		Furthermore,	depending	on	the	severity	of	the	failure,	we	may	also	be	subject	to	other	sanctions,	which	may	include,	among	other	things,	damages.		Pursuant to	STELA,	our	compliance	with	certain	conditions	of	the	waiver	is	subject	to	periodic	examination	and	review.

Dependence	on	Cable	Act	for	Program	Access.		We	purchase	a	large	percentage	of	our	programming	from	cable-affiliated	programmers.		The	provisions	of	the	Cable Act	of	1992,	as	amended	("Cable	Act"),	prohibiting	exclusive	contracting	practices	with	cable-affiliated	programmers,	were	extended	for	another	five-year	period	in September	2007.		Cable	companies	appealed	the	FCC's	decision,	and	while	that	decision	was	upheld	by	the	D.C.	Circuit	in	March	2010,	that	court	indicated	if	the market	continues	to	evolve,	it	is	expected	that	the	exclusivity	prohibition	may	no	longer	be	necessary.		Any	change	in	the	Cable	Act	and	the	FCC's	rules	that	currently limit	the	ability	of	cable-affiliated	programmers	to	discriminate	against	competing	businesses,	such	as	ours,	in	the	sale	of	programming	could	adversely	affect	our	ability to	acquire	cable-affiliated	programming	at	all	or	to	acquire	programming	on	a	cost-effective	basis.		As	a	result,	we	may	be	limited	in	our	ability	to	obtain	access	on nondiscriminatory	terms	to	programming	from	programmers	that	are	affiliated	with	cable	system	operators.		In	the	case	of	certain	types	of	programming	affiliated	with Comcast,	Time-Warner	Cable,	and	Liberty,	the	terms	of	access	to	the	programming	are	subject	to	arbitration	for	a	limited	period	of	time	if	we	and	the	programmer cannot	reach	agreement	on	terms,	subject	to	FCC	review.		We	cannot	be	sure	that	this	procedure	will	result	in	favorable	terms	for	us	or	that	the	FCC	conditions	that establish	this	procedure	will	be	allowed	to	expire	on	their	own	terms.

In	addition,	affiliates	of	certain	cable	providers	have	denied	us	access	to	sports	programming	they	feed	to	their	cable	systems	terrestrially,	rather	than	by	satellite.		The FCC	held	that	new	denials	of	such	service	are	unfair	if	they	have	the	purpose	or	effect	of	significantly	hindering	us	from	providing	programming	to	consumers. However,	we	cannot	be	sure	that	we	can	prevail	in	a	complaint	related	to	such	programming	and	gain	access	to	it.		Our	continuing	failure

to	access	such	programming	could	materially	and	adversely	affect	our	ability	to	compete	in	regions	serviced	by	these	cable	providers.

MDU	Exclusivity.		The	FCC	has	found	that	cable	companies	should	not	be	permitted	to	have	exclusive	relationships	with	multiple	dwelling	units	(e.g.,	apartment buildings).		In	May	2009,	the	D.C.	Circuit	upheld	the	FCC's	decision.		While	the	FCC	requested	comments	in	November	2007	on	whether	DBS	and	Private	Cable Operators	should	be	prohibited	from	having	similar	relationships	with	multiple	dwelling	units,	it	has	yet	to	make	a	formal	decision.		If	the	cable	exclusivity	ban	were	to be	extended	to	DBS	providers,	our	ability	to	serve	these	types	of	buildings	and	communities	would	be	adversely	affected.		We	cannot	predict	the	timing	or	outcome	of the	FCC's	consideration	of	this	proposal.

Net	Neutrality.		The	FCC	has	recently	imposed	rules	of	nondiscrimination	and	transparency	upon	wireline	broadband	providers.		While	this	decision	provides	certain protection	from	discrimination	by	wireline	broadband	providers	against	our	distribution	of	video	content	via	the	Internet,	it	may	still	permit	wireline	broadband providers	to	provide	certain	services	over	their	wireline	broadband	network	that	are	not	subject	to	these	requirements.		Although	the	FCC	imposed	similar	transparency requirements	on	wireless	broadband	providers,	it	declined	to	impose	a	nondiscrimination	rule.		Instead,	wireless	broadband	Internet	providers	are	prohibited	from blocking	websites	and	applications	that	compete	with	voice	and	video	telephony	services.		The	FCC's	net	neutrality	rules	have	been	challenged	in	Federal	court	and could	be	curtailed	or	overturned	if	those	challenges	are	successful.		One	party	has	asked	the	FCC	to	clarify	and/or	ease	the	limitations	under	which	wireline	broadband providers	can	provide	services	that	are	not	subject	to	these	requirements.		It	is	uncertain	how	these	requirements,	even	if	they	are	affirmed	by	the	Federal	court	of appeals,	may	be	interpreted	and	enforced	by	the	FCC;	therefore,	we	cannot	predict	the	practical	effect	of	these	rules	on	our	ability	to	distribute	our	video	content	via	the Internet.

Comcast/NBC	Universal	Transaction.		Comcast	and	General	Electric	have	joined	their	programming	properties,	including	NBC,	Bravo	and	many	others,	in	a	venture	to be	controlled	by	Comcast.		In	January	2011,	the	transaction	was	approved	by	the	FCC	and	the	Department	of	Justice.		The	FCC	conditioned	its	approval	on,	among other	things,	Comcast	complying	with	the	terms	of	the	FCC's	recent	order	on	network	neutrality	(even	if	that	order	is	vacated	by	judicial	or	legislative	action)	and Comcast	licensing	its	affiliated	content	to	us,	other	traditional	pay-TV	providers	and	certain	providers	of	video	services	over	the	Internet	on	fair	and	nondiscriminatory terms	and	conditions,	including,	among	others,	price.		If	Comcast	does	not	license	its	affiliated	content	to	us	on	fair	and	nondiscriminatory	terms	and	conditions,	we	can seek	arbitration	and	continue	to	carry	such	content	while	the	arbitration	is	pending.		However,	it	is	uncertain	how	these	conditions	may	be	interpreted	and	enforced	by the	FCC;	therefore,	we	cannot	predict	the	practical	effect	of	these	conditions.

# Spectrum	Investment	FCC	Authorization

During	the	first	half	of	2011,	we	entered	into	a	transaction	to	acquire	100%	of	the	equity	of	reorganized	DBSD	North	America	for	approximately	$1.4	billion	upon DBSD	North	America's	emergence	from	bankruptcy,	which	included	capital	stock	and	convertible	securities	of,	and	certain	claims	related	to,	DBSD	North	America.		In addition,	in	June	2011,	we	entered	into	the	TerreStar	Transaction	for	a	purchase	price	of	$1.375	billion.	We	have	paid	all	but	$30	million	of	the	purchase	price	for	the TerreStar	Transaction,	which	will	be	paid	upon	closing	of	the	TerreStar	Transaction,	or	upon	certain	other	conditions	being	met	under	the	asset	purchase	agreement. Additionally,	during	the	fourth	quarter	2011,	we	and	Sprint	entered	into	the	Sprint	Settlement	Agreement	pursuant	to	which	all	disputed	issues	relating	to	our	acquisition of	DBSD	North	America	and	the	TerreStar	Transaction	were	resolved	between	us	and	Sprint,	including,	but	not	limited	to,	issues	relating	to	costs	allegedly	incurred	by Sprint	to	relocate	users	from	the	spectrum	now	licensed	to	DBSD	North	America	and	TerreStar.		Pursuant	to	the	Sprint	Settlement	Agreement,	we	made	a	net	payment of	approximately	$114	million	to	Sprint.		Our	ultimate	acquisition	of	100%	of	the	equity	of	reorganized	DBSD	North	America	and	consummation	of	the	TerreStar Transaction	are	subject	to	certain	conditions,	including	approval	by	the	FCC.

Under	our	agreements	to	acquire	DBSD	North	America	and	purchase	TerreStar's	assets,	we	paid	substantially	all	of	the	purchase	price	for	both	transactions	prior	to	the receipt	of	certain	regulatory	approvals	(the	FCC	with	respect	to	DBSD	North	America,	and	the	FCC	and	Industry	Canada	with	respect	to	TerreStar).		On	February	7, 2012,	Industry	Canada	approved	the	transfer	of	the	Canadian	spectrum	licenses	held	by	TerreStar	to	us.		If	the	remaining	required	approvals	are	not	obtained,	subject	to certain	exceptions,	we	have	the	right	to	require	and	direct	the	sale	of	some	or

all	of	the	assets	of	the	relevant	company	to	a	third	party	and	we	would	be	entitled	to	the	proceeds	from	such	a	sale.		These	proceeds	could,	however,	be	substantially	less than	amounts	we	have	paid	in	the	respective	transactions.

In	addition,	our	consolidated	FCC	applications	for	approval	of	the	license	transfers	from	DBSD	North	America	and	TerreStar	were	accompanied	by	requests	for	waiver of	the	integrated	service	requirement,	the	spare	satellite	requirement	and	various	technical	provisions.		Waiver	of	the	integrated	service	requirement	would	allow	DISH to	offer	single-mode	terrestrial	terminals	to	customers	who	do	not	desire	satellite	functionality.		The	spectrum	licenses	currently	held	by	DBSD	North	America	and TerreStar	do	not	include	a	waiver	of	this	integrated	service	requirement.		Our	integrated	service	requirement	waiver	request	has	been	opposed	by	certain	parties,	and there	can	be	no	assurance	that	the	FCC	will	approve	it.		If	our	FCC	applications	and	waiver	requests	are	not	granted	by	the	FCC,	or	are	granted	in	a	manner	that	varies

from	the	form	we	have	requested,	it	could	cause	the	value	of	these	assets	to	be	impaired,	potentially	requiring	us	to	take	significant	write-downs	on	these	assets.		We assess	potential	impairments	to	these	assets	annually,	or	more	often	if	indicators	of	impairment	arise,	to	determine	whether	an	impairment	condition	may	exist.		We	use	a probability	weighted	analysis	considering	estimated	future	cash	flows	discounted	at	a	rate	commensurate	with	the	risk	involved	and	market	based	data	to	assess	potential impairments.

# The	International	Telecommunication	Union

Our	pay-TV	service	also	must	conform	to	the	ITU	broadcasting	satellite	service	plan	for	Region	2	(which	includes	the	United	States).		If	any	of	our	operations	are	not consistent	with	this	plan,	the	ITU	will	only	provide	authorization	on	a	non-interference	basis	pending	successful	modification	of	the	plan	or	the	agreement	of	all	affected administrations	to	the	non-conforming	operations.		Certain	of	our	DBS	satellites	are	not	presently	entitled	to	any	interference	protection	from	other	satellites	that	are	in conformance	with	the	plan.		Accordingly,	unless	and	until	the	ITU	modifies	its	broadcasting	satellite	service	plan	to	include	the	technical	parameters	of	DBS	applicants' non-conforming	operations,	our	non-conforming	satellites,	along	with	those	of	other	DBS	operators,	must	not	cause	harmful	electrical	interference	with	other assignments	that	are	in	conformance	with	the	plan.

# Export	Control	Regulation

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

# PATENTS	AND	OTHER	INTELLECTUAL	PROPERTY

Many	entities,	including	some	of	our	competitors,	have	or	may	in	the	future	obtain	patents	and	other	intellectual	property	rights	that	cover	or	affect	products	or	services that	we	offer.		In	general,	if	a	court	determines	that	one	or	more	of	our	products	or	services	infringe	intellectual	property	rights	held	by	others,	we	may	be	required	to cease	developing	or	marketing	those	products	or	services,	to	obtain	licenses	from	the	holders	of	the	intellectual	property	rights	at	a	material	cost,	or	to	redesign	those products	or	services	in	such	a	way	as	to	avoid	infringing	any	patent	claims.		If	those	intellectual	property	rights	are	held	by	a	competitor,	we	may	be	unable	to	obtain	the intellectual	property	rights	at	any	price,	which	could	adversely	affect	our	competitive	position.

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

We	cannot	estimate	the	extent	to	which	we	may	be	required	in	the	future	to	obtain	intellectual	property	licenses	or	the	availability	and	cost	of	any	such	licenses.		Those costs,	and	their	impact	on	our	results	of	operations,	could	be	material.		Damages	in	patent	infringement	cases	can	be	substantial,	and	in	certain	circumstances	can	be trebled.		To	the	extent	that	we	are	required	to	pay	unanticipated	royalties	to	third	parties,	these	increased	costs	of	doing	business	could	negatively	affect	our	liquidity	and operating	results.		We	are	currently	defending	multiple	patent	infringement	actions.		We	cannot	be	certain	the	courts	will	conclude	these	companies	do	not	own	the rights	they	claim,	that	our	products	do	not	infringe	on	these	rights	and/or	that	these	rights	are	not	valid.		Further,	we	cannot	be	certain	that	we	would	be	able	to	obtain licenses	from	these	persons	on	commercially	reasonable	terms	or,	if	we	were	unable	to	obtain	such	licenses,	that	we	would	be	able	to	redesign	our	products	to	avoid infringement.

# ENVIRONMENTAL	REGULATIONS

We	are	subject	to	the	requirements	of	federal,	state,	local	and	foreign	environmental	and	occupational	safety	and	health	laws	and	regulations.		These	include	laws regulating	air	emissions,	water	discharge	and	waste	management.		We	attempt	to	maintain	compliance	with	all	such	requirements.		We	do	not	expect	capital	or	other expenditures	for	environmental	compliance	to	be	material	in	2012	or	2013.		Environmental	requirements	are	complex,	change	frequently	and	have	become	more stringent	over	time.		Accordingly,	we	cannot	provide	assurance	that	these	requirements	will	not	change	or	become	more	stringent	in	the	future	in	a	manner	that	could have	a	material	adverse	effect	on	our	business.

# SEGMENT	REPORTING	DATA	AND	GEOGRAPHIC	AREA	DATA

For	segment	reporting	data	and	principal	geographic	area	data	for	2011,	2010	and	2009,	see	Note	17	in	the	Notes	to	our	Consolidated	Financial	Statements	in	Item	15	of this	Annual	Report	on	Form	10-K.

# EMPLOYEES

We	had	approximately	34,000	employees	at	December	31,	2011,	most	of	whom	are	located	in	the	United	States.		We	generally	consider	relations	with	our	employees	to be	good.

Approximately	60	employees	in	three	of	our	field	offices	have	voted	to	have	a	union	represent	them	in	contract	negotiations.		While	we	are	not	currently	a	party	to	any collective	bargaining	agreements,	we	are	currently	negotiating	collective	bargaining	agreements	at	these	offices.

# WHERE	YOU	CAN	FIND	MORE	INFORMATION

We	are	subject	to	the	informational	requirements	of	the	Exchange	Act	and	accordingly	file	our	annual	report	on	Form	10-K,	quarterly	reports	on	Form	10-Q,	current reports	on	Form	8-K,	proxy	statements	and	other	information	with	the	SEC.		The	public	may	read	and	copy	any	materials	filed	with	the	SEC	at	the	SEC's	Public Reference	Room	at	100	F	Street,	NE,	Washington,	D.C.	20549.		Please	call	the	SEC	at	(800)	SEC-0330	for	further	information	on	the	operation	of	the	Public	Reference Room.		As	an	electronic	filer,	our	public	filings	are	also	maintained	on	the	SEC's	Internet	site	that	contains	reports,	proxy	and	information	statements,	and	other information	regarding	issuers	that	file	electronically	with	the	SEC.		The	address	of	that	website	is	http://www.sec.gov.

# WEBSITE	ACCESS

Our	annual	report	on	Form	10-K,	quarterly	reports	on	Form	10-Q,	current	reports	on	Form	8-K	and	amendments	to	those	reports	filed	or	furnished	pursuant	to Section	13(a)	or	15(d)	of	the	Exchange	Act	also	may	be	accessed	free	of	charge	through	our	website	as	soon	as	reasonably	practicable	after	we	have	electronically	filed such	material	with,	or	furnished	it	to,	the	SEC.		The	address	of	that	website	is	http://www.dishnetwork.com.

We	have	adopted	a	written	code	of	ethics	that	applies	to	all	of	our	directors,	officers	and	employees,	including	our	principal	executive	officer	and	senior	financial officers,	in	accordance	with	Section	406	of	the	Sarbanes-Oxley	Act	of	2002	and	the	rules	of	the	SEC	promulgated	thereunder.		Our	code	of	ethics	is	available	on	our corporate	website	at	http://www.dishnetwork.com.		In	the	event	that	we	make	changes	in,	or	provide	waivers	of,	the	provisions	of	this	code	of	ethics	that	the	SEC requires	us	to	disclose,	we	intend	to	disclose	these	events	on	our	website.

# EXECUTIVE	OFFICERS	OF	THE	REGISTRANT

(furnished	in	accordance	with	Item	401	(b)	of	Regulation	S-K,	pursuant	to	General	Instruction	G(3)	of	Form	10-K)

The	following	table	and	information	below	sets	forth	the	name,	age	and	position	with	DISH	Network	of	each	of	our	executive	officers,	the	period	during	which	each executive	officer	has	served	as	such,	and	each	executive	officer's	business	experience	during	the	past	five	years:

Charles	W.	Ergen.		Mr.	Ergen	is	our	executive	Chairman	and	has	been	Chairman	of	the	Board	of	Directors	of	DISH	Network	since	its	formation	and,	during	the	past five	years,	has	held	executive	officer	and	director	positions	with	DISH	Network	and	its	subsidiaries.		Mr.	Ergen	also	serves	as	executive	Chairman	and	Chairman	of	the Board	of	Directors	of	EchoStar.		Mr.	Ergen	co-founded	DISH	Network	with	his	spouse,	Cantey	Ergen,	and	James	DeFranco,	in	1980.

Joseph	P.	Clayton.		Mr.	Clayton	has	served	as	our	President	and	Chief	Executive	Officer	and	has	been	a	member	of	our	Board	of	Directors	since	June	2011. Mr.	Clayton	served	as	Chairman	of	Sirius	Satellite	Radio	Inc.	(Sirius)	from	November	2004	through	July	2008	and	served	as	Chief	Executive	Officer	of	Sirius	from November	2001	through	November	2004.		Prior	to	joining	Sirius,	Mr.	Clayton	served	as	President	of	Global	Crossing	North	America,	as	President	and	Chief	Executive Officer	of	Frontier	Corporation	and	as	Executive	Vice	President,	Marketing	and	Sales	-	Americas	and	Asia,	of	Thomson	S.A.		Mr.	Clayton	is	also	currently	serving	on the	Board	of	Directors	of	Transcend	Services,	Inc.		Mr.	Clayton	previously	served	on	the	Board	of	Directors	of	EchoStar	from	October	2008	until	June	2011.

W.	Erik	Carlson.		Mr.	Carlson	has	served	as	our	Executive	Vice	President,	DNS	and	Service	Operations	since	February	2008	and	is	responsible	for	overseeing	our residential	and	commercial	installations,	customer	billing	and	equipment	retrieval	and	refurbishment	operations.		Mr.	Carlson	previously	was	Senior	Vice	President	of Retail	Services,	a	position	he	held	since	mid-2006.		He	joined	DISH	Network	in	1995	and	has	held	operating	roles	of	increasing	responsibility	over	the	years.

Thomas	A.	Cullen.		Mr.	Cullen	has	served	as	our	Executive	Vice	President,	Corporate	Development	since	July	2011.		Mr.	Cullen	served	as	our	Executive	Vice	President, Sales,	Marketing	and	Programming	from	April	2009	until	July

2011	and	as	our	Executive	Vice	President,	Corporate	Development	from	December	2006	until	April	2009.		Before	joining	DISH	Network,	Mr.	Cullen	served	as President	of	TensorComm,	a	venture-backed	wireless	technology	company.		From	August	2003	to	April	2005,	Mr.	Cullen	was	with	Charter	Communications	Inc., serving	as	Senior	Vice	President,	Advanced	Services	and	Business	Development	from	August	2003	until	he	was	promoted	to	Executive	Vice	President	in	August	2004.

James	DeFranco.		Mr.	DeFranco	is	one	of	our	Executive	Vice	Presidents	and	has	been	one	of	our	vice	presidents	and	a	member	of	the	Board	of	Directors	since	our formation.		During	the	past	five	years	he	has	held	various	executive	officer	and	director	positions	with	our	subsidiaries.		Mr.	DeFranco	co-founded	DISH	Network	with Charles	W.	Ergen	and	Cantey	Ergen,	in	1980.

R.	Stanton	Dodge.		Mr.	Dodge	has	served	as	our	Executive	Vice	President,	General	Counsel	and	Secretary	since	June	2007	and	is	responsible	for	all	legal	and government	affairs	for	DISH	Network	and	its	subsidiaries.		Mr.	Dodge	has	served	on	the	Board	of	Directors	of	EchoStar	since	March	2009.		Mr.	Dodge	also	served	as EchoStar's	Executive	Vice	President,	General	Counsel	and	Secretary	from	October	2007	to	November	2011	pursuant	to	a	management	services	agreement	between DISH	Network	and	EchoStar.		Since	joining	DISH	Network	in	November	1996,	he	has	held	various	positions	of	increasing	responsibility	in	DISH	Network's	legal department.

Bernard	L.	Han.		Mr.	Han	has	served	as	our	Executive	Vice	President	and	Chief	Operating	Officer	since	April	2009	and	is	in	charge	of	all	operations	and	information technology	functions	for	DISH	Network.		Mr.	Han	served	as	Executive	Vice	President	and	Chief	Financial	Officer	of	DISH	Network	from	September	2006	until April	2009.		Mr.	Han	also	served	as	EchoStar's	Executive	Vice	President	and	Chief	Financial	Officer	from	January	2008	to	June	2010	pursuant	to	a	management services	agreement	between	DISH	Network	and	EchoStar.		From	October	2002	to	May	2005,	Mr.	Han	served	as	Executive	Vice	President	and	Chief	Financial	Officer	of Northwest	Airlines,	Inc.

Michael	Kelly.		Mr.	Kelly	has	served	as	the	President	of	Blockbuster	L.L.C	since	May	2011.		Mr.	Kelly	served	as	our	Executive	Vice	President,	Direct,	Commercial	and Advertising	Sales	from	December	2005	until	May	2011	and	as	Executive	Vice	President	of	DISH	Network	Service	L.L.C.	and	Customer	Service	from	February	2004 until	December	2005.

Roger	J.	Lynch.		Mr.	Lynch	has	served	as	our	Executive	Vice	President,	Advanced	Technologies	since	November	2009.		Mr.	Lynch	also	serves	as	EchoStar's	Executive Vice	President,	Advanced	Technologies.		Prior	to	joining	DISH	Network,	Mr.	Lynch	served	as	Chairman	and	CEO	of	Video	Networks	International,	Ltd.,	an	IPTV technology	company	in	the	United	Kingdom	from	2002	until	2009.

Robert	E.	Olson.		Mr.	Olson	has	served	as	our	Executive	Vice	President	and	Chief	Financial	Officer	since	April	2009.		Mr.	Olson	was	the	Chief	Financial	Officer	of

Trane	Commercial	Systems,	the	largest	operating	division	of	American	Standard,	from	April	2006	to	August	2008.		From	April	2003	to	January	2006,	Mr.	Olson	served as	the	Chief	Financial	Officer	of	AT&T's	Consumer	Services	division	and	later	its	Business	Services	division.

Stephen	W.	Wood.		Mr.	Wood	has	served	as	our	Executive	Vice	President,	Human	Resources	since	May	2006	and	is	responsible	for	all	human	resource	functions	for DISH	Network	and	its	subsidiaries.		Prior	to	joining	DISH	Network,	Mr.	Wood	served	as	an	Executive	Vice	President	for	Gate	Gourmet	International	from	2004	to 2006.

There	are	no	arrangements	or	understandings	between	any	executive	officer	and	any	other	person	pursuant	to	which	any	executive	officer	was	selected	as	such.		Pursuant to	the	Bylaws	of	DISH	Network,	executive	officers	serve	at	the	discretion	of	the	Board	of	Directors.

# Item	1A.		RISK	FACTORS

The	risks	and	uncertainties	described	below	are	not	the	only	ones	facing	us.		If	any	of	the	following	events	occur,	our	business,	financial	condition	or	results	of operations	could	be	materially	and	adversely	affected.

Our	business	is	focused	on	providing	pay-TV	services	and	we	have	traditionally	competed	against	satellite	television	providers	and	cable	companies,	some	of	whom have	greater	financial,	marketing	and	other	resources	than	we	do.		Many	of	these	competitors	offer	video	services	bundled	with	broadband,	telephony	services,	HD offerings,	interactive	services	and	video	on	demand	services	that	consumers	may	find	attractive.		Moreover,	mergers	and	acquisitions,	joint	ventures	and	alliances	among cable	television	providers,	telecommunications	companies	and	others	may	result	in,	among	other	things,	greater	financial	leverage	and	increase	the	availability	of offerings	from	providers	capable	of	bundling	television,	broadband	and	telephone	services	in	competition	with	our	services.		We	and	our	competitors	increasingly	must seek	to	attract	a	greater	proportion	of	new	subscribers	from	each	other's	existing	subscriber	bases	rather	than	from	first-time	purchasers	of	pay-TV	services.		In	addition, because	other	pay-TV	providers	may	be	seeking	to	attract	a	greater	proportion	of	their	new	subscribers	from	our	existing	subscriber	base	we	may	be	required	to	increase retention	spending.

Competition	has	intensified	in	recent	quarters	as	the	pay-TV	industry	matures	and	the	growth	of	fiber-based	pay-TV	services	offered	by	telecommunications	companies such	as	Verizon	and	AT&T	continues.		These	fiber-based	pay-TV	services	have	significantly	greater	capacity,	enabling	the	telecommunications	companies	to	offer substantial	HD	programming	content	as	well	as	bundled	services.		This	increasingly	competitive	environment	may	require	us	to	increase	subscriber	acquisition	and retention	spending	or	accept	lower	subscriber	activations	and	higher	subscriber	churn.

Our	business	is	focused	on	pay-TV	services,	and	we	face	competition	from	providers	of	digital	media,	including	companies	that	offer	online	services	distributing	movies, television	shows	and	other	video	programming.		Moreover,	new	technologies	have	been,	and	will	likely	continue	to	be,	developed	that	further	increase	the	number	of competitors	we	face	with	respect	to	video	services.		For	example,	online	platforms	that	provide	for	the	distribution	and	viewing	of	video	programming	compete	with	our pay-TV	services.		These	online	platforms	may	cause	our	subscribers	to	disconnect	our	services.		In	addition,	even	if	our	subscribers	do	not	disconnect	our	services,	they may	purchase	a	certain	portion	of	the	services	that	they	would	have	historically	purchased	from	us	through	these	online	platforms,	such	as	pay	per	view	movies, resulting	in	less	revenue	to	us.		Some	of	these	companies	have	greater	financial,	marketing	and	other	resources	than	we	do.		In	particular,	programming	offered	over	the Internet	has	become	more	prevalent	as	the	speed	and	quality	of	broadband	and	wireless	networks	have	improved.		In	addition,	consumers	are	spending	an	increasing amount	of	time	accessing	video	content	via	the	Internet	on	their	mobile	devices.		These	technological	advancements	and	changes	in	consumer	behavior	with	regard	to	the means	by	which	they	obtain	video	content	could	reduce	our	gross	new	subscriber	activations	and	could	materially	adversely	affect	our	business,	results	of	operations and	financial	condition	or	otherwise	disrupt	our	business.

A	substantial	majority	of	our	revenue	comes	from	residential	customers	whose	spending	patterns	may	be	affected	by	sustained	economic	weakness	and	uncertainty. Economic	weakness	and	uncertainty	persisted	during	2011.		Our	ability	to	grow	or	maintain	our	business	may	be	adversely	affected	by	sustained	economic	weakness and	uncertainty,	including	the	effect	of	wavering	consumer	confidence,	continued	high	unemployment	and	other	factors	that	may	adversely	affect	the	pay-TV	industry. In	particular,	economic	weakness	and	uncertainty	could	result	in	the	following:

·																		Fewer	gross	new	subscriber	activations	and	increased	churn.		We	could	face	fewer	gross	new	subscriber	activations	and	increased	churn	due	to,	among	other things:		(i)	the	sustained	weak	housing	market	in	the	United	States	combined	with	lower	discretionary	spending;	(ii)	increased	price	competition	for	our products	and	services;	and	(iii)	the	potential	loss	of	retailers,	who	generate	a	significant	portion	of	our	new	subscribers,	because	many	of	them	are	small businesses	that	are	more	susceptible	to	the	negative	effects	of	economic	weakness.		In	particular,	subscriber	churn	may	increase	with	respect	to	subscribers	who purchase	our	lower	tier	programming	packages	and	who	may	be	more	sensitive	to	sustained	economic	weakness,	including,	among	others,	our	pay-in-advance subscribers.

·																		Lower	average	monthly	revenue	per	subscriber	("ARPU").		Our	ARPU	could	be	negatively	impacted	by	aggressive	introductory	offers	by	our	competitors and	the	growth	of	video	content	being	delivered	via	the	Internet.		Furthermore,	due	to	lower	levels	of	disposable	income,	our	customers	may	downgrade	to lower	cost	programming	packages,	elect	not	to	purchase	premium	services	or	pay	per	view	movies	or	may	disconnect	our	services	and	choose	to	replace	them with	less	expensive	alternatives	such	as	video	content	delivered	via	the	Internet,	including,	among	others,	video	on	demand.

·																		Higher	subscriber	acquisition	and	retention	costs.		Our	profits	may	be	adversely	affected	by	increased	subscriber	acquisition	and	retention	costs	necessary	to attract	and	retain	subscribers	during	a	period	of	economic	weakness.

The	cost	of	programming	represents	the	largest	percentage	of	our	overall	costs.		Certain	of	our	competitors	own	directly	or	are	affiliated	with	companies	that	own programming	content	that	may	enable	them	to	obtain	lower	programming	costs	or	offer	exclusive	programming	that	may	be	attractive	to	prospective	subscribers.

Unlike	our	larger	cable	and	satellite	competitors,	we	have	not	made	significant	investments	in	programming	providers.		For	example,	Comcast	and	General	Electric	have joined	their	programming	properties,	including	NBC,	Bravo	and	many	others	that	are	available	in	the	majority	of	our	programming	packages,	in	a	venture	controlled	by Comcast.		This	transaction	may	affect	us	adversely	by,	among	other	things,	making	it	more	difficult	for	us	to	obtain	access	to	their	programming	networks	on nondiscriminatory	and	fair	terms,	or	at	all.		The	transaction	was	approved	by	the	FCC	and	the	Department	of	Justice	in	January	2011.		The	FCC	conditioned	its	approval on,	among	other	things,	Comcast	complying	with	the	terms	of	the	FCC's	recent	order	on	network	neutrality	(even	if	that	order	is	vacated	by	judicial	or	legislative	action) and	Comcast	licensing	its	affiliated	content	to	us,	other	traditional	pay-TV	providers	and	certain	providers	of	video	services	over	the	Internet	on	fair	and nondiscriminatory	terms	and	conditions,	including,	among	others,	price.		If	Comcast	does	not	license	its	affiliated	content	to	us	on	fair	and	nondiscriminatory	terms	and conditions,	we	can	seek	arbitration	and	continue	to	carry	such	content	while	the	arbitration	is	pending.		However,	it	is	uncertain	how	these	conditions	may	be	interpreted and	enforced	by	the	FCC;	therefore,	we	cannot	predict	the	practical	effect	of	these	conditions.

We	face	increasing	competition	from	other	distributors	of	foreign	language	programming,	including	programming	distributed	over	the	Internet.		There	can	be	no assurance	that	we	will	maintain	subscribers	in	our	foreign	language	programming	services.		In	addition,	the	increasing	availability	of	foreign	language	programming from	our

competitors,	which	in	certain	cases	has	resulted	from	our	inability	to	renew	programming	agreements	on	an	exclusive	basis	or	at	all,	could	contribute	to	an	increase	in our	subscriber	churn.		Our	agreements	with	distributors	of	foreign	language	programming	have	varying	expiration	dates,	and	some	agreements	are	on	a	month-to-month basis.		There	can	be	no	assurance	that	we	will	be	able	to	grow	or	maintain	our	foreign	language	programming	subscriber	base.

If	we	are	unable	to	continue	improving	our	operational	performance	and	customer	satisfaction,	we	may	experience	a	decrease	in	gross	new	subscriber	activations	and	an increase	in	churn,	which	could	have	a	material	adverse	effect	on	our	business,	financial	condition	and	results	of	operations.		To	continue	improving	our	operational performance,	we	need	to	make	significant	investments	in	staffing,	training,	information	systems,	and	other	initiatives,	primarily	in	our	call	center	and	in-home	service operations.		These	investments	are	intended	to	help	combat	inefficiencies	introduced	by	the	increasing	complexity	of	our	business,	improve	customer	satisfaction, reduce	churn,	increase	productivity,	and	allow	us	to	scale	better	over	the	long	run.		We	cannot,	however,	be	certain	that	our	spending	will	ultimately	be	successful	in improving	our	operational	performance.		In	the	meantime,	we	may	continue	to	incur	higher	costs	to	improve	our	operational	performance.		While	we	believe	that	these costs	will	be	outweighed	by	longer-term	benefits,	there	can	be	no	assurance	when	or	if	we	will	realize	these	benefits	at	all.		If	we	are	unable	to	improve	our	operational performance,	our	future	gross	new	subscriber	activations	and	existing	subscriber	churn	may	be	negatively	impacted,	which	could	in	turn	adversely	affect	our	revenue growth	and	results	of	operations.

We	may	incur	increased	costs	to	acquire	new	subscribers	and	retain	existing	subscribers.		Our	subscriber	acquisition	costs	could	increase	as	a	result	of	increased spending	for	advertising	and	the	installation	of	more	HD	and	DVR	receivers,	which	are	generally	more	expensive	than	other	receivers.		Meanwhile,	retention	costs	may be	driven	higher	by	increased	upgrades	of	existing	subscribers'	equipment	to	HD	and	DVR	receivers.		Additionally,	certain	of	our	promotions,	including,	among	others, pay-in-advance,	allow	consumers	with	relatively	lower	credit	scores	to	become	subscribers.		These	subscribers	typically	churn	at	a	higher	rate.

Our	subscriber	acquisition	costs	and	our	subscriber	retention	costs	can	vary	significantly	from	period	to	period	and	can	cause	material	variability	to	our	net	income	(loss) and	free	cash	flow.		Any	material	increase	in	subscriber	acquisition	or	retention	costs	from	current	levels	could	have	a	material	adverse	effect	on	our	business,	financial position	and	results	of	operations.

Our	programming	costs	currently	represent	the	largest	component	of	our	total	expense	and	we	expect	these	costs	to	continue	to	increase.		The	pay-TV	industry	has continued	to	experience	an	increase	in	the	cost	of	programming,	especially	local	broadcast	channels	and	sports	programming.		Our	ability	to	compete	successfully	will depend	on	our	ability	to	continue	to	obtain	desirable	programming	and	deliver	it	to	our	subscribers	at	competitive	prices.

When	offering	new	programming,	or	upon	expiration	of	existing	contracts,	programming	suppliers	have	historically	attempted	to	increase	the	rates	they	charge	us	for programming.		We	expect	this	practice	to	continue,	which,	if	successful,	would	increase	our	programming	costs.		As	a	result,	our	margins	may	face	further	pressure	if we	are	unable	to	renew	our	long-term	programming	contracts	on	favorable	pricing	and	other	economic	terms.

In	addition,	increases	in	programming	costs	could	cause	us	to	increase	the	rates	that	we	charge	our	subscribers,	which	could	in	turn	cause	our	existing	subscribers	to disconnect	our	service	or	cause	potential	new	subscribers	to	choose	not	to	subscribe	to	our	service.		Therefore,	we	may	be	unable	to	pass	increased	programming	costs on	to	our	customers,	which	could	have	a	material	adverse	effect	on	our	financial	condition	and	results	of	operations.

We	depend	on	third	parties	to	provide	us	with	programming	services.		Our	programming	agreements	have	remaining	terms	ranging	from	less	than	one	to	up	to	several years	and	contain	various	renewal	and	cancellation	provisions.		We	may	not	be	able	to	renew	these	agreements	on	favorable	terms	or	at	all,	and	these	agreements	may	be canceled	prior	to	expiration	of	their	original	term.		Certain	programmers	have,	in	the	past,	temporarily	limited	our	access	to	their	programming.		For	example,	during	the fourth	quarter	2010,	our	gross	new	subscriber	activations	and	subscriber	churn	were	negatively	impacted	as	a	result	of	multiple	programming	interruptions	and threatened	programming	interruptions	related	to	contract	disputes	with	several	content	providers.		If	we	are	unable	to	renew	any	of	these	agreements	or	the	other	parties cancel	the	agreements,	there	can	be	no	assurance	that	we	would	be	able	to	obtain	substitute	programming,	or	that	such	substitute	programming	would	be	comparable	in quality	or	cost	to	our	existing	programming.		In	addition,	loss	of	access	to	programming	could	have	a	material	adverse	effect	on	our	business,	financial	condition	and results	of	operations,	including,	among	other	things,	our	gross	new	subscriber	activations	and	subscriber	churn	rate.

We	believe	that	the	availability	and	extent	of	HD	programming	continues	to	be	a	significant	factor	in	consumers'	choice	among	pay-TV	providers.		Other	pay-TV providers	may	have	more	successfully	marketed	and	promoted	their	HD	programming	packages	and	may	also	be	better	equipped	and	have	greater	resources	to	increase their	HD	offerings	to	respond	to	increasing	consumer	demand	for	this	content.		In	addition,	even	though	it	remains	a	small	portion	of	the	market,	consumer	demand	for 3D	televisions	and	programming	will	likely	increase	in	the	future.		We	may	be	required	to	make	substantial	additional	investments	in	infrastructure	to	respond	to competitive	pressure	to	deliver	additional	programming,	and	there	can	be	no	assurance	that	we	will	be	able	to	compete	effectively	with	programming	offerings	from other	pay-TV	providers.

The	capacity,	reliability	and	security	of	our	information	technology	hardware	and	software	infrastructure	(including	our	billing	systems)	are	important	to	the	operation of	our	current	business,	which	would	suffer	in	the	event	of	system	failures.		Likewise,	our	ability	to	expand	and	update	our	information	technology	infrastructure	in response	to	our	growth	and	changing	needs	is	important	to	the	continued	implementation	of	our	new	service	offering	initiatives.		Our	inability	to	expand	or	upgrade	our technology	infrastructure	could	have	adverse	consequences,	which	could	include	the	delayed	implementation	of	new	service	offerings,	service	or	billing	interruptions, and	the	diversion	of	development	resources.		For	example,	during	2011,	we	implemented	new	interactive	voice	response	and	in-home	appointment	scheduling	systems. Also	during	2011,	we	began	developing	and	testing	a	new	CSG	billing	system	as	well	as	new	sales	and	customer	care	systems	that	are	likely	to	be	implemented	in	2012. We	are	relying	on	third	parties	for	developing	key	components	of	these	systems	and	ongoing	service	after	their	implementation.		Third	parties	may	experience	errors	or disruptions	that	could	adversely	impact	us	and	over	which	we	may	have	limited	control.		Interruption,	failure	and/or	delay	in	transitioning	to	any	of	these	new	systems could	disrupt	our	operations	and	damage	our	reputation	thus	adversely	impacting	our	ability	to	provide	our	services,	retain	our	current	subscribers	and	attract	new subscribers.		As	a	result,	an	unsuccessful	transition	to	these	new	systems	could	have	a	material	adverse	effect	on	our	business,	financial	condition	and	results	of operations.

In	addition,	although	we	take	protective	measures	and	endeavor	to	modify	them	as	circumstances	warrant,	our	information	technology	hardware	and	software infrastructure	may	be	vulnerable	to	unauthorized	access,	misuse,	computer	viruses	or	other	malicious	code	and	other	events	that	could	have	a	security	impact.		If	one	or more	of	such	events	occur,	this	potentially	could	jeopardize	our	customer	and	other	information	processed	and	stored	in,	and	transmitted	through,	our	information technology	hardware	and	software	infrastructure,	or	otherwise	cause	interruptions	or	malfunctions	in	our	operations,	which	could	result	in	significant	losses	or reputational	damage.	We	may	be	required	to	expend	significant	additional	resources	to	modify	our	protective	measures	or	to	investigate	and	remediate	vulnerabilities	or other	exposures,	and	we	may	be	subject	to	litigation	and	financial	losses.

We	rely	on	EchoStar,	to	design	and	develop	all	of	our	new	set-top	boxes	and	certain	related	components,	and	to	provide	transponder	capacity,	digital	broadcast operations	and	other	services	to	us.		Our	business	would	be	adversely	affected	if	EchoStar	ceases	to	provide	these	products	and	services	to	us	and	we	are	unable	to obtain	suitable	replacement	products	and	services	from	third	parties.

EchoStar	is	our	sole	supplier	of	digital	set-top	boxes	and	digital	broadcast	operations.		In	addition,	EchoStar	is	a	key	supplier	of	transponder	capacity	and	related services	to	us.		We	purchase	digital	set-top	boxes	from	EchoStar	pursuant	to	a	contract	that	expires	on	December	31,	2014.		EchoStar	provides	digital	broadcast operations	to	us	pursuant	to	a	contract	that	expires	on	December	31,	2016.		EchoStar	has	no	obligation	to	supply	digital	set-top	boxes	or	digital	broadcast	operations	to us	after	these	dates.		We	may	be	unable	to	renew	agreements	for	digital	set-top	boxes	or	digital	broadcast	operations	with	EchoStar	on	acceptable	terms	or	at	all. 	Equipment,	transponder	leasing	and	digital	broadcast	operation	costs	may	increase	beyond	our	current	expectations.		EchoStar's	inability	to	develop	and	produce,	or	our inability	to	obtain,	equipment	with	the	latest	technology,	or	our	inability	to	obtain	transponder	capacity	and	digital	broadcast	operations	and	other	services	from	third parties,	could	affect	our	subscriber	acquisition	and	churn	and	cause	related	revenue	to	decline.

Furthermore,	due	to	the	lack	of	compatibility	of	our	infrastructure	with	the	set-top	boxes	of	a	provider	other	than	EchoStar,	any	transition	to	a	new	supplier	of	set-top boxes	could	take	a	significant	period	of	time	to	complete,	cause	us	to	incur	significant	costs	and	negatively	affect	our	gross	new	subscriber	activations	and	subscriber churn.		For	example,	the	proprietary	nature	of	the	Sling	technology	and	certain	other	technology	used	in	EchoStar's	set-top	boxes	may	significantly	limit	our	ability	to obtain	set-top	boxes	with	the	same	or	similar	features	from	any	other	provider	of	set-top	boxes.

If	we	were	to	switch	to	another	provider	of	set-top	boxes,	we	may	have	to	implement	additional	infrastructure	to	support	the	set-top	boxes	purchased	from	such	new provider,	which	could	significantly	increase	our	costs.		In	addition,	differences	in,	among	other	things,	the	user	interface	between	set-top	boxes	provided	by	EchoStar and	those	of	any	other	provider	could	cause	subscriber	confusion,	which	could	increase	our	costs	and	have	a	material	adverse	effect	on	our	gross	new	subscriber activations	and	subscriber	churn.		Furthermore,	switching	to	a	new	provider	of	set-top	boxes	may	cause	a	reduction	in	our	supply	of	set-top	boxes	and	thus	delay	our ability	to	ship	set-top	boxes,	which	could	have	a	material	adverse	effect	on	our	gross	new	subscriber	activations	and	subscriber	churn	rate.

Our	operating	results	are	dependent	to	a	significant	extent	upon	our	ability	to	continue	to	introduce	new	products	and	services	and	to	upgrade	existing	products	and services	on	a	timely	basis,	and	to	reduce	costs	of	our	existing	products	and	services.		We	may	not	be	able	to	successfully	identify	new	product	or	service	opportunities	or develop	and	market	these	opportunities	in	a	timely	or	cost-effective	manner.		The	research	and	development	of	new,	technologically	advanced	products	is	a	complex	and uncertain	process	requiring	high	levels	of	innovation	and	investment.		The	success	of	new	product	and	service	development	depends	on	many	factors,	including	among others,	the	following:

·																		difficulties	and	delays	in	the	development,	production,	timely	completion,	testing	and	marketing	of	products	and	services;

·																		proper	identification	of	customer	need	and	customer	acceptance	of	products;

·																		the	development	of,	approval	of	and	compliance	with	industry	standards;

·																		the	significant	amount	of	resources	we	must	devote	to	the	development	of	new	technologies;	and

·																		the	ability	to	differentiate	our	products	and	services	and	compete	with	other	companies	in	the	same	markets.

If	our	products	and	services,	including	without	limitation,	our	new	whole-home	HD	DVR	entertainment	system	featuring	the	Hopper,	are	not	competitive	or	do	not	work properly,	our	business	could	suffer	and	our	financial

performance	could	be	negatively	impacted.		If	the	quality	of	our	products	and	services	do	not	meet	our	customers'	expectations	or	our	products	are	found	to	be defective,	then	our	sales	and	revenues,	and	ultimately	our	reputation,	could	be	negatively	impacted.

Technology	in	the	pay-TV	industry	changes	rapidly	as	new	technologies	are	developed,	which	could	cause	our	products	and	services	to	become	obsolete.		We	and	our suppliers	may	not	be	able	to	keep	pace	with	technological	developments.		If	the	new	technologies	on	which	we	intend	to	focus	our	research	and	development investments	fail	to	achieve	acceptance	in	the	marketplace,	our	competitive	position	could	be	negatively	impacted	causing	a	reduction	in	our	revenues	and	earnings.		We may	also	be	at	a	competitive	disadvantage	in	developing	and	introducing	complex	new	products	and	services	because	of	the	substantial	costs	we	may	incur	in	making these	products	or	services	available	across	our	installed	base	of	approximately	14	million	subscribers.		For	example,	our	competitors	could	use	proprietary	technologies that	are	perceived	by	the	market	as	being	superior.		Further,	after	we	have	incurred	substantial	costs,	one	or	more	of	the	products	or	services	under	our	development,	or under	development	by	one	or	more	of	our	strategic	partners,	could	become	obsolete	prior	to	it	being	widely	adopted.

In	addition,	our	competitive	position	depends	in	part	on	our	ability	to	offer	new	subscribers	and	upgrade	existing	subscribers	with	more	advanced	equipment,	such	as receivers	with	DVR	and	HD	technology	and	by	otherwise	making	additional	infrastructure	investments,	such	as	those	related	to	our	information	technology	and	call centers.		Furthermore,	the	continued	demand	for	HD	programming	continues	to	require	investments	in	additional	satellite	capacity.		We	may	not	be	able	to	pass	on	to	our subscribers	the	entire	cost	of	these	upgrades	and	infrastructure	investments.

New	technologies	could	also	create	new	competitors	for	us.		For	instance,	we	face	increasing	consumer	demand	for	the	delivery	of	digital	video	services	via	the	Internet, including	providing	what	we	refer	to	as	"TV	Everywhere."		We	expect	to	continue	to	face	increased	threats	from	companies	who	use	the	Internet	to	deliver	digital	video services	as	the	speed	and	quality	of	broadband	and	wireless	networks	continues	to	improve.

Technological	innovation	is	important	to	our	success	and	depends,	to	a	significant	degree,	on	the	work	of	technically	skilled	employees.		We	rely	on	EchoStar	to	design and	develop	set-top	boxes	with	advanced	features	and	functionality	and	solutions	for	providing	digital	video	services	via	the	Internet.		If	EchoStar	is	unable	to	attract	and retain	appropriately	technically	skilled	employees,	our	competitive	position	could	be	materially	and	adversely	affected.		In	addition,	delays	in	the	delivery	of components	or	other	unforeseen	problems	associated	with	our	technology	may	occur	that	could	materially	and	adversely	affect	our	ability	to	generate	revenue,	offer	new products	and	services	and	remain	competitive.

Historically,	we	have	contracted	with	a	single	vendor	or	a	limited	number	of	vendors	to	provide	certain	key	products	or	services	to	us	such	as	information	technology support,	billing	systems,	and	security	access	devices.		If	these	vendors	are	unable	to	meet	our	needs	because	they	fail	to	perform	adequately,	are	no	longer	in	business, are	experiencing	shortages	or	discontinue	a	certain	product	or	service	we	need,	our	business,	financial	position	and	results	of	operations	may	be	adversely	affected. While	alternative	sources	for	these	products	and	services	exist,	we	may	not	be	able	to	develop	these	alternative	sources	quickly	and	cost-effectively	which	could materially	impair	our	ability	to	timely	deliver	our	products	to	our	subscribers	or	operate	our	business.		Furthermore,	our	vendors	may	request	changes	in	pricing, payment	terms	or	other	contractual	obligations	between	the	parties,	which	could	cause	us	to	make	substantial	additional	investments.

EchoStar	relies	on	a	few	suppliers	and	in	some	cases	a	single	supplier,	for	many	components	of	our	new	set-top	boxes	that	we	provide	to	subscribers	in	order	to	deliver our	digital	television	services.	Our	ability	to	meet	customer	demand	depends,	in	part,	on	EchoStar's	ability	to	obtain	timely	and	adequate	delivery	of	quality	materials, parts	and	components	from	suppliers.	In	the	event	of	an	interruption	of	supply	or	a	significant	price	increase	from	these	suppliers,	EchoStar	may	not	be	able	to	diversify sources	of	supply	in	a	timely	manner,	which	could	have	a	negative	impact	on	our	business.	Further,	due	to	increased	demand	for	products,	many	electronic manufacturers	are	experiencing	shortages	for	certain	components.	EchoStar	has	experienced	in	the	past	and	may	continue	to	experience	shortages	driven	by	raw	material availability,	manufacturing	capacity,	labor	shortages,	industry	allocations,	natural	disasters	and	significant	changes	in	the	financial	or	business	conditions	of	our suppliers	that	negatively	impact	our	operations.

For	example,	during	2011,	several	regions	of	Thailand	experienced	severe	flooding,	causing	damage	to	infrastructure,	housing	and	factories.	Certain	of	EchoStar's	hard drive	suppliers	are	located	in	Thailand.		There	is	uncertainty	regarding	the	ultimate	impact	of	this	event	on	our	business,	but	there	is	a	risk	in	the	future	that	EchoStar could	experience	delays	or	other	constraints	in	obtaining	hard	drive	components.	There	can	be	no	assurance	that	we	will	not	encounter	shortages	in	the	future	or	that	such shortages	will	not	negatively	impact	our	operations.		Any	such	delays	or	constraints	could	have	a	material	adverse	affect	on	our	business,	financial	condition	and	results of	operations,	including,	among	other	things,	our	gross	new	subscriber	activations.

Increases	in	theft	of	our	signal	or	our	competitors'	signals	could,	in	addition	to	reducing	new	subscriber	activations,	also	cause	subscriber	churn	to	increase.		We	use microchips	embedded	in	credit	card-sized	cards,	called	"smart	cards"	or	Security	Access	Devices.

We	are	also	vulnerable	to	other	forms	of	fraud.		While	we	are	addressing	certain	fraud	through	a	number	of	actions,	including	terminating	retailers	that	we	believe violated	DISH	Network's	business	rules,	there	can	be	no	assurance	that	we	will	not	continue	to	experience	fraud	which	could	impact	our	gross	new	subscriber activations	and	subscriber	churn.		Sustained	economic	weakness	may	create	greater	incentive	for	signal	theft	and	other	forms	of	fraud,	which	could	lead	to	higher subscriber	churn	and	reduced	revenue.

Most	of	our	retailers	are	not	exclusive	to	us	and	some	of	our	retailers	may	favor	our	competitors'	products	and	services	over	ours	based	on	the	relative	financial arrangements	associated	with	marketing	our	products	and	services	and	those	of	our	competitors.		Furthermore,	most	of	these	retailers	are	significantly	smaller	than	we are	and	may	be	more	susceptible	to	sustained	economic	weaknesses	that	make	it	more	difficult	for	them	to	operate	profitably.		Because	our	retailers	receive	most	of	their incentive	value	at	activation	and	not	over	an	extended	period	of	time,	our	interests	in	obtaining	and	retaining	subscribers	through	good	customer	service	may	not	always be	aligned	with	our	retailers.		It	may	be	difficult	to	better	align	our	interests	with	our	resellers'	because	of	their	capital	and	liquidity

constraints.		Loss	of	these	relationships	could	have	an	adverse	effect	on	our	subscriber	base	and	certain	of	our	other	key	operating	metrics	because	we	may	not	be	able	to develop	comparable	alternative	distribution	channels.

The	Copyright	Act	generally	gives	satellite	companies	a	statutory	copyright	license	to	retransmit	local	broadcast	channels	by	satellite	back	into	the	market	from	which they	originated,	subject	to	obtaining	the	retransmission	consent	of	local	network	stations	that	do	not	elect	"must	carry"	status,	as	required	by	the	Communications	Act. If	we	fail	to	reach	retransmission	consent	agreements	with	such	broadcasters,	we	cannot	carry	their	signals.		This	could	have	an	adverse	effect	on	our	strategy	to	compete with	cable	and	other	satellite	companies	that	provide	local	signals.		While	we	have	been	able	to	reach	retransmission	consent	agreements	with	most	of	these	local network	stations,	there	remain	stations	with	which	we	have	not	been	able	to	reach	an	agreement.		We	cannot	be	sure	that	we	will	secure	these	agreements	or	that	we	will secure	new	agreements	on	acceptable	terms	(or	at	all)	upon	the	expiration	of	our	current	retransmission	consent	agreements,	some	of	which	are	short-term.		In	recent years,	national	broadcasters	have	used	their	ownership	of	certain	local	broadcast	stations	to	require	us	to	carry	additional	cable	programming	in	exchange	for retransmission	consent	of	their	local	broadcast	stations.		These	requirements	may	place	constraints	on	available	capacity	on	our	satellites	for	other	programming. Furthermore,	the	rates	we	are	charged	for	retransmitting	local	channels	have	been	increasing.		We	may	be	unable	to	pass	these	increased	programming	costs	on	to	our customers,	which	could	have	a	material	adverse	effect	on	our	financial	condition	and	results	of	operations.

Operation	of	our	programming	service	requires	that	we	have	adequate	satellite	transmission	capacity	for	the	programming	we	offer.		Moreover,	current	competitive conditions	require	that	we	continue	to	expand	our	offering	of	new	programming,	particularly	by	expanding	local	HD	coverage	and	offering	more	HD	national	channels. While	we	generally	have	had	in-orbit	satellite	capacity	sufficient	to	transmit	our	existing	channels	and	some	backup	capacity	to	recover	the	transmission	of	certain critical	programming,	our	backup	capacity	is	limited.

Our	ability	to	earn	revenue	depends	on	the	usefulness	of	our	satellites,	each	of	which	has	a	limited	useful	life.		A	number	of	factors	affect	the	useful	lives	of	the satellites,	including,	among	other	things,	the	quality	of	their	construction,	the	durability	of	their	component	parts,	the	ability	to	continue	to	maintain	proper	orbit	and control	over	the	satellite's	functions,	the	efficiency	of	the	launch	vehicle	used,	and	the	remaining	on-board	fuel	following	orbit	insertion.		Generally,	the	minimum design	life	of	each	of	our	satellites	ranges	from	12	to	15	years.		We	can	provide	no	assurance,	however,	as	to	the	actual	useful	lives	of	the	satellites.		Our	operating	results could	be	adversely	affected	if	the	useful	life	of	any	of	our	satellites	were	significantly	shorter	than	12	years	from	the	launch	date.

In	the	event	of	a	failure	or	loss	of	any	of	our	satellites,	we	may	need	to	acquire	or	lease	additional	satellite	capacity	or	relocate	one	of	our	other	satellites	and	use	it	as	a replacement	for	the	failed	or	lost	satellite,	any	of	which	could	have	a	material	adverse	effect	on	our	business,	financial	condition	and	results	of	operations.		Such	a	failure could	result	in	a	prolonged	loss	of	critical	programming	or	a	significant	delay	in	our	plans	to	expand	programming	as	necessary	to	remain	competitive.		A	relocation would	require	FCC	approval	and,	among	other	things,	a	showing	to	the	FCC	that	the	replacement	satellite	would	not	cause	additional	interference	compared	to	the	failed or	lost	satellite.		We	cannot	be	certain	that	we	could	obtain	such	FCC	approval.		If	we	choose	to	use	a	satellite	in	this	manner,	this	use	could	adversely	affect	our	ability to	satisfy	certain	operational	conditions	associated	with	our	authorizations.		Failure	to	satisfy	those	conditions	could	result	in	the	loss	of	such	authorizations,	which would	have	an	adverse	effect	on	our	ability	to	generate	revenues.

Construction	and	launch	risks.		A	key	component	of	our	business	strategy	is	our	ability	to	expand	our	offering	of	new	programming	and	services,	including	increased local	and	HD	programming.		To	accomplish	this	goal,	we	need	to	construct	and	launch	satellites.		Satellite	construction	and	launch	is	subject	to	significant	risks, including	construction	and	launch	delays,	launch	failure	and	incorrect	orbital	placement.		Certain	launch	vehicles	that	may	be

used	by	us	have	either	unproven	track	records	or	have	experienced	launch	failures	in	the	recent	past.		The	risks	of	launch	delay	and	failure	are	usually	greater	when	the launch	vehicle	does	not	have	a	track	record	of	previous	successful	flights.		Launch	failures	result	in	significant	delays	in	the	deployment	of	satellites	because	of	the	need both	to	construct	replacement	satellites,	which	can	take	more	than	three	years,	and	to	obtain	other	launch	opportunities.		Significant	construction	or	launch	delays	could materially	and	adversely	affect	our	ability	to	generate	revenues.		If	we	were	unable	to	obtain	launch	insurance,	or	obtain	launch	insurance	at	rates	we	deem	commercially reasonable,	and	a	significant	launch	failure	were	to	occur,	it	could	have	a	material	adverse	effect	on	our	ability	to	fund	future	satellite	procurement	and	launch opportunities.

In	addition,	the	occurrence	of	future	launch	failures	for	other	operators	may	delay	the	deployment	of	our	satellites	and	materially	and	adversely	affect	our	ability	to insure	the	launch	of	our	satellites	at	commercially	reasonable	premiums,	if	at	all.		Please	see	further	discussion	under	the	caption	"We	generally	do	not	have	commercial insurance	coverage	on	the	satellites	we	use	and	could	face	significant	impairment	charges	if	one	of	our	satellites	fails"	below.

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

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

Any	single	anomaly	or	series	of	anomalies	could	materially	and	adversely	affect	our	operations	and	revenues	and	our	relationship	with	current	customers,	as	well	as	our ability	to	attract	new	customers	for	our	pay-TV	services.		In	particular,	future	anomalies	may	result	in	the	loss	of	individual	transponders	on	a	satellite,	a	group	of transponders	on	that	satellite	or	the	entire	satellite,	depending	on	the	nature	of	the	anomaly.		Anomalies	may	also	reduce	the	expected	useful	life	of	a	satellite,	thereby reducing	the	channels	that	could	be	offered	using	that	satellite,	or	create	additional	expenses	due	to	the	need	to	provide	replacement	or	back-up	satellites.		You	should review	the	disclosures	relating	to	satellite	anomalies	set	forth	under	Note	7	in	the	Notes	to	our	Consolidated	Financial	Statements	in	Item	15	of	this	Annual	Report	on Form	10-K.

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

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

Generally,	we	do	not	carry	launch	or	in-orbit	insurance	on	the	satellites	we	use.		We	currently	do	not	carry	in-orbit	insurance	on	any	of	our	satellites	and	generally	do	not use	commercial	insurance	to	mitigate	the	potential	financial	impact	of	launch	or	in-orbit	failures	because	we	believe	that	the	cost	of	insurance	premiums	is	uneconomical relative	to	the	risk	of	such	failures.		If	one	or	more	of	our	in-orbit	satellites	fail,	we	could	be	required	to	record	significant	impairment	charges.

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

·																		Cross	officerships,	directorships	and	stock	ownership.		We	have	certain	overlap	in	directors	and	executive	officers	with	EchoStar,	which	may	lead	to conflicting	interests.		Our	Board	of	Directors	and	executive	officers	include	persons	who	are	members	of	the	Board	of	Directors	of	EchoStar,	including	Charles W.	Ergen,	who	serves	as	the	Chairman	of	EchoStar	and	us.		The	executive	officers	and	the	members	of	our	Board	of	Directors	who	overlap	with	EchoStar	have fiduciary	duties	to	EchoStar's	shareholders.		For	example,	there	is	the	potential	for	a	conflict	of	interest	when	we	or	EchoStar	look	at	acquisitions	and	other corporate	opportunities	that	may	be	suitable	for	both	companies.		In	addition,	certain	of	our	directors	and	officers	own	EchoStar	stock	and	options	to	purchase EchoStar	stock,	which	they	acquired	or	were	granted	prior	to	the	Spin-off	of	EchoStar	from	us,	including	Mr.	Ergen,	who	owns	approximately	50.7%	of	the total	equity	(assuming	conversion	of	only	the	Class	B	Common	Stock	held	by	Mr.	Ergen	into	Class	A	Common	Stock)	and	controls	approximately	75.6%	of the	voting	power	of	EchoStar.		Mr.	Ergen's	beneficial	ownership	of	EchoStar	excludes	8,734,250	shares	of	its	Class	A	Common	Stock	issuable	upon conversion	of	shares	of	its	Class	B	Common	Stock	currently	held	by	certain	trusts	established	by	Mr.	Ergen	for	the	benefit	of	his	family.		These	trusts beneficially	own	approximately	18.3%	of	EchoStar's	total	equity	securities	(assuming	conversion	of	only	the	Class	B	Common	Stock	held	by	such	trusts	into Class	A	Common	Stock)	and	possess	approximately	16.9%	of	EchoStar's	total	voting	power.	These	ownership	interests	could	create	actual,	apparent	or potential	conflicts	of	interest	when	these	individuals	are	faced	with	decisions	that	could	have	different	implications	for	us	and	EchoStar.		Furthermore,	Charles W.	Ergen,	our	Chairman,	and	Roger	Lynch,	Executive	Vice	President,	Advanced	Technologies,	are	employed	by	both	us	and	EchoStar	and	Paul	Orban,	our Senior	Vice	President	and	Controller,	provides	management	services	to	EchoStar	pursuant	to	a	management	services	agreement	between	EchoStar	and	us. These	individuals	may	have	actual	or	apparent	conflicts	of	interest	with	respect	to	matters	involving	or	affecting	each	company.

·																		Intercompany	agreements	related	to	the	Spin-off.		We	have	entered	into	certain	agreements	with	EchoStar	pursuant	to	which	we	provide	EchoStar	with	certain management,	administrative,	accounting,	tax,	legal	and	other	services,	for	which	EchoStar	pays	us	our	cost	plus	a	fixed	margin.		In	addition,	we	have	entered into	a	number	of	intercompany	agreements	covering	matters	such	as	tax	sharing	and	EchoStar's	responsibility	for	certain	liabilities	previously	undertaken	by	us for	certain	of	EchoStar's	businesses.		We	have	also	entered	into	certain	commercial	agreements	with	EchoStar	pursuant	to	which	EchoStar,	among	other	things, sells	set-top	boxes	and	related	equipment	to	us	at	specified	prices.		The	terms	of	certain	of	these	agreements	were	established	while	EchoStar	was	a	wholly- owned	subsidiary	of	us	and	were	not	the	result	of	arm's	length	negotiations.		The	allocation	of	assets,	liabilities,	rights,	indemnifications	and	other	obligations between	EchoStar	and	us	under	the	separation	and	other	intercompany	agreements	we	entered	into	with	EchoStar	in	connection	with	the	Spin-off	of	EchoStar may	have	been	different	if	agreed	to	by	two	unaffiliated	parties.		Had	these	agreements	been	negotiated	with	unaffiliated	third	parties,	their	terms	may	have been	more	favorable,	or	less	favorable,	to	us.		In	addition,	conflicts	could	arise	between	us	and	EchoStar	in	the	interpretation	or	any	extension	or	renegotiation of	these	existing	agreements.

·																		Additional	intercompany	transactions.		EchoStar	or	its	affiliates	have	and	will	continue	to	enter	into	transactions	with	us	or	our	subsidiaries	or	other	affiliates. Although	the	terms	of	any	such	transactions	will	be	established	based	upon	negotiations	between	EchoStar	and	us	and,	when	appropriate,	subject	to	the approval	of	a	committee	of	the	non-interlocking	directors	or	in	certain	instances	non-interlocking	management,	there	can	be	no	assurance	that	the	terms	of	any such	transactions	will	be	as	favorable	to	us	or	our	subsidiaries	or	affiliates	as	may	otherwise	be	obtained	between	unaffiliated	parties.

·																		Business	opportunities.		We	have	retained	interests	in	various	companies	that	have	subsidiaries	or	controlled	affiliates	that	own	or	operate	domestic	or	foreign services	that	may	compete	with	services	offered	by	EchoStar.		We	may	also	compete	with	EchoStar	when	we	participate	in	auctions	for	spectrum	or	orbital	slots for	our	satellites.		In	addition,	EchoStar	may	in	the	future	use	its	satellites,	uplink	and	transmission	assets	to	compete	directly	against	us	in	the	subscription television	business.

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

We	do	not	have	any	agreements	with	EchoStar	that	would	prevent	either	company	from	competing	with	the	other.

We	believe	that	our	future	success	will	depend	to	a	significant	extent	upon	the	performance	of	Charles	W.	Ergen,	our	Chairman,	and	certain	other	executives.		The	loss of	Mr.	Ergen	or	of	certain	other	key	executives	could	have	a	material	adverse	effect	on	our	business,	financial	condition	and	results	of	operations.		Although	all	of	our executives	have	executed	agreements	limiting	their	ability	to	work	for	or	consult	with	competitors	if	they	leave	us,	we	do	not	have	employment	agreements	with	any	of them.		Paul	W.	Orban,	our	Senior	Vice	President	and	Controller,	provides	services	to	EchoStar	pursuant	to	a	management	services	agreement	with	EchoStar.		In addition,	Roger	J.	Lynch	also	serves	as	Executive	Vice	President,	Advanced	Technologies	of	EchoStar.		To	the	extent	these	and	other	officers	are	performing	services for	EchoStar,	this	may	divert	their	time	and	attention	away	from	our	business	and	may	therefore	adversely	affect	our	business.

Under	our	agreements	to	acquire	DBSD	North	America	and	purchase	TerreStar's	assets,	we	paid	substantially	all	of	the	purchase	price	for	both	transactions	prior	to	the receipt	of	certain	regulatory	approvals	(the	FCC	with	respect	to	DBSD	North	America,	and	the	FCC	and	Industry	Canada	with	respect	to	TerreStar).		On	February	7, 2012,	Industry	Canada	approved	the	transfer	of	the	Canadian	spectrum	licenses	held	by	TerreStar	to	us.		If	the	remaining	required	approvals	are	not	obtained,	subject	to certain	exceptions,	we	have	the	right	to	require	and	direct	the	sale	of	some	or	all	of	the	assets	of	the	relevant	company	to	a	third	party	and	we	would	be	entitled	to	the proceeds	from	such	a	sale.		These	proceeds	could,	however,	be	substantially	less	than	amounts	we	have	paid	in	the	respective	transactions.

In	addition,	our	consolidated	FCC	applications	for	approval	of	the	license	transfers	from	DBSD	North	America	and	TerreStar	were	accompanied	by	requests	for	waiver of	the	integrated	service	requirement,	the	spare	satellite	requirement	and	various	technical	provisions.		Waiver	of	the	integrated	service	requirement	would	allow	DISH to	offer	single-mode	terrestrial	terminals	to	customers	who	do	not	desire	satellite	functionality.		The	spectrum	licenses	currently	held	by	DBSD	North	America	and TerreStar	do	not	include	a	waiver	of	this	integrated	service	requirement.		Our	integrated	service	requirement	waiver	request	has	been	opposed	by	certain	parties,	and there	can	be	no	assurance	that	the	FCC	will	approve	it.		If	our	FCC	applications	and	waiver	requests	are	not	granted	by	the	FCC,	or	are	granted	in	a	manner	that	varies from	the	form	we	have	requested,	it	could	cause	the	value	of	these	assets

to	be	impaired,	potentially	requiring	us	to	take	significant	write-downs	on	these	assets.		We	assess	potential	impairments	to	these	assets	annually,	or	more	often	if indicators	of	impairment	arise,	to	determine	whether	an	impairment	condition	may	exist.		We	use	a	probability	weighted	analysis	considering	estimated	future	cash	flows discounted	at	a	rate	commensurate	with	the	risk	involved	and	market	based	data	to	assess	potential	impairments.

In	2008,	we	paid	$712	million	to	acquire	certain	700	MHz	wireless	licenses,	which	were	granted	to	us	by	the	FCC	in	February	2009.		To	commercialize	these	licenses and	satisfy	the	associated	FCC	build-out	requirements,	we	will	be	required	to	make	significant	additional	investments	or	partner	with	others.		Depending	on	the	nature and	scope	of	such	commercialization	and	build-out,	any	such	investment	or	partnership	could	vary	significantly.		Part	or	all	of	these	licenses	may	be	terminated	if	the associated	FCC	build-out	requirements	are	not	satisfied.

There	can	be	no	assurance	that	we	will	be	able	to	develop	and	implement	a	business	model	that	will	realize	a	return	on	these	investments	and	profitably	deploy	the spectrum	represented	by	the	700	MHz	licenses.

Furthermore,	the	fair	values	of	wireless	licenses	may	vary	significantly	in	the	future.		In	particular,	valuation	swings	could	occur	if:

·																		consolidation	in	the	wireless	industry	allows	or	requires	wireless	carriers	to	sell	significant	portions	of	their	wireless	spectrum	holdings,	which	could	in	turn reduce	the	value	of	our	spectrum	holdings;	or

·																		a	sudden	large	sale	of	spectrum	by	one	or	more	wireless	providers	occurs.

In	addition,	the	fair	value	of	wireless	licenses	could	decline	as	a	result	of	the	FCC's	pursuit	of	policies,	including	auctions,	designed	to	increase	the	number	of	wireless licenses	available	in	each	of	our	markets.		If	the	fair	value	of	our	700	MHz	licenses	were	to	decline	significantly,	the	value	of	our	700	MHz	licenses	could	be	subject	to non-cash	impairment	charges.		We	assess	potential	impairments	to	our	indefinite-lived	intangible	assets	annually	or	more	often	if	indicators	of	impairment	arise	to determine	whether	there	is	evidence	that	indicate	an	impairment	condition	may	exist.

On	April	26,	2011,	we	completed	the	Blockbuster	Acquisition.		As	of	December	31,	2011,	Blockbuster	operated	over	1,500	retail	stores	in	the	United	States. Blockbuster's	retail	store	operations	involve	the	management	and	distribution	of	product	inventories,	and	we	have	limited	experience	in	operating	retail	stores.		Factors that	are	unique	to	the	Blockbuster	business,	compared	to	our	existing	businesses,	include,	among	other	things,	maintaining	adequate	inventory,	controlling	shrinkage	due to	theft	and	loss,	managing	excess	inventory	and	product	fulfillment.		Prior	to	the	acquisition,	Blockbuster	experienced	significant	operating	and	financial	challenges, which	resulted	in	Blockbuster	commencing	bankruptcy	proceedings.		If	we	are	unable	to	successfully	address	these	challenges	and	risks,	our	Blockbuster	business, financial	condition	or	results	of	operations	may	likely	suffer.

In	addition,	our	Blockbuster	retail	store	operations	face	increasing	competition	from	video	rental	kiosk,	streaming	and	mail	order	businesses.		These	competitive pressures	have	contributed	to	weak	store-level	financial	performance	at	many	of	our	Blockbuster	retail	stores.		We	expect	to	close	over	500	domestic	stores	during	the first	half	of	2012	as	a	result	of	weak	store-level	financial	performance.

We	continue	to	evaluate	the	impact	of	certain	factors,	including,	among	other	things,	competitive	pressures,	the	scale	of	our	Blockbuster	retail	operations	and	other issues	impacting	the	store-level	financial	performance	of	our	Blockbuster	retail	stores.		These	factors,	or	other	reasons,	could	lead	us	to	close	additional	Blockbuster retail	stores.		There	is	no	assurance	that	we	will	achieve	the	expected	benefits	from	the	Blockbuster	Acquisition.

Our	future	success	may	depend	on	opportunities	to	buy	other	businesses	or	technologies	that	could	complement,	enhance	or	expand	our	current	business	or	products	or that	might	otherwise	offer	us	growth	opportunities.

We	may	be	unable	to	obtain	in	the	anticipated	timeframe,	or	at	all,	any	regulatory	approvals	required	to	complete	proposed	acquisitions	and	other	strategic	transactions. Furthermore,	the	conditions	imposed	for	obtaining	any	necessary	approvals	could	delay	the	completion	of	such	transactions	for	a	significant	period	of	time	or	prevent them	from	occurring	at	all.		We	may	not	be	able	to	complete	such	transactions	and	such	transactions,	if	executed,	pose	significant	risks	and	could	have	a	negative	effect on	our	operations.		Any	transactions	that	we	are	able	to	identify	and	complete	may	involve	a	number	of	risks,	including:

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

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

·																		a	high	degree	of	risk	involved	in	these	transactions,	which	could	become	substantial	over	time,	and	higher	exposure	to	significant	financial	losses	if	the underlying	ventures	are	not	successful;

·																		our	possible	inability	to	achieve	the	intended	objectives	of	the	transaction;	and

·																		the	risks	associated	with	complying	with	regulations	applicable	to	the	acquired	business,	which	may	cause	us	to	incur	substantial	expenses.

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

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

These	transactions	pose	substantial	risks	and	require	the	commitment	of	significant	capital	both	to	complete	the	acquisitions	and	to	operate	the	acquired	businesses following	their	acquisition.	These	acquisitions	may	result	in	significant	financial	losses	if	the	intended	objectives	of	the	transactions	are	not	achieved.		Some	of	the businesses	acquired	by	us	have	experienced	significant	operating	and	financial	challenges	in	their	recent	history,	which	in	some	cases	resulted	in	these	businesses commencing	bankruptcy	proceedings.		We	may	acquire	similar	businesses	in	the	future.	There	is	no	assurance	that	we	will	be	able	to	successfully	address	the	challenges and	risks	encountered	by	these	businesses	following	their	acquisition.		If	we	are	unable	to	successfully	address	these	challenges	and	risks,	our	business,	financial condition	or	results	of	operations	may	likely	suffer.

We	may	need	to	raise	additional	capital	in	the	future,	which	may	not	be	available	on	acceptable	terms	or	at	all,	to	among	other	things,	continue	investing	in	our	business, construct	and	launch	new	satellites,	and	to	pursue	acquisitions	and	other	strategic	transactions.

Furthermore,	weakness	in	the	equity	markets	could	make	it	difficult	for	us	to	raise	equity	financing	without	incurring	substantial	dilution	to	our	existing	shareholders.		In addition,	sustained	economic	weakness	or	weak	results	of	operations	may	limit	our	ability	to	generate	sufficient	internal	cash	to	fund	these	investments,	capital expenditures,	acquisitions	and	other	strategic	transactions.		As	a	result,	these	conditions	make	it	difficult	for	us	to	accurately	forecast	and	plan	future	business	activities because	we	may	not	have	access	to	funding	sources	necessary	for	us	to	pursue	organic	and	strategic	business	development	opportunities.

A	portion	of	our	investment	portfolio	is	invested	in	auction	rate	securities,	mortgage	backed	securities,	and	strategic	investments,	and	as	a	result	a	portion	of	our portfolio	has	restricted	liquidity.		Liquidity	in	the	markets	for	these	investments	has	been	adversely	impacted.		If	the	credit	ratings	of	these	securities	deteriorate	or	the lack	of	liquidity	in	the	marketplace	continues,	we	may	be	required	to	record	further	impairment	charges.		Moreover,	the	sustained	uncertainty	of	domestic	and	global financial	markets	has	greatly	affected	the	volatility	and	value	of	our	marketable	investment	securities.		To	the	extent	we	require	access	to	funds,	we	may	need	to	sell these	securities	under	unfavorable	market	conditions,	record	further	impairment	charges	and	fall	short	of	our	financing	needs.

As	of	December	31,	2011,	our	total	debt,	including	the	debt	of	our	subsidiaries,	was	$7.494	billion.		Our	debt	levels	could	have	significant	consequences,	including:

·																		requiring	us	to	devote	a	substantial	portion	of	our	cash	to	make	interest	and	principal	payments	on	our	debt,	thereby	reducing	the	amount	of	cash	available	for other	purposes.		As	a	result,	we	would	have	limited		financial	and	operating	flexibility	in	responding	to	changing	economic	and	competitive	conditions;

·																		limiting	our	ability	to	raise	additional	debt	because	it	may	be	more	difficult	for	us	to	obtain	debt	financing	on	attractive	terms;	and

·																		placing	us	at	a	disadvantage	compared	to	our	competitors	that	have	less	debt.

In	addition,	we	may	incur	substantial	additional	debt	in	the	future.		The	terms	of	the	indentures	relating	to	our	senior	notes	permit	us	to	incur	additional	debt.		If	new	debt is	added	to	our	current	debt	levels,	the	risks	we	now	face	could	intensify.

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

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

·																		a	provision	that	authorizes	the	issuance	of	"blank	check"	preferred	stock,	which	could	be	issued	by	our	Board	of	Directors	to	increase	the	number	of outstanding	shares	and	thwart	a	takeover	attempt;

·																		a	provision	limiting	who	may	call	special	meetings	of	shareholders;	and

·																		a	provision	establishing	advance	notice	requirements	for	nominations	of	candidates	for	election	to	our	Board	of	Directors	or	for	proposing	matters	that	can	be acted	upon	by	shareholders	at	shareholder	meetings.

In	addition,	pursuant	to	our	certificate	of	incorporation	we	have	a	significant	amount	of	authorized	and	unissued	stock	which	would	allow	our	Board	of	Directors	to	issue shares	to	persons	friendly	to	current	management,	thereby	protecting	the	continuity	of	its	management,	or	which	could	be	used	to	dilute	the	stock	ownership	of	persons seeking	to	obtain	control	of	us.

Charles	W.	Ergen,	our	Chairman,	currently	beneficially	owns	approximately	53.2%	of	our	total	equity	securities	(assuming	conversion	of	only	the	Class	B	Common Stock	held	by	Mr.	Ergen	into	Class	A	Common	Stock)	and	possesses	approximately	90.4%	of	the	total	voting	power.		Mr.	Ergen's	beneficial	ownership	of	shares	of Class	A	Common	Stock	excludes	4,245,151	shares	of	Class	A	Common	Stock	issuable	upon	conversion	of	shares	of	Class	B	Common	Stock	currently	held	by	certain trusts	established	by	Mr.	Ergen	for	the	benefit	of	his	family.		These	trusts	beneficially	own	approximately	2.0%	of	our	total	equity	securities	(assuming	conversion	of only	the	Class	B	Common	Stock	held	by	such	trusts	into	Class	A	Common	Stock)	and	possess	approximately	1.6%	of	the	total	voting	power.		Through	his	voting	power, Mr.	Ergen	has	the	ability	to	elect	a	majority	of	our	directors	and	to	control	all	other	matters	requiring	the	approval	of	our	stockholders.		As	a	result,	DISH	Network	is	a "controlled	company"	as	defined	in	the	Nasdaq	listing	rules	and	is,	therefore,	not	subject	to	Nasdaq	requirements	that	would	otherwise	require	us	to	have:	(i)	a	majority of	independent	directors;	(ii)	a	nominating	committee	composed	solely	of	independent	directors;	(iii)	compensation	of	our	executive	officers	determined	by	a	majority	of the	independent	directors	or	a	compensation	committee	composed	solely	of	independent	directors;	and	(iv)	director	nominees	selected,	or	recommended	for	the	Board's selection,	either	by	a	majority	of	the	independent	directors	or	a	nominating	committee	composed	solely	of	independent	directors.

In	January	2008,	Voom	HD	Holdings	("Voom")	filed	a	lawsuit	against	us	in	New	York	Supreme	Court,	alleging	breach	of	contract	and	other	claims	arising	from	our termination	of	the	affiliation	agreement	governing	carriage	of	certain	Voom	HD	channels	on	the	DISH	pay-TV	service.		At	that	time,	Voom	also	sought	a	preliminary injunction	to	prevent	us	from	terminating	the	agreement.		The	Court	denied	Voom's	request,	finding,	among	other	things,	that	Voom	had	not	demonstrated	that	it	was likely	to	prevail	on	the	merits.		In	April	2010,	we	and	Voom	each	filed	motions	for	summary	judgment.		Voom	later	filed	two	motions	seeking	discovery	sanctions.		On November	9,	2010,	the	Court	issued	a	decision	denying	both	motions	for	summary	judgment,	but	granting	Voom's	motions	for	discovery	sanctions.		The	Court's decision	provides	for	an	adverse	inference	jury	instruction	at	trial	and	precludes	our	damages	expert	from	testifying	at	trial.		We	appealed	the	grant	of	Voom's	motion for	discovery	sanctions	to	the	New	York	State	Supreme	Court,	Appellate	Division,	First	Department.		On	February	15,	2011,	the	appellate	court	granted	our	motion	to stay	the	trial	pending	our	appeal.		On	January	31,	2012,	the	appellate	court	affirmed	the	order	imposing	discovery	sanctions	and	precluding	our	damages	expert	from testifying	at	trial.		We	are	seeking	leave	to	appeal	to	New	York's	highest	state	court,	the	Court	of	Appeals.		A	trial	date	has	not	been	set.		Voom	is	claiming	over	$2.5 billion	in	damages.		If	we	are	unsuccessful	in	our	suit	with	Voom,	we	may	be	required	to	pay	substantial	damages,	which	would	have	a	material	adverse	affect	on	our financial	position	and	results	of	operations.

We	rely	on	our	patents,	copyrights,	trademarks	and	trade	secrets,	as	well	as	licenses	and	other	agreements	with	our	vendors	and	other	parties,	to	use	our	technologies, conduct	our	operations	and	sell	our	products	and	services.		Legal	challenges	to	our	intellectual	property	rights	and	claims	of	intellectual	property	infringement	by	third parties	could	require	that	we	enter	into	royalty	or	licensing	agreements	on	unfavorable	terms,	incur	substantial	monetary	liability	or	be	enjoined	preliminarily	or permanently	from	further	use	of	the	intellectual	property	in	question	or	from	the	continuation	of	our	businesses	as	currently	conducted,	which	could	require	us	to	change our	business	practices	or	limit	our	ability	to	compete	effectively	or	could	have	an	adverse	effect	on	our	results	of	operations.		Even	if	we	believe	any	such	challenges	or claims	are	without	merit,	they	can	be	time-consuming	and	costly	to	defend	and	divert

management's	attention	and	resources	away	from	our	business.		Moreover,	because	of	the	rapid	pace	of	technological	change,	we	rely	on	technologies	developed	or licensed	by	third	parties,	and	if	we	are	unable	to	obtain	or	continue	to	obtain	licenses	from	these	third	parties	on	reasonable	terms,	our	business,	financial	position	and results	of	operations	could	be	adversely	affected.

We	are	subject	to	various	legal	proceedings	and	claims	which	arise	in	the	ordinary	course	of	business,	including	among	other	things,	disputes	with	programmers regarding	fees.		Many	entities,	including	some	of	our	competitors,	have	or	may	in	the	future	obtain	patents	and	other	intellectual	property	rights	that	cover	or	affect products	or	services	related	to	those	that	we	offer.		In	general,	if	a	court	determines	that	one	or	more	of	our	products	or	services	infringes	on	intellectual	property	held	by others,	we	may	be	required	to	cease	developing	or	marketing	those	products	or	services,	to	obtain	licenses	from	the	holders	of	the	intellectual	property	at	a	material	cost, or	to	redesign	those	products	or	services	in	such	a	way	as	to	avoid	infringing	the	intellectual	property.		If	those	intellectual	property	rights	are	held	by	a	competitor,	we may	be	unable	to	obtain	the	intellectual	property	at	any	price,	which	could	adversely	affect	our	competitive	position.		Please	see	further	discussion	under	"Item	1. Business	—	Patents	and	Trademarks"	of	this	Annual	Report	on	Form	10-K.

We	may	not	be	aware	of	all	intellectual	property	rights	that	our	services	or	the	products	used	in	connection	with	our	services	may	potentially	infringe.		In	addition, patent	applications	in	the	United	States	are	confidential	until	the	Patent	and	Trademark	Office	issues	a	patent.		Therefore,	it	is	difficult	to	evaluate	the	extent	to	which	our services	or	the	products	used	in	connection	with	our	services	may	infringe	claims	contained	in	pending	patent	applications.		Further,	it	is	often	not	possible	to	determine definitively	whether	a	claim	of	infringement	is	valid.

As	a	result	of	recent	updates	to	certain	of	our	programming	agreements	which	allow	us	to,	among	other	things,	deliver	certain	authenticated	content	via	the	Internet,	we are	increasingly	distributing	content	to	our	subscribers	via	the	Internet.		The	ability	to	continue	this	strategy	may	depend	in	part	on	the	FCC's	success	in	implementing rules	prohibiting	discrimination	against	our	distribution	of	content	over	networks	owned	by	broadband	and	wireless	Internet	providers.		For	more	information,	see	"Item 1.		Business	—	Government	Regulations	—	FCC	Regulation	under	the	Communications	Act	—	Net	Neutrality"	of	this	Annual	Report	on	Form	10-K.

We	purchase	a	large	percentage	of	our	programming	from	cable-affiliated	programmers.		The	provisions	of	the	Cable	Act	prohibiting	exclusive	contracting	practices with	cable-affiliated	programmers	were	extended	for	another	five-year	period	in	September	2007.		Cable	companies	appealed	the	FCC's	decision,	and	while	that decision	was	upheld	by	the	D.C.	Circuit	in	March	2010,	that	court	indicated	if	the	market	continues	to	evolve,	it	is	expected	that	the	exclusivity	prohibition	may	no longer	be	necessary.		Any	change	in	the	Cable	Act	and	the	FCC's	rules	that	currently	limit	the	ability	of	cable-affiliated	programmers	to	discriminate	against	competing businesses,	such	as	ours,	in	the	sale	of	programming	could	adversely	affect	our	ability	to	acquire	cable-affiliated	programming	at	all	or	to	acquire	programming	on	a cost-effective	basis.		As	a	result,	we	may	be	limited	in	our	ability	to	obtain	access	on	nondiscriminatory	terms	to	programming	from	programmers	that	are	affiliated	with cable	system	operators.		In	the	case	of	certain	types	of	programming	affiliated	with	Comcast,	Time-Warner	Cable,	and	Liberty,	the	terms	of	access	to	the	programming

are	subject	to	arbitration	for	a	limited	period	of	time	if	we	and	the	programmer	cannot	reach	agreement	on	terms,	subject	to	FCC	review.		We	cannot	be	sure	that	this procedure	will	result	in	favorable	terms	for	us	or	that	the	FCC	conditions	that	establish	this	procedure	will	be	allowed	to	expire	on	their	own	terms.

In	addition,	affiliates	of	certain	cable	providers	have	denied	us	access	to	sports	programming	they	feed	to	their	cable	systems	terrestrially,	rather	than	by	satellite.		The FCC	recently	held	that	new	denials	of	such	service	are	unfair	if	they	have	the	purpose	or	effect	of	significantly	hindering	us	from	providing	programming	to	consumers. However,	we	cannot	be	sure	that	we	can	prevail	in	a	complaint	related	to	such	programming,	and	gain	access	to	it.		Our

continuing	failure	to	access	such	programming	could	materially	and	adversely	affect	our	ability	to	compete	in	regions	serviced	by	these	cable	providers.

Pursuant	to	STELA,	we	have	been	able	to	obtain	a	waiver	of	a	court	injunction	that	previously	prevented	us	from	retransmitting	certain	distant	network	signals	under	a statutory	copyright	license.		Because	of	that	waiver,	we	may	once	again	provide	distant	network	signals	to	eligible	subscribers.		To	qualify	for	that	waiver,	we	are required	to	provide	local	service	in	all	210	local	markets	in	the	U.S.	on	an	ongoing	basis.		This	condition	poses	a	significant	strain	on	our	capacity.		Moreover,	we	may lose	that	waiver	if	we	are	found	to	have	failed	to	provide	local	service	in	any	of	the	210	local	markets.		If	we	lose	the	waiver,	the	injunction	could	be	reinstated. Furthermore,	depending	on	the	severity	of	the	failure,	we	may	also	be	subject	to	other	sanctions,	which	may	include,	among	other	things,	damages.		Pursuant	to	STELA, our	compliance	with	certain	conditions	of	the	waiver	is	subject	to	periodic	examination	and	review.

DBS	operators	are	subject	to	significant	government	regulation,	primarily	by	the	FCC	and,	to	a	certain	extent,	by	Congress,	other	federal	agencies	and	foreign,	state	and local	authorities.		Depending	upon	the	circumstances,	noncompliance	with	legislation	or	regulations	promulgated	by	these	entities	could	result	in	the	suspension	or revocation	of	our	licenses	or	registrations,	the	termination	or	loss	of	contracts	or	the	imposition	of	contractual	damages,	civil	fines	or	criminal	penalties,	any	of	which could	have	a	material	adverse	effect	on	our	business,	financial	condition	and	results	of	operations.		Furthermore,	the	adoption	or	modification	of	laws	or	regulations relating	to	video	programming,	satellite	services,	the	Internet	or	other	areas	of	our	business	could	limit	or	otherwise	adversely	affect	the	manner	in	which	we	currently conduct	our	business.		If	we	become	subject	to	new	regulations	or	legislation	or	new	interpretations	of	existing	regulations	or	legislation	that	govern	Internet	network neutrality,	we	may	be	required	to	incur	additional	expenses	or	alter	our	business	model.		The	manner	in	which	legislation	governing	Internet	network	neutrality	may	be interpreted	and	enforced	cannot	be	precisely	determined,	which	in	turn	could	have	an	adverse	effect	on	our	business,	financial	condition	and	results	of	operations.	You should	review	the	regulatory	disclosures	under	the	caption	"Item	1.		Business	—	Government	Regulation	—	FCC	Regulation	under	the	Communications	Act"	of	this Annual	Report	on	Form	10-K.

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

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

# We	are	subject	to	digital	HD	"carry-one,	carry-all"	requirements	that	cause	capacity	constraints.

To	provide	any	full-power	local	broadcast	signal	in	any	market,	we	are	required	to	retransmit	all	qualifying	broadcast	signals	in	that	market	("carry-one,	carry-all").		The FCC	has	adopted	digital	carriage	rules	that	require	DBS	providers	to	phase	in	carry-one,	carry-all	obligations	with	respect	to	the	carriage	of	full-power	broadcasters'	HD signals	by	February	2013	in	markets	in	which	DISH	elects	to	provide	local	channels	in	HD.		In	addition,	STELA	has	imposed	accelerated	HD	carriage	requirements	for noncommercial	educational	stations	on	DBS	providers	that	do	not	have	a	certain	contractual	relationship	with	a	certain	number	of	such	stations.		DISH	Network	has entered	into	an	agreement	with	a	number	of	PBS	stations	to	comply	with	the	requirements.		The	carriage	of

additional	HD	signals	on	our	pay-TV	service	could	cause	us	to	experience	significant	capacity	constraints	and	prevent	us	from	carrying	additional	popular	national programs	and/or	carrying	those	national	programs	in	HD.

In	addition,	there	is	a	pending	rulemaking	before	the	FCC	regarding	whether	to	require	DBS	providers	to	carry	all	broadcast	stations	in	a	local	market	in	both	standard definition	and	HD	if	they	carry	any	station	in	that	market	in	both	standard	definition	and	HD.		If	we	were	required	to	carry	multiple	versions	of	each	broadcast	station, we	would	have	to	dedicate	more	of	our	finite	satellite	capacity	to	each	broadcast	station.		We	cannot	predict	the	outcome	or	timing	of	that	rulemaking	process.

We	periodically	evaluate	and	test	our	internal	control	over	financial	reporting	to	satisfy	the	requirements	of	Section	404	of	the	Sarbanes-Oxley	Act.		On	April	26,	2011, we	completed	the	Blockbuster	Acquisition.		We	are	currently	integrating	policies,	processes,	people,	technology	and	operations	for	the	combined	company. Management	will	continue	to	evaluate	our	internal	control	over	financial	reporting	as	we	execute	integration	activities.		Except	as	discussed	above,	our	management	has concluded	that	our	internal	control	over	financial	reporting	was	effective	as	of	December	31,	2011.		If	in	the	future	we	are	unable	to	report	that	our	internal	control	over financial	reporting	is	effective	(or	if	our	auditors	do	not	agree	with	our	assessment	of	the	effectiveness	of,	or	are	unable	to	express	an	opinion	on,	our	internal	control over	financial	reporting),	investors,	customers	and	business	partners	could	lose	confidence	in	the	accuracy	of	our	financial	reports,	which	could	in	turn	have	a	material adverse	effect	on	our	business,	investor	confidence	in	our	financial	results	may	weaken,	and	our	stock	price	may	suffer.

We	may	face	other	risks	described	from	time	to	time	in	periodic	and	current	reports	we	file	with	the	SEC.

None.

# Item	2.			PROPERTIES

The	following	table	sets	forth	certain	information	concerning	our	principal	properties	related	to	our	DISH	segment	and	our	Blockbuster	segment.

|  | Segment(s) |  | Leased	From | Leased	From |
| :--- | :--- | :--- | :--- | :--- |
|  | Using |  |  | Other |
| Description/Use/Location | Property | Owned | EchoStar\t(1) | Third\tParty |
| Corporate\theadquarters,\tEnglewood,\tColorado | DISH |  | X |  |
| Customer\tcall\tcenter\tand\tgeneral\toffices,\tPine\tBrook,\tNew\tJersey | DISH |  | X | X |
| Customer\tcall\tcenter\tand\tgeneral\toffices,\tTulsa,\tOklahoma | DISH |  | X | X |
| Customer\tcall\tcenter,\tAlvin,\tTexas | DISH |  |  | X |
| Customer\tcall\tcenter,\tBluefield,\tWest\tVirginia | DISH | X |  |  |
| Customer\tcall\tcenter,\tChristiansburg,\tVirginia | DISH | X |  |  |
| Customer\tcall\tcenter,\tCollege\tPoint,\tNew\tYork | DISH |  | X | X |
| Customer\tcall\tcenter,\tHarlingen,\tTexas | DISH | X |  |  |
| Customer\tcall\tcenter,\tHilliard,\tOhio | DISH |  | X | X |
| Customer\tcall\tcenter,\tLittleton,\tColorado | DISH |  | X |  |
| Customer\tcall\tcenter,\tPhoenix,\tArizona | DISH |  | X | X |
| Customer\tcall\tcenter,\tThornton,\tColorado | DISH | X |  |  |
| Customer\tcall\tcenter,\twarehouse\tand\tservice\tcenter,\tEl\tPaso,\tTexas | DISH | X |  |  |
| Service\tcenter,\tEnglewood,\tColorado | DISH |  | X |  |
| Service\tcenter,\tSpartanburg,\tSouth\tCarolina | DISH |  | X | X |
| Warehouse\tand\tdistribution\tcenter,\tDenver,\tColorado | DISH |  |  | X |
| Warehouse\tand\tdistribution\tcenter,\tSacramento,\tCalifornia | DISH | X |  |  |
| Warehouse,\tDenver,\tColorado | DISH | X |  |  |
| Warehouse,\tdistribution\tand\tservice\tcenter,\tAtlanta,\tGeorgia | DISH |  | X | X |
| Warehouse\tand\tgeneral\toffices,\tMcKinney,\tTexas | Blockbuster |  |  | X |

In	addition	to	the	principal	properties	listed	above,	we	operate	numerous	DISH	service	centers	strategically	located	in	regions	throughout	the	United	States.

Furthermore,	we	own	or	lease	capacity	on	13	satellites	which	are	a	major	component	of	our	DISH	pay-TV	service.		See	further	discussion	under	"Item	1.	Business	— Satellites"	in	this	Annual	Report	on	Form	10-K.

# Item	3.			LEGAL	PROCEEDINGS

We	are	involved	in	a	number	of	legal	proceedings	(including	those	described	below)	concerning	matters	arising	in	connection	with	the	conduct	of	our	business activities.		Many	of	these	proceedings	are	at	preliminary	stages,	and	many	of	these	cases	seek	an	indeterminate	amount	of	damages.		We	regularly	evaluate	the	status	of the	legal	proceedings	in	which	we	are	involved	to	assess	whether	a	loss	is	probable	or	there	is	a	reasonable	possibility	that	a	loss	or	additional	loss	may	have	been incurred	and	to	determine	if	accruals	are	appropriate.		If	accruals	are	not	appropriate,	we	further	evaluate	each	legal	proceeding	to	assess	whether	an	estimate	of	the possible	loss	or	range	of	possible	loss	can	be	made.

For	certain	cases	described	on	the	following	pages,	management	is	unable	to	provide	a	meaningful	estimate	of	the	possible	loss	or	range	of	possible	loss	because,	among other	reasons,	(i)	the	proceedings	are	in	various	stages;	(ii)	damages	have	not	been	sought;	(iii)	damages	are	unsupported	and/or	exaggerated;	(iv)	there	is	uncertainty	as to	the	outcome	of	pending	appeals	or	motions;	(v)	there	are	significant	factual	issues	to	be	resolved;	and/or	(vi)	there	are	novel	legal	issues	or	unsettled	legal	theories	to be	presented	or	a	large	number	of	parties	(as	with	many	patent-related	cases).		For	these	cases,	however,	management	does	not	believe,	based	on	currently	available information,	that	the	outcomes	of	these	proceedings	will	have	a	material	adverse	effect	on	our	financial	condition,	though	the

outcomes	could	be	material	to	our	operating	results	for	any	particular	period,	depending,	in	part,	upon	the	operating	results	for	such	period.

# Broadcast	Innovation,	L.L.C.

During	2001,	Broadcast	Innovation,	L.L.C.	("Broadcast	Innovation")	filed	a	lawsuit	against	us,	DirecTV,	Thomson	Consumer	Electronics	and	others	in	United	States District	Court	in	Denver,	Colorado.		Broadcast	Innovation	is	an	entity	that	seeks	to	license	an	acquired	patent	portfolio	without	itself	practicing	any	of	the	claims	recited therein.		The	suit	alleges	infringement	of	United	States	Patent	Nos.	6,076,094	(the	"'094	patent")	and	4,992,066	(the	"'066	patent").		The	'094	patent	relates	to	certain methods	and	devices	for	transmitting	and	receiving	data	along	with	specific	formatting	information	for	the	data.		The	'066	patent	relates	to	certain	methods	and	devices for	providing	the	scrambling	circuitry	for	a	pay	television	system	on	removable	cards.		Subsequently,	DirecTV	and	Thomson	settled	with	Broadcast	Innovation	leaving us	as	the	only	defendant.

During	2004,	the	District	Court	issued	an	order	finding	the	'066	patent	invalid.		Also	in	2004,	the	District	Court	found	the	'094	patent	invalid	in	a	parallel	case	filed	by Broadcast	Innovation	against	Charter	and	Comcast.		In	2005,	the	United	States	Court	of	Appeals	for	the	Federal	Circuit	overturned	that	finding	of	invalidity	with	respect to	the	'094	patent	and	remanded	the	Charter	case	back	to	the	District	Court.		During	June	2006,	Charter	filed	a	request	for	reexamination	of	the	'094	patent	with	the	U.S. Patent	and	Trademark	Office	and,	on	December	13,	2011,	the	U.S.	Patent	and	Trademark	Office	issued	a	certificate	cancelling	all	claims	of	the	'094	patent.		On February	2,	2012,	Broadcast	Innovation	dismissed	the	case	against	us	with	prejudice.

# Channel	Bundling	Class	Action

During	2007,	a	purported	class	of	cable	and	satellite	subscribers	filed	an	antitrust	action	against	us	in	the	United	States	District	Court	for	the	Central	District	of California.		The	suit	also	names	as	defendants	DirecTV,	Comcast,	Cablevision,	Cox,	Charter,	Time	Warner,	Inc.,	Time	Warner	Cable,	NBC	Universal,	Viacom,	Fox Entertainment	Group	and	Walt	Disney	Company.		The	suit	alleges,	among	other	things,	that	the	defendants	engaged	in	a	conspiracy	to	provide	customers	with	access only	to	bundled	channel	offerings	as	opposed	to	giving	customers	the	ability	to	purchase	channels	on	an	"a	la	carte"	basis.		On	October	16,	2009,	the	District	Court granted	defendants'	motion	to	dismiss	with	prejudice.		On	June	3,	2011,	the	U.S.	Court	of	Appeals	for	the	Ninth	Circuit	affirmed	the	District	Court's	motion	to	dismiss with	prejudice.		The	plaintiff	class	sought	rehearing	en	banc.		On	October	31,	2011,	the	Ninth	Circuit	issued	an	order	vacating	the	June	3,	2011	order,	directing	that	a	3- judge	panel	be	reconstituted,	and	denying	the	plaintiff	class'	motion	for	rehearing.		We	intend	to	vigorously	defend	this	case.		We	cannot	predict	with	any	degree	of certainty	the	outcome	of	the	suit	or	determine	the	extent	of	any	potential	liability	or	damages.

Cyberfone	Systems,	LLC	(f/k/a	LVL	Patent	Group,	LLC)

On	September	15,	2011,	LVL	Patent	Group,	LLC	filed	a	complaint	against	our	wholly-owned	subsidiary	DISH	Network	L.L.C.,	as	well	as	EchoStar,	EchoStar Technologies	L.L.C.,	a	wholly-owned	subsidiary	of	EchoStar,	and	DirecTV	in	the	United	States	District	Court	for	the	District	of	Delaware	alleging	infringement	of United	States	Patent	No.	6,044,382,	which	is	entitled	"Data	Transaction	Assembly	Server."		On	November	18,	2011,	Cyberfone	Systems,	LLC	(f/k/a	LVL	Patent	Group, LLC)	filed	an	amended	complaint	making	the	same	claim.		DirecTV	was	dismissed	from	the	case	on	January	4,	2012.

We	intend	to	vigorously	defend	this	case.		In	the	event	that	a	court	ultimately	determines	that	we	infringe	the	asserted	patent,	we	may	be	subject	to	substantial	damages, which	may	include	treble	damages,	and/or	an	injunction	that	could	require	us	to	materially	modify	certain	features	that	we	currently	offer	to	consumers.		We	cannot predict	with	any	degree	of	certainty	the	outcome	of	the	suit	or	determine	the	extent	of	any	potential	liability	or	damages.

During	2008,	we	filed	a	lawsuit	against	ESPN,	Inc.,	ESPN	Classic,	Inc.,	ABC	Cable	Networks	Group,	Soapnet	L.L.C.	and	International	Family	Entertainment (collectively,	"ESPN")	for	breach	of	contract	in	New	York	State	Supreme	Court.		Our	complaint	alleges	that	ESPN	failed	to	provide	us	with	certain	high-definition	feeds of	the

Disney	Channel,	ESPN	News,	Toon	and	ABC	Family.		In	October	2011,	the	jury	returned	a	verdict	in	favor	of	the	defendants.		We	intend	to	appeal.

ESPN	had	asserted	a	counterclaim	alleging	that	we	owed	approximately	$35	million	under	the	applicable	affiliation	agreements.		On	April	15,	2009,	the	New	York	State Supreme	Court	granted,	in	part,	ESPN's	motion	for	summary	judgment	on	the	counterclaim,	finding	that	we	are	liable	for	some	of	the	amount	alleged	to	be	owing	but that	the	actual	amount	owing	is	disputed.		On	December	29,	2010,	the	New	York	State	Supreme	Court,	Appellate	Division,	First	Department	affirmed	the	partial	grant	of ESPN's	motion	on	the	counterclaim.		After	the	partial	grant	of	ESPN's	motion	for	summary	judgment,	ESPN	sought	an	additional	$30	million	under	the	applicable affiliation	agreements.		On	March	15,	2010,	the	New	York	State	Supreme	Court	affirmed	the	prior	grant	of	ESPN's	motion	and	ruled	that	we	owe	the	full	amount	of approximately	$66	million	under	the	applicable	affiliation	agreement.		As	of	December	31,	2010,	we	had	$42	million	recorded	as	a	"Litigation	accrual"	on	our Consolidated	Balance	Sheets.

On	June	21,	2011,	the	First	Department	affirmed	the	New	York	Supreme	Court's	ruling	that	we	owe	approximately	$66	million	under	the	applicable	affiliation agreements	and,	on	October	18,	2011,	denied	our	motion	for	leave	to	appeal	that	decision	to	New	York's	highest	court,	the	New	York	Court	of	Appeals.		We	sought leave	to	appeal	directly	to	the	New	York	Court	of	Appeals	and,	on	January	10,	2012,	the	New	York	Court	of	Appeals	dismissed	our	motion	for	leave	on	the	ground	that the	ruling	upon	which	we	appealed	does	not	fully	resolve	all	claims	in	the	action.		As	a	result	of	the	First	Department's	June	2011	ruling,	during	the	year	ended December	31,	2011,	we	recorded	$24	million	of	"Litigation	Expense"	on	our	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss)	and	increased our	"Litigation	accrual"	to	a	total	of	$66	million	as	of	December	31,	2011.		This	reflects	our	estimated	exposure	for	ESPN's	counterclaim.		On	February	6,	2012,	ESPN filed	a	motion	seeking	$5	million	in	attorneys'	fees	as	the	prevailing	party	on	both	our	claim	and	ESPN's	counterclaim,	which	we	intend	to	oppose.		We	intend	to vigorously	prosecute	and	defend	this	case.

During	August	2010,	Ganas,	L.L.C.	("Ganas")	filed	suit	against	DISH	DBS	Corporation,	our	indirect	wholly	owned	subsidiary,	Sabre	Holdings	Corporation,	SAP America,	Inc.,	SAS	Institute	Inc.,	Scottrade,	Inc.,	TD	Ameritrade,	Inc.,	The	Charles	Schwab	Corporation,	TiVo	Inc.,	Unicoi	Systems	Inc.,	Xerox	Corporation,	Adobe Systems	Inc.,	AOL	Inc.,	Apple	Inc.,	Axibase	Corporation,	DirecTV,	E*Trade	Securities	L.L.C.,	Exinda	Networks,	Fidelity	Brokerage	Services	L.L.C.,	Firstrade Securities	Inc.,	Hewlett-Packard	Company,	iControl	Inc.,	International	Business	Machines	Corporation	and	JPMorgan	Chase	&	Co.	in	the	United	States	District	Court for	the	Eastern	District	of	Texas	alleging	infringement	of	United	States	Patent	Nos.	7,136,913,	7,325,053,	and	7,734,756.		The	patents	relate	to	hypertext	transfer protocol	and	simple	object	access	protocol.		Ganas	is	an	entity	that	seeks	to	license	an	acquired	patent	portfolio	without	itself	practicing	any	of	the	claims	recited therein.		On	January	23,	2012,	Ganas	dismissed	the	case	against	us	with	prejudice	pursuant	to	a	settlement	in	which	our	contribution	was	not	material.

# InterAD	Technologies,	LLC

On	September	16,	2011,	InterAD	Technologies,	LLC	("InterAD")	filed	a	complaint	against	our	wholly-owned	subsidiary	DISH	Network	L.L.C.,	as	well	as	EchoStar, EchoStar	Technologies	L.L.C.,	a	wholly-owned	subsidiary	of	EchoStar,	Atlantic	Broadband	Finance,	LLC,	AT&T,	Inc.,	Bright	House	Networks,	LLC,	Cable	One,	Inc., Cequel	Communications,	LLC,	Charter	Communications	Holding	Company,	LLC,	Charter	Communications,	Inc.,	Comcast	Corporation,	Cox	Communications,	Inc., CSC	Holdings,	LLC,	DirecTV,	Inc.,	Insight	Communications	Company,	Inc.,	Knology,	Inc.,	Mediacom	Broadband,	LLC,	RCN	Telecom	Services,	LLC,	Time	Warner Cable,	Inc.,	and	Verizon,	Inc.	in	the	United	States	District	Court	for	the	District	of	Delaware	alleging	infringement	of	United	States	Patent	No.	5,438,355,	which	is entitled	"Interactive	System	for	Processing	Viewer	Responses	to	Television	Programming."		On	January	5,	2012,	InterAD	voluntarily	dismissed	the	case	against	us without	prejudice.

# Norman	IP	Holdings,	Inc.

On	September	15,	2011,	Norman	IP	Holdings,	Inc.	("Norman")	filed	a	patent	infringement	complaint	against	Brother	International	Corporation	and	Lexmark International	Corporation	in	the	United	States	District	Court	for	the	Eastern	District	of	Texas	alleging	infringement	of	U.S.	Patent	No.	5,592,555	(the	"'555	patent")		and U.S.	Patent	No.	5,502,689	(the	"'689	patent").		On	December	9,	2011,	Norman	filed	a	first	amended	complaint	that	added	Ricoh	Americas	Corporation	and	dropped Brother	International	Corporation	as	defendants.		On	January	27,	2012,	Norman	filed	a	second	amended	complaint	that	added	us	as	a	defendant,	in	addition	to	adding Belkin	International,	Inc.,	BMW	of	North	America	LLC,	Daimler	North	America	Corporation,	Mercedes-Benz	USA,	LLC,	D-Link	Systems,	Inc.,	Ford	Motor Company,	Garmin	International,	Inc.,	Garmin	USA,	Inc.,	General	Electric	Company,	General	Motors	Company,	JVC	Americas	Corporation,	Novatel	Wireless,	Inc., Novatel	Wireless	Solutions,	Inc.,	Novatel	Wireless	Technology,	Inc.,	TomTom,	Inc.,	ViewSonic	Corporation,	Vizio,	Inc.,	Volkswagen	Group	of	America,	Inc.,	Xerox Corporation,	ZTE	USA,	Inc.,	and	ZTE	Solutions,	Inc.		The	'555	patent	relates	to	a	wireless	communications	privacy	method	and	system	and	the	'689	patent	relates	to	a clock	generator	capable	of	shut-down	mode	and	clock	generation	method.		Norman	is	an	entity	that	seeks	to	license	an	acquired	patent	portfolio	without	itself	practicing any	of	the	claims	recited	therein.

We	intend	to	vigorously	defend	this	case.		In	the	event	that	a	court	ultimately	determines	that	we	infringe	any	of	the	asserted	patents,	we	may	be	subject	to	substantial damages,	which	may	include	treble	damages,	and/or	an	injunction	that	could	require	us	to	materially	modify	certain	features	that	we	currently	offer	to	consumers.		We cannot	predict	with	any	degree	of	certainty	the	outcome	of	the	suit	or	determine	the	extent	of	any	potential	liability	or	damages.

# NorthPoint	Technology,	Ltd.

On	July	2,	2009,	NorthPoint	Technology,	Ltd.	("Northpoint")	filed	suit	against	us,	EchoStar	and	DirecTV	in	the	United	States	District	Court	for	the	Western	District	of Texas	alleging	infringement	of	United	States	Patent	No.	6,208,636	(the	"'636	patent").		The	'636	patent	relates	to	the	use	of	multiple	low-noise	block	converter

feedhorns,	or	LNBFs,	which	are	antennas	used	for	satellite	reception.		On	April	21,	2011,	the	U.S.	Patent	and	Trademark	Office	issued	an	order	granting	reexamination of	the	'636	patent.		On	June	21,	2011,	the	District	Court	entered	summary	judgment	in	our	favor,	finding	that	all	asserted	claims	of	the	'636	patent	are	invalid. Northpoint	has	appealed.

# Olympic	Developments	AG,	LLC

On	January	20,	2011,	Olympic	Developments	AG,	LLC	("Olympic")	filed	suit	against	us,	Atlantic	Broadband,	Inc.,	Bright	House	Networks,	LLC,	Cable	One,	Inc., Cequel	Communications	Holdings	I,	LLC,	CSC	Holdings,	LLC,	GCI	Communication	Corp.,	Insight	Communications	Company,	Inc.,	Knology,	Inc.,	Mediacom Communications	Corporation	and	RCN	Telecom	Services,	LLC	in	the	United	States	District	Court	for	the	Central	District	of	California	alleging	infringement	of	United States	Patent	Nos.	5,475,585	and	6,246,400.		The	patents	relate	to	on-demand	services.		Olympic	is	an	entity	that	seeks	to	license	an	acquired	patent	portfolio	without itself	practicing	any	of	the	claims	recited	therein.		On	June	13,	2011,	the	case	was	transferred	to	the	Northern	District	of	California.		On	November	4,	2011,	the	case	was stayed	pending	reexamination	by	the	U.S.	Patent	and	Trademark	Office.

We	intend	to	vigorously	defend	this	case.		In	the	event	that	a	court	ultimately	determines	that	we	infringe	the	asserted	patents,	we	may	be	subject	to	substantial	damages, which	may	include	treble	damages,	and/or	an	injunction	that	could	require	us	to	materially	modify	certain	features	that	we	currently	offer	to	consumers.		We	cannot predict	with	any	degree	of	certainty	the	outcome	of	the	suit	or	determine	the	extent	of	any	potential	liability	or	damages.

# Personalized	Media	Communications,	Inc.

During	2008,	Personalized	Media	Communications,	Inc.	("PMC")	filed	suit	against	us,	EchoStar	and	Motorola	Inc.	in	the	United	States	District	Court	for	the	Eastern District	of	Texas	alleging	infringement	of	United	States	Patent	Nos.	4,694,490,	5,109,414,	4,965,825,	5,233,654,	5,335,277,	and	5,887,243,	which	relate	to	satellite signal	processing.		PMC	is	an	entity	that	seeks	to	license	an	acquired	patent	portfolio	without	itself	practicing	any	of	the	claims	recited	therein.		Subsequently,	Motorola Inc.	settled	with	PMC	leaving	EchoStar	and	us	as	defendants.		Trial	is	currently	set	for	August	2012.

We	intend	to	vigorously	defend	this	case.		In	the	event	that	a	court	ultimately	determines	that	we	infringe	any	of	the	asserted	patents,	we	may	be	subject	to	substantial damages,	which	may	include	treble	damages,	and/or	an	injunction	that	could	require	us	to	materially	modify	certain	user-friendly	features	that	we	currently	offer	to consumers.		We	cannot	predict	with	any	degree	of	certainty	the	outcome	of	the	suit	or	determine	the	extent	of	any	potential	liability	or	damages.

# Preservation	Technologies,	LLC

# Retailer	Class	Actions

During	2000,	lawsuits	were	filed	in	Colorado	state	and	federal	courts	attempting	to	certify	nationwide	classes	on	behalf	of	certain	of	our	retailers.		The	plaintiffs requested	that	the	Courts	declare	certain	provisions	of,	and	changes	to,	alleged	agreements	between	us	and	the	retailers	invalid	and	unenforceable,	and	to	award	damages for	lost	incentives	and	payments,	charge	backs	and	other	compensation.		On	September	20,	2010,	we	agreed	to	a	settlement	of	both	lawsuits	that	provides,	among	other things,	for	mutual	releases	of	the	claims	underlying	the	litigation,	payment	by	us	of	up	to	$60	million,	and	the	option	for	certain	class	members	to	elect	to	reinstate	certain monthly	incentive	payments,	which	the	parties	agreed	have	an	aggregate	maximum	value	of	$23	million.		We	cannot	predict	with	any	degree	of	certainty	how	many class	members	will	elect	to	reinstate	these	monthly	incentive	payments.		As	a	result,	a	$60	million	"Litigation	accrual"	was	recorded	as	of	December	31,	2010	on	our Consolidated	Balance	Sheets.		On	February	9,	2011,	the	court	granted	final	approval	of	the	settlement,	and	we	made	a	$60	million	settlement	payment	on	April	28, 2011.

# Ronald	A.	Katz	Technology	Licensing,	L.P.

During	2007,	Ronald	A.	Katz	Technology	Licensing,	L.P.	("Katz")	filed	a	patent	infringement	action	against	us	in	the	United	States	District	Court	for	the	Northern District	of	California.		The	suit	alleges	infringement	of	19	patents	owned	by	Katz.		The	patents	relate	to	interactive	voice	response,	or	IVR,	technology.		The	case	has been	transferred	and	consolidated	for	pretrial	purposes	in	the	United	States	District	Court	for	the	Central	District	of	California	by	order	of	the	Judicial	Panel	on Multidistrict	Litigation.		Only	four	patents	remain	in	the	case	against	us,	one	of	which	is	subject	to	a	reexamination	request	before	the	U.S.	Patent	and	Trademark	Office, which	was	filed	on	February	13,	2012.

We	intend	to	vigorously	defend	this	case.		In	the	event	that	a	court	ultimately	determines	that	we	infringe	any	of	the	asserted	patents,	we	may	be	subject	to	substantial damages,	which	may	include	treble	damages	and/or	an	injunction

that	could	require	us	to	materially	modify	certain	user-friendly	features	that	we	currently	offer	to	consumers.		We	cannot	predict	with	any	degree	of	certainty	the outcome	of	the	suit	or	determine	the	extent	of	any	potential	liability	or	damages.

# Suomen	Colorize	Oy

During	October	2010,	Suomen	Colorize	Oy	("Suomen")	filed	suit	against	DISH	Network	L.L.C.,	our	indirect	wholly	owned	subsidiary,	and	EchoStar	in	the	United States	District	Court	for	the	Middle	District	of	Florida	alleging	infringement	of	United	States	Patent	No.	7,277,398.		The	abstract	of	the	patent	states	that	the	claims	are directed	to	a	method	and	terminal	for	providing	services	in	a	telecommunications	network.		Suomen	is	an	entity	that	seeks	to	license	an	acquired	patent	portfolio	without itself	practicing	any	of	the	claims	recited	therein.		The	action	was	transferred	to	the	United	States	District	Court	for	the	District	of	Colorado,	and	on	January	10,	2012, Suomen	voluntarily	dismissed	the	case	against	us	without	prejudice.

Technology	Development	and	Licensing	L.L.C.

On	January	22,	2009,	Technology	Development	and	Licensing	L.L.C.	("TDL")	filed	suit	against	us	and	EchoStar	in	the	United	States	District	Court	for	the	Northern District	of	Illinois	alleging	infringement	of	United	States	Patent	No.	Re.	35,952,	which	relates	to	certain	favorite	channel	features.		TDL	is	an	entity	that	seeks	to	license an	acquired	patent	portfolio	without	itself	practicing	any	of	the	claims	recited	therein.		In	July	2009,	the	Court	granted	our	motion	to	stay	the	case	pending	two reexamination	petitions	before	the	Patent	and	Trademark	Office.

We	intend	to	vigorously	defend	this	case.		In	the	event	that	a	court	ultimately	determines	that	we	infringe	the	asserted	patent,	we	may	be	subject	to	substantial	damages, which	may	include	treble	damages,	and/or	an	injunction	that	could	require	us	to	materially	modify	certain	user-friendly	features	that	we	currently	offer	to	consumers. We	cannot	predict	with	any	degree	of	certainty	the	outcome	of	the	suit	or	determine	the	extent	of	any	potential	liability	or	damages.

# TiVo	Inc.

In	connection	with	our	litigation	with	TiVo	Inc.	("TiVo"),	which	is	described	in	our	periodic	reports	filed	with	the	SEC,	including	in	our	annual	report	on	Form	10-K	for the	year	ended	December	31,	2010	under	the	caption	"Item	3.		Legal	Proceedings	—	TiVo	Inc.,"	on	April	20,	2011,	the	U.S.	Court	of	Appeals	for	the	Federal	Circuit vacated	the	District	Court's	contempt	ruling	on	infringement,	articulated	a	new	standard	for	determining	"colorable	difference"	and	remanded	that	issue	back	to	the District	Court	for	determination.		The	Federal	Circuit	also	vacated	the	District	Court's	amended	injunction	requiring	that	we	inform	the	court	of	any	further	attempts	to design	around	TiVo's	United	States	Patent	No.	6,233,389	(the	'389	patent)	and	seek	approval	from	the	court	before	any	such	design-around	is	implemented.		The Federal	Circuit	also	vacated	the	infringement	damages	for	the	period	after	we	deployed	our	original	alternative	technology	(although	it	did	not	foreclose	that	damages may	be	reinstated	if	upon	remand	a	new	court	or	jury	decision	found	that	the	original	alternative	technology	infringed	TiVo's	'389	patent).		The	Federal	Circuit	affirmed the	District	Court's	contempt	ruling	on	disablement,	holding	that	the	original	2006	injunction	required	that	we	disable	DVR	functionality	in	all	but	approximately 192,000	digital	set-top	boxes	deployed	with	customers	(the	"Disablement	Provision")	and	affirmed	the	$90	million	in	contempt	sanctions	awarded	against	us	for violating	the	Disablement	Provision.

On	April	29,	2011,	we	and	EchoStar	entered	into	a	settlement	agreement	with	TiVo.		The	settlement	resolves	all	pending	litigation	between	us	and	EchoStar,	on	the	one hand,	and	TiVo,	on	the	other	hand,	including	litigation	relating	to	alleged	patent	infringement	involving	certain	DISH	digital	video	recorders,	or	DVRs,	which	litigation is	described	in	our	periodic	reports	filed	with	the	Securities	and	Exchange	Commission	including	in	our	annual	report	on	Form	10-K	for	the	year	ended	December	31, 2010	under	the	caption	"Item	3.		Legal	Proceedings	—	TiVo	Inc."

Under	the	settlement	agreement,	all	pending	litigation	has	been	dismissed	with	prejudice	and	all	injunctions	that	permanently	restrain,	enjoin	or	compel	any	action	by	us or	EchoStar	have	been	dissolved.		We	and	EchoStar	are	jointly	responsible	for	making	payments	to	TiVo	in	the	aggregate	amount	of	$500	million,	including	an	initial payment	of	$300	million	and	the	remaining	$200	million	in	six	equal	annual	installments	between	2012	and	2017.		Pursuant	to	the	terms	and	conditions	of	the agreements	entered	into	in	connection	with	the	Spin-off	of	EchoStar

from	us,	we	made	the	initial	payment	to	TiVo	in	May	2011,	except	for	a	contribution	from	EchoStar	totaling	approximately	$10	million,	representing	an	allocation	of liability	relating	to	EchoStar's	sales	of	DVR-enabled	receivers	to	an	international	customer.		Future	payments	will	be	allocated	between	us	and	EchoStar	based	on historical	sales	of	certain	licensed	products,	with	us	being	responsible	for	95%	of	each	annual	payment.

As	previously	disclosed,	our	total	litigation	accrual	for	TiVo	was	$517	million	as	of	December	31,	2010.		As	a	result	of	the	settlement	agreement,	we	reversed	$335 million	of	this	accrual	and	made	a	payment	of	approximately	$290	million	for	our	portion	of	the	initial	payment	to	TiVo.		Of	this	amount,	approximately	$182	million relates	to	prior	periods	and	the	remaining	$108	million	represents	a	prepayment.		Our	$108	million	prepayment	and	our	$190	million	share	of	the	remaining	payments,	a total	of	$298	million,	will	be	expensed	ratably	as	a	subscriber-related	expense	from	April	1,	2011	through	July	31,	2018,	the	expiration	date	of	the	'389	patent.		In connection	with	our	TiVo	settlement,	TiVo	agreed	to	advertise	and	market	certain	of	our	products	and	services.		As	a	result,	$6	million	was	recognized	as	a	reduction	of litigation	expense	and	we	recorded	a	pre-paid	marketing	asset	on	our	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss)	and	our	Consolidated Balance	Sheets,	respectively.		The	amount	of	the	pre-paid	license	agreement	is	being	amortized	as	costs	of	sales	over	the	six-year	term	of	the	agreement.

In	addition,	under	the	settlement	agreement,	TiVo	granted	us	a	license	under	its	'389	patent	and	certain	related	patents,	for	the	remaining	life	of	those	patents,	with respect	to	DISH-branded	and	co-branded	products	and	services.

We	and	EchoStar,	on	the	one	hand,	and	TiVo,	on	the	other	hand,	have	also	agreed	on	mutual	releases	of	certain	related	claims	and	agreed	not	to	challenge	each	other's DVR	technology-related	patents	that	are	licensed	under	the	settlement	agreement.

Because	both	we	and	EchoStar	were	defendants	in	the	TiVo	lawsuit,	we	and	EchoStar	were	jointly	and	severally	liable	to	TiVo	for	any	final	damages	and	sanctions	that could	have	been	awarded	by	the	District	Court.		As	previously	disclosed,	we	determined	that	we	were	obligated	under	the	agreements	entered	into	in	connection	with	the Spin-off	to	indemnify	EchoStar	for	substantially	all	liability	arising	from	this	lawsuit.		EchoStar	contributed	an	amount	equal	to	its	$5	million	intellectual	property liability	limit	under	the	receiver	agreement.		We	and	EchoStar	further	agreed	that	EchoStar's	$5	million	contribution	would	not	exhaust	EchoStar's	liability	to	us	for other	intellectual	property	claims	that	may	arise	under	the	receiver	agreement.		We	and	EchoStar	also	agreed	that	we	would	each	be	entitled	to	joint	ownership	of,	and	a cross-license	to	use,	any	intellectual	property	developed	in	connection	with	any	potential	new	alternative	technology.		Any	amounts	that	EchoStar	is	responsible	for under	the	settlement	agreement	with	TiVo	are	in	addition	to	the	$5	million	contribution	previously	made	by	EchoStar.

# Vigilos,	LLC

On	February	23,	2011,	Vigilos,	LLC	filed	suit	against	EchoStar,	two	EchoStar	subsidiaries,	Sling	Media,	Inc.	and	EchoStar	Technologies	L.L.C.,	and	Monsoon Multimedia,	Inc.	in	the	U.S.	District	Court	for	the	Eastern	District	of	Texas	alleging	infringement	of	U.S.	Patent	No.	6,839,731,	which	is	entitled	"System	and	Method for	Providing	Data	Communication	in	a	Device	Network."		Subsequently	in	2011,	Vigilos	added	DISH	Network	L.L.C.,	our	indirect	wholly	owned	subsidiary,	as	a defendant	in	its	First	Amended	Complaint	and	the	case	was	transferred	to	the	Northern	District	of	California.		Later	in	2011,	Vigilos	filed	a	Second	Amended	Complaint that	added	claims	for	infringement	of	a	second	patent,	U.S.	Patent	No.	7,370,074,	which	is	entitled	"System	and	Method	for	Implementing	Open-Protocol	Remote Device	Control."

In	January	2008,	Voom	filed	a	lawsuit	against	us	in	New	York	Supreme	Court,	alleging	breach	of	contract	and	other	claims	arising	from	our	termination	of	the affiliation	agreement	governing	carriage	of	certain	Voom	HD	channels	on	the	DISH	pay-TV	service.		At	that	time,	Voom	also	sought	a	preliminary	injunction	to	prevent us	from

terminating	the	agreement.		The	Court	denied	Voom's	request,	finding,	among	other	things,	that	Voom	had	not	demonstrated	that	it	was	likely	to	prevail	on	the	merits. In	April	2010,	we	and	Voom	each	filed	motions	for	summary	judgment.		Voom	later	filed	two	motions	seeking	discovery	sanctions.		On	November	9,	2010,	the	Court issued	a	decision	denying	both	motions	for	summary	judgment,	but	granting	Voom's	motions	for	discovery	sanctions.		The	Court's	decision	provides	for	an	adverse inference	jury	instruction	at	trial	and	precludes	our	damages	expert	from	testifying	at	trial.		We	appealed	the	grant	of	Voom's	motion	for	discovery	sanctions	to	the	New York	State	Supreme	Court,	Appellate	Division,	First	Department.		On	February	15,	2011,	the	appellate	court	granted	our	motion	to	stay	the	trial	pending	our	appeal.		On January	31,	2012,	the	appellate	court	affirmed	the	order	imposing	discovery	sanctions	and	precluding	our	damages	expert	from	testifying	at	trial.		We	are	seeking	leave to	appeal	to	New	York's	highest	state	court,	the	Court	of	Appeals.		A	trial	date	has	not	been	set.		Voom	is	claiming	over	$2.5	billion	in	damages.		We	intend	to vigorously	defend	this	case.		We	cannot	predict	with	any	degree	of	certainty	the	outcome	of	the	suit	or	determine	the	extent	of	any	potential	liability	or	damages.

# Other

In	addition	to	the	above	actions,	we	are	subject	to	various	other	legal	proceedings	and	claims	which	arise	in	the	ordinary	course	of	business,	including,	among	other things,	disputes	with	programmers	regarding	fees.		In	our	opinion,	the	amount	of	ultimate	liability	with	respect	to	any	of	these	actions	is	unlikely	to	materially	affect	our financial	position,	results	of	operations	or	liquidity,	though	the	outcomes	could	be	material	to	our	operating	results	for	any	particular	period,	depending,	in	part,	upon	the operating	results	for	such	period.

# Not	applicable.

# Item	5.																					MARKET	FOR	REGISTRANT'S	COMMON	EQUITY,	RELATED	STOCKHOLDER	MATTERS	AND	ISSUER	PURCHASES	OF	EQUITY SECURITIES

# Market	Price	of	and	Dividends	on	the	Registrant's	Common	Equity	and	Related	Stockholder	Matters

Market	Information.		Our	Class	A	common	stock	is	quoted	on	the	Nasdaq	Global	Select	Market	under	the	symbol	"DISH."		The	high	and	low	closing	sale	prices	of	our Class	A	common	stock	during	2011	and	2010	on	the	Nasdaq	Global	Select	Market	(as	reported	by	Nasdaq)	are	set	forth	below.		The	sales	prices	of	our	Class	A	common stock	reported	below	are	not	adjusted	to	reflect	the	dividend	paid	on	December	1,	2011,	discussed	below.

As	of	February	14,	2012,	there	were	approximately	10,478	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	14,	2012,	234,190,057	of	the	238,435,208	outstanding	shares	of	our	Class	B	common	stock	were	held	by Charles	W.	Ergen,	our	Chairman,	and	the	remaining	4,245,151	were	held	in	trusts	established	by	Mr.	Ergen	for	the	benefit	of	his	family.		There	is	currently	no	trading market	for	our	Class	B	common	stock.

Dividends.		On	December	1,	2011,	we	paid	a	cash	dividend	of	$2.00	per	share,	or	approximately	$893	million,	on	our	outstanding	Class	A	and	Class	B	common	stock	to stockholders	of	record	at	the	close	of	business	on	November	17,	2011.

While	we	currently	do	not	intend	to	declare	additional	dividends	on	our	common	stock,	we	may	elect	to	do	so	from	time	to	time.		Payment	of	any	future	dividends	will depend	upon	our	earnings	and	capital	requirements,	restrictions	in	our	debt	facilities,	and	other	factors	the	Board	of	Directors	considers	appropriate.		We	currently	intend to	retain	our	earnings,	if	any,	to	support	future	growth	and	expansion	although	we	expect	to	repurchase	shares	of	our	common	stock	from	time	to	time.		See	further discussion	under	"Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	—	Liquidity	and	Capital	Resources"	in	this	Annual Report	on	Form	10-K.

Securities	Authorized	for	Issuance	Under	Equity	Compensation	Plans.		See	"Item	12.	Security	Ownership	of	Certain	Beneficial	Owners	and	Management	and	Related Stockholder	Matters"	in	this	Annual	Report	on	Form	10-K.

# Purchases	of	Equity	Securities	by	the	Issuer	and	Affiliated	Purchasers

The	following	table	provides	information	regarding	purchases	of	our	Class	A	common	stock	made	by	us	for	the	period	from	October	1,	2011	through	December	31, 2011.

|  |  | Total	Number	of | Total	Number	of | Maximum	Approximate |
| :--- | :--- | :--- | :--- | :--- |
|  | Total | Shares\tPurchased | Shares\tPurchased | Dollar\tValue\tof\tShares |
|  | Number\tof | Average | as\tPart\tof\tPublicly | that\tMay\tYet\tbe |
|  | Shares | Price\tPaid | Announced\tPlans | Purchased\tUnder\tthe |
| Period | Purchased | per\tShare | or\tPrograms | Plans\tor\tPrograms\t(1) |
|  |  | (In\tthousands,\texcept\tshare\tdata) |  |  |
| October\t1,\t2011\t-\tOctober\t31,\t2011 | — $— | — $— | — | $999,604 |
| November\t1,\t2011\t-\tNovember\t30,\t2011 | — $— | — $— | — | $1,000,000 |
| December\t1,\t2011\t-\tDecember\t31,\t2011 | — $— | — $— | — | $1,000,000 |
| Total | — | $— | — | $1,000,000 |

Our	Board	of	Directors	previously	authorized	the	repurchase	of	up	to	$1.0	billion	of	our	Class	A	common	stock.	On	November	1,	2011,	our	Board of	Directors	extended	the	plan	and	authorized	an	increase	in	the	maximum	dollar	value	of	shares	that	may	be	repurchased	under	the	plan,	such	that we	are	currently	authorized	to	repurchase	up	to	$1.0	billion	of	our	outstanding	shares	of	our	Class	A	common	stock	through	and	including December	31,	2012.	Purchases	under	our	repurchase	program	may	be	made	through	open	market	purchases,	privately	negotiated	transactions,	or Rule	10b5-1	trading	plans,	subject	to	market	conditions	and	other	factors.	We	may	elect	not	to	purchase	the	maximum	amount	of	shares	allowable under	this	program	and	we	may	also	enter	into	additional	share	repurchase	programs	authorized	by	our	Board	of	Directors.

# Item	6.				SELECTED	FINANCIAL	DATA

The	selected	consolidated	financial	data	as	of	and	for	each	of	the	five	years	ended	December	31,	2011	have	been	derived	from,	and	are	qualified	by	reference	to	our Consolidated	Financial	Statements.		Certain	prior	year	amounts	have	been	reclassified	to	conform	to	the	current	year	presentation.		See	further	discussion	under	"Item	7. Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	—	Explanation	of	Key	Metrics	and	Other	Items"	in	this	Annual	Report	on Form	10-K.		This	data	should	be	read	in	conjunction	with	our	Consolidated	Financial	Statements	and	related	Notes	thereto	for	the	three	years	ended	December	31,	2011, and	"Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations"	included	elsewhere	in	this	report.

| Balance	Sheet	Data | 2011 | 2010 | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | (In\tthousands) |  |  |
| Cash,\tcash\tequivalents\tand\tcurrent\tmarketable\tinvestment |  |  |  |  |  |
| securities | $2,040,853 | $2,940,377 | $2,139,336 | $559,132 | $2,788,196 |
| Total\tassets | 11,470,231 | 9,632,153 | 8,295,343 | 6,460,047 | 10,086,529 |
| Long-term\tdebt\tand\tcapital\tlease\tobligations\t(including |  |  |  |  |  |
| current\tportion) | 7,493,779 | 6,514,936 | 6,496,564 | 5,007,756 | 6,125,704 |
| Total\tstockholders'\tequity\t(deficit) | (419,003) | (1,133,443) | (2,091,688) | (1,949,106) | 639,989 |

|  |  | For	the	Years	Ended	December	31, | For	the	Years	Ended	December	31, |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Statements\tof\tOperations\tData | 2011 | 2010 | 2009 | 2008 | 2007 |
|  |  | (In\tthousands,\texcept\tper\tshare\tamounts) | (In\tthousands,\texcept\tper\tshare\tamounts) |  |  |
| Total\trevenue | $14,048,393 | $12,640,744 | $11,664,151 | $11,617,187 | $11,090,375 |
| Total\tcosts\tand\texpenses | 11,120,439 | 10,699,916 | 10,277,221 | 9,561,007 | 9,516,971 |
| Operating\tincome\t(loss) | $2,927,954 | $1,940,828 | $1,386,930 | $2,056,180 | $1,573,404 |
| Net\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | $1,515,907 | $984,729 | $635,545 | $902,947 | $756,054 |
| Basic\tnet\tincome\t(loss)\tper\tshare\tattributable\tto\tDISH |  |  |  |  |  |
| Network | $3.40 | $2.21 | $1.42 | $2.01 | $1.69 |
| Diluted\tnet\tincome\t(loss)\tper\tshare\tattributable\tto\tDISH |  |  |  |  |  |
| Network | $3.39 | $2.20 | $1.42 | $1.98 | $1.68 |
| Cash\tdividend\tper\tcommon\tshare | $2.00 | $— | $2.00 | $— $— | $— $— |

|  |  | For	the	Years	Ended	December	31, | For	the	Years	Ended	December	31, |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Other\tData\t(Unaudited\texcept\tfor\tnet\tcash\tflows) | 2011 | 2010 | 2009 | 2008 | 2007 |
| DISH\tNetwork\tsubscribers,\tas\tof\tperiod\tend\t(in\tmillions) | 13.967 | 14.133 | 14.100 | 13.678 | 13.780 |
| DISH\tNetwork\tsubscriber\tadditions,\tgross\t(in\tmillions) | 2.576 | 3.052 | 3.118 | 2.966 | 3.434 |
| DISH\tNetwork\tsubscriber\tadditions,\tnet\t(in\tmillions) | (0.166) | 0.033 | 0.422 | (0.102) | 0.675 |
| Average\tmonthly\tsubscriber\tchurn\trate | 1.63% | 1.76% | 1.64% | 1.86% | 1.70% |
| Average\tmonthly\trevenue\tper\tsubscriber\t("ARPU") | $76.93 | $73.32 | $70.04 | $69.27 | $65.83 |
| Average\tsubscriber\tacquisition\tcost\tper\tsubscriber\t("SAC") | $771 | $776 | $697 | $720 | $656 |
| Net\tcash\tflows\tfrom\t(in\tthousands): |  |  |  |  |  |
| Operating\tactivities | $2,573,878 | $2,139,802 | $2,194,543 | $2,188,344 | $2,616,720 |
| Investing\tactivities | $(2,695,328) | $(1,477,521) | $(2,605,556) | $(1,597,471) | $(2,470,832) |
| Financing\tactivities | $93,997 | $(127,453) | $418,283 | $(1,411,841) | $(976,016) |

# Item	7. MANAGEMENT'S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND	RESULTS	OF	OPERATIONS

You	should	read	the	following	discussion	and	analysis	of	our	financial	condition	and	results	of	operations	together	with	the	audited	consolidated	financial	statements and	notes	to	our	financial	statements	included	elsewhere	in	this	annual	report.		This	management's	discussion	and	analysis	is	intended	to	help	provide	an	understanding of	our	financial	condition,	changes	in	financial	condition	and	results	of	our	operations	and	contains	forward-looking	statements	that	involve	risks	and	uncertainties. The	forward-looking	statements	are	not	historical	facts,	but	rather	are	based	on	current	expectations,	estimates,	assumptions	and	projections	about	our	industry, business	and	future	financial	results.		Our	actual	results	could	differ	materially	from	the	results	contemplated	by	these	forward-looking	statements	due	to	a	number	of factors,	including	those	discussed	in	this	report,	including	under	the	caption	"Item	1A.		Risk	Factors"	in	this	Annual	Report	on	Form	10-K.

# EXECUTIVE	SUMMARY

DISH	lost	approximately	166,000	net	subscribers	during	the	year	ended	December	31,	2011,	compared	to	a	gain	of	approximately	33,000	net	new	subscribers	during	the same	period	in	2010.		The	change	versus	the	prior	year	primarily	resulted	from	a	decline	in	gross	new	subscriber	activations.		During	the	year	ended	December	31,	2011, DISH	added	approximately	2.576	million	gross	new	subscribers	compared	to	approximately	3.052	million	gross	new	subscribers	during	the	same	period	in	2010,	a decrease	of	15.6%.

Our	gross	activations	and	net	subscriber	additions	were	negatively	impacted	during	the	year	ended	December	31,	2011	compared	to	the	same	period	in	2010	as	a	result	of increased	competitive	pressures,	including	aggressive	marketing	and	the	effectiveness	of	certain	competitors'	promotional	offers,	which	included	an	increased	level	of programming	discounts.		In	addition,	telecommunications	companies	continue	to	grow	their	respective	customer	bases.		Our	gross	activations	and	net	subscriber additions	continue	to	be	adversely	affected	during	the	year	ended	December	31,	2011	by	sustained	economic	weakness	and	uncertainty,	including,	among	other	things, the	weak	housing	market	in	the	United	States	combined	with	lower	discretionary	spending.

Our	average	monthly	subscriber	churn	rate	for	the	year	ended	December	31,	2011	was	1.63%,	compared	to	1.76%	for	the	same	period	in	2010.		While	churn	improved compared	to	the	same	period	in	2010,	churn	continues	to	be	adversely	affected	by	the	increased	competitive	pressures	discussed	above.		In	general,	our	churn	rate	is impacted	by	the	quality	of	subscribers	acquired	in	past	quarters,	our	ability	to	provide	outstanding	customer	service,	and	our	ability	to	control	piracy.

"Net	income	(loss)	attributable	to	DISH	Network"	for	the	year	ended	December	31,	2011	was	$1.516	billion	compared	to	$985	million	for	the	same	period	in	2010. During	the	year	ended	December	31,	2011,	"Net	income	(loss)	attributable	to	DISH	Network"	improved	primarily	due	to	a	reduction	in	our	accrued	expenses	related	to the	TiVo	Inc.	settlement,	price	increases	during	the	past	year	and	less	costs	associated	with	fewer	gross	new	subscriber	activations.

Programming	costs	represent	a	large	percentage	of	our	"Subscriber-related	expenses."		Going	forward,	our	margins	may	face	pressure	if	we	are	unable	to	renew	our long-term	programming	contracts	on	favorable	pricing	and	other	economic	terms.		Additionally,	our	gross	new	subscriber	activations	and	subscriber	churn	rate	may	be negatively	impacted	if	we	are	unable	to	renew	our	long-term	programming	contracts	before	they	expire.

As	the	pay-TV	industry	matures,	we	and	our	competitors	increasingly	must	seek	to	attract	a	greater	proportion	of	new	subscribers	from	each	other's	existing	subscriber bases	rather	than	from	first-time	purchasers	of	pay-TV	services.		Some	of	our	competitors	have	been	especially	aggressive	by	offering	discounted	programming	and services	for	both	new	and	existing	subscribers.		In	addition,	programming	offered	over	the	Internet	has	become	more	prevalent	as	the	speed	and	quality	of	broadband networks	have	improved.		Significant	changes	in	consumer	behavior	with	regard	to	the	means	by	which	they	obtain	video	entertainment	and	information	in	response	to digital	media	competition	could	materially	adversely	affect	our	business,	results	of	operations	and	financial	condition	or	otherwise	disrupt	our	business.

# Item	7. MANAGEMENT'S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND	RESULTS	OF	OPERATIONS	-	Continued

While	economic	factors	have	impacted	the	entire	pay-TV	industry,	our	relative	performance	has	also	been	driven	by	issues	specific	to	DISH.		In	the	past,	our	subscriber growth	has	been	adversely	affected	by	signal	theft	and	other	forms	of	fraud	and	by	operational	inefficiencies	at	DISH.		To	combat	signal	theft	and	improve	the	security of	our	broadcast	system,	we	completed	the	replacement	of	our	security	access	devices	to	re-secure	our	system	during	2009.		We	expect	that	additional	future replacements	of	these	devices	will	be	necessary	to	keep	our	system	secure.		To	combat	other	forms	of	fraud,	we	continue	to	expect	that	our	third	party	distributors	and retailers	will	adhere	to	our	business	rules.

While	we	have	made	improvements	in	responding	to	and	dealing	with	customer	service	issues,	we	continue	to	focus	on	the	prevention	of	these	issues,	which	is	critical	to our	business,	financial	position	and	results	of	operations.		To	improve	our	operational	performance,	we	continue	to	make	significant	investments	in	staffing,	training, information	systems,	and	other	initiatives,	primarily	in	our	call	center	and	in-home	service	operations.		These	investments	are	intended	to	help	combat	inefficiencies introduced	by	the	increasing	complexity	of	our	business,	improve	customer	satisfaction,	reduce	churn,	increase	productivity,	and	allow	us	to	scale	better	over	the	long run.		We	cannot,	however,	be	certain	that	our	spending	will	ultimately	be	successful	in	improving	our	operational	performance.

We	have	been	deploying	receivers	that	utilize	8PSK	modulation	technology	and	receivers	that	utilize	MPEG-4	compression	technology	for	several	years.		These technologies,	when	fully	deployed,	will	allow	more	programming	channels	to	be	carried	over	our	existing	satellites.		Many	of	our	customers	today,	however,	do	not	have receivers	that	use	MPEG-4	compression	and	a	smaller	but	still	significant	percentage	do	not	have	receivers	that	use	8PSK	modulation.		We	may	choose	to	invest significant	capital	to	accelerate	the	conversion	of	customers	to	MPEG-4	and/or	8PSK	to	realize	the	bandwidth	benefits	sooner.		In	addition,	given	that	all	of	our	HD content	is	broadcast	in	MPEG-4,	any	growth	in	HD	penetration	will	naturally	accelerate	our	transition	to	these	newer	technologies	and	may	increase	our	subscriber acquisition	and	retention	costs.		All	new	receivers	that	we	purchase	from	EchoStar	have	MPEG-4	technology.		Although	we	continue	to	refurbish	and	redeploy	MPEG-2 receivers,	as	a	result	of	our	HD	initiatives	and	current	promotions,	we	currently	activate	most	new	customers	with	higher	priced	MPEG-4	technology.		This	limits	our ability	to	redeploy	MPEG-2	receivers	and,	to	the	extent	that	our	promotions	are	successful,	will	accelerate	the	transition	to	MPEG-4	technology,	resulting	in	an	adverse effect	on	our	average	subscriber	acquisition	costs	per	new	subscriber	activation	("SAC").

From	time	to	time,	we	change	equipment	for	certain	subscribers	to	make	more	efficient	use	of	transponder	capacity	in	support	of	HD	and	other	initiatives.		We	believe that	the	benefit	from	the	increase	in	available	transponder	capacity	outweighs	the	short-term	cost	of	these	equipment	changes.

To	maintain	and	enhance	our	competitiveness	over	the	long	term,	we	recently	introduced	the	Hopper	that	allows,	among	other	things,	recorded	programming	to	be viewed	in	HD	in	multiple	rooms.		We	are	also	promoting	a	suite	of	integrated	products	designed	to	maximize	the	convenience	and	ease	of	watching	TV	anytime	and anywhere,	which	we	refer	to	as	TV	Everywhere	which	utilizes,	among	other	things,	online	access	and	Slingbox	"placeshifting"	technology.		There	can	be	no	assurance that	these	integrated	products	will	positively	affect	our	results	of	operations	or	our	gross	new	subscriber	activations.

On	April	26,	2011,	we	completed	the	Blockbuster	Acquisition.		We	acquired	Blockbuster	operations	in	the	United	States	and	in	certain	foreign	countries.		Our	winning bid	in	the	bankruptcy	court	auction	was	valued	at	$321	million.		We	paid	$238	million,	including	$226	million	in	cash	and	$12	million	in	certain	assumed	liabilities.		Of the	$226	million	paid	in	cash,	$20	million	was	placed	in	escrow.		Subsequent	to	this	payment,	we	received	a	$4	million	refund	from	escrow,	resulting	in	a	net	purchase price	of	$234	million.		This	transaction	was	accounted	for	as	a	business	combination	and	therefore	the	purchase	price	was	allocated	to	the	assets	acquired	based	on	their estimated	fair	value.		Since	the	purchase	prices	of	future	inventory	are	expected	to	be	higher	than	the	fair	value	of	the	inventory	acquired,	our	cost	of	sales	as	a percentage	of	revenue	will	be	higher	in	the	future.

Blockbuster	primarily	offers	movies	and	video	games	for	sale	and	rental	through	multiple	distribution	channels	such	as	retail	stores,	by-mail,	digital	devices,	the blockbuster.com	website	and	the	BLOCKBUSTER	On	Demand	service.		The	Blockbuster	Acquisition	complements	our	core	business	of	delivering	high-quality	video entertainment	to

consumers.		We	are	promoting	our	new	Blockbuster	offerings	including	Blockbuster@Home	which	provides	movies,	games	and	TV	shows	through	Internet	streaming, mail	and	in-store	exchanges	and	online.		This	offering	is	only	available	to	DISH	subscribers.

From	the	acquisition	date	of	April	26,	2011	through	December	31,	2011,	Blockbuster	operations	contributed	$975	million	in	revenue	and	$4	million	in	net	income	to	our consolidated	results	of	operations.		As	of	December	31,	2011,	Blockbuster	operated	over	1,500	retail	stores	in	the	United	States.		We	expect	to	close	over	500	domestic stores	during	the	first	half	of	2012	as	a	result	of	weak	store-level	financial	performance.		Over	900	of	our	retail	store	leases,	including	the	leases	for	the	majority	of	the stores	we	expect	to	close,	include	favorable	early	termination	rights	for	us.		We	continue	to	evaluate	the	impact	of	certain	factors,	including,	among	other	things, competitive	pressures,	the	scale	of	our	Blockbuster	retail	operations	and	other	issues	impacting	the	store-level	financial	performance	of	our	Blockbuster	retail	stores. These	factors,	or	other	reasons,	could	lead	us	to	close	additional	Blockbuster	retail	stores.

The	following	discussion	and	analysis	of	our	consolidated	results	of	operations,	financial	condition	and	liquidity	are	presented	on	a	historical	basis.		Our	Consolidated Statements	of	Operations	and	Comprehensive	Income	(Loss)	for	the	year	ended	December	31,	2011	includes	the	results	of	operations	for	Blockbuster	from	the acquisition	date	of	April	26,	2011	to	December	31,	2011.		Therefore,	our	results	of	operations	for	the	year	ended	December	31,	2011	are	not	comparable	to	our	results	of operations	for	the	same	periods	in	2010	and	2009.

# Operational	Liquidity

Like	many	companies,	we	make	general	investments	in	property	such	as	satellites,	set-top	boxes,	information	technology	and	facilities	that	support	our	overall	business. As	a	subscriber-based	company,	however,	we	also	make	subscriber-specific	investments	to	acquire	new	subscribers	and	retain	existing	subscribers.		While	the	general investments	may	be	deferred	without	impacting	the	business	in	the	short-term,	the	subscriber-specific	investments	are	less	discretionary.		Our	overall	objective	is	to generate	sufficient	cash	flow	over	the	life	of	each	subscriber	to	provide	an	adequate	return	against	the	upfront	investment.		Once	the	upfront	investment	has	been	made for	each	subscriber,	the	subsequent	cash	flow	is	generally	positive.

There	are	a	number	of	factors	that	impact	our	future	cash	flow	compared	to	the	cash	flow	we	generate	at	a	given	point	in	time.		The	first	factor	is	how	successful	we	are at	retaining	our	current	subscribers.		As	we	lose	subscribers	from	our	existing	base,	the	positive	cash	flow	from	that	base	is	correspondingly	reduced.		The	second	factor is	how	successful	we	are	at	maintaining	our	subscriber-related	margins.		To	the	extent	our	"Subscriber-related	expenses"	grow	faster	than	our	"Subscriber-related revenue,"	the	amount	of	cash	flow	that	is	generated	per	existing	subscriber	is	reduced.		The	third	factor	is	the	rate	at	which	we	acquire	new	subscribers.		The	faster	we acquire	new	subscribers,	the	more	our	positive	ongoing	cash	flow	from	existing	subscribers	is	offset	by	the	negative	upfront	cash	flow	associated	with	new	subscribers. Finally,	our	future	cash	flow	is	impacted	by	the	rate	at	which	we	make	general	investments	and	any	cash	flow	from	financing	activities.

Our	subscriber-specific	investments	to	acquire	new	subscribers	have	a	significant	impact	on	our	cash	flow.		While	fewer	subscribers	might	translate	into	lower	ongoing cash	flow	in	the	long-term,	cash	flow	is	actually	aided,	in	the	short-term,	by	the	reduction	in	subscriber-specific	investment	spending.		As	a	result,	a	slow	down	in	our business	due	to	external	or	internal	factors	does	not	introduce	the	same	level	of	short-term	liquidity	risk	as	it	might	in	other	industries.

# Availability	of	Credit	and	Effect	on	Liquidity

The	ability	to	raise	capital	has	generally	existed	for	DISH	Network	despite	the	weak	economic	conditions.		Modest	fluctuations	in	the	cost	of	capital	will	not	likely impact	our	current	operational	plans.

# Future	Liquidity

If	Voom	prevails	in	its	breach	of	contract	suit	against	us,	we	could	be	required	to	pay	substantial	damages,	which	would	have	a	material	adverse	affect	on	our	financial

position	and	results	of	operations.		In	January	2008,	Voom	HD	Holdings	("Voom")	filed	a	lawsuit	against	us	in	New	York	Supreme	Court,	alleging	breach	of	contract and	other	claims	arising	from	our	termination	of	the	affiliation	agreement	governing	carriage	of	certain	Voom	HD	channels	on	the	DISH	pay-TV	service.		At	that	time, Voom	also	sought	a	preliminary	injunction	to	prevent	us	from	terminating	the	agreement.		The	Court	denied	Voom's	request,	finding,	among	other	things,	that	Voom had	not	demonstrated	that	it	was	likely	to	prevail	on	the	merits.		In	April	2010,	we	and	Voom	each	filed	motions	for	summary	judgment.		Voom	later	filed	two	motions seeking	discovery	sanctions.		On	November	9,	2010,	the	Court	issued	a	decision	denying	both	motions	for	summary	judgment,	but	granting	Voom's	motions	for discovery	sanctions.		The	Court's	decision	provides	for	an	adverse	inference	jury	instruction	at	trial	and	precludes	our	damages	expert	from	testifying	at	trial.		We appealed	the	grant	of	Voom's	motion	for	discovery	sanctions	to	the	New	York	State	Supreme	Court,	Appellate	Division,	First	Department.		On	February	15,	2011,	the appellate	court	granted	our	motion	to	stay	the	trial	pending	our	appeal.		On	January	31,	2012,	the	appellate	court	affirmed	the	order	imposing	discovery	sanctions	and precluding	our	damages	expert	from	testifying	at	trial.		We	are	seeking	leave	to	appeal	to	New	York's	highest	state	court,	the	Court	of	Appeals.		A	trial	date	has	not been	set.		Voom	is	claiming	over	$2.5	billion	in	damages.

# EXPLANATION	OF	KEY	METRICS	AND	OTHER	ITEMS

Subscriber-related	revenue.		"Subscriber-related	revenue"	consists	principally	of	revenue	from	basic,	premium	movie,	local,	HD	programming,	pay-per-view,	Latino and	international	subscription	television	services,	equipment	rental	fees	and	other	hardware	related	fees,	including	fees	for	DVRs,	equipment	upgrade	fees	and	additional outlet	fees	from	subscribers	with	receivers	with	multiple	tuners,	advertising	services,	fees	earned	from	our	in-home	service	operations	and	other	subscriber	revenue. Certain	of	the	amounts	included	in	"Subscriber-related	revenue"	are	not	recurring	on	a	monthly	basis.

Equipment	and	merchandise	sales,	rental	and	other	revenue.		"Equipment	and	merchandise	sales,	rental	and	other	revenue"	principally	includes	the	non-subsidized sales	of	DBS	accessories	to	retailers	and	other	third-party	distributors	of	our	equipment	domestically	and	to	DISH	subscribers.		Effective	April	26,	2011,	revenue	from merchandise	sold	to	customers	including	movies,	video	games	and	other	accessories,	and	revenue	from	the	rental	of	movies	and	video	games	and	the	sale	of	previously rented	titles	related	to	our	Blockbuster	operations	are	included	in	this	category.

Equipment	sales,	services	and	other	revenue	—	EchoStar.		"Equipment	sales,	services	and	other	revenue	—	EchoStar"	includes	revenue	related	to	equipment	sales, services,	and	other	agreements	with	EchoStar.

Subscriber-related	expenses.		"Subscriber-related	expenses"	principally	include	programming	expenses,	which	represent	a	substantial	majority	of	these	expenses. "Subscriber-related	expenses"	also	include	costs	incurred	in	connection	with	our	in-home	service	and	call	center	operations,	billing	costs,	refurbishment	and	repair	costs related	to	receiver	systems,	subscriber	retention	and	other	variable	subscriber	expenses.

Satellite	and	transmission	expenses	—	EchoStar.		"Satellite	and	transmission	expenses	—	EchoStar"	includes	the	cost	of	leasing	satellite	and	transponder	capacity from	EchoStar	and	the	cost	of	digital	broadcast	operations	provided	to	us	by	EchoStar,	including	satellite	uplinking/downlinking,	signal	processing,	conditional	access management,	telemetry,	tracking	and	control,	and	other	professional	services.

Satellite	and	transmission	expenses	—	other.		"Satellite	and	transmission	expenses	—	other"	includes	executory	costs	associated	with	capital	leases	and	costs	associated with	transponder	leases	and	other	related	services.

Cost	of	sales	-	equipment,	merchandise,	services,	rental	and	other.		"Cost	of	sales	-	equipment,	merchandise,	services,	rental	and	other"	principally	includes	the	cost	of non-subsidized	sales	of	DBS	accessories	to	retailers	and	other	third-party	distributors	of	our	equipment	domestically	and	to	DISH	subscribers.		Effective	April	26,	2011, the	cost	of	movies	and	video	games	including	rental	title	purchases	or	revenue	sharing	to	studios,	packaging	and	online	delivery	costs	and	cost	of	merchandise	sold including	movies,	video	games	and	other	accessories	related	to	our

Blockbuster	operations	are	included	in	this	category.		In	addition,	"Cost	of	sales	-	equipment,	merchandise,	services,	rental	and	other"	includes	costs	related	to	equipment sales,	services,	and	other	agreements	with	EchoStar.

Subscriber	acquisition	costs.		In	addition	to	leasing	receivers,	we	generally	subsidize	installation	and	all	or	a	portion	of	the	cost	of	our	receiver	systems	to	attract	new DISH	subscribers.		Our	"Subscriber	acquisition	costs"	include	the	cost	of	sales	of	receiver	systems	to	retailers	and	other	third-party	distributors	of	our	equipment,	the cost	of	sales	of	receiver	systems	directly	by	us	to	subscribers,	including	net	costs	related	to	our	promotional	incentives,	costs	related	to	our	direct	sales	efforts	and	costs related	to	installation	and	acquisition	advertising.		We	exclude	the	value	of	equipment	capitalized	under	our	lease	program	for	new	subscribers	from	"Subscriber acquisition	costs."

SAC.		Subscriber	acquisition	cost	measures	are	commonly	used	by	those	evaluating	companies	in	the	pay-TV	industry.		We	are	not	aware	of	any	uniform	standards	for calculating	the	"average	subscriber	acquisition	costs	per	new	subscriber	activation,"	or	SAC,	and	we	believe	presentations	of	SAC	may	not	be	calculated	consistently	by different	companies	in	the	same	or	similar	businesses.		Our	SAC	is	calculated	as	"Subscriber	acquisition	costs,"	plus	the	value	of	equipment	capitalized	under	our	lease program	for	new	subscribers,	divided	by	gross	new	subscriber	activations.		We	include	all	the	costs	of	acquiring	subscribers	(e.g.,	subsidized	and	capitalized	equipment) as	we	believe	it	is	a	more	comprehensive	measure	of	how	much	we	are	spending	to	acquire	subscribers.		We	also	include	all	new	DISH	subscribers	in	our	calculation, including	DISH	subscribers	added	with	little	or	no	subscriber	acquisition	costs.

General	and	administrative	expenses.		"General	and	administrative	expenses"	consists	primarily	of	employee-related	costs	associated	with	administrative	services	such as	legal,	information	systems,	accounting	and	finance,	including	non-cash,	stock-based	compensation	expense.		It	also	includes	outside	professional	fees	(e.g.,	legal, information	systems	and	accounting	services)	and	other	items	associated	with	facilities	and	administration.

Litigation	expense.		"Litigation	expense"	primarily	consists	of	legal	settlements,	judgments	or	accruals	associated	with	certain	significant	litigation.

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

Other,	net.		The	main	components	of	"Other,	net"	are	gains	and	losses	realized	on	the	sale	of	investments,	impairment	of	marketable	and	non-marketable	investment securities,	unrealized	gains	and	losses	from	changes	in	fair	value	of	marketable	and	non-marketable	strategic	investments	accounted	for	at	fair	value,	and	equity	in earnings	and	losses	of	our	affiliates.

Earnings	before	interest,	taxes,	depreciation	and	amortization	("EBITDA").		EBITDA	is	defined	as	"Net	income	(loss)	attributable	to	DISH	Network"	plus	"Interest expense,	net	of	amounts	capitalized"	net	of	"Interest	income,"	"Taxes"	and	"Depreciation	and	amortization."		This	"non-GAAP	measure"	is	reconciled	to	"Net	income (loss)	attributable	to	DISH	Network"	in	our	discussion	of	"Results	of	Operations"	below.

DISH	subscribers.		We	include	customers	obtained	through	direct	sales,	third-party	retailers	and	other	third-party	distribution	relationships	in	our	DISH	subscriber count.		We	also	provide	DISH	service	to	hotels,	motels	and	other	commercial	accounts.		For	certain	of	these	commercial	accounts,	we	divide	our	total	revenue	for	these commercial	accounts	by	an	amount	approximately	equal	to	the	retail	price	of	our	DISH	America	programming	package,	and	include	the	resulting	number,	which	is substantially	smaller	than	the	actual	number	of	commercial	units	served,	in	our	DISH	subscriber	count.		Effective	during	the	first	quarter	2011,	we	made	two	changes	to

this	calculation	methodology	compared	to	prior	periods.		Beginning	February	1,	2011,	the	retail	price	of	our	DISH	America	programming	package	was	used	in	the calculation	rather	than	America's	Top	120	programming	package,	which	had	been	used	in	prior	periods.		We	also	determined	that	two	of	our	commercial	business	lines, which	had	previously	been	included	in	the	described	calculation,	could	be	more	accurately	reflected	through	actual	subscriber	counts.		The	net	impact	of	these	two changes	was	to	increase	our	subscriber	count	by	approximately	6,000	subscribers	in	the	first	quarter	2011.		Prior	period	DISH	subscriber	counts	have	not	been	adjusted for	this	revised	commercial	accounts	calculation	as	the	impacts	were	immaterial.

Average	monthly	revenue	per	subscriber.		We	are	not	aware	of	any	uniform	standards	for	calculating	ARPU	and	believe	presentations	of	ARPU	may	not	be	calculated consistently	by	other	companies	in	the	same	or	similar	businesses.		We	calculate	average	monthly	revenue	per	subscriber,	or	ARPU,	by	dividing	average	monthly "Subscriber-related	revenue"	for	the	period	(total	"Subscriber-related	revenue"	during	the	period	divided	by	the	number	of	months	in	the	period)	by	our	average	number of	DISH	subscribers	for	the	period.		The	average	number	of	DISH	subscribers	is	calculated	for	the	period	by	adding	the	average	number	of	DISH	subscribers	for	each month	and	dividing	by	the	number	of	months	in	the	period.		The	average	number	of	DISH	subscribers	for	each	month	is	calculated	by	adding	the	beginning	and	ending DISH	subscribers	for	the	month	and	dividing	by	two.

Average	monthly	subscriber	churn	rate.		We	are	not	aware	of	any	uniform	standards	for	calculating	subscriber	churn	rate	and	believe	presentations	of	subscriber	churn rates	may	not	be	calculated	consistently	by	different	companies	in	the	same	or	similar	businesses.		We	calculate	subscriber	churn	rate	for	any	period	by	dividing	the number	of	DISH	subscribers	who	terminated	service	during	the	period	by	the	average	number	of	DISH	subscribers	for	the	same	period,	and	further	dividing	by	the number	of	months	in	the	period.		When	calculating	subscriber	churn,	the	same	methodology	for	calculating	average	number	of	DISH	subscribers	is	used	as	when calculating	ARPU.

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

# RESULTS	OF	OPERATIONS

|  | For	the	Years	Ended	December	31, |  | Variance |  |
| :--- | :--- | :--- | :--- | :--- |
| Statements\tof\tOperations\tData | 2011 | 2010 | Amount | % |
|  |  | (In\tthousands) |  |  |
| Revenue: |  |  |  |  |
| Subscriber-related\trevenue | $12,976,009 | $12,543,794 | $432,215 | 3.4 |
| Equipment\tand\tmerchandise\tsales,\trental\tand\tother\trevenue | 1,035,910 | 59,770 | 976,140 | NM |
| Equipment\tsales,\tservices\tand\tother\trevenue\t-\tEchoStar | 36,474 | 37,180 | (706) | (1.9) |
| Total\trevenue | 14,048,393 | 12,640,744 | 1,407,649 | 11.1 |
| Costs\tand\tExpenses: |  |  |  |  |
| Subscriber-related\texpenses | 6,845,611 | 6,676,145 | 169,466 | 2.5 |
| %\tof\tSubscriber-related\trevenue | 52.8% | 53.2% |  |  |
| Satellite\tand\ttransmission\texpenses\t-\tEchoStar | 441,541 | 418,358 | 23,183 | 5.5 |
| %\tof\tSubscriber-related\trevenue | 3.4% | 3.3% |  |  |
| Satellite\tand\ttransmission\texpenses\t-\tOther | 39,806 | 40,249 | (443) | (1.1) |
| %\tof\tSubscriber-related\trevenue | 0.3% | 0.3% |  |  |
| Cost\tof\tsales\t-\tequipment,\tmerchandise,\tservices,\trental\tand\tother | 448,686 | 76,406 | 372,280 | NM |
| Subscriber\tacquisition\tcosts | 1,505,177 | 1,653,494 | (148,317) | (9.0) |
| General\tand\tadministrative\texpenses | 1,234,494 | 625,843 | 608,651 | 97.3 |
| %\tof\tTotal\trevenue | 8.8% | 5.0% |  |  |
| Litigation\texpense | (316,949) | 225,456 | (542,405) | NM |
| Depreciation\tand\tamortization | 922,073 | 983,965 | (61,892) | (6.3) |
| Total\tcosts\tand\texpenses | 11,120,439 | 10,699,916 | 420,523 | 3.9 |
| Operating\tincome\t(loss) | 2,927,954 | 1,940,828 | 987,126 | 50.9 |
| Other\tIncome\t(Expense): |  |  |  |  |
| Interest\tincome | 34,354 | 25,158 | 9,196 | 36.6 |
| Interest\texpense,\tnet\tof\tamounts\tcapitalized | (557,910) | (454,777) | (103,133) | (22.7) |
| Other,\tnet | 6,186 | 30,996 | (24,810) | (80.0) |
| Total\tother\tincome\t(expense) | (517,370) | (398,623) | (118,747) | (29.8) |
| Income\t(loss)\tbefore\tincome\ttaxes | 2,410,584 | 1,542,205 | 868,379 | 56.3 |
| Income\ttax\t(provision)\tbenefit,\tnet | (895,006) | (557,473) | (337,533) | (60.5) |
| Effective\ttax\trate | 37.1% | 36.1% |  |  |
| Net\tincome\t(loss) | 1,515,578 | 984,732 | 530,846 | 53.9 |
| Less:\tNet\tincome\t(loss)\tattributable\tto\tnoncontrolling\tinterest | (329) | 3 | (332) | NM |
| Net\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | $1,515,907 | $984,729 | $531,178 | 53.9 |
| Other\tData: |  |  |  |  |
| DISH\tNetwork\tsubscribers,\tas\tof\tperiod\tend\t(in\tmillions) | 13.967 | 14.133 | (0.166) | (1.2) |
| DISH\tNetwork\tsubscriber\tadditions,\tgross\t(in\tmillions) | 2.576 | 3.052 | (0.476) | (15.6) |
| DISH\tNetwork\tsubscriber\tadditions,\tnet\t(in\tmillions) | (0.166) | 0.033 | (0.199) | NM |
| Average\tmonthly\tsubscriber\tchurn\trate | 1.63% | 1.76% | (0.13)% | (7.4) |
| Average\tmonthly\trevenue\tper\tsubscriber\t("ARPU") | $76.93 | $73.32 | $3.61 | 4.9 |

| Average	subscriber	acquisition	cost	per	subscriber	("SAC") | $771 | $776 | $(5) | (0.6) |
| :--- | :--- | :--- | :--- | :--- |
| EBITDA | $3,856,542 | $2,955,786 | $900,756 | 30.5 |

DISH	subscribers.		DISH	lost	approximately	166,000	net	subscribers	during	the	year	ended	December	31,	2011,	compared	to	a	gain	of	approximately	33,000	net	new subscribers	during	the	same	period	in	2010.		The	change	versus	the	prior	year	primarily	resulted	from	a	decline	in	gross	new	subscriber	activations.		During	the	year ended	December	31,	2011,	DISH	added	approximately	2.576	million	gross	new	subscribers	compared	to	approximately	3.052	million	gross	new	subscribers	during	the same	period	in	2010,	a	decrease	of	15.6%.

We	have	not	always	met	our	own	standards	for	performing	high-quality	installations,	effectively	resolving	subscriber	issues	when	they	arise,	answering	subscriber	calls in	an	acceptable	timeframe,	effectively	communicating	with	our	subscriber	base,	reducing	calls	driven	by	the	complexity	of	our	business,	improving	the	reliability	of certain	systems	and	subscriber	equipment,	and	aligning	the	interests	of	certain	third	party	retailers	and	installers	to	provide	high-quality	service.		Most	of	these	factors have	affected	both	gross	new	subscriber	activations	as	well	as	existing	subscriber	churn.		Our	future	gross	new	subscriber	activations	and	subscriber	churn	may	be negatively	impacted	by	these	factors,	which	could	in	turn	adversely	affect	our	revenue	growth.

Subscriber-related	revenue.		DISH	"Subscriber-related	revenue"	totaled	$12.976	billion	for	the	year	ended	December	31,	2011,	an	increase	of	$432	million	or	3.4% compared	to	the	same	period	in	2010.		This	change	was	primarily	related	to	the	increase	in	"ARPU"	discussed	below.

ARPU.		"Average	monthly	revenue	per	subscriber"	was	$76.93	during	the	year	ended	December	31,	2011	versus	$73.32	during	the	same	period	in	2010.		The	$3.61	or 4.9%	increase	in	ARPU	was	primarily	attributable	to	price	increases	during	the	past	year,	higher	hardware	related	revenue	and	fees	earned	from	our	in-home	service operations,	partially	offset	by	decreases	in	premium	and	pay	per	view	revenue.

Equipment	and	merchandise	sales,	rental	and	other	revenue.		"Equipment	and	merchandise	sales,	rental	and	other	revenue"	totaled	$1.036	billion	for	the	year	ended December	31,	2011,	an	increase	of	$976	million	compared	to	the	same	period	in	2010.		This	increase	was	primarily	driven	by	revenue	from	the	rental	of	movies	and video	games,	the	sale	of	previously	rented	titles,	and	other	merchandise	sold	to	customers	including	movies,	video	games	and	other	accessories	related	to	our Blockbuster	operations	which	commenced	April	26,	2011.

Subscriber-related	expenses.		"Subscriber-related	expenses"	totaled	$6.846	billion	during	the	year	ended	December	31,	2011,	an	increase	of	$169	million	or	2.5% compared	to	the	same	period	in	2010.		The	increase	in	"Subscriber-related	expenses"	was	primarily	attributable	to	higher	programming	costs	and	an	increase	in	customer retention	expense,	partially	offset	by	reduced	costs	related	to	our	call	centers.		The	increase	in	programming	costs	was	driven	by	rate	increases	in	certain	of	our programming	contracts,	including	the	renewal	of	certain	contracts	at	higher	rates.	"Subscriber-related	expenses"	represented	52.8%	and	53.2%	of	"Subscriber-related revenue"	during	the	year	ended	December	31,	2011	and	2010,	respectively.		The	improvement	in	this	expense	to	revenue	ratio	primarily	resulted	from	an	increase	in "Subscriber-related	revenue,"	partially	offset	by	higher	programming	costs,	discussed	above.

In	the	normal	course	of	business,	we	enter	into	contracts	to	purchase	programming	content	in	which	our	payment	obligations	are	fully	contingent	on	the	number	of subscribers	to	whom	we	provide	the	respective	content.		Our	programming	expenses	will	continue	to	increase	to	the	extent	we	are	successful	in	growing	our	subscriber base.		In

addition,	our	"Subscriber-related	expenses"	may	face	further	upward	pressure	from	price	increases	and	the	renewal	of	long-term	programming	contracts	on	less favorable	pricing	terms.

Cost	of	sales	—	equipment,	merchandise,	services,	rental	and	other.		"Cost	of	sales	—	equipment,	merchandise,	services,	rental	and	other"	totaled	$449	million	for	the year	ended	December	31,	2011,	an	increase	of	$372	million	compared	to	the	same	period	in	2010.		This	increase	is	primarily	associated	with	the	cost	of	rental	title purchases	or	revenue	sharing	to	studios,	packaging	and	on-line	delivery	costs	as	well	as	the	cost	of	merchandise	sold	such	as	movies,	video	games	and	other	accessories related	to	our	Blockbuster	operations	which	commenced	April	26,	2011.

Subscriber	acquisition	costs.		"Subscriber	acquisition	costs"	totaled	$1.505	billion	for	the	year	ended	December	31,	2011,	a	decrease	of	$148	million	or	9.0%	compared to	the	same	period	in	2010.		This	decrease	was	primarily	attributable	to	a	decline	in	gross	new	subscriber	activations.

SAC.		SAC	was	$771	during	the	year	ended	December	31,	2011	compared	to	$776	during	the	same	period	in	2010,	a	decrease	of	$5	or	0.6%.		This	decrease	was primarily	attributable	to	an	increase	in	the	percentage	of	redeployed	receivers	that	were	installed.

During	the	years	ended	December	31,	2011	and	2010,	the	amount	of	equipment	capitalized	under	our	lease	program	for	new	subscribers	totaled	$480	million	and	$716 million,	respectively.		This	decrease	in	capital	expenditures	under	our	lease	program	for	new	subscribers	resulted	primarily	from	a	decrease	in	gross	new	subscriber activations	and	an	increase	in	the	percentage	of	redeployed	receivers	that	were	installed.

Capital	expenditures	resulting	from	our	equipment	lease	program	for	new	subscribers	were	partially	mitigated	by	the	redeployment	of	equipment	returned	by disconnecting	lease	program	subscribers.		To	remain	competitive	we	upgrade	or	replace	subscriber	equipment	periodically	as	technology	changes,	and	the	costs associated	with	these	upgrades	may	be	substantial.		To	the	extent	technological	changes	render	a	portion	of	our	existing	equipment	obsolete,	we	would	be	unable	to redeploy	all	returned	equipment	and	consequently	would	realize	less	benefit	from	the	SAC	reduction	associated	with	redeployment	of	that	returned	lease	equipment.

Our	SAC	calculation	does	not	reflect	any	benefit	from	payments	we	received	in	connection	with	equipment	not	returned	to	us	from	disconnecting	lease	subscribers	and returned	equipment	that	is	made	available	for	sale	or	used	in	our	existing	customer	lease	program	rather	than	being	redeployed	through	our	new	customer	lease

program.		During	the	years	ended	December	31,	2011	and	2010,	these	amounts	totaled	$96	million	and	$108	million,	respectively.

We	have	been	deploying	receivers	that	utilize	8PSK	modulation	technology	and	receivers	that	utilize	MPEG-4	compression	technology	for	several	years.		These technologies,	when	fully	deployed,	will	allow	more	programming	channels	to	be	carried	over	our	existing	satellites.		Many	of	our	customers	today,	however,	do	not	have receivers	that	use	MPEG-4	compression	and	a	smaller	but	still	significant	percentage	do	not	have	receivers	that	use	8PSK	modulation.		We	may	choose	to	invest significant	capital	to	accelerate	the	conversion	of	customers	to	MPEG-4	and/or	8PSK	to	realize	the	bandwidth	benefits	sooner.		In	addition,	given	that	all	of	our	HD content	is	broadcast	in	MPEG-4,	any	growth	in	HD	penetration	will	naturally	accelerate	our	transition	to	these	newer	technologies	and	may	increase	our	subscriber acquisition	and	retention	costs.		All	new	receivers	that	we	purchase	from	EchoStar	have	MPEG-4	technology.		Although	we	continue	to	refurbish	and	redeploy	MPEG-2 receivers,	as	a	result	of	our	HD	initiatives	and	current	promotions,	we	currently	activate	most	new	customers	with	higher	priced	MPEG-4	technology.		This	limits	our ability	to	redeploy	MPEG-2	receivers	and,	to	the	extent	that	our	promotions	are	successful,	will	accelerate	the	transition	to	MPEG-4	technology,	resulting	in	an	adverse effect	on	our	SAC.

Our	"Subscriber	acquisition	costs"	and	"SAC"	may	materially	increase	in	the	future	to	the	extent	that	we	transition	to	newer	technologies,	introduce	more	aggressive promotions,	or	provide	greater	equipment	subsidies.		See	further	discussion	under	"Liquidity	and	Capital	Resources	—	Subscriber	Acquisition	and	Retention	Costs."

General	and	administrative	expenses.	"General	and	administrative	expenses"	totaled	$1.234	billion	during	the	year	ended	December	31,	2011,	a	$609	million	increase compared	to	the	same	period	in	2010.		This	increase	was	primarily	due	to	an	increase	in	personnel,	building	and	maintenance	and	other	administrative	costs	associated with	our	Blockbuster	operations	which	commenced	April	26,	2011.

Litigation	expense.		"Litigation	expense"	totaled	a	negative	$317	million	during	the	year	ended	December	31,	2011,	a	reduction	in	expense	of	$542	million	compared	to the	same	period	in	2010.		See	Note	16	in	the	Notes	to	our	Consolidated	Financial	Statements	in	Item	15	of	this	Annual	Report	on	Form	10-K	for	further	discussion.

Depreciation	and	amortization.		"Depreciation	and	amortization"	expense	totaled	$922	million	during	the	year	ended	December	31,	2011,	a	$62	million	or	6.3% decrease	compared	to	the	same	period	in	2010.		This	change	in	"Depreciation	and	amortization"	expense	was	primarily	due	to	a	decrease	in	depreciation	on	equipment leased	to	subscribers	principally	related	to	less	equipment	capitalization	during	2011	compared	to	the	same	period	in	2010	and	less	equipment	write-offs	from disconnecting	subscribers.		This	decrease	was	partially	offset	by	an	increase	in	depreciation	on	satellites	as	a	result	of	EchoStar	XIV	and	EchoStar	XV	being	placed	into service	during	the	second	and	third	quarters	2010,	respectively.

Interest	expense,	net	of	amounts	capitalized.		"Interest	expense,	net	of	amounts	capitalized"	totaled	$558	million	during	the	year	ended	December	31,	2011,	an	increase of	$103	million	or	22.7%	compared	to	the	same	period	in	2010.		This	change	primarily	resulted	from	an	increase	in	interest	expense	related	to	the	issuance	of	our	6	3/4% Senior	Notes	due	2021	during	the	second	quarter	2011	and	a	decrease	in	the	amount	of	interest	capitalized,	partially	offset	by	a	decrease	in	interest	expense	as	a	result	of the	repurchases	and	redemptions	of	our	6	3/8%	Senior	Notes	due	2011.

Earnings	before	interest,	taxes,	depreciation	and	amortization.	EBITDA	was	$3.857	billion	during	the	year	ended	December	31,	2011,	an	increase	of	$901	million	or 30.5%	compared	to	the	same	period	in	2010.	The	following	table	reconciles	EBITDA	to	the	accompanying	financial	statements.

|  | For	the	Years	Ended | For	the	Years	Ended |
| :--- | :--- | :--- |
|  | December\t31, |  |
|  | 2011 | 2010 |
|  | (In\tthousands) |  |
| EBITDA | $3,856,542 | $2,955,786 |
| Interest\texpense,\tnet | (523,556) | (429,619) |
| Income\ttax\t(provision)\tbenefit,\tnet | (895,006) | (557,473) |
| Depreciation\tand\tamortization | (922,073) | (983,965) |
| Net\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | $1,515,907 | $984,729 |

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

Income	tax	(provision)	benefit,	net.		Our	income	tax	provision	was	$895	million	during	the	year	ended	December	31,	2011,	an	increase	of	$338	million	compared	to	the same	period	in	2010.		The	increase	in	the	provision	was	primarily	related	to	the	increase	in	"Income	(loss)	before	income	taxes."

Net	income	(loss)	attributable	to	DISH	Network.		"Net	income	(loss)	attributable	to	DISH	Network"	was	$1.516	billion	during	the	year	ended	December	31,	2011,	an increase	of	$531	million	compared	to	$985	million	for	the	same	period	in	2010.		The	increase	was	primarily	attributable	to	the	changes	in	revenue	and	expenses discussed	above.

|  | For	the	Years	Ended	December	31, | For	the	Years	Ended	December	31, | Variance |  |
| :--- | :--- | :--- | :--- | :--- |
| Statements\tof\tOperations\tData | 2010 | 2009 | Amount | % |
|  | (In\tthousands) | (In\tthousands) |  |  |
| Revenue: |  |  |  |  |
| Subscriber-related\trevenue | $12,543,794 | $11,538,729 | $1,005,065 | 8.7 |
| Equipment\tand\tmerchandise\tsales,\trental\tand\tother\trevenue | 59,770 | 97,863 | (38,093) | (38.9) |
| Equipment\tsales,\tservices\tand\tother\trevenue\t-\tEchoStar | 37,180 | 27,559 | 9,621 | 34.9 |
| Total\trevenue | 12,640,744 | 11,664,151 | 976,593 | 8.4 |

Costs	and	Expenses:

| Subscriber-related	expenses | 6,676,145 | 6,359,329 | 316,816 | 5.0 |
| :--- | :--- | :--- | :--- | :--- |
| %\tof\tSubscriber-related\trevenue | 53.2% | 55.1% |  |  |
| Satellite\tand\ttransmission\texpenses\t-\tEchoStar | 418,358 | 319,752 | 98,606 | 30.8 |
| %\tof\tSubscriber-related\trevenue | 3.3% | 2.8% |  |  |
| Satellite\tand\ttransmission\texpenses\t-\tOther | 40,249 | 33,672 | 6,577 | 19.5 |
| %\tof\tSubscriber-related\trevenue | 0.3% | 0.3% |  |  |
| Cost\tof\tsales\t-\tequipment,\tmerchandise,\tservices,\trental\tand\tother | 76,406 | 121,238 | (44,832) | (37.0) |
| Subscriber\tacquisition\tcosts | 1,653,494 | 1,539,562 | 113,932 | 7.4 |
| General\tand\tadministrative\texpenses | 625,843 | 602,611 | 23,232 | 3.9 |
| %\tof\tTotal\trevenue | 5.0% | 5.2% |  |  |
| Litigation\texpense | 225,456 | 361,024 | (135,568) | (37.6) |
| Depreciation\tand\tamortization | 983,965 | 940,033 | 43,932 | 4.7 |
| Total\tcosts\tand\texpenses | 10,699,916 | 10,277,221 | 422,695 | 4.1 |
| Operating\tincome\t(loss) | 1,940,828 | 1,386,930 | 553,898 | 39.9 |
| Other\tIncome\t(Expense): |  |  |  |  |
| Interest\tincome | 25,158 | 30,034 | (4,876) | (16.2) |
| Interest\texpense,\tnet\tof\tamounts\tcapitalized | (454,777) | (388,425) | (66,352) | (17.1) |
| Other,\tnet | 30,996 | (15,707) | 46,703 | NM |
| Total\tother\tincome\t(expense) | (398,623) | (374,098) | (24,525) | (6.6) |
| Income\t(loss)\tbefore\tincome\ttaxes | 1,542,205 | 1,012,832 | 529,373 | 52.3 |
| Income\ttax\t(provision)\tbenefit,\tnet | (557,473) | (377,429) | (180,044) | (47.7) |
| Effective\ttax\trate | 36.1% | 37.3% |  |  |
| Net\tincome\t(loss) | 984,732 | 635,403 | 349,329 | 55.0 |
| Less:\tNet\tincome\t(loss)\tattributable\tto\tnoncontrolling\tinterest | 3 | (142) | 145 | NM |
| Net\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | $984,729 | $635,545 | $349,184 | 54.9 |
| Other\tData: |  |  |  |  |
| DISH\tNetwork\tsubscribers,\tas\tof\tperiod\tend\t(in\tmillions) | 14.133 | 14.100 | 0.033 | 0.2 |
| DISH\tNetwork\tsubscriber\tadditions,\tgross\t(in\tmillions) | 3.052 | 3.118 | (0.066) | (2.1) |
| DISH\tNetwork\tsubscriber\tadditions,\tnet\t(in\tmillions) | 0.033 | 0.422 | (0.389) | (92.2) |
| Average\tmonthly\tsubscriber\tchurn\trate | 1.76% | 1.64% | 0.12% | 7.3 |
| Average\tmonthly\trevenue\tper\tsubscriber\t("ARPU") | $73.32 | $70.04 | $3.28 | 4.7 |
| Average\tsubscriber\tacquisition\tcost\tper\tsubscriber\t("SAC") | $776 | $697 | $79 | 11.3 |
| EBITDA | $2,955,786 | $2,311,398 | $644,388 | 27.9 |

DISH	subscribers.		As	of	December	31,	2010,	we	had	approximately	14.133	million	DISH	subscribers	compared	to	approximately	14.100	million	subscribers	at December	31,	2009,	an	increase	of	0.2%.	During	the	year	ended	December	31,	2010,	DISH	added	approximately	3.052	million	gross	new	subscribers	compared	to approximately	3.118	million	gross	new	subscribers	during	the	same	period	in	2009,	a	decrease	of	2.1%.		Our	gross	activations	in	2010	were	negatively	impacted	relative to	2009	by	increased	competitive	pressures,	including	the	aggressive	marketing	and	the	effectiveness	of	certain	competitors'	promotional	offers,	which	included	an increased	level	of	discounts.		DISH	added	approximately	33,000	net	new	subscribers	during	the	year	ended	December	31,	2010,	compared	to	approximately	422,000	net new	subscribers	during	the	same	period	in	2009.		This	decrease	primarily	resulted	from	increased	churn.

Our	average	monthly	subscriber	churn	rate	for	the	year	ended	December	31,	2010	was	1.76%,	compared	to	1.64%	for	the	same	period	in	2009.		Churn	increased	during the	year	as	a	result	of	the	increasingly	competitive	nature	of	our	industry,	the	current	economic	conditions,	multiple	programming	interruptions	related	to	contract disputes	with	several	content	providers	during	the	fourth	quarter	of	2010,	and	our	2010	price	increases.		In	general,	our	churn	rate	is	impacted	by	the	quality	of subscribers	acquired	in	past	quarters,	our	ability	to	provide	strong	customer	service,	and	our	ability	to	control	piracy.		Historically,	we	have	experienced	slightly	higher churn	in	the	months	following	the	expiration	of	commitments	for	new	subscribers.		In	February	2008,	we	extended	our	new	subscriber	commitment	from	18	to	24 months.		Consequently,	during	the	second	half	of	2009,	churn	was	positively	impacted	by,	among	other	things,	this	increase	in	our	new	subscriber	commitment	period.

Subscriber-related	revenue.		DISH	"Subscriber-related	revenue"	totaled	$12.544	billion	for	the	year	ended	December	31,	2010,	an	increase	of	$1.005	billion	or	8.7% compared	to	the	same	period	in	2009.		This	change	was	primarily	related	to	the	increase	in	"ARPU"	discussed	below	as	well	as	a	larger	average	subscriber	base	during the	year	ended	December	31,	2010	compared	to	the	same	period	in	2009.

ARPU.		"Average	monthly	revenue	per	subscriber"	was	$73.32	during	the	year	ended	December	31,	2010	versus	$70.04	during	the	same	period	in	2009.		The	$3.28	or 4.7%	increase	in	ARPU	was	primarily	attributable	to	price	increases	in	February	and	June	2010	and	changes	in	the	sales	mix	toward	more	advanced	hardware	offerings. ARPU	increased	as	a	result	of	higher	hardware	related	fees	which	include	rental	fees,	fees	earned	from	our	in-home	service	operations,	and	fees	for	DVRs.		This increase	was	partially	offset	by	increases	in	the	amount	of	promotional	discounts	on	programming	offered	to	our	new	subscribers.

Equipment	and	merchandise	sales,	rental	and	other	revenue.		"Equipment	and	merchandise	sales,	rental	and	other	revenue"	totaled	$60	million	during	the	year	ended December	31,	2010,	a	decrease	of	$38	million	or	38.9%	compared	to	the	same	period	in	2009.		The	decrease	in	"Equipment	sales	and	other	revenue"	primarily	resulted from	a	decline	in	the	sales	of	non-subsidized	DBS	receivers	and	accessories,	and	digital	converter	boxes	in	2010	compared	to	the	same	period	in	2009.

Subscriber-related	expenses.		"Subscriber-related	expenses"	totaled	$6.676	billion	during	the	year	ended	December	31,	2010,	an	increase	of	$317	million	or	5.0% compared	to	the	same	period	in	2009.		The	increase	in	"Subscriber-related	expenses"	was	primarily	attributable	to	higher	programming	costs.		The	increase	in programming	costs	was	driven	by	rate	increases	in	certain	of	our	programming	contracts,	including	the	renewal	of	certain	contracts	at	higher	rates	and	by	a	larger average	subscriber	base.		This	increase	was	partially	offset	by	reduced	costs	related	to	our	call	centers,	customer	retention,	and	in-home	service	operations.		We	continue to	address	our	operational	inefficiencies	by	streamlining	our	hardware	offerings	and	making	significant	investments	in	staffing,	training,	information	systems	and	other initiatives,	primarily	in	our	call	centers	and	in-home	service	operations.		"Subscriber-related	expenses"	represented	53.2%	and	55.1%	of	"Subscriber-related	revenue" during	the	years	ended	December	31,	2010	and	2009,	respectively.		The	improvement	in	this	expense	to	revenue	ratio	primarily	resulted	from	an	increase	in	"Subscriber- related	revenue"	and	the	reduced	costs	discussed	above,	partially	offset	by	higher	programming	costs.

Satellite	and	transmission	expenses	—	EchoStar.		"Satellite	and	transmission	expenses	—	EchoStar"	totaled	$418	million	during	the	year	ended	December	31,	2010, an	increase	of	$99	million	or	30.8%	compared	to	the	same	period	in	2009.		The	increase	in	"Satellite	and	transmission	expenses	—	EchoStar"	is	related	to	an	increase	in transponder	capacity	leased	from	EchoStar	primarily	related	to	the	Nimiq	5	satellite,	which	was	placed	into	service	in	October	2009,	an	increase	in	monthly	lease	rates per	transponder	on	certain	satellites	based	on	the	terms	of	our	amended	lease	agreements	and	the	increase	in	uplink	services.		The	increase	in	uplink	services	was primarily	attributable	to	the	launch

of	additional	local	channels	and	increased	costs	related	to	additional	satellites	being	placed	into	service.		See	Note	20	in	the	Notes	to	our	Consolidated	Financial Statements	in	Item	15	of	this	Annual	Report	on	Form	10-K	for	further	discussion.		"Satellite	and	transmission	expenses	—	EchoStar"	as	a	percentage	of	"Subscriber- related	revenue"	increased	to	3.3%	in	2010	from	2.8%	in	2009	primarily	as	a	result	of	the	increase	in	expenses	discussed	above.

Cost	of	sales	—	equipment,	merchandise,	services,	rental	and	other.		"Cost	of	sales	—	equipment,	merchandise,	services,	rental	and	other"	totaled	$76	million	during the	year	ended	December	31,	2010,	a	decrease	of	$45	million	or	37.0%	compared	to	the	same	period	in	2009.		This	decrease	in	"Equipment,	services	and	other	cost	of sales"	primarily	resulted	from	a	decline	in	the	sales	of	non-subsidized	DBS	receivers	and	accessories	and	in	sales	of	digital	converter	boxes,	and	lower	charges	for	slow moving	and	obsolete	inventory	in	2010	compared	to	the	same	period	in	2009.

Subscriber	acquisition	costs.		"Subscriber	acquisition	costs"	totaled	$1.653	billion	for	the	year	ended	December	31,	2010,	an	increase	of	$114	million	or	7.4%	compared to	the	same	period	in	2009.		This	increase	was	primarily	attributable	to	higher	SAC	discussed	below,	partially	offset	by	the	decline	in	gross	new	subscriber	activations.

SAC.			SAC	was	$776	during	the	year	ended	December	31,	2010	compared	to	$697	during	the	same	period	in	2009,	an	increase	of	$79	or	11.3%.		This	increase	was primarily	attributable	to	increased	advertising	and	hardware	costs	per	activation.

During	the	years	ended	December	31,	2010	and	2009,	the	amount	of	equipment	capitalized	under	our	lease	program	for	new	subscribers	totaled	$716	million	and	$634 million,	respectively.		This	increase	in	capital	expenditures	under	our	lease	program	for	new	subscribers	resulted	primarily	from	an	increase	in	hardware	costs	per activation,	which	was	driven	by	an	increase	in	the	deployment	of	more	advanced	set-top	boxes,	such	as	HD	receivers	and	HD	DVRs,	and	a	decrease	in	the	redeployment of	remanufactured	receivers.		The	increase	in	the	deployment	of	more	advanced	set-top	boxes	was	partially	driven	by	our	HD	Free	for	Life	promotion,	which	began during	June	2010.

Our	SAC	calculation	does	not	reflect	any	benefit	from	payments	we	received	in	connection	with	equipment	not	returned	to	us	from	disconnecting	lease	subscribers	and returned	equipment	that	is	made	available	for	sale	or	used	in	our	existing	customer	lease	program	rather	than	being	redeployed	through	our	new	lease	program.		During the	years	ended	December	31,	2010	and	2009,	these	amounts	totaled	$108	million	and	$94	million,	respectively.

Litigation	expense.		"Litigation	expense"	totaled	$225	million	during	the	year	ended	December	31,	2010,	a	$136	million	or	37.6%	decrease	compared	to	the	same	period in	2009.		"Litigation	expense"	during	2009	included	expense	related	to	the	Tivo	litigation	for	the	period	from	April	2008	to	June	2009	for	supplemental	damages, contempt	sanctions	and	interest	expense.		See	Note	16	in	the	Notes	to	our	Consolidated	Financial	Statements	in	Item	15	of	this	Annual	Report	on	Form	10-K	for	further discussion.

Depreciation	and	amortization.		"Depreciation	and	amortization"	expense	totaled	$984	million	during	the	year	ended	December	31,	2010,	a	$44	million	or	4.7% increase	compared	to	the	same	period	in	2009.		The	change	in	"Depreciation	and	amortization"	expense	was	primarily	due	to	an	increase	in	depreciation	on	satellites,	as a	result	of	EchoStar	XIV	and	EchoStar	XV	being	placed	into	service	and	on	equipment	leased	to	subscribers.

Interest	expense,	net	of	amounts	capitalized.		"Interest	expense,	net	of	amounts	capitalized"	totaled	$455	million	during	the	year	ended	December	31,	2010,	an	increase of	$66	million	or	17.1%	compared	to	the	same	period	in	2009.		This	change	primarily	resulted	from	an	increase	in	interest	expense	related	to	the	issuance	of	debt	during the	second	half	of	2009.

Other,	net.		"Other,	net"	income	totaled	$31	million	during	the	year	ended	December	31,	2010,	an	increase	of	$47	million	compared	to	the	same	period	in	2009.		This increase	primarily	resulted	from	lower	impairment	charges	on	marketable	and	other	investment	securities	of	$28	million	and	higher	realized	and	unrealized	gains	of marketable	and	other	investment	securities	in	2010	compared	to	2009.

Earnings	before	interest,	taxes,	depreciation	and	amortization.		EBITDA	was	$2.956	billion	during	the	year	ended	December	31,	2010,	an	increase	of	$644	million	or 27.9%	compared	to	the	same	period	in	2009.		The	following	table	reconciles	EBITDA	to	the	accompanying	financial	statements.

|  | For	the	Years	Ended | For	the	Years	Ended |
| :--- | :--- | :--- |
|  | December\t31, |  |
|  | 2010 | 2009 |
|  | (In\tthousands) |  |
| EBITDA | $2,955,786 | $2,311,398 |
| Interest\texpense,\tnet | (429,619) | (358,391) |
| Income\ttax\t(provision)\tbenefit,\tnet | (557,473) | (377,429) |
| Depreciation\tand\tamortization | (983,965) | (940,033) |
| Net\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | $984,729 | $635,545 |

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

Income	tax	(provision)	benefit,	net.		Our	income	tax	provision	was	$557	million	during	the	year	ended	December	31,	2010,	an	increase	of	$180	million	compared	to	the same	period	in	2009.		The	increase	in	the	provision	was	primarily	related	to	the	increase	in	"Income	(loss)	before	income	taxes."

Net	income	(loss)	attributable	to	DISH	Network.		"Net	income	(loss)	attributable	to	DISH	Network"	was	$985	million	during	the	year	ended	December	31,	2010,	an increase	of	$349	million	compared	to	$636	million	for	the	same	period	in	2009.		The	increase	was	primarily	attributable	to	the	changes	in	revenue	and	expenses discussed	above.

# LIQUIDITY	AND	CAPITAL	RESOURCES

Cash,	Cash	Equivalents	and	Current	Marketable	Investment	Securities

We	consider	all	liquid	investments	purchased	within	90	days	of	their	maturity	to	be	cash	equivalents.		See	"Item	7A.	—	Quantitative	and	Qualitative	Disclosures	About Market	Risk"	for	further	discussion	regarding	our	marketable	investment	securities.		As	of	December	31,	2011,	our	cash,	cash	equivalents	and	current	marketable investment	securities	totaled	$2.041	billion	compared	to	$2.940	billion	as	of	December	31,	2010,	a	decrease	of	$899	million.		This	decrease	in	cash,	cash	equivalents	and current	marketable	investment	securities	was	primarily	related	to	our	investment	in	DBSD	North	America	of	$1.139	billion,	the	TerreStar	Transaction	of	$1.345	billion, repurchases	and	redemptions	of	our	6	3/8%	Senior	Notes	due	2011	totaling	$1.0	billion,	the	$893	million	dividend	paid	in	cash	on	our	Class	A	and	Class	B	common stock,	capital	expenditures	of	$779	million,	the	Blockbuster	Acquisition	of	$127	million,	net	of	$107	million	cash	received,	and	the	Sprint	Settlement	Agreement	net payment	of	approximately	$114	million,	which	were	partially	offset	by	cash	generated	from	operations	of	$2.574	billion	and	the	net	proceeds	of	$1.973	billion	related	to the	issuance	of	our	6	3/4%	Senior	Notes	due	2021.

We	have	investments	in	various	debt	and	equity	instruments	including	corporate	bonds,	corporate	equity	securities,	government	bonds	and	variable	rate	demand	notes ("VRDNs").		VRDNs	are	long-term	floating	rate	municipal	bonds	with	embedded	put	options	that	allow	the	bondholder	to	sell	the	security	at	par	plus	accrued	interest. All	of	the	put	options	are	secured	by	a	pledged	liquidity	source.		Our	VRDN	portfolio	is	comprised	of	investments	in	many	municipalities,	which	are	backed	by	financial institutions	or	other	highly	rated	companies	that	serve	as	the	pledged	liquidity	source.		While	they	are	classified	as	marketable	investment	securities,	the	put	option allows	VRDNs	to	be	liquidated	generally	on	a	same	day	or	on	a	five	business	day	settlement	basis.		As	of	December	31,	2011	and	2010,	we	held	VRDNs,	within	our current	marketable	investment	securities	portfolio,	with	fair	values	of	$161	million	and	$1.334	billion,	respectively.

The	following	discussion	highlights	our	cash	flow	activities	during	the	years	ended	December	31,	2011,	2010	and	2009.

# Free	Cash	Flow

We	define	free	cash	flow	as	"Net	cash	flows	from	operating	activities"	less	"Purchases	of	property	and	equipment,"	as	shown	on	our	Consolidated	Statements	of	Cash Flows.		We	believe	free	cash	flow	is	an	important	liquidity	metric	because	it	measures,	during	a	given	period,	the	amount	of	cash	generated	that	is	available	to	repay	debt obligations,	make	investments,	fund	acquisitions	and	for	certain	other	activities.		Free	cash	flow	is	not	a	measure	determined	in	accordance	with	GAAP	and	should	not be	considered	a	substitute	for	"Operating	income,"	"Net	income,"	"Net	cash	flows	from	operating	activities"	or	any	other	measure	determined	in	accordance	with GAAP.		Since	free	cash	flow	includes	investments	in	operating	assets,	we	believe	this	non-GAAP	liquidity	measure	is	useful	in	addition	to	the	most	directly	comparable GAAP	measure	"Net	cash	flows	from	operating	activities."

During	the	years	ended	December	31,	2011,	2010	and	2009,	free	cash	flow	was	significantly	impacted	by	changes	in	operating	assets	and	liabilities	and	in	"Purchases	of property	and	equipment"	as	shown	in	the	"Net	cash	flows	from	operating	activities"	and	"Net	cash	flows	from	investing"	sections,	respectively,	of	our	Consolidated Statements	of	Cash	Flows	included	herein.		Operating	asset	and	liability	balances	can	fluctuate	significantly	from	period	to	period	and	there	can	be	no	assurance	that	free cash	flow	will	not	be	negatively	impacted	by	material	changes	in	operating	assets	and	liabilities	in	future	periods,	since	these	changes	depend	upon,	among	other	things, management's	timing	of	payments	and	control	of	inventory	levels,	and	cash	receipts.		In	addition	to	fluctuations	resulting	from	changes	in	operating	assets	and liabilities,	free	cash	flow	can	vary	significantly	from	period	to	period	depending	upon,	among	other	things,	subscriber	growth,	subscriber	revenue,	subscriber	churn, subscriber	acquisition	costs	including	amounts	capitalized	under	our	equipment	lease	programs,	operating	efficiencies,	increases	or	decreases	in	purchases	of	property and	equipment,	and	other	factors.

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

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Free\tcash\tflow | $1,794,973 | $923,670 | $1,157,353 |
| Add\tback: |  |  |  |
| Purchases\tof\tproperty\tand\tequipment | 778,905 | 1,216,132 | 1,037,190 |
| Net\tcash\tflows\tfrom\toperating\tactivities | $2,573,878 | $2,139,802 | $2,194,543 |

The	increase	in	free	cash	flow	from	2010	to	2011	of	$871	million	resulted	from	an	increase	in	"Net	cash	flows	from	operating	activities"	of	$434	million	and	a	decrease in	"Purchases	of	property	and	equipment"	of	$437	million.		The	increase	in	"Net	cash	flows	from	operating	activities"	was	primarily	attributable	to	a	$895	million increase	in	cash	resulting	from	net	income,	adjusted	to	exclude	non-cash	changes	in	"Deferred	tax	expense	(benefit),"	and	"Depreciation	and	amortization"	expense, partially	offset	by	a	$502	million	decrease	in	cash	resulting	from	changes	in	operating	assets	and	liabilities.		The	decrease	in	cash	resulting	from	changes	in	operating assets	and	liabilities	is	principally	attributable	to	timing	differences	between	book	expense	and	cash	payments	and	$350	million	in	payments	for	the	TiVo	and	Retailer Class	Action	settlements.		The	decrease	in	"Purchases	of	property	and	equipment"	in	2011	was	primarily	attributable	to	a	decrease	in	satellite	construction	and	a	decline in	expenditures	for	equipment	under	our	lease	programs	for	new	and	existing	subscribers	of	$241	million.

On	December	17,	2010,	the	Tax	Relief,	Unemployment	Insurance	Reauthorization	and	Job	Creation	Act	of	2010	was	enacted,	which	provides	for	a	bonus	depreciation deduction	of	100%	of	the	cost	of	our	qualified	capital	expenditures	from	September	8,	2010	through	December	31,	2011.		During	the	year	ended	December	31,	2011, our	"Deferred	income	tax	expense	(benefit)"	recorded	as	a	non-cash	adjustment	to	net	income	on	our	Consolidated	Statements	of	Cash	Flows	increased	$427	million compared	to	the	same	period	in	2010.		This	change	is	primarily	associated	with	equipment-related	temporary	differences	as	a	result	of	bonus	depreciation	deductions available	in	2011.

The	decrease	in	free	cash	flow	from	2009	to	2010	of	$234	million	resulted	from	a	decrease	in	"Net	cash	flows	from	operating	activities"	of	$55	million	or	2.5%	and	an increase	in	"Purchases	of	property	and	equipment"	of	$179	million	or	17.3%.		The	decrease	in	"Net	cash	flows	from	operating	activities"	was	primarily	attributable	to	a $605	million	decrease	in	cash	resulting	from	changes	in	operating	assets	and	liabilities,	partially	offset	by	a	$543	million	increase	in	net	income,	adjusted	to	exclude non-cash	changes	in	"Deferred	tax	expense	(benefit),"	"Realized	and	unrealized	losses	(gains)	on	investments,"	and	"Depreciation	and	amortization"	expense.		The decrease	in	cash	resulting	from	changes	in	operating	assets	and	liabilities	is	principally	attributable	to	the	increase	in	inventory	and	timing	differences	between	book expense	and	cash	payments,	primarily	related	to	income	taxes	and	litigation	expense.		The	increase	in	"Purchases	of	property	and	equipment"	in	2010	was	primarily attributable	to	the	assignment	of	certain	rights	under	a	launch	contract	for	EchoStar	XV	and	an	increase	in	expenditures	for	equipment	under	our	lease	program	for	new subscribers.

Cash	flows	from	operating	activities.		We	typically	reinvest	the	cash	flow	from	operating	activities	in	our	business	primarily	to	grow	our	subscriber	base	and	to	expand our	infrastructure.		For	the	years	ended	December	31,	2011,	2010	and	2009,	we	reported	net	cash	flows	from	operating	activities	of	$2.574	billion,	$2.140	billion,	and

$2.195	billion,	respectively.		See	discussion	of	changes	in	net	cash	flows	from	operating	activities	included	in	"Free	cash	flow"	above.

Cash	flows	from	investing	activities.		Our	investing	activities	generally	include	purchases	and	sales	of	marketable	investment	securities,	acquisitions,	strategic investments	and	cash	used	to	grow	our	subscriber	base	and	expand	our	infrastructure.		For	the	years	ended	December	31,	2011,	2010	and	2009,	we	reported	net	cash outflows	from	investing	activities	of	$2.695	billion,	$1.478	billion	and	$2.606	billion,	respectively.		During	the	years	ended	December	31,	2011,	2010	and	2009,	capital expenditures	for	new	and	existing	customer	equipment	totaled	$701	million,	$942	million	and	$876	million,	respectively.

The	increase	in	net	cash	outflows	from	investing	activities	from	2010	to	2011	of	$1.218	billion	primarily	resulted	from	our	investment	in	DBSD	North	America	of $1.139	billion,	the	TerreStar	Transaction	of	$1.345	billion,	the	Blockbuster	Acquisition	of	$127	million,	net	of	$107	million	cash	received,	and	the	Sprint	Settlement Agreement	net	payment	of	$114	million	which	were	partially	offset	by	a	net	increase	in	sales	of	marketable	investment	securities	of	$1.072	billion	and	a	decline	in capital	expenditures	of	$437	million.

The	decrease	in	net	cash	outflows	from	investing	activities	from	2009	to	2010	of	$1.128	billion	primarily	resulted	from	a	net	decrease	in	purchases	of	marketable investment	securities,	partially	offset	by	an	increase	in	capital	expenditures	including	the	assignment	of	certain	rights	under	a	launch	contract	from	EchoStar.

Cash	flows	from	financing	activities.		Our	financing	activities	generally	include	net	proceeds	related	to	the	issuance	of	long-term	debt,	cash	used	for	the	repurchase, redemption	or	payment	of	long-term	debt	and	capital	lease	obligations,	dividends	paid	on	our	Class	A	and	Class	B	common	stock	and	repurchases	of	our	Class	A common	stock.		For	the	year	ended	December	31,	2011,	we	reported	net	cash	inflows	from	financing	activities	of	$94	million.		For	the	year	ended	December	31,	2010, we	reported	net	cash	outflows	from	financing	activities	of	$127	million.		For	the	year	ended	December	31,	2009,	we	reported	net	cash	inflows	from	financing	activities of	$418	million.

The	net	cash	inflows	in	2011	primarily	related	to	the	proceeds	of	$1.973	billion	from	the	issuance	of	our	6	3/4%	Senior	Notes	due	2021,	net	of	deferred	financing	costs, partially	offset	by	the	redemption	and	repurchases	of	our	6	3/8%	Senior	Notes	due	2011	of	$1.0	billion	and	our	dividend	payment	of	$893	million.

The	net	cash	outflows	in	2010	primarily	related	to	the	repurchases	of	our	Class	A	common	stock.

The	net	cash	inflows	in	2009	primarily	related	to	the	debt	issuance	of	our	7	7/8%	Senior	Notes	due	2019,	partially	offset	by	our	dividend	payment	of	$894	million.

# Other	Liquidity	Items

# Subscriber	Base

DISH	lost	approximately	166,000	net	subscribers	during	the	year	ended	December	31,	2011,	compared	to	a	gain	of	approximately	33,000	net	new	subscribers	during	the same	period	in	2010.		The	change	versus	the	prior	year

primarily	resulted	from	a	decline	in	gross	new	subscriber	activations.		Our	gross	new	subscriber	activations	for	the	year	ended	December	31,	2011	was	2.576	million, compared	to	3.052	million	for	the	same	period	in	2010.		See	"Results	of	Operations"	above	for	further	discussion.		There	are	a	number	of	factors	that	impact	our	future cash	flow	compared	to	the	cash	flow	we	generate	at	any	given	point	in	time,	including	subscriber	churn	and	how	successful	we	are	at	retaining	our	current	subscribers. As	we	lose	subscribers	from	our	existing	base,	the	positive	cash	flow	from	that	base	is	correspondingly	reduced.

Operation	of	our	subscription	television	service	requires	that	we	have	adequate	satellite	transmission	capacity	for	the	programming	we	offer.		Moreover,	current competitive	conditions	require	that	we	continue	to	expand	our	offering	of	new	programming,	particularly	by	expanding	local	HD	coverage	and	offering	more	national HD	channels.		While	we	generally	have	had	in-orbit	satellite	capacity	sufficient	to	transmit	our	existing	channels	and	some	backup	capacity	to	recover	the	transmission of	certain	critical	programming,	our	backup	capacity	is	limited.		In	the	event	of	a	failure	or	loss	of	any	of	our	satellites,	we	may	need	to	acquire	or	lease	additional satellite	capacity	or	relocate	one	of	our	other	satellites	and	use	it	as	a	replacement	for	the	failed	or	lost	satellite.		Such	a	failure	could	result	in	a	prolonged	loss	of	critical programming	or	a	significant	delay	in	our	plans	to	expand	programming	as	necessary	to	remain	competitive	and	cause	us	to	expend	a	significant	portion	of	our	cash	to acquire	or	lease	additional	satellite	capacity.

# Security	Systems

Increases	in	theft	of	our	signal	or	our	competitors'	signals	could,	in	addition	to	reducing	new	subscriber	activations,	also	cause	subscriber	churn	to	increase.		We	use Security	Access	Devices	in	our	receiver	systems	to	control	access	to	authorized	programming	content.		Our	signal	encryption	has	been	compromised	in	the	past	and	may be	compromised	in	the	future	even	though	we	continue	to	respond	with	significant	investment	in	security	measures,	such	as	Security	Access	Device	replacement programs	and	updates	in	security	software,	that	are	intended	to	make	signal	theft	more	difficult.		It	has	been	our	prior	experience	that	security	measures	may	only	be effective	for	short	periods	of	time	or	not	at	all	and	that	we	remain	susceptible	to	additional	signal	theft.		During	2009,	we	completed	the	replacement	of	our	Security Access	Devices	and	re-secured	our	system.		We	expect	additional	future	replacements	of	these	devices	will	be	necessary	to	keep	our	system	secure.		We	cannot	ensure that	we	will	be	successful	in	reducing	or	controlling	theft	of	our	programming	content	and	we	may	incur	additional	costs	in	the	future	if	our	system's	security	is compromised.

# Stock	Repurchases

Our	Board	of	Directors	previously	authorized	the	repurchase	of	up	to	$1.0	billion	of	our	Class	A	common	stock.		On	November	1,	2011,	our	Board	of	Directors extended	the	plan	and	authorized	an	increase	in	the	maximum	dollar	value	of	shares	that	may	be	repurchased	under	the	plan,	such	that	we	are	currently	authorized	to repurchase	up	to	$1.0	billion	of	our	outstanding	shares	of	our	Class	A	common	stock	through	and	including	December	31,	2012.		As	of	December	31,	2011,	we	may repurchase	up	to	$1.0	billion	under	this	plan.

The	following	table	provides	information	regarding	repurchases	of	our	Class	A	common	stock.

|  | For	the	Years	Ended	December	31, | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| Class\tA\tCommon\tStock\tRepurchases | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Total\tnumber\tof\tshares\trepurchased | — | 6,020 | 1,948 |
| Dollar\tvalue\tof\tshares\trepurchased | $— | $107,079 | $18,594 |

# Subscriber	Acquisition	and	Retention	Costs

We	incur	significant	upfront	costs	to	acquire	subscribers,	including	advertising,	retailer	incentives,	equipment	subsidies,	installation	services,	and	new	customer

promotions.		While	we	attempt	to	recoup	these	upfront	costs	over	the	lives	of	their	subscription,	there	can	be	no	assurance	that	we	will.		We	employ	business	rules	such as	minimum	credit	requirements	and	we	strive	to	provide	outstanding	customer	service,	to	increase	the	likelihood	of	customers

keeping	their	DISH	service	over	longer	periods	of	time.		Our	subscriber	acquisition	costs	may	vary	significantly	from	period	to	period.

We	incur	significant	costs	to	retain	our	existing	customers,	mostly	by	upgrading	their	equipment	to	HD	and	DVR	receivers.		As	with	our	subscriber	acquisition	costs, our	retention	spending	includes	the	cost	of	equipment	and	installation	services.		In	certain	circumstances,	we	also	offer	free	programming	and/or	promotional	pricing	for limited	periods	for	existing	customers	in	exchange	for	a	commitment	to	receive	service	for	a	minimum	term.		A	component	of	our	retention	efforts	includes	the installation	of	equipment	for	customers	who	move.		Our	subscriber	retention	costs	may	vary	significantly	from	period	to	period.

# Covenants	and	Restrictions	Related	to	our	Senior	Notes

The	indentures	related	to	our	outstanding	senior	notes	contain	restrictive	covenants	that,	among	other	things,	impose	limitations	on	the	ability	of	DISH	DBS	Corporation ("DDBS")	and	its	restricted	subsidiaries	to:		(i)	incur	additional	indebtedness;	(ii)	enter	into	sale	and	leaseback	transactions;	(iii)	pay	dividends	or	make	distributions	on DDBS'	capital	stock	or	repurchase	DDBS'	capital	stock;	(iv)	make	certain	investments;	(v)	create	liens;	(vi)	enter	into	certain	transactions	with	affiliates;	(vii)	merge	or consolidate	with	another	company;	and	(viii)	transfer	or	sell	assets.		Should	we	fail	to	comply	with	these	covenants,	all	or	a	portion	of	the	debt	under	the	senior	notes could	become	immediately	payable.		The	senior	notes	also	provide	that	the	debt	may	be	required	to	be	prepaid	if	certain	change-in-control	events	occur.		As	of	the	date of	filing,	DDBS	was	in	compliance	with	the	covenants.

We	are	also	vulnerable	to	fraud,	particularly	in	the	acquisition	of	new	subscribers.		While	we	are	addressing	the	impact	of	subscriber	fraud	through	a	number	of	actions, there	can	be	no	assurance	that	we	will	not	continue	to	experience	fraud,	which	could	impact	our	subscriber	growth	and	churn.		Sustained	economic	weakness	may	create greater	incentive	for	signal	theft	and	subscriber	fraud,	which	could	lead	to	higher	subscriber	churn	and	reduced	revenue.

# Obligations	and	Future	Capital	Requirements

# Contractual	Obligations	and	Off-Balance	Sheet	Arrangements

As	of	December	31,	2011,	future	maturities	of	our	long-term	debt,	capital	lease	and	contractual	obligations	are	summarized	as	follows:

|  |  |  |  | Payments	due	by	period |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Total | 2012 | 2013 | 2014 | 2015 | 2016 | Thereafter |
|  |  |  |  | (In\tthousands) |  |  |  |
| Long-term\tdebt\tobligations | $7,221,871 | $6,443 | $506,114 | $1,005,778 | $756,160 | $1,504,669 | $3,442,707 |
| Capital\tlease\tobligations | 271,908 | 29,202 | 24,541 | 25,207 | 27,339 | 30,024 | 135,595 |
| Interest\texpense\ton\tlong-term\tdebt\tand |  |  |  |  |  |  |  |
| capital\tlease\tobligations | 3,257,955 | 537,000 | 534,685 | 497,274 | 399,500 | 313,963 | 975,533 |
| Satellite-related\tobligations | 2,224,776 | 220,527 | 248,679 | 248,461 | 248,244 | 248,027 | 1,010,838 |
| Operating\tlease\tobligations\t(1) | 437,897 | 145,050 | 87,414 | 60,243 | 37,311 | 29,508 | 78,371 |
| Purchase\tobligations | 2,911,025 | 1,481,014 | 445,771 | 432,319 | 327,286 | 187,304 | 37,331 |
| Total | $16,325,432 | $2,419,236 | $1,847,204 | $2,269,282 | $1,795,840 | $2,313,495 | $5,680,375 |

(1)		In	connection	with	the	Blockbuster	Acquisition,	we	assumed	or	entered	into	new	leases	that	had	an	aggregate	commitment	of	$254	million,	included	in	the	table above.		Certain	of	these	leases	have	an	early	termination	right,	which	is	reflected	in	the	future	maturity.

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

The	table	above	does	not	include	$267	million	of	liabilities	associated	with	unrecognized	tax	benefits	which	were	accrued,	as	discussed	in	Note	12	in	the	Notes	to	our Consolidated	Financial	Statements	in	Item	15	of	this	Annual	Report	on	Form	10-K,	and	are	included	on	our	Consolidated	Balance	Sheets	as	of	December	31,	2011.		We do	not	expect	any	portion	of	this	amount	to	be	paid	or	settled	within	the	next	twelve	months.

Other	than	the	"Guarantees"	disclosed	in	Note	16	in	the	Notes	to	our	Consolidated	Financial	Statements	in	Item	15	of	this	Annual	Report	on	Form	10-K,	we	generally do	not	engage	in	off-balance	sheet	financing	activities.

# Satellite-Related	Obligations

Satellites	Under	Construction.		As	of	December	31,	2011,	we	have	agreed	to	lease	capacity	on	one	satellite	from	EchoStar	that	is	currently	under	construction.		Future commitments	related	to	this	satellite	are	included	in	the	table	above	under	"Satellite-related	obligations."

·																		EchoStar	XVI.		During	December	2009,	we	entered	into	a	ten-year	transponder	service	agreement	with	EchoStar	to	lease	all	of	the	capacity	on	EchoStar	XVI,	a DBS	satellite,	which	is	expected	to	be	launched	during	the	second	half	of	2012.

# Satellite	Insurance

We	generally	do	not	have	commercial	insurance	coverage	on	the	satellites	we	use.		We	do	not	use	commercial	insurance	to	mitigate	the	potential	financial	impact	of	in- orbit	failures	because	we	believe	that	the	premium	costs	are	uneconomical	relative	to	the	risk	of	satellite	failure.		While	we	generally	have	had	in-orbit	satellite	capacity sufficient	to	transmit	our	existing	channels	and	some	backup	capacity	to	recover	the	transmission	of	certain	critical	programming,	our	backup	capacity	is	limited.		In	the event	of	a	failure	or	loss	of	any	of	our	satellites,	we	may	need	to	acquire	or	lease	additional	satellite	capacity	or	relocate	one	of	our	other	satellites	and	use	it	as	a replacement	for	the	failed	or	lost	satellite.

# Purchase	Obligations

Our	2012	purchase	obligations	primarily	consist	of	binding	purchase	orders	for	receiver	systems	and	related	equipment,	digital	broadcast	operations,	satellite	and transponder	leases,	engineering	and	for	products	and	services	related	to	the	operation	of	DISH.		Our	purchase	obligations	also	include	certain	guaranteed	fixed contractual	commitments	to	purchase	programming	content.		Our	purchase	obligations	can	fluctuate	significantly	from	period	to	period	due	to,	among	other	things, management's	control	of	inventory	levels,	and	can	materially	impact	our	future	operating	asset	and	liability	balances,	and	our	future	working	capital	requirements.

# Programming	Contracts

In	the	normal	course	of	business,	we	enter	into	contracts	to	purchase	programming	content	in	which	our	payment	obligations	are	fully	contingent	on	the	number	of subscribers	to	whom	we	provide	the	respective	content.		These	programming	commitments	are	not	included	in	the	"Contractual	obligations	and	off-balance	sheet arrangements"	table	above.		The	terms	of	our	contracts	typically	range	from	one	to	ten	years	with	annual	rate	increases.		Our	programming	expenses	will	continue	to increase	to	the	extent	we	are	successful	growing	our	subscriber	base.		In	addition,	our	margins	may	face	further	downward	pressure	from	price	increases	and	the	renewal of	long	term	programming	contracts	on	less	favorable	pricing	terms.

# Future	Capital	Requirements

We	expect	to	fund	our	future	working	capital,	capital	expenditure	and	debt	service	requirements	from	cash	generated	from	operations,	existing	cash	and	marketable investment	securities	balances,	and	cash	generated	through	raising	additional	capital.		The	amount	of	capital	required	to	fund	our	future	working	capital	and	capital expenditure	needs	varies,	depending	on,	among	other	things,	the	rate	at	which	we	acquire	new	subscribers	and	the	cost	of	subscriber	acquisition	and	retention,	including capitalized	costs	associated	with	our	new	and	existing	subscriber	equipment	lease	programs.		The	majority	of	our	capital	expenditures	for	2012	are	driven	by	the	costs associated	with	subscriber	premises	equipment,	included	in	our	firm	purchase	obligations,	as	well	as	capital	expenditures	for	our	satellite-

related	obligations.		These	expenditures	are	necessary	to	operate	and	maintain	the	DISH	pay-TV	service.		Consequently,	we	consider	them	to	be	non-discretionary.		The amount	of	capital	required	will	also	depend	on	the	levels	of	investment	necessary	to	support	potential	strategic	initiatives,	including	our	plans	to	expand	our	national	HD offerings	and	other	strategic	opportunities	that	may	arise	from	time	to	time.		Our	capital	expenditures	vary	depending	on	the	number	of	satellites	leased	or	under construction	at	any	point	in	time,	and	could	increase	materially	as	a	result	of	increased	competition,	significant	satellite	failures,	or	sustained	economic	weakness.		These factors	could	require	that	we	raise	additional	capital	in	the	future.

Volatility	in	the	financial	markets	has	made	it	more	difficult	at	times	for	issuers	of	high-yield	indebtedness,	such	as	us,	to	access	capital	markets	at	acceptable	terms. These	developments	may	have	a	significant	effect	on	our	cost	of	financing	and	our	liquidity	position.

During	the	first	half	of	2011,	we	entered	into	a	transaction	to	acquire	100%	of	the	equity	of	reorganized	DBSD	North	America	for	approximately	$1.4	billion	upon DBSD	North	America's	emergence	from	bankruptcy,	which	included	capital	stock	and	convertible	securities	of,	and	certain	claims	related	to,	DBSD	North	America.		In addition,	in	June	2011,	we	entered	into	the	TerreStar	Transaction	for	a	purchase	price	of	$1.375	billion.	We	have	paid	all	but	$30	million	of	the	purchase	price	for	the TerreStar	Transaction	(included	in	the	table	above),	which	will	be	paid	upon	closing	of	the	TerreStar	Transaction,	or	upon	certain	other	conditions	being	met	under	the asset	purchase	agreement.		Additionally,	during	the	fourth	quarter	2011,	we	and	Sprint	entered	into	the	Sprint	Settlement	Agreement	pursuant	to	which	all	disputed	issues relating	to	our	acquisition	of	DBSD	North	America	and	the	TerreStar	Transaction	were	resolved	between	us	and	Sprint,	including,	but	not	limited	to,	issues	relating	to costs	allegedly	incurred	by	Sprint	to	relocate	users	from	the	spectrum	now	licensed	to	DBSD	North	America	and	TerreStar.		Pursuant	to	the	Sprint	Settlement Agreement,	we	made	a	net	payment	of	approximately	$114	million	to	Sprint.		Our	ultimate	acquisition	of	100%	of	the	equity	of	reorganized	DBSD	North	America	and consummation	of	the	TerreStar	Transaction	are	subject	to	certain	conditions,	including	approval	by	the	FCC.

To	the	extent	we	receive	these	approvals	and	waivers,	there	can	be	no	assurance	that	we	will	be	able	to	develop	and	implement	a	business	model	that	will	realize	a	return on	these	spectrum	investments	or	that	we	will	be	able	to	profitably	deploy	the	assets	represented	by	these	spectrum	investments.		We	will	likely	be	required	to	make

significant	additional	investments	or	partner	with	others	to	commercialize	these	licenses.		Because	we	have	not	received	approval	from	the	FCC,	we	do	not	yet	know	the full	costs	(including	any	build-out	requirements)	associated	with	complying	with	regulations	applicable	to	our	acquisition	of	DBSD	North	America	or	the	TerreStar Transaction.		Depending	on	the	nature	and	scope	of	such	commercialization	and	build-out,	any	such	investment	or	partnership	could	vary	significantly,	which	may	affect the	carrying	value	of	our	investments	and	our	future	financial	condition	or	results	of	operations.

If	Voom	prevails	in	its	breach	of	contract	suit	against	us,	we	could	be	required	to	pay	substantial	damages,	which	would	have	a	material	adverse	affect	on	our	financial position	and	results	of	operations.		In	January	2008,	Voom	HD	Holdings	("Voom")	filed	a	lawsuit	against	us	in	New	York	Supreme	Court,	alleging	breach	of	contract and	other	claims	arising	from	our	termination	of	the	affiliation	agreement	governing	carriage	of	certain	Voom	HD	channels	on	the	DISH	pay-TV	service.		At	that	time, Voom	also	sought	a	preliminary	injunction	to	prevent	us	from	terminating	the	agreement.		The	Court	denied	Voom's	request,	finding,	among	other	things,	that	Voom had	not	demonstrated	that	it	was	likely	to	prevail	on	the	merits.		In	April	2010,	we	and	Voom	each	filed	motions	for	summary	judgment.		Voom	later	filed	two	motions seeking	discovery	sanctions.		On	November	9,	2010,	the	Court	issued	a	decision	denying	both	motions	for	summary	judgment,	but	granting	Voom's	motions	for discovery	sanctions.		The	Court's	decision	provides	for	an	adverse	inference	jury	instruction	at	trial	and	precludes	our	damages	expert	from	testifying	at	trial.		We appealed	the	grant	of	Voom's	motion	for	discovery	sanctions	to	the	New	York	State	Supreme	Court,	Appellate	Division,	First	Department.		On	February	15,	2011,	the appellate	court	granted	our	motion	to	stay	the	trial	pending	our	appeal.		On	January	31,	2012,	the	appellate	court	affirmed	the	order	imposing	discovery	sanctions	and precluding	our	damages	expert	from	testifying	at	trial.		We	are	seeking	leave	to	appeal	to	New	York's	highest	state	court,	the	Court	of	Appeals.		A	trial	date	has	not been	set.		Voom	is	claiming	over	$2.5	billion	in	damages.

# Critical	Accounting	Estimates

The	preparation	of	the	consolidated	financial	statements	in	conformity	with	GAAP	requires	management	to	make	estimates,	judgments	and	assumptions	that	affect amounts	reported	therein.		Management	bases	its	estimates,	judgments	and	assumptions	on	historical	experience	and	on	various	other	factors	that	are	believed	to	be reasonable	under	the	circumstances.		Actual	results	may	differ	from	previously	estimated	amounts,	and	such	differences	may	be	material	to	the	Consolidated	Financial Statements.		Estimates	and	assumptions	are	reviewed	periodically,	and	the	effects	of	revisions	are	reflected	prospectively	in	the	period	they	occur.		The	following represent	what	we	believe	are	the	critical	accounting	policies	that	may	involve	a	high	degree	of	estimation,	judgment	and	complexity.		For	a	summary	of	our	significant accounting	policies,	including	those	discussed	below,	see	Note	2	in	the	Notes	to	our	Consolidated	Financial	Statements	in	Item	15	of	this	Annual	Report	on	Form	10-K.

·																		Capitalized	satellite	receivers.		Since	we	retain	ownership	of	certain	equipment	provided	pursuant	to	our	subscriber	equipment	lease	programs,	we	capitalize and	depreciate	equipment	costs	that	would	otherwise	be	expensed	at	the	time	of	sale.		Such	capitalized	costs	are	depreciated	over	the	estimated	useful	life	of the	equipment,	which	is	based	on,	among	other	things,	management's	judgment	of	the	risk	of	technological	obsolescence.		Because	of	the	inherent	difficulty	of making	this	estimate,	the	estimated	useful	life	of	capitalized	equipment	may	change	based	on,	among	other	things,	historical	experience	and	changes	in technology	as	well	as	our	response	to	competitive	conditions.		Changes	in	estimated	useful	life	may	impact	"Depreciation	and	amortization"	on	our Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss).		For	example,	if	we	decreased	the	estimated	useful	life	of	our	capitalized	subscriber equipment	by	one	year,	annual	depreciation	expense	would	increase	by	approximately	$53	million.

·																		Accounting	for	investments	in	private	and	publicly-traded	securities.		We	hold	debt	and	equity	interests	in	companies,	some	of	which	are	publicly	traded	and have	highly	volatile	prices.		We	record	an	investment	impairment	charge	in	"Other,	net"	within	"Other	Income	(Expense)"	on	our	Consolidated	Statements	of Operations	and	Comprehensive	Income	(Loss)	when	we	believe	an	investment	has	experienced	a	decline	in	value	that	is	judged	to	be	other-than-temporary. We	monitor	our	investments	for	impairment	by	considering	current	factors	including	economic	environment,	market	conditions	and	the	operational performance	and	other	specific	factors	relating	to	the	business	underlying	the	investment.		Future	adverse	changes	in	these	factors

																								could	result	in	losses	or	an	inability	to	recover	the	carrying	value	of	the	investments	that	may	not	be	reflected	in	an	investment's	current	carrying	value,	thereby possibly	requiring	an	impairment	charge	in	the	future.

·																		Fair	value	of	financial	instruments.		Fair	value	estimates	of	our	financial	instruments	are	made	at	a	point	in	time,	based	on	relevant	market	data	as	well	as	the best	information	available	about	the	financial	instrument.		Sustained	economic	weakness	has	resulted	in	inactive	markets	for	certain	of	our	financial instruments,	including	Mortgage-Backed	Securities	("MBS")	and	Auction	Rate	Securities	("ARS").		For	certain	of	these	instruments,	there	is	no	or	limited observable	market	data.		Fair	value	estimates	for	financial	instruments	for	which	no	or	limited	observable	market	data	is	available	are	based	on	judgments regarding	current	economic	conditions,	liquidity	discounts,	currency,	credit	and	interest	rate	risks,	loss	experience	and	other	factors.		These	estimates	involve significant	uncertainties	and	judgments	and	may	be	a	less	precise	measurement	of	fair	value	as	compared	to	financial	instruments	where	observable	market	data is	available.		We	make	certain	assumptions	related	to	expected	maturity	date,	credit	and	interest	rate	risk	based	upon	market	conditions	and	prior	experience. As	a	result,	such	calculated	fair	value	estimates	may	not	be	realizable	in	a	current	sale	or	immediate	settlement	of	the	instrument.		In	addition,	changes	in	the underlying	assumptions	used	in	the	fair	value	measurement	technique,	including	liquidity	risks,	and	estimate	of	future	cash	flows,	could	significantly	affect these	fair	value	estimates,	which	could	have	a	material	adverse	impact	on	our	financial	position	and	results	of	operations.		For	example,	as	of	December	31, 2011,	we	held	$945	million	of	securities	that	lack	observable	market	quotes,	and	a	10%	decrease	in	our	estimated	fair	value	of	these	securities	would	result	in	a decrease	of	the	reported	amount	by	approximately	$95	million.

·																		Valuation	of	long-lived	assets.		We	evaluate	the	carrying	value	of	long-lived	assets	to	be	held	and	used,	other	than	goodwill	and	intangible	assets	with indefinite	lives,	when	events	and	circumstances	warrant	such	a	review.		We	evaluate	our	satellite	fleet	for	recoverability	as	one	asset	group.		See	Note	2	in	the Notes	to	our	Consolidated	Financial	Statements	in	Item	15	of	this	Annual	Report	on	Form	10-K.		The	carrying	value	of	a	long-lived	asset	or	asset	group	is considered	impaired	when	the	anticipated	undiscounted	cash	flows	from	such	asset	or	asset	group	is	less	than	its	carrying	value.		In	that	event,	a	loss	will	be recorded	in	a	new	line	item	entitled	"Impairments	of	indefinite-lived	and	long-lived	assets"	on	our	Consolidated	Statements	of	Operations	and	Comprehensive Income	(Loss)	based	on	the	amount	by	which	the	carrying	value	exceeds	the	fair	value	of	the	long-lived	asset	or	asset	group.		Fair	value	is	determined	primarily using	the	estimated	cash	flows	associated	with	the	asset	or	asset	group	under	review,	discounted	at	a	rate	commensurate	with	the	risk	involved.		Losses	on	long- lived	assets	to	be	disposed	of	by	sale	are	determined	in	a	similar	manner,	except	that	fair	values	are	reduced	for	estimated	selling	costs.		Among	other	reasons, changes	in	estimates	of	future	cash	flows	could	result	in	a	write-down	of	the	asset	in	a	future	period.

·																		Valuation	of	intangible	assets	with	indefinite	lives.		We	evaluate	the	carrying	value	of	intangible	assets	with	indefinite	lives	annually,	and	also	when	events	and circumstances	warrant.		We	use	estimates	of	fair	value	to	determine	the	amount	of	impairment,	if	any,	of	recorded	intangible	assets	with	indefinite	lives.		Fair value	is	determined	using	the	estimated	future	cash	flows,	discounted	at	a	rate	commensurate	with	the	risk	involved	or	the	market	approach.		While	our impairment	tests	in	2011	indicated	the	fair	value	of	our	intangible	assets	exceeded	their	carrying	amounts,	significant	changes	in	our	estimates	of	future	cash flows	or	market	data	could	result	in	a	write-down	of	intangible	assets	with	indefinite	lives	in	a	future	period,	which	will	be	recorded	in	a	new	line	item	entitled "Impairments	of	indefinite-lived	and	long-lived	assets,"	on	our	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss)	and	could	be material	to	our	consolidated	results	of	operations	and	financial	position.		Based	on	the	methodology	utilized	to	test	for	impairment,	a	10%	decrease	in	the estimated	future	cash	flows	or	market	value	of	comparable	assets	and/or	a	10%	increase	in	the	discount	rate	used	in	estimating	the	fair	value	of	these	assets (while	all	other	assumptions	remain	unchanged)	would	not	result	in	these	assets	being	impaired.

·																		Income	taxes.		Our	income	tax	policy	is	to	record	the	estimated	future	tax	effects	of	temporary	differences	between	the	tax	bases	of	assets	and	liabilities	and amounts	reported	in	the	accompanying	consolidated	balance	sheets,	as	well	as	operating	loss	and	tax	credit	carryforwards.		Determining	necessary	valuation allowances	requires	us	to	make	assessments	about	the	timing	of	future	events,	including	the	probability	of	expected	future	taxable	income	and	available	tax planning	opportunities.		We	periodically	evaluate	our	need	for	a	valuation	allowance	based	on	both	historical	evidence,	including	trends,	and	future expectations	in	each	reporting

																								period.		Any	such	valuation	allowance	is	recorded	in	either	"Income	tax	(provision)	benefit,	net"	on	our	Consolidated	Statements	of	Operations	and Comprehensive	Income	(Loss)	or	"Accumulated	other	comprehensive	income	(loss)"	within	"Stockholders'	equity	(deficit)"	on	our	Consolidated	Balance Sheets.		Future	performance	could	have	a	significant	effect	on	the	realization	of	tax	benefits,	or	reversals	of	valuation	allowances,	as	reported	in	our consolidated	results	of	operations.

·																		Uncertainty	in	tax	positions.		Management	evaluates	the	recognition	and	measurement	of	uncertain	tax	positions	based	on	applicable	tax	law,	regulations,	case law,	administrative	rulings	and	pronouncements	and	the	facts	and	circumstances	surrounding	the	tax	position.		Changes	in	our	estimates	related	to	the recognition	and	measurement	of	the	amount	recorded	for	uncertain	tax	positions	could	result	in	significant	changes	in	our	"Income	tax	provision	(benefit),	net," which	could	be	material	to	our	consolidated	results	of	operations.

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

·																		Business	combinations.		When	we	acquire	a	business,	we	allocate	the	purchase	price	to	the	various	components	of	the	acquisition	based	upon	the	fair	value	of each	component	using	various	valuation	techniques,	including	the	market	approach,	income	approach	and/or	cost	approach.		The	accounting	standard	for business	combinations	requires	most	identifiable	assets,	liabilities,	noncontrolling	interests	and	goodwill	acquired	to	be	recorded	at	estimated	fair	value. Determining	the	fair	value	of	assets	acquired	and	liabilities	assumed	requires	management's	judgment	and	often	involves	the	use	of	significant	estimates	and assumptions,	including	assumptions	with	respect	to	the	estimated	future	cash	flows,	discounted	at	a	rate	commensurate	with	the	risk	involved	or	the	market approach.

# Seasonality

Historically,	the	first	half	of	the	year	generally	produces	fewer	new	subscribers	than	the	second	half	of	the	year,	as	is	typical	in	the	pay-TV	service	industry.		In	addition, the	first	and	fourth	quarter	generally	produce	a	lower	churn	rate	than	the	second	and	third	quarter.		However,	we	can	not	provide	assurance	that	this	will	continue	in	the future.

# Inflation

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

# Backlog

We	do	not	have	any	material	backlog	of	our	products.

# Item	7A.	QUANTITATIVE	AND	QUALITATIVE	DISCLOSURES	ABOUT	MARKET	RISK

# Market	Risks	Associated	With	Financial	Instruments

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

As	of	December	31,	2011,	our	cash,	cash	equivalents	and	current	marketable	investment	securities	had	a	fair	value	of	$2.041	billion.		Of	that	amount,	a	total	of	$1.681 billion	was	invested	in:		(a)	cash;	(b)	VRDNs	convertible	into	cash	at	par	value	plus	accrued	interest	generally	in	five	business	days	or	less;	(c)	debt	instruments	of	the United	States	Government	and	its	agencies;	(d)	commercial	paper	and	corporate	notes	with	an	overall	average	maturity	of	less	than	one	year	and	rated	in	one	of	the	four highest	rating	categories	by	at	least	two	nationally	recognized	statistical	rating	organizations;	and/or	(e)	instruments	with	similar	risk,	duration	and	credit	quality characteristics	to	the	commercial	paper	and	corporate	obligations	described	above.		The	primary	purpose	of	these	investing	activities	has	been	to	preserve	principal	until the	cash	is	required	to,	among	other	things,	fund	operations,	make	strategic	investments	and	expand	the	business.		Consequently,	the	size	of	this	portfolio	fluctuates significantly	as	cash	is	received	and	used	in	our	business.		The	value	of	this	portfolio	is	negatively	impacted	by	credit	losses;	however,	this	risk	is	mitigated	through diversification	that	limits	our	exposure	to	any	one	issuer.

# Interest	Rate	Risk

A	change	in	interest	rates	would	affect	the	fair	value	of	our	cash,	cash	equivalents	and	current	marketable	investment	securities	portfolio,	however,	we	normally	hold these	investments	to	maturity.		Based	on	our	December	31,	2011	current	non-strategic	investment	portfolio	of	$1.681	billion,	a	hypothetical	10%	change	in	average interest	rates	would	not	have	a	material	impact	on	the	fair	value	due	to	the	limited	duration	of	our	investments.

Our	cash,	cash	equivalents	and	current	marketable	investment	securities	had	an	average	annual	rate	of	return	for	the	year	ended	December	31,	2011	of	0.5%.		A	change in	interest	rates	would	affect	our	future	annual	interest	income	from	this	portfolio,	since	funds	would	be	re-invested	at	different	rates	as	the	instruments	mature.		A hypothetical	10%	decrease	in	average	interest	rates	during	2011	would	result	in	a	decrease	of	approximately	$2	million	in	annual	interest	income.

# Strategic	Marketable	Investment	Securities

As	of	December	31,	2011,	we	held	current	strategic	and	financial	debt	and	equity	investments	of	public	companies	with	a	fair	value	of	$360	million.		These	investments, which	are	held	for	strategic	and	financial	purposes,	are	concentrated	in	several	companies,	are	highly	speculative	and	have	experienced	and	continue	to	experience volatility.		The	fair	value	of	our	strategic	and	financial	debt	and	equity	investments	can	be	significantly	impacted	by	the	risk	of	adverse	changes	in	securities	markets generally,	as	well	as	risks	related	to	the	performance	of	the	companies	whose	securities	we	have	invested	in,	risks	associated	with	specific	industries,	and	other	factors. These	investments	are	subject	to	significant	fluctuations	in	fair	value	due	to	the	volatility	of	the	securities	markets	and	of	the	underlying	businesses.		In	general,	the	debt instruments	held	in	our	strategic	marketable	investment	securities	portfolio	are	not	significantly	impacted	by	interest	rate	fluctuations	as	their	value	is	more	closely

related	to	factors	specific	to	the	underlying	business.		A	hypothetical	10%	adverse	change	in	the	price	of	our	public	strategic	debt	and	equity	investments	would	result	in a	decrease	of	approximately	$36	million	in	the	fair	value	of	these	investments.

# Restricted	Cash	and	Marketable	Investment	Securities	and	Noncurrent	Marketable	and	Other	Investment	Securities

# Restricted	Cash	and	Marketable	Investment	Securities

As	of	December	31,	2011,	we	had	$132	million	of	restricted	cash	and	marketable	investment	securities	invested	in:		(a)	cash;		(b)	VRDNs	convertible	into	cash	at	par value	plus	accrued	interest	generally	in	five	business	days	or	less;	(c)	debt	instruments	of	the	United	States	Government	and	its	agencies;	(d)	commercial	paper	and corporate	notes	with	an	overall	average	maturity	of	less	than	one	year	and	rated	in	one	of	the	four	highest	rating	categories	by	at	least	two	nationally	recognized statistical	rating	organizations;	and/or	(e)	instruments	with	similar	risk,	duration	and	credit	quality	characteristics	to	the	commercial	paper	described	above.		Based	on our	December	31,	2011	investment

# Item	7A.	QUANTITATIVE	AND	QUALITATIVE	DISCLOSURES	ABOUT	MARKET	RISK	-	Continued

portfolio,	a	hypothetical	10%	increase	in	average	interest	rates	would	not	have	a	material	impact	in	the	fair	value	of	our	restricted	cash	and	marketable	investment securities.

# Noncurrent	Auction	Rate	and	Mortgage	Backed	Securities

As	of	December	31,	2011,	we	held	investments	in	ARS	and	MBS	of	$109	million,	which	are	reported	at	fair	value.		Events	in	the	credit	markets	have	reduced	or eliminated	current	liquidity	for	certain	of	our	ARS	and	MBS	investments.		As	a	result,	we	classify	these	investments	as	noncurrent	assets	as	we	intend	to	hold	these investments	until	they	recover	or	mature,	and	therefore	interest	rate	risk	associated	with	these	securities	is	mitigated.		A	hypothetical	10%	adverse	change	in	the	price	of these	investments	would	result	in	a	decrease	of	approximately	$11	million	in	the	fair	value	of	these	investments.

# Investment	in	DBSD	North	America	and	Other	Investment	Securities

As	of	December	31,	2011,	we	had	$1.3	billion	of	noncurrent	public	and	nonpublic	debt	and	equity	instruments	that	we	hold	for	strategic	business	purposes.		We	account for	these	investments	under	the	cost,	equity	and/or	fair	value	methods	of	accounting.		A	hypothetical	10%	adverse	change	in	the	price	of	these	public	and	nonpublic	debt and	equity	instruments	would	result	in	a	decrease	of	approximately	$130	million	in	the	fair	value	of	these	investments.		Of	the	$1.3	billion,	a	total	of	$1.298	billion	is invested	in	DBSD	North	America.		If	our	FCC	applications	and	waiver	requests	are	not	granted	by	the	FCC,	or	are	granted	in	a	manner	that	varies	from	the	form	we have	requested,	it	could	cause	the	value	of	these	assets	to	be	impaired,	potentially	requiring	us	to	take	significant	write-downs	on	these	assets.		See	Note	10	in	the	Notes to	our	Consolidated	Financial	Statements	in	Item	15	of	this	Annual	Report	on	Form	10-K	for	further	discussion.

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

# Long-Term	Debt

As	of	December	31,	2011,	we	had	long-term	debt	of	$7.222	billion	on	our	Consolidated	Balance	Sheets.		We	estimated	the	fair	value	of	this	debt	to	be	approximately $7.807	billion	using	quoted	market	prices	for	our	publicly	traded	debt,	which	constitutes	approximately	99%	of	our	debt.		The	fair	value	of	our	debt	is	affected	by fluctuations	in	interest	rates.		A	hypothetical	10%	decrease	in	assumed	interest	rates	would	increase	the	fair	value	of	our	debt	by	approximately	$213	million.		To	the extent	interest	rates	increase,	our	costs	of	financing	would	increase	at	such	time	as	we	are	required	to	refinance	our	debt.		As	of	December	31,	2011,	a	hypothetical	10% increase	in	assumed	interest	rates	would	increase	our	annual	interest	expense	by	approximately	$52	million.

# Derivative	Financial	Instruments

From	time	to	time,	we	speculate	using	derivative	financial	instruments,	such	amounts,	however,	are	typically	insignificant.

# Item	8.							FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	DATA

Our	Consolidated	Financial	Statements	are	included	in	this	report	beginning	on	page	F-1.

# Item	9.																					CHANGES	IN	AND	DISAGREEMENTS	WITH	ACCOUNTANTS	ON	ACCOUNTING	AND	FINANCIAL	DISCLOSURE

# Item	9A.								CONTROLS	AND	PROCEDURES

# Disclosure	controls	and	procedures

Under	the	supervision	and	with	the	participation	of	our	management,	including	our	Chief	Executive	Officer	and	Chief	Financial	Officer,	we	evaluated	the	effectiveness of	our	disclosure	controls	and	procedures	(as	defined	in	Rule	13a-15(e)	under	the	Securities	Exchange	Act	of	1934)	as	of	the	end	of	the	period	covered	by	this	report. Based	upon	that	evaluation,	our	Chief	Executive	Officer	and	Chief	Financial	Officer	concluded	that	our	disclosure	controls	and	procedures	were	effective	as	of	the	end of	the	period	covered	by	this	report.

# Changes	in	internal	control	over	financial	reporting

On	April	26,	2011,	we	completed	the	Blockbuster	Acquisition.		We	are	currently	integrating	policies,	processes,	people,	technology	and	operations	for	the	combined company.		Management	will	continue	to	evaluate	our	internal	control	over	financial	reporting	as	we	execute	integration	activities.		Except	as	discussed	above,	there	has been	no	change	in	our	internal	control	over	financial	reporting	(as	defined	in	Rule	13a-15(f)	under	the	Securities	Exchange	Act	of	1934)	during	our	most	recent	fiscal quarter	that	has	materially	affected,	or	is	reasonably	likely	to	materially	affect,	our	internal	control	over	financial	reporting.

Management's	Annual	Report	on	Internal	Control	Over	Financial	Reporting

Our	management	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting.	Our	internal	control	over	financial	reporting	is designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the	preparation	of	financial	statements	for	external	purposes	in	accordance with	U.S.	generally	accepted	accounting	principles.

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

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

(ii)																						provide	reasonable	assurance	that	our	transactions	are	recorded	as	necessary	to	permit	preparation	of	our	financial	statements	in	accordance	with	generally accepted	accounting	principles,	and	that	our	receipts	and	expenditures	are	being	made	only	in	accordance	with	authorizations	of	our	management	and	our directors;	and

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

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

Our	management	conducted	an	evaluation	of	the	effectiveness	of	our	internal	control	over	financial	reporting	based	on	the	framework	in	Internal	Control—Integrated Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.		Based	on	this	evaluation,	our	management	concluded	that	our	internal control	over	financial	reporting	was	effective	as	of	December	31,	2011.		Our	evaluation	of	internal	control	over	financial	reporting	did	not	include	the	internal	control	of Blockbuster	which	we	acquired	on	April	26,	2011.		Our	consolidated	financial	statements	as	of	and	for	the	year	ended	December	31,	2011	included	$454	million	of assets	and	$975	million	of	revenue	associated	with	this	business.

The	effectiveness	of	our	internal	control	over	financial	reporting	as	of	December	31,	2011	has	been	audited	by	KPMG	LLP,	an	independent	registered	public	accounting firm,	as	stated	in	their	report	which	appears	in	Item	15(a)	of	this	Annual	Report	on	Form	10-K.

# Item	9B.				OTHER	INFORMATION

# PART	III

# Item	10.														DIRECTORS,	EXECUTIVE	OFFICERS	AND	CORPORATE	GOVERNANCE

The	information	required	by	this	Item	with	respect	to	the	identity	and	business	experience	of	our	directors	will	be	set	forth	in	our	Proxy	Statement	for	the	2012	Annual Meeting	of	Shareholders	under	the	caption	"Election	of	Directors,"	which	information	is	hereby	incorporated	herein	by	reference.

The	information	required	by	this	Item	with	respect	to	the	identity	and	business	experience	of	our	executive	officers	is	set	forth	on	page	17	of	this	report	under	the caption	"Executive	Officers	of	the	Registrant."

The	information	required	by	this	Item	will	be	set	forth	in	our	Proxy	Statement	for	the	2012	Annual	Meeting	of	Shareholders	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	2012	Annual	Meeting	of	Shareholders	under	the	captions	"Election	of	Directors," "Equity	Security	Ownership"	and	"Equity	Compensation	Plan	Information,"	which	information	is	hereby	incorporated	herein	by	reference.

# Item	13.														CERTAIN	RELATIONSHIPS	AND	RELATED	TRANSACTIONS,	AND	DIRECTOR	INDEPENDENCE

The	information	required	by	this	Item	will	be	set	forth	in	our	Proxy	Statement	for	the	2012	Annual	Meeting	of	Shareholders	under	the	caption	"Certain	Relationships and	Related	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	2012	Annual	Meeting	of	Shareholders	under	the	caption	"Principal	Accounting Fees	and	Services,"	which	information	is	hereby	incorporated	herein	by	reference.

(a)									The	following	documents	are	filed	as	part	of	this	report:

# (2)									Financial	Statement	Schedules

None.		All	schedules	have	been	included	in	the	Consolidated	Financial	Statements	or	Notes	thereto.

3.1(a)* Amended	and	Restated	Articles	of	Incorporation	of	DISH	Network	Corporation	(incorporated	by	reference	to	Exhibit	3.1(a)	on	the	Quarterly Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	June	30,	2003,	Commission	File	No.	0-26176)	as	amended	by	the Certificate	of	Amendment	to	the	Articles	of	Incorporation	of	DISH	Network	Corporation	(incorporated	by	reference	to	Annex	1	on	DISH Network	Corporation's	Definitive	Information	Statement	on	Schedule	14C	filed	on	December	31,	2007,	Commission	File	No.	0-26176).

3.1(b)* Amended	and	Restated	Bylaws	of	DISH	Network	Corporation	(incorporated	by	reference	to	Exhibit	3.1(b)	on	the	Quarterly	Report	on	Form	10- Q	of	DISH	Network	Corporation	for	the	quarter	ended	March	31,	2007,	Commission	File	No.	0-26176).

3.2(a)* Articles	of	Incorporation	of	DISH	DBS	Corporation	(incorporated	by	reference	to	Exhibit	3.4(a)	to	the	Registration	Statement	on	Form	S-4	of DDBS,	Registration	No.	333-31929).

3.2(b)* Bylaws	of	DDBS	(incorporated	by	reference	to	Exhibit	3.4(b)	to	the	Registration	Statement	on	Form	S-4	of	DDBS,	Registration	No.	333-31929).

4.1* Registration	Rights	Agreement	by	and	between	DISH	Network	Corporation	and	Charles	W.	Ergen	(incorporated	by	reference	to	Exhibit	4.8	to the	Registration	Statement	on	Form	S-1	of	DISH	Network	Corporation,	Registration	No.	33-91276).

4.2* Indenture,	relating	to	the	6	5/8%	Senior	Notes	Due	2014,	dated	as	of	October	1,	2004	between	DDBS	and	U.S.	Bank	National	Association,	as Trustee	(incorporated	by	reference	to	Exhibit	4.1	to	the	Current	Report	on	Form	8-K	of	DISH	Network	Corporation	filed	October	1,	2004, Commission	File	No.	0-26176).

4.3* Indenture,	relating	to	the	7	1/8%	Senior	Notes	Due	2016,	dated	as	of	February	2,	2006	between	DDBS	and	U.S.	Bank	National	Association,	as Trustee	(incorporated	by	reference	to	Exhibit	4.1	to	the	Current	Report	on	Form	8-K	of	DISH	Network	Corporation	filed	February	3,	2006, Commission	File	No.	0-26176).

4.5* Indenture,	relating	to	the	7	3/4%	Senior	Notes	Due	2015,	dated	as	of	May	27,	2008	between	DDBS	and	U.S.	Bank	National	Association,	as Trustee	(incorporated	by	reference	to	Exhibit	4.1	to	the	Current	Report	on	Form	8-K	of	DISH	Network	Corporation	filed	May	28,	2008, Commission	File	No.	0-26176).

4.6* Indenture,	relating	to	the	7	7/8%	Senior	Notes	Due	2019,	dated	as	of	August	17,	2009	between	DDBS	and	U.S.	Bank	National	Association,	as Trustee	(incorporated	by	reference	to	Exhibit	4.1	to	the	Current	Report	on	Form	8-K	of	DISH	Network	Corporation	filed	August	18,	2009, Commission	File	No.	0-26176).

		4.7* Indenture,	relating	to	the	$2.0	billion	aggregate	principal	amount	of	DDBS	6.75%	Senior	Notes	due	2021	(the	"Notes"),	dated	as	of	May	5,	2011, among	DDBS,	the	guarantors	named	on	the	signature	pages	thereto	and	Wells	Fargo	Bank,	National	Association,	as	trustee	(incorporated	by reference	from	Exhibit	4.1	to	the	Current	Report	on	Form	8-K	of	DISH	Network	Corporation	filed	May	5,	2011,	Commission	File	No.	000- 26176).

		4.8* Registration	Rights	Agreement,	relating	to	the	Notes,	dated	as	of	May	5,	2011,	among	DDBS,	the	guarantors	named	on	the	signature pages	thereto	and	Wells	Fargo	Bank,	National	Association,	as	trustee	(incorporated	by	reference	from	Exhibit	4.2	to	the	Current	Report	on Form	8-K	of	DISH	Network	Corporation	filed	May	5,	2011,	Commission	File	No.	000-26176).

10.1* 2002	Class	B	CEO	Stock	Option	Plan	(incorporated	by	reference	to	Appendix	A	to	DISH	Network	Corporation's	Definitive	Proxy	Statement	on Schedule	14A	dated	April	9,	2002).**

10.2* Satellite	Service	Agreement,	dated	as	of	March	21,	2003,	between	SES	Americom,	Inc.,	DISH	Network	L.L.C.	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.1	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	March	31, 2003,	Commission	File	No.	0-26176).

10.3* Amendment	No.	1	to	Satellite	Service	Agreement	dated	March	31,	2003	between	SES	Americom	Inc.	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.1	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended September	30,	2003,	Commission	File	No.	0-26176).

10.4* Satellite	Service	Agreement	dated	as	of	August	13,	2003	between	SES	Americom	Inc.	and	DISH	Network	Corporation	(incorporated	by reference	to	Exhibit	10.2	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	September	30,	2003, Commission	File	No.	0-26176).

10.5* Satellite	Service	Agreement,	dated	February	19,	2004,	between	SES	Americom,	Inc.	and	DISH	Network	Corporation	(incorporated	by	reference to	Exhibit	10.1	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	March	31,	2004,	Commission	File No.	0-26176).

10.6* Amendment	No.	1	to	Satellite	Service	Agreement,	dated	March	10,	2004,	between	SES	Americom,	Inc.	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.2	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	March	31, 2004,	Commission	File	No.	0-26176).

10.7* Amendment	No.	3	to	Satellite	Service	Agreement,	dated	February	19,	2004,	between	SES	Americom,	Inc.	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.3	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	March	31, 2004,	Commission	File	No.	0-26176).

10.8* Whole	RF	Channel	Service	Agreement,	dated	February	4,	2004,	between	Telesat	Canada	and	DISH	Network	Corporation	(incorporated	by reference	to	Exhibit	10.4	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	March	31,	2004, Commission	File	No.	0-26176).

10.9* Letter	Amendment	to	Whole	RF	Channel	Service	Agreement,	dated	March	25,	2004,	between	Telesat	Canada	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.5	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	March	31, 2004,	Commission	File	No.	0-26176).

10.10* Amendment	No.	2	to	Satellite	Service	Agreement,	dated	April	30,	2004,	between	SES	Americom,	Inc.	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.1	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	June	30, 2004,	Commission	File	No.	0-26176).

10.11* Second	Amendment	to	Whole	RF	Channel	Service	Agreement,	dated	May	5,	2004,	between	Telesat	Canada	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.2	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	June	30, 2004,	Commission	File	No.	0-26176).

10.12* Third	Amendment	to	Whole	RF	Channel	Service	Agreement,	dated	October	12,	2004,	between	Telesat	Canada	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.22	to	the	Annual	Report	on	Form	10-K	of	DISH	Network	Corporation	for	the	year	ended	December	31, 2004,	Commission	File	No.	0-26176).

10.13* Amendment	No.	4	to	Satellite	Service	Agreement,	dated	October	21,	2004,	between	SES	Americom,	Inc.	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.23	to	the	Annual	Report	on	Form	10-K	of	DISH	Network	Corporation	for	the	year	ended	December	31, 2004,	Commission	File	No.	0-26176).

10.14* Amendment	No.	3	to	Satellite	Service	Agreement,	dated	November	19,	2004	between	SES	Americom,	Inc.	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.24	to	the	Annual	Report	on	Form	10-K	of	DISH	Network	Corporation	for	the	year	ended	December	31, 2004,	Commission	File	No.	0-26176).

10.16* Amendment	No.	6	to	Satellite	Service	Agreement,	dated	December	20,	2004,	between	SES	Americom,	Inc.	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.26	to	the	Annual	Report	on	Form	10-K	of	DISH	Network	Corporation	for	the	year	ended	December	31, 2004,	Commission	File	No.	0-26176).

10.17* Description	of	the	2005	Long-Term	Incentive	Plan	dated	January	26,	2005	(incorporated	by	reference	to	Exhibit	10.1	to	the	Quarterly	Report	on Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	March	31,	2005,	Commission	File	No.	0-26176).**

10.18* Amendment	No.	4	to	Satellite	Service	Agreement,	dated	April	6,	2005,	between	SES	Americom,	Inc.	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.1	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	June	30, 2005,	Commission	File	No.	0-26176).

10.19* Amendment	No.	5	to	Satellite	Service	Agreement,	dated	June	20,	2005,	between	SES	Americom,	Inc.	and	DISH	Network	Corporation (incorporated	by	reference	to	Exhibit	10.2	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	June	30, 2005,	Commission	File	No.	0-26176).

10.20* Incentive	Stock	Option	Agreement	(Form	A)	(incorporated	by	reference	to	Exhibit	99.1	to	the	Current	Report	on	Form	8-K	of	DISH	Network Corporation	filed	July	7,	2005,	Commission	File	No.	0-26176).**

10.25* Nonemployee	Director	Stock	Option	Agreement	(incorporated	by	reference	to	Exhibit	99.6	to	the	Current	Report	on	Form	8-K	of	DISH	Network Corporation	filed	July	7,	2005,	Commission	File	No.	0-26176).**

10.26* Nonqualifying	Stock	Option	Agreement	(2005	Long-Term	Incentive	Plan	(incorporated	by	reference	to	Exhibit	99.7	to	the	Current	Report	on Form	8-K	of	DISH	Network	Corporation	filed	July	7,	2005,	Commission	File	No.	0-26176).**

10.27* Restricted	Stock	Unit	Agreement	(2005	Long-Term	Incentive	Plan)	(incorporated	by	reference	to	Exhibit	99.8	to	the	Current	Report	on	Form	8-K of	DISH	Network	Corporation	filed	July	7,	2005,	Commission	File	No.	0-26176).**

10.28* Separation	Agreement	between	EchoStar	Corporation	and	DISH	Network	Corporation	(incorporated	by	reference	from	Exhibit	2.1	to	the Form	10	of	EchoStar	Corporation	filed	December	28,	2007,	Commission	File	No.	001-33807).

10.29* Tax	Sharing	Agreement	between	EchoStar	Corporation	and	DISH	Network	Corporation	(incorporated	by	reference	from	Exhibit	10.2	to	the Form	10	of	EchoStar	Corporation	filed	December	28,	2007,	Commission	File	No.	001-33807).

10.30* Employee	Matters	Agreement	between	EchoStar	Corporation	and	DISH	Network	Corporation	(incorporated	by	reference	from	Exhibit	10.3	to the	Form	10	of	EchoStar	Corporation	filed	December	28,	2007,	Commission	File	No.	001-33807).

10.31* Intellectual	Property	Matters	Agreement	between	EchoStar	Corporation,	EchoStar	Acquisition	L.L.C.,	Echosphere	L.L.C.,	DDBS,	EIC	Spain	SL, EchoStar	Technologies	L.L.C.	and	DISH	Network	Corporation	(incorporated	by	reference	from	Exhibit	10.4	to	the	Form	10	of	EchoStar Corporation	filed	December	28,	2007,	Commission	File	No.	001-33807).

10.32* Management	Services	Agreement	between	EchoStar	Corporation	and	DISH	Network	Corporation	(incorporated	by	reference	from	Exhibit	10.5 to	the	Form	10	of	EchoStar	Corporation	filed	December	28,	2007,	Commission	File	No.	001-33807).

10.33* Form	of	Satellite	Capacity	Agreement	between	EchoStar	Corporation	and	DISH	Network	L.L.C.	(incorporated	by	reference	from	Exhibit	10.28 to	the	Amendment	No.2	to	Form	10	of	EchoStar	Corporation	filed	December	26,	2007,	Commission	File	No.	001-33807).

10.34* Amendment	No.	1	to	Receiver	Agreement	dated	December	31,	2007	between	EchoSphere	L.L.C.	and	EchoStar	Technologies	L.L.C. (incorporated	by	reference	to	Exhibit	99.1	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended September	30,	2008,	Commission	File	No.	0-26176).

10.35* Amendment	No.	1	to	Broadcast	Agreement	dated	December	31,	2007	between	EchoStar	Corporation	and	DISH	Network	L.L.C.	(incorporated	by reference	to	Exhibit	99.2	to	the	Quarterly	Report	on	Form	10-Q	of	DISH	Network	Corporation	for	the	quarter	ended	September	30,	2008, Commission	File	No.	0-26176).

10.36* Description	of	the	2008	Long-Term	Incentive	Plan	dated	December	22,	2008	(incorporated	by	reference	to	Exhibit	10.42	to	the	Annual	Report	on Form	10-K	of	DISH	Network	Corporation	for	the	year	ended	December	31,	2008,	Commission	File	No.	0-26176).**

10.37* DISH	Network	Corporation	2009	Stock	Incentive	Plan	(incorporated	by	reference	to	DISH	Network	Corporation's	Definitive	Proxy	Statement	on Form	14A	filed	March	31,	2009,	Commission	File	No.	000-26176).	**

10.38* Amended	and	Restated	DISH	Network	Corporation	2001	Nonemployee	Director	Stock	Option	Plan	(incorporated	by	reference	to	DISH	Network Corporation's	Definitive	Proxy	Statement	on	Form	14A	filed	March	31,	2009,	Commission	File	No.	000-26176).	**

10.39* Amended	and	Restated	DISH	Network	Corporation	1999	Stock	Incentive	Plan	(incorporated	by	reference	to	DISH	Network	Corporation's Definitive	Proxy	Statement	on	Form	14A	filed	March	31,	2009,	Commission	File	No.	000-26176).	**

10.40* Amended	and	Restated	DISH	Network	Corporation	1995	Stock	Incentive	Plan	(incorporated	by	reference	to	DISH	Network	Corporation's Definitive	Proxy	Statement	on	Form	14A	filed	March	31,	2009,	Commission	File	No.	000-26176).	**

10.41* NIMIQ	5	Whole	RF	Channel	Service	Agreement,	dated	September	15,	2009,	between	Telesat	Canada	and	EchoStar	Corporation	(incorporated by	reference	from	Exhibit	10.29	to	the	Annual	Report	on	Form	10-K	of	EchoStar	Corporation	for	the	year	ended	December	31,	2009, Commission	File	No.	001-33807).****

10.42* NIMIQ	5	Whole	RF	Channel	Service	Agreement,	dated	September	15,	2009,	between	EchoStar	Corporation	and	DISH	Network	L.L.C. (incorporated	by	reference	from	Exhibit	10.30	to	the	Annual	Report	on	Form	10-K	of	EchoStar	Corporation	for	the	year	ended	December	31, 2009,	Commission	File	No.	001-33807).****

10.43* Professional	Services	Agreement,	dated	August	4,	2009,	between	EchoStar	Corporation	and	DISH	Network	Corporation	(incorporated	by reference	from	Exhibit	10.3	to	the	Quarterly	Report	on	Form	10-Q	of	EchoStar	Corporation	for	the	quarter	ended	September	30,	2009, Commission	File	No.	001-33807).****

10.44* Allocation	Agreement,	dated	August	4,	2009,	between	EchoStar	Corporation	and	DISH	Network	Corporation	(incorporated	by	reference	from Exhibit	10.4	to	the	Quarterly	Report	on	Form	10-Q	of	EchoStar	Corporation	for	the	quarter	ended	September	30,	2009,	Commission	File No.	001-33807).

10.45* Amendment	to	Form	of	Satellite	Capacity	Agreement	(Form	A)	between	EchoStar	Corporation	and	DISH	Network	L.L.C.	(incorporated	by reference	from	Exhibit	10.33	to	the	Annual	Report	on	Form	10-K	of	EchoStar	Corporation	for	the	year	ended	December	31,	2009,	Commission File	No.	001-33807).

10.46* Amendment	to	Form	of	Satellite	Capacity	Agreement	(Form	B)	between	EchoStar	Corporation	and	DISH	Network	L.L.C.	(incorporated	by reference	from	Exhibit	10.34	to	the	Annual	Report	on	Form	10-K	of	EchoStar	Corporation	for	the	year	ended	December	31,	2009,	Commission File	No.	001-33807).

10.47* EchoStar	XVI	Satellite	Capacity	Agreement	between	EchoStar	Satellite	Services	L.L.C.	and	DISH	Network	L.L.C.	(incorporated	by	reference from	Exhibit	10.35	to	the	Annual	Report	on	Form	10-K	of	EchoStar	Corporation	for	the	year	ended	December	31,	2009,	Commission	File No.	001-33807).****

10.48* Assignment	of	Rights	Under	Launch	Service	Contract	from	EchoStar	Corporation	to	DISH	Orbital	II	L.L.C.	(incorporated	by	reference	from Exhibit	10.36	to	the	Annual	Report	on	Form	10-K	of	EchoStar	Corporation	for	the	year	ended	December	31,	2009,	Commission	File	No.	001- 33807).

10.49* Amended	and	Restated	Investment	Agreement,	dated	as	of	February	24,	2011,	and	First	Amendment	to	Amended	and	Restated	Investment Agreement,	dated	as	of	March	15,	2011,	between	DISH	Network	Corporation	and	DBSD	North	America,	Inc.	(incorporated	by	reference	from Exhibit	10.1	to	the	Current	Report	on	Form	8-K	of	ICO	Global	Communications	(Holdings)	Limited	filed	March	17,	2011,	Commission	File No.	001-33008).

10.50* Implementation	Agreement,	dated	as	of	March	15,	2011,	between	DISH	Network	and	ICO	Global	Communications	(Holdings)	Limited (incorporated	by	reference	from	Exhibit	10.2	to	the	Current	Report	on	Form	8-K	of	ICO	Global	Communications	(Holdings)	Limited	filed March	17,	2011,	Commission	File	No.	001-33008).

10.51* Restructuring	Support	Agreement,	dated	as	of	March	15,	2011,	between	DISH	Network	and	ICO	Global	Communications	(Holdings)	Limited (incorporated	by	reference	from	Exhibit	10.3	to	the	Current	Report	on	Form	8-K	of	ICO	Global	Communications	(Holdings)	Limited	filed March	17,	2011,	Commission	File	No.	001-33008).

10.54* Purchase	Agreement,	dated	as	of	June	14,	2011,	by	and	among	TerreStar	Networks	Inc.,	TerreStar	License	Inc.,	TerreStar	National	Services	Inc., TerreStar	Networks	Holdings	(Canada)	Inc.,	TerreStar	Networks	(Canada)	Inc.,	0887729	B.C.	Ltd.,	and	Gamma	Acquisition	L.L.C.	and	DISH Network	Corporation	(solely	with	respect	to	Section	6.19	thereof)	(incorporated	by	reference	from	Exhibit	99.1	to	the	Current	Report	on	Form	8- K	of	DISH	Network	Corporation	filed	June	16,	2011,	Commission	File	No.	000-26176).

10.55* Cost	Allocation	Agreement,	dated	April	29,	2011,	between	EchoStar	and	DISH	Network	(incorporated	by	reference	from	Exhibit	10.2	to	the Quarterly	Report	on	Form	10-Q	of	EchoStar	for	the	quarter	ended	June	30,	2011,	Commission	File	No.	001-33807).

10.56* Settlement	and	Patent	License	between	TiVo	Inc.	and	DISH	Network	Corporation	and	EchoStar	Corporation,	dated	as	of	April	29,	2011 (incorporated	by	reference	to	Exhibit	10.9	to	the	Quarterly	Report	on	Form	10-Q/A	of	EchoStar	Corporation	filed	February	21,	2012, Commission	File	No.	001-33807).****

101*** The	following	materials	from	the	Annual	Report	on	Form	10-K	of	DISH	Network	Corporation	for	the	year	ended	December	31,	2011,	filed	on February	23,	2012,	formatted	in	eXtensible	Business	Reporting	Language	("XBRL"):	(i)	Consolidated	Balance	Sheets,	(ii)	Consolidated Statements	of	Operations	and	Comprehensive	Income	(Loss),	(iii)	Consolidated	Statement	of	Changes	in	Stockholders'	Equity	(Deficit), (iv)	Consolidated	Statements	of	Cash	Flows,	and	(v)	related	notes	to	these	financial	statements.

***																											In	accordance	with	Rule	402	of	Regulation	S-T,	the	information	in	this	Exhibit	101	shall	not	be	deemed	"filed"	for	the	purposes	of	section	18	of	the	Securities Exchange	Act	of	1934,	as	amended	(the	"Exchange	Act"),	or	otherwise	subject	to	the	liability	of	that	section,	and	shall	not	be	incorporated	by	reference	into any	registration	statement	or	other	document	filed	under	the	Securities	Act	of	1933,	as	amended,	or	the	Exchange	Act,	except	as	shall	be	expressly	set	forth	by the	specific	reference	in	such	filing.

****																			Certain	portions	of	the	exhibit	have	been	omitted	and	separately	filed	with	the	Securities	and	Exchange	Commission	with	a	request	for	confidential	treatment.

# SIGNATURES

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed	on	its	behalf	by	the undersigned,	thereunto	duly	authorized.

/s/	Robert	E.	Olson

Robert	E.	Olson

Executive	Vice	President	and	Chief	Financial	Officer

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	the	registrant	and	in	the capacities	and	on	the	dates	indicated.

Signature

Title

# INDEX	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

# The	Board	of	Directors	and	Stockholders

We	have	audited	the	accompanying	consolidated	balance	sheets	of	DISH	Network	Corporation	and	subsidiaries	as	of	December	31,	2011	and	2010,	and	the	related consolidated	statements	of	operations	and	comprehensive	income	(loss),	changes	in	stockholders'	equity	(deficit),	and	cash	flows	for	each	of	the	years	in	the	three-year period	ended	December	31,	2011.	We	also	have	audited	DISH	Network	Corporation's	internal	control	over	financial	reporting	as	of	December	31,	2011,	based	on criteria	established	in	Internal	Control	—	Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO).	DISH Network	Corporation's	management	is	responsible	for	these	consolidated	financial	statements,	for	maintaining	effective	internal	control	over	financial	reporting,	and	for its	assessment	of	the	effectiveness	of	internal	control	over	financial	reporting,	included	in	the	accompanying	Management's	Annual	Report	on	Internal	Control	Over Financial	Reporting.	Our	responsibility	is	to	express	an	opinion	on	these	consolidated	financial	statements	and	an	opinion	on	DISH	Network	Corporation's	internal control	over	financial	reporting	based	on	our	audits.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and perform	the	audits	to	obtain	reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement	and	whether	effective	internal	control	over financial	reporting	was	maintained	in	all	material	respects.	Our	audits	of	the	consolidated	financial	statements	included	examining,	on	a	test	basis,	evidence	supporting the	amounts	and	disclosures	in	the	financial	statements,	assessing	the	accounting	principles	used	and	significant	estimates	made	by	management,	and	evaluating	the overall	financial	statement	presentation.	Our	audit	of	internal	control	over	financial	reporting	included	obtaining	an	understanding	of	internal	control	over	financial reporting,	assessing	the	risk	that	a	material	weakness	exists,	and	testing	and	evaluating	the	design	and	operating	effectiveness	of	internal	control	based	on	the	assessed risk.	Our	audits	also	included	performing	such	other	procedures	as	we	considered	necessary	in	the	circumstances.	We	believe	that	our	audits	provide	a	reasonable	basis for	our	opinions.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal	control	over	financial

reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in	accordance	with	authorizations	of management	and	directors	of	the	company;	and	(3)	provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use,	or disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

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

In	our	opinion,	the	consolidated	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	financial	position	of	DISH	Network	Corporation	and subsidiaries	as	of	December	31,	2011	and	2010,	and	the	results	of	their	operations	and	their	cash	flows	for	each	of	the	years	in	the	three-year	period	ended	December	31, 2011,	in	conformity	with	U.S.	generally	accepted	accounting	principles.	Also	in	our	opinion,	DISH	Network	Corporation	maintained,	in	all	material	respects,	effective internal	control	over	financial	reporting	as	of	December	31,	2011,	based	on	criteria	established	in	Internal	Control	—	Integrated	Framework	issued	by	the	COSO.

Management's	evaluation	of	the	effectiveness	of	DISH	Network	Corporation	and	subsidiaries'	internal	control	over	financial	reporting	as	of	December	31,	2011, excluded	Blockbuster,	which	was	acquired	in	2011.	Our	audit	of	internal	control	over	financial	reporting	of	DISH	Network	Corporation	and	subsidiaries	also	excluded an	evaluation	of	the	internal	control	over	financial	reporting	of	this	subsidiary.	The	aggregate	amount	of	total	assets	and	revenue	of	Blockbuster	included	in	the consolidated	financial	statements	of	DISH	Network	Corporation	and	subsidiaries	as	of	and	for	the	year	ended	December	31,	2011	was	$454	million	and	$975	million, respectively.

/s/	KPMG	LLP

# CONSOLIDATED	BALANCE	SHEETS

(Dollars	in	thousands,	except	share	amounts)

|  | As	of	December	31,<br>2011 | 2010 |
| :--- | :--- | :--- |
| Assets |  |  |
| Current\tAssets: |  |  |
| Cash\tand\tcash\tequivalents | $609,108 | $640,672 |
| Marketable\tinvestment\tsecurities\t(Note\t5) | 1,431,745 | 2,299,705 |
| Trade\taccounts\treceivable\t-\tother,\tnet\tof\tallowance\tfor\tdoubtful\taccounts\tof\t$12,350\tand\t$29,650,\trespectively | 778,443 | 771,898 |
| Trade\taccounts\treceivable\t-\tEchoStar,\tnet\tof\tallowance\tfor\tdoubtful\taccounts\tof\tzero | 16,374 | 14,155 |
| Inventory | 707,151 | 487,575 |
| Deferred\ttax\tassets\t(Note\t12) | 73,014 | 216,899 |
| Other\tcurrent\tassets | 131,988 | 142,489 |
| Total\tcurrent\tassets | 3,747,823 | 4,573,393 |
| Noncurrent\tAssets: |  |  |
| Restricted\tcash\tand\tmarketable\tinvestment\tsecurities\t(Note\t5) | 132,435 | 144,437 |
| Property\tand\tequipment,\tnet\t(Note\t7) | 3,169,891 | 3,232,348 |
| FCC\tauthorizations | 1,391,441 | 1,391,441 |
| Marketable\tand\tother\tinvestment\tsecurities\t(Note\t5) | 112,132 | 121,926 |
| Investment\tin\tDBSD\tNorth\tAmerica\t(Note\t10) | 1,297,614 | 102,591 |
| TerreStar\tTransaction\t(Note\t10) | 1,345,000 | — |
| Other\tnoncurrent\tassets,\tnet | 273,895 | 66,017 |
| Total\tnoncurrent\tassets | 7,722,408 | 5,058,760 |
| Total\tassets | $11,470,231 | $9,632,153 |
| Liabilities\tand\tStockholders'\tEquity\t(Deficit) |  |  |
| Current\tLiabilities: |  |  |
| Trade\taccounts\tpayable\t-\tother | $225,556 | $161,767 |
| Trade\taccounts\tpayable\t-\tEchoStar | 229,852 | 238,997 |
| Deferred\trevenue\tand\tother | 832,390 | 803,768 |
| Accrued\tprogramming | 1,067,625 | 1,089,988 |
| Litigation\taccrual\t(Note\t16) | 65,580 | 619,022 |
| Other\taccrued\texpenses | 763,863 | 554,864 |
| Current\tportion\tof\tlong-term\tdebt\tand\tcapital\tlease\tobligations\t(Note\t11) | 35,645 | 1,030,895 |
| Total\tcurrent\tliabilities | 3,220,511 | 4,499,301 |
| Long-Term\tObligations,\tNet\tof\tCurrent\tPortion: |  |  |
| Long-term\tdebt\tand\tcapital\tlease\tobligations,\tnet\tof\tcurrent\tportion\t(Note\t11) | 7,458,134 | 5,484,041 |
| Deferred\ttax\tliabilities\t(Note\t12) | 974,414 | 567,686 |
| Long-term\tdeferred\trevenue,\tdistribution\tand\tcarriage\tpayments\tand\tother\tlong-term\tliabilities | 236,175 | 214,568 |
| Total\tlong-term\tobligations,\tnet\tof\tcurrent\tportion | 8,668,723 | 6,266,295 |
| Total\tliabilities | 11,889,234 | 10,765,596 |

Commitments	and	Contingencies	(Note	16)

# Stockholders'	Equity	(Deficit):

| issued,	208,613,814	and	204,799,717	shares	outstanding,	respectively | 2,647 | 2,609 |
| :--- | :--- | :--- |
|  | 2,384 | 2,384 |
|  | — | — |
| Additional\tpaid-in\tcapital | 2,274,005 | 2,171,799 |
| Accumulated\tother\tcomprehensive\tincome\t(loss) | 82,043 | 93,357 |
| Accumulated\tearnings\t(deficit) | (1,211,990) | (1,834,619) |
| Treasury\tstock,\tat\tcost | (1,569,459) | (1,569,459) |
| Total\tDISH\tNetwork\tstockholders'\tequity\t(deficit) | (420,370) | (1,133,929) |
| Noncontrolling\tinterest | 1,367 | 486 |
| Total\tstockholders'\tequity\t(deficit) | (419,003) | (1,133,443) |
| Total\tliabilities\tand\tstockholders'\tequity\t(deficit) | $11,470,231 | $9,632,153 |

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

# CONSOLIDATED	STATEMENTS	OF	OPERATIONS	AND	COMPREHENSIVE	INCOME	(LOSS)

(In	thousands,	except	per	share	amounts)

|  | 2011 | For	the	Years	Ended	December	31,<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Revenue: |  |  |  |
| Subscriber-related\trevenue | $12,976,009 | $12,543,794 | $11,538,729 |
| Equipment\tand\tmerchandise\tsales,\trental\tand\tother\trevenue | 1,035,910 | 59,770 | 97,863 |
| Equipment\tsales,\tservices\tand\tother\trevenue\t-\tEchoStar | 36,474 | 37,180 | 27,559 |
| Total\trevenue | 14,048,393 | 12,640,744 | 11,664,151 |
| Costs\tand\tExpenses\t(exclusive\tof\tdepreciation\tshown\tseparately\tbelow\t-\tNote\t7): |  |  |  |
| Subscriber-related\texpenses | 6,845,611 | 6,676,145 | 6,359,329 |
| Satellite\tand\ttransmission\texpenses: |  |  |  |
| EchoStar | 441,541 | 418,358 | 319,752 |
| Other | 39,806 | 40,249 | 33,672 |
| Cost\tof\tsales\t-\tequipment,\tmerchandise,\tservices,\trental\tand\tother | 448,686 | 76,406 | 121,238 |
| Subscriber\tacquisition\tcosts: |  |  |  |
| Cost\tof\tsales\t-\tsubscriber\tpromotion\tsubsidies\t-\tEchoStar | 249,440 | 175,777 | 188,793 |
| Other\tsubscriber\tpromotion\tsubsidies | 925,094 | 1,104,653 | 1,071,655 |
| Subscriber\tacquisition\tadvertising | 330,643 | 373,064 | 279,114 |
| Total\tsubscriber\tacquisition\tcosts | 1,505,177 | 1,653,494 | 1,539,562 |
| General\tand\tadministrative\texpenses\t-\tEchoStar | 47,393 | 47,457 | 45,356 |
| General\tand\tadministrative\texpenses | 1,187,101 | 578,386 | 557,255 |
| Litigation\texpense\t(Note\t16) | (316,949) | 225,456 | 361,024 |
| Depreciation\tand\tamortization\t(Note\t7) | 922,073 | 983,965 | 940,033 |
| Total\tcosts\tand\texpenses | 11,120,439 | 10,699,916 | 10,277,221 |
| Operating\tincome\t(loss) | 2,927,954 | 1,940,828 | 1,386,930 |
| Other\tIncome\t(Expense): |  |  |  |
| Interest\tincome | 34,354 | 25,158 | 30,034 |
| Interest\texpense,\tnet\tof\tamounts\tcapitalized | (557,910) | (454,777) | (388,425) |
| Other,\tnet | 6,186 | 30,996 | (15,707) |
| Total\tother\tincome\t(expense) | (517,370) | (398,623) | (374,098) |
| Income\t(loss)\tbefore\tincome\ttaxes | 2,410,584 | 1,542,205 | 1,012,832 |
| Income\ttax\t(provision)\tbenefit,\tnet\t(Note\t12) | (895,006) | (557,473) | (377,429) |
| Net\tincome\t(loss) | 1,515,578 | 984,732 | 635,403 |
| Less:\tNet\tincome\t(loss)\tattributable\tto\tnoncontrolling\tinterest | (329) | 3 | (142) |
| Net\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | $1,515,907 | $984,729 | $635,545 |
| Comprehensive\tIncome\t(Loss): |  |  |  |
| Net\tincome\t(loss) | $1,515,578 | $984,732 | $635,403 |
| Foreign\tcurrency\ttranslation\tadjustments | (9,139) | (13,476) | (106) |
| Unrealized\tholding\tgains\t(losses)\ton\tavailable-for-sale\tsecurities,\tnet\tof\ttax | (13,965) | 50,348 | 133,635 |
| Recognition\tof\tpreviously\tunrealized\t(gains)\tlosses\ton\tavailable-for-sale\tsecurities\tincluded\tin |  |  |  |
| net\tincome\t(loss),\tnet\tof\ttax | 11,790 | (3,852) | (20,045) |
| Deferred\tincome\ttax\t(expense)\tbenefit | — | 5,067 | 128 |
| Comprehensive\tincome\t(loss) | 1,504,264 | 1,022,819 | 749,015 |
| Less:\tComprehensive\tincome\t(loss)\tattributable\tto\tnoncontrolling\tinterest | (329) | 3 | (142) |
| Comprehensive\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | $1,504,593 | $1,022,816 | $749,157 |
| Weighted-average\tcommon\tshares\toutstanding\t-\tClass\tA\tand\tB\tcommon\tstock: |  |  |  |
| Basic | 445,434 | 445,865 | 446,874 |
| Diluted | 446,865 | 446,597 | 448,596 |
| Earnings\tper\tshare\t-\tClass\tA\tand\tB\tcommon\tstock: |  |  |  |
| Basic\tnet\tincome\t(loss)\tper\tshare\tattributable\tto\tDISH\tNetwork | $3.40 | $2.21 | $1.42 |
|  | $3.39 | $2.20 | $1.42 |

# CONSOLIDATED	STATEMENTS	OF	CHANGES	IN	STOCKHOLDERS'	EQUITY	(DEFICIT)

(In	thousands)

|  | Class	A	and	B | Additional | Other | Accumulated |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Common | Paid-In | Comprehensive | Earnings | Treasury | Noncontrolling |  |
|  | Stock | Capital | Income\t(Loss) | (Deficit) | Stock | Interest | Total |
| Balance,\tDecember\t31,\t2008 | $4,955 | $2,090,527 | $(107,998) | $(2,492,804) | $(1,443,786) | $— | $(1,949,106) |
| Issuance\tof\tClass\tA\tcommon\tstock: |  |  |  |  |  |  |  |
| Exercise\tof\tstock\toptions | 5 | 3,189 | — | — | — | — | 3,194 |
| Employee\tbenefits | 11 | 12,187 | — | — | — | — | 12,198 |
| Employee\tStock\tPurchase\tPlan | 2 | 2,222 | — | — | — | — | 2,224 |
| Class\tA\tcommon\tstock\trepurchases,\tat |  |  |  |  |  |  |  |
| cost | — | — | — | — | (18,594) | — | (18,594) |
| Non-cash,\tstock-based\tcompensation | — | 12,227 | — | — | — | — | 12,227 |
| Income\ttax\t(expense)\tbenefit\trelated\tto |  |  |  |  |  |  |  |
| stock\tawards\tand\tother | — | (141) | — | — | — | — | (141) |
| Change\tin\tunrealized\tholding\tgains |  |  |  |  |  |  |  |
| (losses)\ton\tavailable-for-sale |  |  |  |  |  |  |  |
| securities,\tnet | — | — | 113,590 | — | — | — | 113,590 |
| Foreign\tcurrency\ttranslation | — | — | (106) | — | — | — | (106) |
| Deferred\tincome\ttax\t(expense)\tbenefit |  |  |  |  |  |  |  |
| attributable\tto\tforeign\tcurrency |  |  |  |  |  |  |  |
| translation | — | — | 128 | — | — | — | 128 |
| Cash\tdividend\ton\tClass\tA\tand\tClass\tB |  |  |  |  |  |  |  |
| common\tstock\t($2.00\tper\tshare) | — | — | — | (894,150) | — | — | (894,150) |
| Capital\ttransaction\twith\tEchoStar\tin |  |  |  |  |  |  |  |
| connection\twith\tlaunch\tservice,\tnet |  |  |  |  |  |  |  |
| of\ttax\tof\t$5,280\t(Note\t20) | — | — | — | (9,180) | — | — | (9,180) |
| Acquisition\tof\tnoncontrolling\tinterest\tin |  |  |  |  |  |  |  |
| subsidiary | — | — | — | — | — | 625 | 625 |
| Net\tincome\t(loss)\tattributable\tto |  |  |  |  |  |  |  |
| noncontrolling\tinterest | — | — | — | — | — | (142) | (142) |
| Net\tincome\t(loss)\tattributable\tto\tDISH |  |  |  |  |  |  |  |
| Network | — | — | — | 635,545 | — | — | 635,545 |
| Balance,\tDecember\t31,\t2009 | 4,973 | 2,120,211 | 5,614 | (2,760,589) | (1,462,380) | 483 | (2,091,688) |
| Investment\tsecurities\t-\tfair\tvalue |  |  |  |  |  |  |  |
| election\t(Note\t5) | — | — | 49,656 | (49,656) | — | — | — |
| Issuance\tof\tClass\tA\tcommon\tstock: |  |  |  |  |  |  |  |
| Exercise\tof\tstock\toptions | 5 | 4,134 | — | — | — | — | 4,139 |
| Employee\tbenefits | 14 | 29,113 | — | — | — | — | 29,127 |
| Employee\tStock\tPurchase\tPlan | 1 | 2,379 | — | — | — | — | 2,380 |
| Class\tA\tcommon\tstock\trepurchases,\tat |  |  |  |  |  |  |  |
| cost | — | — | — | — | (107,079) | — | (107,079) |
| Non-cash,\tstock-based\tcompensation | — | 15,387 | — | — | — | — | 15,387 |
| Income\ttax\t(expense)\tbenefit\trelated\tto |  |  |  |  |  |  |  |
| stock\tawards\tand\tother | — | 575 | — | — | — | — | 575 |
| Change\tin\tunrealized\tholding\tgains |  |  |  |  |  |  |  |
| (losses)\ton\tavailable-for-sale |  |  |  |  |  |  |  |
| securities,\tnet | — | — | 46,496 | — | — | — | 46,496 |
| Foreign\tcurrency\ttranslation | — | — | (13,476) | — | — | — | (13,476) |
| Deferred\tincome\ttax\t(expense)\tbenefit |  |  |  |  |  |  |  |
| attributable\tto\tforeign\tcurrency |  |  |  |  |  |  |  |
| translation | — | — | 5,067 | — | — | — | 5,067 |
| Capital\ttransaction\twith\tEchoStar\tin |  |  |  |  |  |  |  |
| connection\twith\tpurchases\tof |  |  |  |  |  |  |  |
| strategic\tinvestments,\tnet\tof\ttax\tof |  |  |  |  |  |  |  |
| $2,895\t(Note\t20) | — | — | — | (9,103) | — | — | (9,103) |
| Net\tincome\t(loss)\tattributable\tto |  |  |  |  |  |  |  |
| noncontrolling\tinterest | — | — | — | — | — | 3 | 3 |
| Net\tincome\t(loss)\tattributable\tto\tDISH |  |  |  |  |  |  |  |
| Network | — | — | — | 984,729 | — | — | 984,729 |
| Balance,\tDecember\t31,\t2010 | 4,993 | 2,171,799 | 93,357 | (1,834,619) | (1,569,459) | 486 | (1,133,443) |
| Issuance\tof\tClass\tA\tcommon\tstock: |  |  |  |  |  |  |  |
| Exercise\tof\tstock\toptions | 24 | 36,892 | — | — | — | — | 36,916 |
| Employee\tbenefits | 13 | 24,791 | — | — | — | — | 24,804 |
| Employee\tStock\tPurchase\tPlan | 1 | 3,078 | — | — | — | — | 3,079 |
| Non-cash,\tstock-based\tcompensation | — | 31,511 | — | — | — | 10 | 31,521 |
| Income\ttax\t(expense)\tbenefit\trelated\tto |  |  |  |  |  |  |  |
| stock\tawards\tand\tother | — | 5,934 | — | — | — | — | 5,934 |
| Change\tin\tunrealized\tholding\tgains |  |  |  |  |  |  |  |
| (losses)\ton\tavailable-for-sale |  |  |  |  |  |  |  |
| securities,\tnet | — | — | (2,175) | — | — | — | (2,175) |
| Foreign\tcurrency\ttranslation | — | — | (9,139) | — | — | — | (9,139) |
| Cash\tdividend\ton\tClass\tA\tand\tClass\tB |  |  |  |  |  |  |  |
| common\tstock\t($2.00\tper\tshare) | — | — | — | (893,278) | — | — | (893,278) |
| Acquisition\tof\tnoncontrolling\tinterest\tin | — | — | — | — | — | 1,200 | 1,200 |
| subsidiary |  |  |  |  |  |  |  |
| Net\tincome\t(loss)\tattributable\tto |  |  |  |  |  |  |  |
| noncontrolling\tinterest | — | — | — | — | — | (329) | (329) |
| Net\tincome\t(loss)\tattributable\tto\tDISH |  |  |  |  |  |  |  |
| Network | — | — | — | 1,515,907 | — | — | 1,515,907 |
| Balance,\tDecember\t31,\t2011 | $5,031 | $2,274,005 | $82,043 | $(1,211,990) | $(1,569,459) | $1,367 | $(419,003) |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

|  | 2011 | For	the	Years	Ended	December	31,<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Cash\tFlows\tFrom\tOperating\tActivities: |  |  |  |
| Net\tincome\t(loss) | $1,515,578 | $984,732 | $635,403 |
| Adjustments\tto\treconcile\tnet\tincome\t(loss)\tto\tnet\tcash\tflows\tfrom\toperating\tactivities: |  |  |  |
| Depreciation\tand\tamortization | 922,073 | 983,965 | 940,033 |
| Realized\tand\tunrealized\tlosses\t(gains)\ton\tinvestments | (8,019) | (33,703) | 13,811 |
| Non-cash,\tstock-based\tcompensation | 31,521 | 15,387 | 12,227 |
| Deferred\ttax\texpense\t(benefit)\t(Note\t12) | 627,927 | 201,400 | 4,630 |
| Other,\tnet | 16,150 | 17,721 | 12,654 |
| Change\tin\tnoncurrent\tassets | 16,976 | 401 | 6,507 |
| Change\tin\tlong-term\tdeferred\trevenue,\tdistribution\tand\tcarriage\tpayments\tand\tother\tlong-term |  |  |  |
| liabilities | 21,604 | (124,759) | 31,658 |
| Changes\tin\tcurrent\tassets\tand\tcurrent\tliabilities: |  |  |  |
| Trade\taccounts\treceivable\t-\tother | 34,266 | (41,652) | 56,536 |
| Allowance\tfor\tdoubtful\taccounts | (17,300) | 13,278 | 1,165 |
| Prepaid\tincome\ttaxes | 72,638 | (37,532) | 113,641 |
| Trade\taccounts\treceivable\t-\tEchoStar | (2,109) | 24,192 | (16,777) |
| Inventory | (139,225) | (229,154) | 51,411 |
| Other\tcurrent\tassets | (15,054) | 2,461 | (35,593) |
| Trade\taccounts\tpayable | 32,592 | 20,218 | (33,420) |
| Trade\taccounts\tpayable\t-\tEchoStar | (9,145) | (32,544) | (27,088) |
| Deferred\trevenue\tand\tother | 10,568 | (11,896) | (14,116) |
| Litigation\texpense\taccrual\t(Note\t16) | (316,949) | 225,456 | 361,024 |
| Litigation\tsettlement\tpayments\t(Note\t16) | (350,000) | — | — |
| Accrued\tprogramming\tand\tother\taccrued\texpenses | 129,786 | 161,831 | 80,837 |
| Net\tcash\tflows\tfrom\toperating\tactivities | 2,573,878 | 2,139,802 | 2,194,543 |
| Cash\tFlows\tFrom\tInvesting\tActivities: |  |  |  |
| Purchases\tof\tmarketable\tinvestment\tsecurities | (5,407,328) | (5,359,284) | (6,017,798) |
| Sales\tand\tmaturities\tof\tmarketable\tinvestment\tsecurities | 6,210,191 | 5,090,462 | 4,570,124 |
| Purchases\tof\tproperty\tand\tequipment | (778,905) | (1,113,219) | (1,037,190) |
| Launch\tservice\tassigned\tfrom\tEchoStar\t(Note\t20) | — | (102,913) | — |
| Change\tin\trestricted\tcash\tand\tmarketable\tinvestment\tsecurities | 12,361 | (2,921) | (58,209) |
| Investment\tin\tDBSD\tNorth\tAmerica\t(Note\t10) | (1,139,201) | — | — |
| TerreStar\tTransaction\t(Note\t10) | (1,345,000) | — | — |
| Purchase\tof\tBlockbuster\tassets,\tnet\tof\tcash\tacquired\tof\t$107,061\t(Note\t9) | (126,523) | — | — |
| Sprint\tSettlement\tAgreement\t(Note\t10) | (114,150) | — | — |
| Purchase\tof\tother\tstrategic\tinvestments | (9,275) | (11,742) | (62,142) |
| Proceeds\tfrom\tsale\tof\tstrategic\tinvestments | 11,327 | 22,002 | — |
| Other | (8,825) | 94 | (341) |
| Net\tcash\tflows\tfrom\tinvesting\tactivities | (2,695,328) | (1,477,521) | (2,605,556) |
| Cash\tFlows\tFrom\tFinancing\tActivities: |  |  |  |
| Proceeds\tfrom\tissuance\tof\tlong-term\tdebt | 2,000,000 | — | 1,400,000 |
| Debt\tissuance\tcosts | (27,261) | — | (23,090) |
| Repayment\tof\tlong-term\tdebt\tand\tcapital\tlease\tobligations | (32,236) | (26,910) | (51,301) |
| Repurchases\tand\tredemption\tof\t6\t3/8%\tSenior\tNotes\tdue\t2011 | (1,000,000) | — | — |
| Class\tA\tcommon\tstock\trepurchases\t(Note\t13) | — | (107,079) | (18,594) |
| Net\tproceeds\tfrom\tClass\tA\tcommon\tstock\toptions\texercised\tand\tstock\tissued\tunder\tthe\tEmployee |  |  |  |
| Stock\tPurchase\tPlan | 39,995 | 6,520 | 5,418 |
| Cash\tdividend\ton\tClass\tA\tand\tClass\tB\tcommon\tstock | (893,278) | — | (894,150) |
| Other | 6,777 | 16 | — |
| Net\tcash\tflows\tfrom\tfinancing\tactivities | 93,997 | (127,453) | 418,283 |
| Effect\tof\texchange\trates\ton\tcash\tand\tcash\tequivalents | (4,111) | — | — |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\tequivalents | (31,564) | 534,828 | 7,270 |
| Cash\tand\tcash\tequivalents,\tbeginning\tof\tperiod | 640,672 | 105,844 | 98,574 |
| Cash\tand\tcash\tequivalents,\tend\tof\tperiod | $609,108 | $640,672 | $105,844 |

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# Principal	Business

DISH	Network	Corporation	is	a	holding	company.		Its	subsidiaries	(which	together	with	DISH	Network	Corporation	are	referred	to	as	"DISH	Network,"	the "Company,"	"we,"	"us"	and/or	"our")	operate	two	primary	segments.

States	as	of	December	31,	2011.		The	DISH	pay-TV	service	consists	of	Federal	Communications	Commission	("FCC")	licenses	authorizing	us	to	use	DBS	and Fixed	Satellite	Service	("FSS")	spectrum,	our	owned	and	leased	satellites,	receiver	systems,	third-party	broadcast	operations,	customer	service	facilities,	a	leased fiber	network,	in-home	service	and	call	center	operations,	and	certain	other	assets	utilized	in	our	operations.

·																		Blockbuster.		On	April	26,	2011,	we	completed	the	acquisition	of	most	of	the	assets	of	Blockbuster,	Inc.	(the	"Blockbuster	Acquisition").		We	acquired Blockbuster	operations	in	the	United	States	and	in	certain	foreign	countries.		Blockbuster	primarily	offers	movies	and	video	games	for	sale	and	rental	through multiple	distribution	channels	such	as	retail	stores,	by-mail,	digital	devices,	the	blockbuster.com	website	and	the	BLOCKBUSTER	On	Demand	service.

During	the	first	half	of	2011,	we	entered	into	a	transaction	to	acquire	100%	of	the	equity	of	reorganized	DBSD	North	America	Inc.	("DBSD	North	America")	for approximately	$1.4	billion	upon	DBSD	North	America's	emergence	from	bankruptcy.		In	addition,	in	June	2011,	we	entered	into	a	transaction	to	acquire	substantially	all of	the	assets	of	TerreStar	Networks,	Inc.	("TerreStar")	for	a	purchase	price	of	$1.375	billion	(the	"TerreStar	Transaction").		These	acquisitions	are	subject	to	certain conditions,	including	approval	by	the	FCC.		Additionally,	during	the	fourth	quarter	2011,	we	and	Sprint	Nextel	Corporation	("Sprint")	entered	into	a	mutual	release	and settlement	agreement	("Sprint	Settlement	Agreement")	pursuant	to	which	all	disputed	issues	relating	to	our	acquisition	of	DBSD	North	America	and	the	TerreStar Transaction	were	resolved	between	us	and	Sprint,	including,	but	not	limited	to,	issues	relating	to	costs	allegedly	incurred	by	Sprint	to	relocate	users	from	the	spectrum now	licensed	to	DBSD	North	America	and	TerreStar.		Pursuant	to	the	Sprint	Settlement	Agreement,	we	made	a	net	payment	of	approximately	$114	million	to	Sprint. For	more	information,	see	Note	10.

# Principles	of	Consolidation	and	Basis	of	Presentation

We	consolidate	all	majority	owned	subsidiaries,	investments	in	entities	in	which	we	have	controlling	influence	and	variable	interest	entities	where	we	have	been determined	to	be	the	primary	beneficiary.		Non-majority	owned	investments	are	accounted	for	using	the	equity	method	when	we	have	the	ability	to	significantly influence	the	operating	decisions	of	the	investee.		When	we	do	not	have	the	ability	to	significantly	influence	the	operating	decisions	of	an	investee,	the	cost	method	is used.		All	significant	intercompany	accounts	and	transactions	have	been	eliminated	in	consolidation.		Certain	prior	period	amounts	have	been	reclassified	to	conform	to the	current	period	presentation.

# Use	of	Estimates

The	preparation	of	financial	statements	in	conformity	with	accounting	principles	generally	accepted	in	the	United	States	("GAAP")	requires	us	to	make	estimates	and assumptions	that	affect	the	reported	amounts	of	assets	and	liabilities	and	disclosure	of	contingent	assets	and	liabilities	at	the	date	of	the	financial	statements	and	the reported	amounts	of	revenue	and	expense	for	each	reporting	period.		Estimates	are	used	in	accounting	for,	among	other	things,	allowances	for	doubtful	accounts,	self- insurance	obligations,	deferred	taxes	and	related	valuation	allowances,	uncertain	tax	positions,	loss	contingencies,	the	useful	lives	and	residual	value	surrounding	our rental	library	inventory,	estimated	accruals	related	to

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS	-	Continued

revenue-sharing	titles	that	are	subject	to	performance	guarantees,	fair	value	of	financial	instruments,	fair	value	of	options	granted	under	our	stock-based	compensation plans,	fair	value	of	assets	and	liabilities	acquired	in	business	combinations,	capital	leases,	asset	impairments,	estimates	of	future	cash	flows	used	to	evaluate impairments,	useful	lives	of	property,	equipment	and	intangible	assets,	asset	retirement	obligations,	retailer	incentives,	programming	expenses,	subscriber	lives	and royalty	obligations.		Weak	economic	conditions	have	increased	the	inherent	uncertainty	in	the	estimates	and	assumptions	indicated	above.		Actual	results	may	differ from	previously	estimated	amounts,	and	such	differences	may	be	material	to	the	Consolidated	Financial	Statements.		Estimates	and	assumptions	are	reviewed periodically,	and	the	effects	of	revisions	are	reflected	prospectively	in	the	period	they	occur.

# Cash	and	Cash	Equivalents

We	consider	all	liquid	investments	purchased	with	an	original	maturity	of	90	days	or	less	to	be	cash	equivalents.		Cash	equivalents	as	of	December	31,	2011	and	2010 may	consist	of	money	market	funds,	government	bonds,	corporate	notes	and	commercial	paper.		The	cost	of	these	investments	approximates	their	fair	value.

# Marketable	Investment	Securities

We	currently	classify	all	marketable	investment	securities	as	available-for-sale,	except	for	investments	accounted	for	under	the	fair	value	method.		We	adjust	the	carrying value	of	our	available-for-sale	securities	to	fair	value	and	report	the	related	temporary	unrealized	gains	and	losses	as	a	separate	component	of	"Accumulated	other comprehensive	income	(loss)"	within	"Total	stockholders'	equity	(deficit),"	net	of	related	deferred	income	tax.		Declines	in	the	fair	value	of	a	marketable	investment security	which	are	determined	to	be	"other-than-temporary"	are	recognized	in	the	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss),	thus establishing	a	new	cost	basis	for	such	investment.	All	changes	to	our	securities	accounted	for	at	fair	value	are	reflected	in	"Other,	net"	in	the	Consolidated	Statements	of Operations	and	Comprehensive	Income	(Loss).

We	evaluate	our	marketable	investment	securities	portfolio	on	a	quarterly	basis	to	determine	whether	declines	in	the	fair	value	of	these	securities	are	other-than- temporary.		This	quarterly	evaluation	consists	of	reviewing,	among	other	things:

·																		the	fair	value	of	our	marketable	investment	securities	compared	to	the	carrying	amount,

·																		any	market	and	company	specific	factors	related	to	each	security.

Declines	in	the	fair	value	of	debt	and	equity	investments	below	cost	basis	are	generally	accounted	for	as	follows:

# Length	of	Time	Investment

Additionally,	in	situations	where	the	fair	value	of	a	debt	security	is	below	its	carrying	amount,	we	consider	the	decline	to	be	other-than-temporary	and	record	a	charge	to earnings	if	any	of	the	following	factors	apply:

·																		it	is	more	likely	than	not	that	we	will	be	required	to	sell	the	security	before	maturity	or	recovery,	or

·																		we	do	not	expect	to	recover	the	security's	entire	amortized	cost	basis,	even	if	there	is	no	intent	to	sell	the	security.

In	general,	we	use	the	first	in,	first	out	method	to	determine	the	cost	basis	on	sales	of	marketable	investment	securities.

# Accounts	Receivable

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

# DISH	Inventory

Inventory	is	stated	at	the	lower	of	cost	or	market	value.		Cost	is	determined	using	the	first-in,	first-out	method.		The	cost	of	manufactured	inventory	includes	the	cost	of materials,	labor,	freight-in,	royalties	and	manufacturing	overhead.

# Blockbuster	Rental	Library	Inventory

Our	rental	library	inventory	consists	of	movies	and	video	games	available	for	rental	by	customers	and	previously	rented	movies	and	video	games	that	are	available	for sale.		Our	rental	library	inventory	is	carried	at	cost	and	includes	an	allocation	of	costs	incurred	in	our	distribution	center	to	prepare	this	product	for	our	stores.		This inventory	is	amortized	over	its	estimated	useful	life	ranging	from	six	to	24	months,	depending	on	the	title,	down	to	an	estimated	residual	value.		Because	of	the	relatively short	useful	lives	of	this	inventory	and	because	this	inventory	is	available	for	sale	to	customers	at	any	time,	we	view	these	assets	as	current	assets.

# Blockbuster	Merchandise	Inventory

Our	merchandise	inventory	consists	primarily	of	new	and	traded	movies	and	video	games	and	other	general	merchandise,	including	confections,	and	are	stated	at	the lower	of	cost	or	market	value.		We	include	in	the	cost	of	our	merchandise	inventory	an	allocation	of	costs	incurred	in	our	distribution	center	to	prepare	this	product	for our	stores.		Merchandise	inventory	costs	are	determined	using	the	weighted-average	method,	the	use	of	which	approximates	the	first-in,	first-out	basis.

# Property	and	Equipment

Property	and	equipment	are	stated	at	cost.		The	costs	of	satellites	under	construction,	including	certain	amounts	prepaid	under	our	satellite	service	agreements,	are capitalized	during	the	construction	phase,	assuming	the	eventual	successful	launch	and	in-orbit	operation	of	the	satellite.		If	a	satellite	were	to	fail	during	launch	or	while in-orbit,	the	resultant	loss	would	be	charged	to	expense	in	the	period	such	loss	was	incurred.		The	amount	of	any	such	loss	would	be	reduced	to	the	extent	of	insurance proceeds	estimated	to	be	received,	if	any.		Depreciation	is	recorded	on	a	straight-line	basis	over	useful	lives	ranging	from	one	to	40	years.		Repair	and	maintenance	costs are	charged	to	expense	when	incurred.		Renewals	and	improvements	that	add	value	or	extend	the	asset's	useful	life	are	capitalized.

# Long-Lived	Assets

We	review	our	long-lived	assets	and	identifiable	finite	lived	intangible	assets	for	impairment	whenever	events	or	changes	in	circumstances	indicate	that	the	carrying amount	of	an	asset	may	not	be	recoverable.		We	evaluate	our	satellite	fleet	for	recoverability	as	one	asset	group.		For	assets	which	are	held	and	used	in	operations,	the asset	would	be	impaired	if	the	carrying	value	of	the	asset	(or	asset	group)	exceeded	its	undiscounted	future	net	cash	flows.		Once	an	impairment	is	determined,	the	actual impairment	is	reported	as	the	difference	between	the	carrying	value	and	the	fair	value	as	estimated	using	discounted	cash	flows.		Assets	which	are	to	be	disposed	of	are reported	at	the	lower	of	the	carrying	amount	or	fair	value	less	costs	to	sell.		We	consider	relevant	cash	flow,	estimated	future	operating	results,	trends	and	other	available information	in	assessing	whether	the	carrying	value	of	assets	are	recoverable.

# Other	Intangible	Assets

We	do	not	amortize	indefinite	lived	intangible	assets,	but	test	these	assets	for	impairment	annually	or	more	often	if	indicators	of	impairment	arise.		Intangible	assets	that have	finite	lives	are	amortized	over	their	estimated	useful	lives	and	tested	for	impairment	as	described	above	for	long-lived	assets.		Our	intangible	assets	with	indefinite lives	primarily	consist	of	FCC	licenses.		Generally,	we	have	determined	that	our	FCC	licenses	have	indefinite	useful	lives	due	to	the	following:

·																		existing	DBS	licenses	are	integral	to	our	business	and	will	contribute	to	cash	flows	indefinitely;

·																		replacement	satellite	applications	are	generally	authorized	by	the	FCC	subject	to	certain	conditions,	without	substantial	cost	under	a	stable	regulatory, legislative	and	legal	environment;

·																		maintenance	expenditures	to	obtain	future	cash	flows	are	not	significant;

We	combine	all	of	our	indefinite	lived	FCC	licenses	that	we	currently	utilize	or	plan	to	utilize	in	the	future	into	a	single	unit	of	accounting,	except	for	700	MHz	wireless licenses	(see	Note	8).		The	analysis	encompasses	future	cash	flows	from	satellites	transmitting	from	such	licensed	orbital	locations,	including	revenue	attributable	to programming	offerings	from	such	satellites,	the	direct	operating	and	subscriber	acquisition	costs	related	to	such	programming,	and	future	capital	costs	for	replacement satellites.		Projected	revenue	and	cost	amounts	include	projected	subscribers.		In	conducting	our	annual	impairment	test	in	2011,	we	determined	that	the	estimated	fair

value	of	the	FCC	licenses,	calculated	using	a	discounted	cash	flow	analysis,	exceeded	their	carrying	amounts.

In	conducting	our	annual	impairment	test	in	2011	for	our	700	MHz	wireless	licenses,	we	determined	that	the	estimated	fair	value	of	these	licenses,	calculated	using	the market	approach,	exceeded	its	carrying	amount	of	$712	million	(See	Note	8).

# DBSD	North	America	and	TerreStar

In	2011,	we	considered	whether	the	amounts	we	invested	(the	carrying	values)	in	DBSD	North	America	and	TerreStar,	including	the	Sprint	Settlement	Agreement, exceeded	their	fair	values	and,	if	so,	the	amount	of	impairment	to	record.		Based	on	our	evaluation,	the	fair	values	exceeded	their	carrying	values.		The	estimated	fair values	were	determined	using	a	probability	weighted	analysis	considering	estimated	future	cash	flows	discounted	at	a	rate	commensurate	with	the	risk	involved,	and market	based	data.		Changes	in	circumstances	or	market	conditions	including	significant	changes	in	our	estimates	of	future	cash	flows	or	available	market	data	could result	in	a	write-down	of	any	of	these	assets	in	the	future.

# Business	Combinations

When	we	acquire	a	business,	we	allocate	the	purchase	price	to	the	various	components	of	the	acquisition	based	upon	the	fair	value	of	each	component	using	various valuation	techniques,	including	the	market	approach,	income	approach	and/or	cost	approach.		The	accounting	standard	for	business	combinations	requires	most identifiable	assets,	liabilities,	noncontrolling	interests	and	goodwill	acquired	to	be	recorded	at	fair	value.		Transaction	costs	related	to	the	acquisition	of	the	business	are expensed	as	incurred.		Costs	associated	with	the	issuance	of	debt	associated	with	a	business	combination	are	capitalized	and	included	as	a	yield	adjustment	to	the underlying	debt's	stated	rate.		Acquired	intangible	assets	other	than	goodwill	are	amortized	over	their	estimated	useful	lives	unless	the	lives	are	determined	to	be indefinite.		Amortization	of	these	intangible	assets	are	recorded	on	a	straight	line	basis	over	an	average	finite	useful	life	primarily	ranging	from	approximately	one	to twenty	years	or	in	relation	to	the	estimated	discounted	cash	flows	over	the	life	of	the	intangible	asset.

# Other	Investment	Securities

Generally,	we	account	for	our	unconsolidated	equity	investments	under	either	the	equity	method	or	cost	method	of	accounting.		Because	these	equity	securities	are generally	not	publicly	traded,	it	is	not	practical	to	regularly	estimate	the	fair	value	of	the	investments;	however,	these	investments	are	subject	to	an	evaluation	for	other- than-temporary	impairment	on	a	quarterly	basis.		This	quarterly	evaluation	consists	of	reviewing,	among	other	things,	company	business	plans	and	current	financial statements,	if	available,	for	factors	that	may	indicate	an	impairment	of	our	investment.		Such	factors	may	include,	but	are	not	limited	to,	cash	flow	concerns,	material litigation,	violations	of	debt	covenants	and	changes	in	business	strategy.		The	fair	value	of	these	equity	investments	is	not	estimated	unless	there	are	identified	changes	in circumstances	that	may	indicate	an	impairment	exists	and	these	changes	are	likely	to	have	a	significant	adverse	effect	on	the	fair	value	of	the	investment.		When impairments	occur	related	to	our	foreign	investments,	any	cumulative	translation	adjustment	associated	with	these	investments	will	remain	in	"Accumulated	other comprehensive	income	(loss)"	within	"Total	stockholders'	equity	(deficit)"	on	our	Consolidated	Balance	Sheets	until	the	investments	are	sold	or	otherwise	liquidated;	at which	time,	they	will	be	recorded	in	our	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss).

# Long-Term	Deferred	Revenue,	Distribution	and	Carriage	Payments

Certain	programmers	provide	us	up-front	payments.		Such	amounts	are	deferred	and	recognized	as	reductions	to	"Subscriber-related	expenses"	on	a	straight-line	basis over	the	relevant	remaining	contract	term	(generally	up	to	ten	years).		The	current	and	long-term	portions	of	these	deferred	credits	are	recorded	in	our	Consolidated Balance	Sheets	in	"Deferred	revenue	and	other"	and	"Long-term	deferred	revenue,	distribution	and	carriage	payments	and	other	long-term	liabilities,"	respectively.

# Sales	Taxes

We	account	for	sales	taxes	imposed	on	our	goods	and	services	on	a	net	basis	in	our	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss).		Since	we primarily	act	as	an	agent	for	the	governmental	authorities,	the	amount	charged	to	the	customer	is	collected	and	remitted	directly	to	the	appropriate	jurisdictional	entity.

# Income	Taxes

We	establish	a	provision	for	income	taxes	currently	payable	or	receivable	and	for	income	tax	amounts	deferred	to	future	periods.		Deferred	tax	assets	and	liabilities	are recorded	for	the	estimated	future	tax	effects	of	differences	that	exist	between	the	book	and	tax	basis	of	assets	and	liabilities.		Deferred	tax	assets	are	offset	by	valuation allowances	when	we	believe	it	is	more	likely	than	not	that	such	net	deferred	tax	assets	will	not	be	realized.

# Accounting	for	Uncertainty	in	Income	Taxes

From	time	to	time,	we	engage	in	transactions	where	the	tax	consequences	may	be	subject	to	uncertainty.		We	record	a	liability	when,	in	management's	judgment,	a	tax filing	position	does	not	meet	the	more	likely	than	not	threshold.		For	tax	positions	that	meet	the	more	likely	than	not	threshold,	we	may	record	a	liability	depending	on management's	assessment	of	how	the	tax	position	will	ultimately	be	settled.		We	adjust	our	estimates	periodically	for	ongoing	examinations	by	and	settlements	with various	taxing	authorities,	as	well	as	changes	in	tax	laws,	regulations	and	precedent.		We	classify	interest	and	penalties,	if	any,	associated	with	our	uncertain	tax	positions as	a	component	of	"Interest	expense,	net	of	amounts	capitalized"	and	"Other,	net,"	respectively.

# Fair	Value	of	Financial	Instruments

As	of	December	31,	2011	and	2010,	the	carrying	value	for	cash	and	cash	equivalents,	marketable	investment	securities,	trade	accounts	receivable,	net	of	allowance	for doubtful	accounts,	and	current	liabilities	is	equal	to	or	approximates	fair	value	due	to	their	short-term	nature	or	proximity	to	current	market	rates.

Fair	values	for	our	publicly	traded	debt	securities	are	based	on	quoted	market	prices.		The	fair	values	of	our	private	debt	is	estimated	based	on	an	analysis	in	which	we evaluate	market	conditions,	related	securities,	various	public	and	private	offerings,	and	other	publicly	available	information.		In	performing	this	analysis,	we	make various	assumptions	regarding,	among	other	things,	credit	spreads,	and	the	impact	of	these	factors	on	the	value	of	the	notes.		See	Note	11	for	the	fair	value	of	our	long-

# term	debt.

# Deferred	Debt	Issuance	Costs

Costs	of	issuing	debt	are	generally	deferred	and	amortized	to	interest	expense	ratably	over	the	terms	of	the	respective	notes	(see	Note	11).

# Revenue	Recognition

We	recognize	revenue	when	an	arrangement	exists,	prices	are	determinable,	collectibility	is	reasonably	assured	and	the	goods	or	services	have	been	delivered.

# DISH	Segment

Revenue	from	our	subscription	television	services	is	recognized	when	programming	is	broadcast	to	subscribers.		Payments	received	from	subscribers	in	advance	of	the broadcast	or	service	period	are	recorded	as	"Deferred	revenue	and	other"	in	our	Consolidated	Balance	Sheets	until	earned.

For	certain	of	our	promotions,	subscribers	are	charged	an	upfront	fee.		A	portion	of	these	fees	may	be	deferred	and	recognized	over	the	estimated	subscriber	life	for	new subscribers	or	the	estimated	remaining	life	for	existing	subscribers	ranging	from	18	months	to	five	years.		Revenue	from	advertising	sales	is	recognized	when	the	related services	are	performed.

Subscriber	fees	for	equipment	rental,	including	DVRs,	additional	outlets	and	fees	for	receivers	with	multiple	tuners,	and	our	in-home	service	operations	are	recognized as	revenue	as	earned.		Revenue	from	equipment	sales	and	equipment	upgrades	are	recognized	upon	shipment	to	customers.

Certain	of	our	existing	and	new	subscriber	promotions	include	programming	discounts.		Programming	revenues	are	recorded	as	earned	at	the	discounted	monthly	rate charged	to	the	subscriber.

# Blockbuster	Segment

Rental	revenue	is	generally	recognized	at	the	time	of	rental	or	sale.		Rental	revenue	is	generated	from	the	rental	of	movies	and	video	games	and	any	eventual	sale	of previously	rented	items.

Certain	rental	and	subscription	programs	allow	customers	to	rent	a	specified	or	unlimited	number	of	titles	during	a	specific	period.		We	recognize	rental	revenues	from the	sale	of	these	programs	and	our	online	subscription	service	over	the	term	of	the	service.

We	offer	our	customers	the	opportunity	to	download	movies	for	a	specific	viewing	period	or	permanently	purchase	a	movie	from	our	web-site.		We	recognize	revenue when	the	movie	is	successfully	downloaded	by	the	customer,	which,	based	on	our	current	technology,	occurs	at	the	time	the	customer	plays	the	movie	for	the	first	time.

# Subscriber-Related	Expenses

The	cost	of	television	programming	distribution	rights	is	generally	incurred	on	a	per	subscriber	basis	and	various	upfront	carriage	payments	are	recognized	when	the related	programming	is	distributed	to	subscribers.		Long-term	flat	rate	programming	contracts	are	charged	to	expense	using	the	straight-line	method	over	the	term	of	the agreement.		The	cost	of	television	programming	rights	to	distribute	live	sporting	events	for	a	season	or	tournament	is	charged	to	expense	using	the	straight-line	method over	the	course	of	the	season	or	tournament.		"Subscriber-related	expenses"	in	the	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss)	principally include	programming	expenses,	costs	incurred	in	connection	with	our	in-home	service	and	call	center	operations,	billing	costs,	refurbishment	and	repair	costs	related	to receiver	systems,	subscriber	retention	and	other	variable	subscriber	expenses.		These	costs	are	recognized	as	the	services	are	performed	or	as	incurred.

# Subscriber	Acquisition	Costs

Subscriber	acquisition	costs	in	our	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss)	consist	of	costs	incurred	to	acquire	new	subscribers through	third	parties	and	our	direct	sales	distribution	channel.		Subscriber	acquisition	costs	include	the	following	line	items	from	our	Consolidated	Statements	of Operations	and	Comprehensive	Income	(Loss):

·																		"Cost	of	sales	—	subscriber	promotion	subsidies	-	EchoStar"	includes	the	cost	of	our	receiver	systems	sold	to	retailers	and	other	distributors	of	our	equipment and	receiver	systems	sold	directly	by	us	to	subscribers.

·																		"Other	subscriber	promotion	subsidies"	includes	net	costs	related	to	promotional	incentives	and	costs	related	to	installation	and	other	promotional	subsidies. ·																		"Subscriber	acquisition	advertising"	includes	advertising	and	marketing	expenses	related	to	the	acquisition	of	new	DISH	subscribers.		Advertising	costs	are expensed	as	incurred.

We	characterize	amounts	paid	to	our	independent	retailers	as	consideration	for	equipment	installation	services	and	for	equipment	buydowns	(incentives	and	rebates)	as	a reduction	of	revenue.		We	expense	payments	for	equipment	installation	services	as	"Other	subscriber	promotion	subsidies."		Our	payments	for	equipment	buydowns represent	a	partial	or	complete	return	of	the	retailer's	purchase	price	and	are,	therefore,	netted	against	the	proceeds	received	from	the	retailer.		We	report	the	net	cost	from our	various	sales	promotions	through	our	independent	retailer	network	as	a	component	of	"Other	subscriber

promotion	subsidies."		Net	proceeds	from	the	sale	of	subscriber	related	equipment	pursuant	to	our	subscriber	acquisition	promotions	are	not	recognized	as	revenue.

# Equipment	Lease	Programs

DISH	subscribers	have	the	choice	of	leasing	or	purchasing	the	satellite	receiver	and	other	equipment	necessary	to	receive	our	programming.		Most	of	our	new subscribers	choose	to	lease	equipment	and	thus	we	retain	title	to	such	equipment.		Equipment	leased	to	new	and	existing	subscribers	is	capitalized	and	depreciated	over their	estimated	useful	lives.

# Foreign	Currency	Translation	and	Transactions

The	functional	currency	of	our	foreign	operations	generally	is	the	local	currency.		Assets	and	liabilities	of	foreign	operations	(including	intercompany	balances	for which	settlement	is	not	anticipated	in	the	foreseeable	future)	are	translated	at	the	spot	rate	in	effect	at	the	applicable	reporting	date,	and	our	consolidated	statements	of operations	generally	are	translated	at	the	average	exchange	rates	in	effect	during	the	applicable	period.	The	resulting	unrealized	cumulative	translation	adjustment,	net	of applicable	income	taxes,	is	recorded	as	a	component	of	"Accumulated	other	comprehensive	income	(loss)"	in	our	Consolidated	Statements	of	Changes	in	Stockholders' Equity	(Deficit).	Cash	flows	from	our	operations	in	foreign	countries	are	translated	at	actual	exchange	rates	when	known	or	at	the	average	rate	for	the	applicable	period. The	effect	of	exchange	rates	on	cash	balances	held	in	foreign	currencies	are	separately	reported	in	our	Consolidated	Statements	of	Cash	Flows.		Transactions denominated	in	currencies	other	than	our	or	our	foreign	operations	functional	currencies	are	recorded	based	on	exchange	rates	at	the	time	such	transactions	arise. Changes	in	exchange	rates	with	respect	to	amounts	recorded	in	our	Consolidated	Balance	Sheets	related	to	these	non-functional	currency	transactions	result	in transaction	gains	and	losses	that	are	reflected	in	our	consolidated	statement	of	operations	as	unrealized	(based	on	the	applicable	period	end	exchange	rates)	or	realized upon	settlement	of	the	transactions.		Net	transaction	gains	(losses)	during	2011,	2010	and	2009	were	not	significant.

We	present	both	basic	earnings	per	share	("EPS")	and	diluted	EPS.		Basic	EPS	excludes	potential	dilution	and	is	computed	by	dividing	"Net	income	(loss)	attributable to	DISH	Network"	by	the	weighted-average	number	of	common	shares	outstanding	for	the	period.		Diluted	EPS	reflects	the	potential	dilution	that	could	occur	if	stock awards	were	exercised	and	convertible	securities	were	converted	to	common	stock.

The	potential	dilution	from	our	subordinated	notes	convertible	into	common	stock	was	computed	using	the	"if	converted	method."		The	potential	dilution	from	stock awards	was	computed	using	the	treasury	stock	method	based	on	the	average	market	value	of	our	Class	A	common	stock.		The	following	table	presents	earnings	per	share amounts	for	all	periods	and	the	basic	and	diluted	weighted-average	shares	outstanding	used	in	the	calculation.

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2011 | 2010 | 2009 |
|  |  | (In\tthousands,\texcept\tper\tshare\tamounts) |  |
| Basic\tnet\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | $1,515,907 | $984,729 | $635,545 |
| Interest\ton\tdilutive\tsubordinated\tconvertible\tnotes,\tnet\tof\trelated\ttax\teffect | — | — | 390 |
| Diluted\tnet\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | $1,515,907 | $984,729 | $635,935 |
| Weighted-average\tcommon\tshares\toutstanding\t-\tClass\tA\tand\tB\tcommon |  |  |  |
| stock: |  |  |  |
| Basic | 445,434 | 445,865 | 446,874 |
| Dilutive\timpact\tof\tstock\tawards\toutstanding | 1,431 | 732 | 1,320 |
| Dilutive\timpact\tof\tsubordinated\tnotes\tconvertible\tinto\tcommon\tshares | — | — | 402 |
| Diluted | 446,865 | 446,597 | 448,596 |
| Earnings\tper\tshare\t-\tClass\tA\tand\tB\tcommon\tstock: |  |  |  |
| Basic\tnet\tincome\t(loss)\tper\tshare\tattributable\tto\tDISH\tNetwork | $3.40 | $2.21 | $1.42 |
| Diluted\tnet\tincome\t(loss)\tper\tshare\tattributable\tto\tDISH\tNetwork | $3.39 | $2.20 | $1.42 |
| Shares\tof\tClass\tA\tcommon\tstock\tissuable\tupon\tconversion\tof: |  |  |  |
| 3%\tConvertible\tSubordinated\tNote\tdue\t2011\t(repaid\tduring\tfourth\tquarter |  |  |  |
| 2009) | — | — | 482 |

As	of	December	31,	2011,	2010	and	2009,	there	were	stock	awards	to	purchase	5.0	million,	10.8	million	and	8.9	million	shares,	respectively,	of	Class	A	common	stock outstanding,	not	included	in	the	weighted-average	common	shares	outstanding	above,	as	their	effect	is	antidilutive.

Vesting	of	options	and	rights	to	acquire	shares	of	our	Class	A	common	stock	granted	pursuant	to	our	performance	based	stock	incentive	plans	("Restricted	Performance Units")	is	contingent	upon	meeting	certain	goals	which	are	not	yet	probable	of	being	achieved.		As	a	consequence,	the	following	are	also	not	included	in	the	diluted	EPS calculation.

|  |  | As	of	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Performance\tbased\toptions | 9,549 | 10,979 | 9,363 |
| Restricted\tPerformance\tUnits\tand\tother | 1,285 | 1,494 | 1,096 |
| Total | 10,834 | 12,473 | 10,459 |

# 4.						Statements	of	Cash	Flow	Data

The	following	presents	our	supplemental	cash	flow	statement	disclosure.

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Cash\tpaid\tfor\tinterest\t(including\tcapitalized\tinterest) | $545,406 | $472,586 | $357,990 |
| Capitalized\tinterest | 120 | 17,139 | 19,685 |
| Cash\treceived\tfor\tinterest | 37,502 | 36,853 | 19,489 |

| Cash	paid	for	income	taxes	(1) | 38,761 | 525,028 | 348,931 |
| :--- | :--- | :--- | :--- |
| Employee\tbenefits\tpaid\tin\tClass\tA\tcommon\tstock | 24,804 | 29,127 | 12,198 |
| Vendor\tfinancing | — | 40,000 | — |
| Launch\tservice\tassigned\tfrom\tEchoStar\t(Note\t20) | — | — | 102,913 |
| Satellites\tand\tother\tassets\tfinanced\tunder\tcapital\tlease\tobligations | 10,548 | 5,282 | 140,109 |

(1)	On	December	17,	2010,	the	Tax	Relief,	Unemployment	Insurance	Reauthorization	and	Job	Creation	Act	of	2010	was	enacted,	which	provides	for	a	bonus depreciation	deduction	of	100%	of	the	cost	of	our	qualified	capital	expenditures	from	September	8,	2010	through	December	31,	2011.		As	a	result,	during	the	year	ended December	31,	2011,	our	"Cash	paid	for	income	taxes"	decreased	$486	million	compared	to	the	same	period	in	2010.		In	2012,	the	bonus	depreciation	deduction	will	be lowered	to	approximately	50%,	which	will	likely	result	in	an	increase	in	cash	paid	for	income	taxes.

# 5.						Marketable	Investment	Securities,	Restricted	Cash	and	Other	Investment	Securities

Our	marketable	investment	securities,	restricted	cash	and	other	investment	securities	consist	of	the	following:

| Current	marketable	investment	securities	-	VRDNs | $160,555 | $1,334,081 |
| :--- | :--- | :--- |
| Current\tmarketable\tinvestment\tsecurities\t-\tstrategic | 360,052 | 211,141 |
| Current\tmarketable\tinvestment\tsecurities\t-\tother | 911,138 | 754,483 |
| Total\tcurrent\tmarketable\tinvestment\tsecurities | 1,431,745 | 2,299,705 |
| Restricted\tmarketable\tinvestment\tsecurities\t(1) | 65,843 | 62,196 |
| Noncurrent\tmarketable\tinvestment\tsecurities\t-\tARS\tand\tMBS\t(2) | 109,327 | 119,121 |
| Total\tmarketable\tinvestment\tsecurities | 1,606,915 | 2,481,022 |
| Restricted\tcash\tand\tcash\tequivalents\t(1) | 66,592 | 82,241 |
| Other\tinvestment\tsecurities: |  |  |
| Other\tinvestment\tsecurities\t-\tcost\tmethod\t(2) | 2,805 | 2,805 |
| Investment\tin\tDBSD\tNorth\tAmerica | 1,297,614 | 102,591 |
| Total\tother\tinvestment\tsecurities | 1,300,419 | 105,396 |
| Total\tmarketable\tinvestment\tsecurities,\trestricted\tcash\tand\tother\tinvestment\nsecurities | $2,973,926 | $2,668,659 |

(1)										Restricted	marketable	investment	securities	and	restricted	cash	and	cash	equivalents	are	included	in	"Restricted	cash	and	marketable	investment	securities"	on	our Consolidated	Balance	Sheets.

(2)									Noncurrent	marketable	investment	securities	—	auction	rate	securities	("ARS"),	mortgage	backed	securities	("MBS")	and	other	investment	securities	are	included in	"Marketable	and	other	investment	securities"	on	our	Consolidated	Balance	Sheets.

Our	marketable	investment	securities	portfolio	consists	of	various	debt	and	equity	instruments,	all	of	which	are	classified	as	available-for-sale,	except	as	specified	below (see	Note	2).

# Current	Marketable	Investment	Securities	-	VRDNs

Variable	rate	demand	notes	("VRDNs")	are	long-term	floating	rate	municipal	bonds	with	embedded	put	options	that	allow	the	bondholder	to	sell	the	security	at	par	plus accrued	interest.		All	of	the	put	options	are	secured	by	a	pledged	liquidity	source.		Our	VRDN	portfolio	is	comprised	of	investments	in	many	municipalities,	which	are backed	by	financial	institutions	or	other	highly	rated	companies	that	serve	as	the	pledged	liquidity	source.		While	they	are	classified	as	marketable	investment	securities, the	put	option	allows	VRDNs	to	be	liquidated	generally	on	a	same	day	or	on	a	five	business	day	settlement	basis.

# Current	Marketable	Investment	Securities	-	Strategic

Our	current	strategic	marketable	investment	securities	include	strategic	and	financial	investments	in	public	companies	that	are	highly	speculative	and	have	experienced and	continue	to	experience	volatility.		As	of	December	31,	2011,	a	significant	portion	of	our	strategic	investment	portfolio	consisted	of	securities	of	several	issuers,	and a	significant	portion	of	the	value	of	that	portfolio	depends	on	the	value	of	those	issuers.

# Current	Marketable	Investment	Securities	-	Other

Our	current	marketable	investment	securities	portfolio	includes	investments	in	various	debt	instruments	including	corporate	and	government	bonds.

As	of	December	31,	2011	and	2010,	our	restricted	marketable	investment	securities,	together	with	our	restricted	cash,	included	amounts	required	as	collateral	for	our letters	of	credit	or	surety	bonds	and	for	litigation	(See	Note	16).

# Noncurrent	Marketable	Investment	Securities	—	ARS	and	MBS

We	have	investments	in	ARS	and	MBS	which	are	either	classified	as	available-for-sale	securities	or	are	accounted	for	under	the	fair	value	method.		Events	in	the	credit markets	have	reduced	or	eliminated	current	liquidity	for	certain	of	our	ARS	and	MBS	investments.		As	a	result,	we	classify	these	investments	as	noncurrent	assets,	as	we intend	to	hold	these	investments	until	they	recover	or	mature.		See	below	for	further	discussion	on	the	July	1,	2010	fair	value	election	on	certain	ARS	investments.

The	valuation	of	our	ARS	and	MBS	investments	portfolio	is	subject	to	uncertainties	that	are	difficult	to	estimate.		Due	to	the	lack	of	observable	market	quotes	for

identical	assets,	we	utilize	analyses	that	rely	on	Level	2	and/or	Level	3	inputs,	as	defined	in	"Fair	Value	Measurements."		These	inputs	include,	among	other	things, observed	prices	on	similar	assets	as	well	as	our	assumptions	and	estimates	related	to	the	counterparty	credit	quality,	default	risk	underlying	the	security	and	overall capital	market	liquidity.		These	securities	were	also	compared,	when	possible,	to	other	observable	market	data	for	financial	instruments	with	similar	characteristics.

Fair	Value	Election.		As	of	December	31,	2011	our	ARS	and	MBS	noncurrent	marketable	investment	securities	portfolio	of	$109	million	includes	$63	million	of securities	accounted	for	under	the	fair	value	method.		In	March	2010,	the	FASB	issued	Accounting	Standards	Update	2010-11	("ASU	2010-11"),	Derivatives	and Hedging:		Scope	Exception	Related	to	Embedded	Credit	Derivatives.		ASU	2010-11	clarifies	the	type	of	embedded	credit	derivative	that	is	exempt	from	certain bifurcation	requirements.		Only	one	form	of	embedded	credit	derivative	qualifies	for	the	exemption	-	one	that	is	related	to	the	subordination	of	one	financial	instrument to	another.		As	a	result,	entities	that	have	contracts	containing	an	embedded	credit

derivative	feature	in	a	form	other	than	subordination	may	need	to	separately	account	for	the	embedded	credit	derivative	feature.		On	July	1,	2010,	we	elected	to	apply	the fair	value	option	to	certain	of	our	ARS	portfolio	impacted	by	ASU	2010-11.		As	a	result,	we	recorded	a	$50	million	loss,	net	of	tax,	which	is	included	as	a	cumulative- effect	adjustment	to	"Accumulated	earnings	(deficit)."		All	changes	in	the	fair	value	of	these	investments	after	June	30,	2010	are	recognized	in	our	results	of	operations and	included	in	"Other,	net"	income	and	expense	on	our	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss)	and	detailed	in	the	table	titled	"Gains and	Losses	on	Sales	and	Changes	in	Carrying	Value	of	Investments"	below.

We	have	a	few	strategic	investments	in	certain	debt	and	equity	securities	that	are	included	in	noncurrent	"Marketable	and	other	investment	securities"	on	our Consolidated	Balance	Sheets	and	accounted	for	using	the	cost,	equity	and/or	fair	value	methods	of	accounting.

# Investment	in	DBSD	North	America

Over	the	past	several	years,	we	have	made	various	strategic	investments	in	DBSD	North	America,	a	subsidiary	of	Pendrell	Corporation,	formerly	known	as	ICO	Global Communications	(Holdings)	Limited	("ICO").		We	have	committed,	through	various	agreements	described	in	Note	10,	to	acquire	100%	of	the	equity	of	reorganized DBSD	North	America	for	approximately	$1.4	billion.	As	of	December	31,	2011,	our	total	investment	in	DBSD	North	America	is	$1.298	billion	and	is	included	on	our Consolidated	Balance	Sheets	under	the	caption	"Investment	in	DBSD	North	America."

All	of	our	investments	in	DBSD	North	America	are	accounted	for	under	the	cost	method	of	accounting,	except	for	the	7.5%	Convertible	Senior	Secured	Notes	due	2009, which	are	accounted	for	at	fair	value.		The	unrealized	gains	and	losses	associated	with	the	7.5%	Convertible	Senior	Secured	Notes	due	2009	are	accounted	for	as	a separate	component	of	"Accumulated	other	comprehensive	income	(loss)"	within	"Total	stockholders'	equity	(deficit)"	on	our	Consolidated	Balance	Sheets.

# Unrealized	Gains	(Losses)	on	Marketable	Investment	Securities

As	of	December	31,	2011	and	2010,	we	had	accumulated	net	unrealized	gains	of	$91	million	and	$93	million,	both	net	of	related	tax	effect,	respectively,	as	a	part	of "Accumulated	other	comprehensive	income	(loss)"	within	"Total	stockholders'	equity	(deficit)."		A	full	valuation	allowance	has	been	established	against	any	deferred taxes	that	are	capital	in	nature.		The	components	of	our	available-for-sale	investments	are	detailed	in	the	table	below.

|  | Investment |  | Unrealized |  | Investment |  | Unrealized |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Securities | Gains | Losses | Net | Securities | Gains | Losses | Net |
|  |  |  |  | (In\tthousands) |  |  |  |  |
| Debt\tsecurities: |  |  |  |  |  |  |  |  |
| VRDNs | $160,555 | $— $— $— | $— $— $— | $— $— $— | $1,334,081 | $— $— $— | $— $— $— | $— $— $— |
| ARS\tand\tMBS | 46,657 | 848 | (14,486) | (13,638) | 56,430 | 902 | (12,262) | (11,360) |
| ARS\tfair\tvalue |  |  |  |  |  |  |  |  |
| election | 62,670 | — | — | — | 62,691 | — | — | — |
| Other\t(including |  |  |  |  |  |  |  |  |
| restricted) | 994,021 | 5,525 | (6,565) | (1,040) | 832,798 | 9,330 | (1,676) | 7,654 |
| Equity\tsecurities: |  |  |  |  |  |  |  |  |
| Other | 343,012 | 89,044 | (61,934) | 27,110 | 195,022 | 82,565 | (8,429) | 74,136 |
| Subtotal | 1,606,915 | 95,417 | (82,985) | 12,432 | 2,481,022 | 92,797 | (22,367) | 70,430 |
| Investment\tin\tDBSD |  |  |  |  |  |  |  |  |
| North\tAmerica\t(1) | 839,009 | 78,749 | — | 78,749 | 55,823 | 22,926 | — | 22,926 |
| Total | $2,445,924 | $174,166 | $(82,985) | $91,181 | $2,536,845 | $115,723 | $(22,367) | $93,356 |

(1)										Of	our	total	investment	in	DBSD	North	America	of	$1.298	billion	as	of	December	31,	2011	and	$103	million	as	of	December	31,	2010,	$839	million	and	$56 million,	respectively,	are	invested	in	the	7.5%	Convertible	Senior	Secured	Notes	due	2009,	which	are	accounted	for	as	available-for-sale	investments.

As	of	December	31,	2011,	restricted	and	non-restricted	marketable	investment	securities	include	debt	securities	of	$1.061	billion	with	contractual	maturities	of	one	year or	less	and	$203	million	with	contractual	maturities	greater	than	one	year,	excluding	our	$839	million	available-for-sale	investment	in	DBSD	North	America.		Actual maturities	may	differ	from	contractual	maturities	as	a	result	of	our	ability	to	sell	these	securities	prior	to	maturity.

# Marketable	Investment	Securities	in	a	Loss	Position

The	following	table	reflects	the	length	of	time	that	the	individual	securities,	accounted	for	as	available-for-sale,	have	been	in	an	unrealized	loss	position,	aggregated	by investment	category.		As	of	December	31,	2011,	the	unrealized	losses	on	our	investments	in	equity	securities	represent	investments	in	broad-based	indexes	and	several companies	in	the	telecommunications	and	technology	industries.		We	are	not	aware	of	any	specific	factors	which	indicate	the	unrealized	losses	in	these	investments	are due	to	anything	other	than	temporary	market	fluctuations.		As	of	December	31,	2011	and	2010,	the	unrealized	losses	on	our	investments	in	debt	securities	primarily represent	investments	in	auction	rate	and	mortgage	backed	securities.		We	do	not	intend	to	sell	our	investments	in	these	debt	securities	before	they	recover	or	mature, and	it	is	more	likely	than	not	that	we	will	hold	these	investments	until	that	time.		In	addition,	we	are	not	aware	of	any	specific	factors	indicating	that	the	underlying issuers	of	these	debt	securities	would	not	be	able	to	pay	interest	as	it	becomes	due	or	repay	the	principal	at	maturity.		Therefore,	we	believe	that	these	changes	in	the estimated	fair	values	of	these	marketable	investment	securities	are	related	to	temporary	market	fluctuations.

|  |  |  | As	of	December	31, | As	of	December	31, |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2011 | 2011 | 2011 | 2010 | 2010 | 2010 |
|  |  | Investment\tCategory |  |  | Investment\tCategory |  |
|  | Debt | Equity |  | Debt | Equity |  |
|  | Securities | Securities | Total | Securities | Securities | Total |
|  |  |  | (In\tthousands) | (In\tthousands) |  |  |
| Less\tthan\tSix\tMonths: |  |  |  |  |  |  |
| Fair\tvalue | $279,362 | $247,683 | $527,045 | $93,072 | $26,890 | $119,962 |
| Unrealized\tloss | (1,259) | (61,934) | (63,193) | (174) | (8,429) | (8,603) |
| Six\tto\tNine\tMonths: |  |  |  |  |  |  |
| Fair\tvalue | 233,708 | — | 233,708 | 26,182 | — | 26,182 |
| Unrealized\tloss | (2,369) | — | (2,369) | (103) | — | (103) |
| Nine\tMonths\tor\tMore: |  |  |  |  |  |  |
| Fair\tvalue | 279,369 | — | 279,369 | 193,603 | — | 193,603 |
| Unrealized\tloss | (17,423) | — | (17,423) | (13,661) | — | (13,661) |
| Total\tFair\tValue | $792,439 | $247,683 | $1,040,122 | $312,857 | $26,890 | $339,747 |

# Fair	Value	Measurements

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

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

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

·																		Level	3,	defined	as	unobservable	inputs	for	which	little	or	no	market	data	exists,	consistent	with	reasonably	available	assumptions	made	by	other	participants therefore	requiring	assumptions	based	on	the	best	information	available.

Our	assets	measured	at	fair	value	on	a	recurring	basis	were	as	follows:

|  |  | December	31,	2011 |  |  |  | December	31,	2010 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Total | Level\t1 | Level\t2 | Level\t3 | Total | Level\t1 | Level\t2 | Level\t3 |
|  |  |  |  | (In\tthousands) |  |  |  |  |
| Cash\tEquivalents\n(including\trestricted) | $397,777 | $46,371 | $351,406 | $— | $569,558 | $92,662 | $476,896 | $— |
| Debt\tsecurities: |  |  |  |  |  |  |  |  |
| VRDNs | $160,555 | $— | $160,555 | $— | $1,334,081 | $— | $1,334,081 | $— |
| ARS\tand\tMBS | 109,327 | — | 3,412 | 105,915 | 119,121 | — | 6,031 | 113,090 |
| Other\t(including |  |  |  |  |  |  |  |  |
| restricted) | 994,021 | — | 994,021 | — | 832,798 | 21,835 | 810,883 | 80 |
| Equity\tsecurities | 343,012 | 343,012 | — | — | 195,022 | 195,022 | — | — |
| Subtotal | 1,606,915 | 343,012 | 1,157,988 | 105,915 | 2,481,022 | 216,857 | 2,150,995 | 113,170 |
| Investment\tin\tDBSD |  |  |  |  |  |  |  |  |
| North\tAmerica\t(1) | 839,009 | — | — | 839,009 | 55,823 | — | — | 55,823 |
| Total | $2,445,924 | $343,012 | $1,157,988 | $944,924 | $2,536,845 | $216,857 | $2,150,995 | $168,993 |

# Changes	in	Level	3	instruments	are	as	follows:

|  | Level	3 |
| :--- | :--- |
|  | Investment |
|  | Securities |
|  | (In\tthousands) |
| Balance\tas\tof\tDecember\t31,\t2010 | $168,993 |
| Net\trealized\tand\tunrealized\tgains\t(losses)\tincluded\tin\tearnings | (1,751) |
| Net\trealized\tand\tunrealized\tgains\t(losses)\tincluded\tin\tother\tcomprehensive\tincome\t(loss) | 53,489 |
| Purchases | 727,364 |
| Settlements | (3,171) |
| Issuances | — |
| Transfers\tfrom\tlevel\t2\tto\tlevel\t3 | — |
| Balance\tas\tof\tDecember\t31,\t2011 | $944,924 |

# Gains	and	Losses	on	Sales	and	Changes	in	Carrying	Values	of	Investments

"Other,	net"	income	and	expense	included	on	our	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss)	includes	other	changes	in	the	carrying amount	of	our	marketable	and	non-marketable	investments	as	follows:

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| Other\tIncome\t(Expense): | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Marketable\tinvestment\tsecurities\t-\tgains\t(losses)\ton\tsales/exchanges | $14,313 | $13,277 | $23,042 |
| Other\tinvestment\tsecurities\t-\tgains\t(losses)\ton\tsales/exchanges | 10,000 | 21,422 | — |
| Marketable\tinvestment\tsecurities\t-\tunrealized\tgains\t(losses)\ton\tinvestments\taccounted\tfor\tat |  |  |  |
| fair\tvalue | 263 | 8,371 | — |
| Marketable\tinvestment\tsecurities\t-\tother-than-temporary\timpairments | (16,557) | (12,734) | (1,050) |
| Other\tinvestment\tsecurities\t-\tunrealized\tgains\t(losses)\ton\tfair\tvalue\tinvestments\tand\tother- |  |  |  |
| than-temporary\timpairments | — | 3,361 | (35,803) |
| Other | (1,833) | (2,701) | (1,896) |
| Total | $6,186 | $30,996 | $(15,707) |

Inventory	consists	of	the	following:

| Finished	goods	-	DBS | $295,058 | $305,068 |
| :--- | :--- | :--- |
| Raw\tmaterials | 183,711 | 143,111 |
| Work-in-process\t-\tused | 29,228 | 36,186 |
| Work-in-process\t-\tnew | 2,308 | 3,210 |
| Total\tDISH\tNetwork\tinventory | 510,305 | 487,575 |
| Blockbuster: |  |  |
| Rental\tlibrary | 104,238 | — |
| Merchandise | 92,608 | — |
| Total\tBlockbuster\tinventory | 196,846 | — |
| Total\tinventory | $707,151 | $487,575 |

Property	and	equipment	consists	of	the	following:

|  | Life | As	of	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | (In\tYears) | 2011 | 2010 |
|  |  | (In\tthousands) |  |
| Equipment\tleased\tto\tcustomers | 2-5 | $3,496,154 | $3,495,360 |
| EchoStar\tI | 12 | 201,607 | 201,607 |
| EchoStar\tVII | 12 | 177,000 | 177,000 |
| EchoStar\tX | 12 | 177,192 | 177,192 |
| EchoStar\tXI | 12 | 200,198 | 200,198 |
| EchoStar\tXIV | 15 | 316,541 | 316,518 |
| EchoStar\tXV | 15 | 277,658 | 277,533 |
| Satellites\tacquired\tunder\tcapital\tlease\tagreements |  |  |  |
|  | 10-15 | 499,819 | 499,819 |
| Furniture,\tfixtures,\tequipment\tand\tother | 1-10 | 522,330 | 480,379 |

| Buildings	and	improvements | 1-40 | 99,346 | 70,471 |
| :--- | :--- | :--- | :--- |
| Land | — | 15,893 | 3,948 |
| Construction\tin\tprogress | — | 48,779 | 16,844 |
| Total\tproperty\tand\tequipment |  | 6,032,517 | 5,916,869 |
| Accumulated\tdepreciation |  | (2,862,626) | (2,684,521) |
| Property\tand\tequipment,\tnet |  | $3,169,891 | $3,232,348 |

Construction	in	progress	consists	of	the	following:

|  | As	of	December	31, |  |
| :--- | :--- | :--- |
|  | 2011 | 2010 |
|  | (In\tthousands) |  |
| Software\trelated\tprojects | $21,519 | $3,469 |
| Other | 27,260 | 13,375 |
| Construction\tin\tprogress | $48,779 | $16,844 |

Depreciation	and	amortization	expense	consists	of	the	following:

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Equipment\tleased\tto\tcustomers | $725,904 | $822,442 | $799,169 |
| Satellites | 128,352 | 110,510 | 86,430 |
| Buildings,\tfurniture,\tfixtures,\tequipment\tand\tother | 67,817 | 51,013 | 54,434 |
| Total\tdepreciation\tand\tamortization | $922,073 | $983,965 | $940,033 |

Cost	of	sales	and	operating	expense	categories	included	in	our	accompanying	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss)	do	not	include depreciation	expense	related	to	satellites	or	equipment	leased	to	customers.

The	cost	of	our	satellites	includes	capitalized	interest	of	less	than	$1	million,	$17	million	and	$20	million	during	the	years	ended	December	31,	2011,	2010	and	2009, respectively.

We	currently	utilize	13	satellites	in	geostationary	orbit	approximately	22,300	miles	above	the	equator,	six	of	which	we	own	and	depreciate	over	the	useful	life	of	each satellite.		We	currently	utilize	capacity	on	five	satellites	from	EchoStar,	which	are	accounted	for	as	operating	leases.		We	also	lease	two	satellites	from	third	parties, which	are	accounted	for	as	capital	leases	and	are	depreciated	over	the	shorter	of	the	economic	life	or	the	term	of	the	satellite	agreement.

|  |  | Degree | Useful |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Launch | Orbital | Life | Lease\tTerm |
| Satellites | Date | Location | (Years) | (Years) |
| Owned: |  |  |  |  |
| EchoStar\tI\t(1) | December\t1995 | 77 | 12 |  |
| EchoStar\tVII | February\t2002 | 119 | 12 |  |
| EchoStar\tX | February\t2006 | 110 | 12 |  |
| EchoStar\tXI | July\t2008 | 110 | 12 |  |
| EchoStar\tXIV | March\t2010 | 119 | 15 |  |
| EchoStar\tXV | July\t2010 | 61.5 | 15 |  |
| Leased\tfrom\tEchoStar: |  |  |  |  |
| EchoStar\tVI\t(1) | July\t2000 | 77 | 12 |  |
| EchoStar\tVIII\t(1)(2) | August\t2002 | 77 | 12 |  |
| EchoStar\tIX\t(1)(2)(3) | August\t2003 | 121 | 12 |  |
| EchoStar\tXII\t(1) | July\t2003 | 61.5 | 10 |  |
| Nimiq\t5\t(1)(2) | September\t2009 | 72.7 | 10 | 10 |
| Leased\tfrom\tOther\tThird\tParty: |  |  |  |  |
| Anik\tF3 | April\t2007 | 118.7 | 15 | 15 |
| Ciel\tII | December\t2008 | 129 | 10 | 10 |
| Under\tConstruction: |  |  |  |  |
| Leased\tfrom\tEchoStar: |  |  |  |  |
| EchoStar\tXVI | 2012 | 61.5 | 10 | 10 |

(1)			See	Note	20	for	further	discussion	of	our	Related	Party	Transactions	with	EchoStar.

(3)			Leased	on	a	month	to	month	basis.

QuetzSat-1.		During	2008,	we	entered	into	a	transponder	service	agreement	with	EchoStar	expiring	in	November	2021,	which	will	be	accounted	for	as	an	operating lease.		We	will	lease	24	DBS	transponders	on	QuetzSat-1	when	the	satellite	is	placed	into	commercial	operation	at	the	77	degree	orbital	location.		QuetzSat-1	was launched	on	September	29,	2011	and	was	placed	into	service	during	the	fourth	quarter	2011	at	the	67.1	degree	orbital	location	while	we	and	EchoStar	explore	alternative

uses	for	the	QuetzSat-1	satellite.		In	the	interim,	EchoStar	is	providing	us	with	alternate	capacity	at	the	77	degree	orbital	location.		See	Note	20	for	further	discussion.

Operation	of	our	pay-TV	service	requires	that	we	have	adequate	satellite	transmission	capacity	for	the	programming	we	offer.		Moreover,	current	competitive	conditions require	that	we	continue	to	expand	our	offering	of	new	programming,	particularly	by	expanding	local	high	definition	("HD")	coverage	and	offering	more	HD	national channels.		While	we	generally	have	had	in-orbit	satellite	capacity	sufficient	to	transmit	our	existing	channels	and	some	backup	capacity	to	recover	the	transmission	of certain	critical	programming,	our	backup	capacity	is	limited.

Prior	to	2011,	certain	satellites	in	our	fleet	experienced	anomalies,	some	of	which	have	had	a	significant	adverse	impact	on	their	remaining	useful	life	and/or	commercial operation.		There	can	be	no	assurance	that	future	anomalies	will	not	further	impact	the	remaining	useful	life	and/or	commercial	operation	of	any	of	these	satellites.		See "Long-Lived	Satellite	Assets"	below	for	further	discussion	of	evaluation	of	impairment.		There	can	be	no	assurance	that	we	can	recover	critical	transmission	capacity	in the	event	one	or	more	of	our	in-orbit	satellites	were	to	fail.		We	do	not	anticipate	carrying	insurance	for	any	of	the	in-orbit	satellites	that	we	use,	and	we	will	bear	the	risk associated	with	any	in-orbit	satellite	failures.		Recent	developments	with	respect	to	certain	of	our	satellites	are	discussed	below.

EchoStar	VIII.		EchoStar	VIII	was	designed	to	operate	32	DBS	transponders	in	the	continental	United	States	at	approximately	120	watts	per	channel,	switchable	to	16 DBS	transponders	operating	at	approximately	240	watts	per	channel.		EchoStar	VIII	was	also	designed	with	spot-beam	technology.		This	satellite	has	experienced several	anomalies	prior	to	2011,	and	during	January	2011	the	satellite	experienced	an	anomaly	that	temporarily	disrupted	electrical	power	to	some	components	causing an	interruption	of	broadcast	service.		In	addition,	it	has	now	been	determined	one	of	the	two	on-board	computers	used	to	control	the	satellite	failed	in	connection	with the	January	2011	anomaly.		None	of	these	anomalies	has	impacted	the	commercial	operation	or	estimated	useful	life	of	the	satellite.		However,	if	the	remaining	on-board computer	fails,	the	commercial	operation	of	the	satellite	would	likely	be	substantially	impacted	and	may	result	in	an	impairment	of	the	satellite.		There	can	also	be	no assurance	that	this	anomaly	or	any	future	anomalies	will	not	reduce	its	useful	life	or	impact	its	commercial	operation.

Long-Lived	Satellite	Assets.		We	evaluate	our	satellite	fleet	for	impairment	as	one	asset	group	and	test	for	recoverability	whenever	events	or	changes	in	circumstances indicate	that	its	carrying	amount	may	not	be	recoverable.		While	certain	of	the	anomalies	discussed	above,	and	previously	disclosed,	may	be	considered	to	represent	a significant	adverse	change	in	the	physical	condition	of	an	individual	satellite,	based	on	the	redundancy	designed	within	each	satellite	and	considering	the	asset	grouping, these	anomalies	are	not	considered	to	be	significant	events	that	would	require	evaluation	for	impairment	recognition.		Unless	and	until	a	specific	satellite	is	abandoned or	otherwise	determined	to	have	no	service	potential,	the	net	carrying	amount	related	to	the	satellite	would	not	be	written	off.

FCC	Authorizations.		We	currently	do	not	have	any	satellites	positioned	at	the	148	degree	orbital	location	as	a	result	of	the	retirement	of	EchoStar	V.		While	we	have requested	the	necessary	approval	from	the	FCC	for	the	continued	use	of	this	orbital	location,	there	can	be	no	assurance	that	the	FCC	will	determine	that	our	proposed future	use	of	this	orbital	location	complies	fully	with	all	licensing	requirements.		If	the	FCC	decides	to	revoke	this	license,	we	may	be	required	to	write-off	its	$68 million	carrying	value.

In	2008,	we	paid	$712	million	to	acquire	certain	700	MHz	wireless	licenses,	which	were	granted	to	us	by	the	FCC	in	February	2009.		To	commercialize	these	licenses and	satisfy	the	associated	FCC	build-out	requirements,	we	will	be	required	to	make	significant	additional	investments	or	partner	with	others.		Depending	on	the	nature and	scope	of	such	commercialization	and	build-out,	any	such	investment	or	partnership	could	vary	significantly.		Part	or	all	of	these	licenses	may	be	terminated	if	the associated	FCC	build-out	requirements	are	not	satisfied.		In	conducting	our	annual	impairment	test	in	2011,	we	determined	that	the	estimated	fair	value	of	the	FCC licenses,	calculated	using	a	market	based	approach,	exceeded	their	carrying	amount.		Based	on	this	assessment,	this	asset	was	not	impaired	as	of	December	31,	2011.

When	we	acquire	a	business	we	recognize	the	assets	acquired,	liabilities	assumed	and	any	noncontrolling	interests	at	fair	value.		We	expense	all	transaction	costs	related to	the	acquisition	as	incurred.

# Blockbuster	Acquisition

On	April	26,	2011,	we	completed	the	Blockbuster	Acquisition.		We	acquired	Blockbuster	operations	in	the	United	States	and	in	certain	foreign	countries.		Our	winning bid	in	the	bankruptcy	court	auction	was	valued	at	$321	million.		We	paid	$238	million,	including	$226	million	in	cash	and	$12	million	in	certain	assumed	liabilities.		Of the	$226	million	paid	in	cash,	$20	million	was	placed	in	escrow.		Subsequent	to	this	payment,	we	received	a	$4	million	refund	from	escrow,	resulting	in	a	net	purchase price	of	$234	million.		Blockbuster	primarily	offers	movies	and	video	games	for	sale	and	rental	through	multiple	distribution	channels	such	as	retail	stores,	by-mail, digital	devices,	the	blockbuster.com	website	and	the	BLOCKBUSTER	On	Demand	service.		The	Blockbuster	Acquisition	complements	our	core	business	of	delivering high-quality	video	entertainment	to	consumers.

From	the	acquisition	date	of	April	26,	2011	through	December	31,	2011,	Blockbuster	operations	contributed	$975	million	in	revenue	and	$4	million	in	net	income	to	our consolidated	results	of	operations.		As	of	December	31,	2011,	Blockbuster	operated	over	1,500	retail	stores	in	the	United	States.		We	expect	to	close	over	500	domestic

stores	during	the	first	half	of	2012	as	a	result	of	weak	store-level	financial	performance.	Over	900	of	our	retail	store	leases,	including	the	leases	for	the	majority	of	the stores	we	expect	to	close,	include	favorable	early	termination	rights	for	us.		We	continue	to	evaluate	the	impact	of	certain	factors,	including,	among	other	things,

competitive	pressures,	the	scale	of	our	Blockbuster	retail	operations	and	other	issues	impacting	the	store-level	financial	performance	of	our	Blockbuster	retail	stores.

These	factors,	or	other	reasons,	could	lead	us	to	close	additional	Blockbuster	retail	stores.

This	transaction	was	accounted	for	as	a	business	combination	using	purchase	price	accounting.		The	allocation	of	the	purchase	consideration	is	in	the	table	below.

|  | Purchase |
| :--- | :--- |
|  | Price |
|  | Allocation |
|  | (In\tthousands) |
| Cash | $107,061 |
| Current\tassets | 153,258 |
| Property\tand\tequipment | 28,663 |
| Acquisition\tintangibles | 17,826 |
| Other\tnoncurrent\tassets | 12,856 |
| Current\tliabilities | (86,080) |
| Total\tpurchase\tprice | $233,584 |

The	pro	forma	revenue	and	earnings	associated	with	the	Blockbuster	Acquisition	are	not	included	in	this	filing.		Due	to	the	material	ongoing	modifications	of	the business,	management	has	determined	that	insufficient	information	exists	to	accurately	develop	meaningful	historical	pro	forma	financial	information.		Moreover,	the historical	operations	of	Blockbuster	materially	changed	during	the	periods	preceding	the	acquisition	as	a	result	of	Blockbuster	Inc.'s	bankruptcy	proceedings,	and	any historical	pro	forma	information	would	not	prove	useful	in	assessing	our	post	acquisition	earnings	and	cash	flows.		The	cost	of	goods	sold	on	a	unit	basis	for	Blockbuster in	the	current	period	was	lower-than-historical	costs.		The	carrying	values	in	the	current	period	of	the	rental	library	and	merchandise	inventories	("Blockbuster Inventory")	were	reduced	to	their	estimated	fair	value	due	to	the	application	of	purchase	accounting.		This	impact	on	cost	of	goods	sold	on	a	unit	basis	will	diminish	in the	future	as	we	purchase	new	Blockbuster	Inventory.

# 10.				Spectrum	Investments

# TerreStar	Transaction

Gamma	Acquisition	L.L.C.	("Gamma"),	a	wholly-owned	subsidiary	of	DISH	Network,	entered	into	the	TerreStar	Transaction	on	June	14,	2011.		On	July	7,	2011,	the U.S.	Bankruptcy	Court	for	the	Southern	District	of	New	York	approved	the	asset	purchase	agreement	with	TerreStar	and	we	subsequently	paid	$1.345	billion	of	the	cash purchase	price.		DISH	Network	is	a	party	to	the	asset	purchase	agreement	solely	with	respect	to	certain	guaranty	obligations.		We	have	paid	all	but	$30	million	of	the purchase	price	for	the	TerreStar	Transaction,	which	will	be	paid	upon	closing	of	the	TerreStar	Transaction,	or	upon	certain	other	conditions	being	met	under	the	asset purchase	agreement.		Consummation	of	the	acquisition	contemplated	in	the	asset	purchase	agreement	is	subject	to,	among	other	things,	approval	by	the	FCC.		On February	7,	2012,	the	Canadian	federal	Department	of	Industry	("Industry	Canada")	approved	the	transfer	of	the	Canadian	spectrum	licenses	held	by	TerreStar	to	us.		If the	remaining	required	approvals	are	not	obtained,	subject	to	certain	exceptions,	we	have	the	right	to	require	and	direct	the	sale	of	some	or	all	of	the	TerreStar	assets	to	a third	party	and	we	would	be	entitled	to	the	proceeds	from	such	a	sale.	These	proceeds	could,	however,	be	substantially	less	than	amounts	we	have	paid	in	the	TerreStar Transaction.		Additionally,	Gamma	is	responsible	for	providing	certain	working	capital	and	certain	administrative	expenses	of	TerreStar	and	certain	of	its	subsidiaries after	December	31,	2011.

We	expect	that	the	TerreStar	Transaction	will	be	accounted	for	as	a	business	combination	using	purchase	price	accounting.		We	also	expect	to	allocate	the	purchase	price to	the	various	components	of	the	acquisition	based	upon	the	fair	value	of	each	component	using	various	valuation	techniques,	including	the	market	approach,	income approach	and/or	cost	approach.		We	expect	the	purchase	price	of	the	TerreStar	assets	to	be	allocated	to,	among	other	things,	spectrum	and	satellites.

Over	the	past	several	years,	we	have	made	various	strategic	investments	in	DBSD	North	America,	a	subsidiary	of	Pendrell	Corporation,	formerly	known	as	ICO.		DBSD North	America	is	developing	an	advanced	hybrid	system	that	combines	both	satellite	and	terrestrial	communications	capable	of	supporting	wireless	voice,	data	and/or Internet	services	throughout	the	United	States.		We	have	committed,	through	various	agreements	described	below,	to	acquire	100%	of	the	equity	of	reorganized	DBSD North	America	for	approximately	$1.4	billion.		Our	ultimate	acquisition	of	100%	of	the	equity	of	reorganized	DBSD	North	America	is	subject	to	the	satisfaction	of certain	conditions,	including	approval	by	the	FCC	and	DBSD	North	America's	emergence	from	bankruptcy.		In	the	event	that	necessary	approval	from	the	FCC	is	not obtained,	we	have	the	right	to	direct	DBSD	North	America	to	sell	substantially	all	of	its	assets	under	Section	363	of	the	bankruptcy	code.		Because	of	our	ownership	of certain	claims	and	DBSD	North	America	debt,	and	our	rights	under	the	Implementation	Agreement	(as	defined	below),	we	are	entitled	to	receive	substantially	all	of	the proceeds	of	any	such	sales.		There	can	be	no	assurance,	however,	that	such	sales	will	result	in	proceeds	equal	to	the	value	of	the	claims	or	DBSD	North	America	debt held	by	us.		While	we	hold	a	material	amount	of	financial	instruments	in	DBSD	North	America,	we	do	not	have	the	power	to	direct	its	activities	and	will	not	until	the acquisition	is	closed.		DBSD	North	America	will	be	consolidated	into	our	financial	statements	if	the	acquisition	is	approved	and	DBSD	North	America	has	emerged from	bankruptcy.		As	of	December	31,	2011,	our	total	investment	in	DBSD	North	America	is	$1.298	billion.		The	following	paragraphs	discuss	the	various	components of	our	investment	in	DBSD	North	America.

Investment	in	DBSD	North	America.		As	of	December	31,	2011	and	2010,	our	other	investment	securities	portfolio	included	DBSD	North	America's	7.5%	Convertible Senior	Secured	Notes	due	2009	of	$112	million	and	$56	million,	respectively.		In	addition,	as	of	December	31,	2011	and	2010,	we	held	a	$47	million	line	of	credit pursuant	to	the	Amended	and	Restated	Revolving	Credit	Agreement,	dated	as	of	April	7,	2008	between	us	and	DBSD	North	America.		During	the	year	ended December	31,	2011,	we	made	additional	investments	in	DBSD	North	America	pursuant	to	various	agreements	discussed	below.

Investment	Agreement.		On	February	1,	2011,	we	entered	into	an	$88	million	Credit	Facility	with	DBSD	North	America	and	committed	to	acquire	100%	of	the	equity	of reorganized	DBSD	North	America	(the	"Investment	Agreement")	for	approximately	$1.4	billion	subject	to	certain	adjustments,	including	interest	accruing	on	DBSD North	America's	existing	debt.		As	of	December	31,	2011,	we	had	funded	$78	million	under	the	Credit	Facility.

On	February	24,	2011	and	again	on	March	15,	2011,	we	amended	the	Investment	Agreement	(the	"Revised	Investment	Agreement").		Pursuant	to	the	Revised Investment	Agreement,	on	March	22,	2011,	we	initiated	a	tender	offer	to	purchase	all	of	DBSD	North	America's	outstanding	7.5%	Convertible	Senior	Secured	Notes due	2009,	certain	claims	against	a	DBSD	North	America's	debtor	affiliate	and	certain	allowed	claims	against	DBSD	North	America.		The	tender	offer	expired	on April	18,	2011	and	on	April	20,	2011	we	made	payments	of	approximately	$727	million	to	purchase	tendered	DBSD	North	America's	7.5%	Convertible	Senior	Secured Notes	due	2009,	and	$19	million	in	payments	for	certain	claims	against	a	DBSD	North	America's	debtor	affiliate	and	claims	against	DBSD	North	America.

Restructuring	Support	Agreement	and	Implementation	Agreement.		In	connection	with	the	Revised	Investment	Agreement	on	March	15,	2011,	we	entered	into	a restructuring	support	agreement	(the	"Restructuring	Support	Agreement")	and	an	implementation	agreement	(the	"Implementation	Agreement")	with	ICO,	the	parent company	of	DBSD	North	America,	pursuant	to	which	ICO	provided	us	with	certain	assets,	rights	and	ICO's	support	of	the	reorganization	of	DBSD	North	America	in exchange	for	approximately	$325	million,	of	which	$315	million	has	been	paid.		On	March	21,	2011,	we	paid	$35	million	to	ICO	pursuant	to	the	Implementation Agreement.		On	April	26,	2011,	we	made	a	second	payment	of	approximately	$280	million	to	ICO	pursuant	to	the	Implementation	Agreement	for	the	capital	stock	of DBSD	North	America.		We	have	also	agreed	to	indemnify	ICO	against	certain	liabilities	in	connection	with	certain	pending	litigation	related	to	DBSD	North	America.

# Sprint	Settlement	Agreement

On	November	3,	2011,	we	and	Sprint	entered	into	the	Sprint	Settlement	Agreement	pursuant	to	which	all	disputed	issues	relating	to	our	acquisition	of	DBSD	North America	and	the	TerreStar	Transaction	were	resolved	between	us	and	Sprint,	including,	but	not	limited	to,	issues	relating	to	costs	allegedly	incurred	by	Sprint	to	relocate users	from	the	spectrum	now	licensed	to	DBSD	North	America	and	TerreStar	(the	"Sprint	Clearing	Costs").		EchoStar	was	a	party	to	the	Sprint	Settlement	Agreement solely	for	the	purposes	of	executing	a	mutual	release	between	it	and	Sprint	relating	to	the	Sprint	Clearing	Costs.		As	of	December	31,	2011,	EchoStar	is	currently	a holder	of	certain	TerreStar	debt	instruments.		Pursuant	to	the	terms	of	the	Sprint	Settlement	Agreement,	we	made	a	net	payment	of	approximately	$114	million	to	Sprint, which	is	included	on	our	Consolidated	Balance	Sheets	under	the	caption	"Other	noncurrent	assets,	net."		As	this	payment	relates	directly	to	our	acquisitions	of	DBSD North	America	and	TerreStar,	the	$114	million	will	be	allocated	evenly	between	these	investments	as	purchase	consideration	on	the	dates	of	the	respective	closings.

During	September	2011,	we	repurchased	$85	million	of	our	6	3/8%	Senior	Notes	due	2011	in	open	market	transactions.		On	October	3,	2011,	we	redeemed	the remaining	$915	million	principal	balance	of	our	6	3/8%	Senior	Notes	due	2011.

The	7%	Senior	Notes	mature	October	1,	2013.		Interest	accrues	at	an	annual	rate	of	7%	and	is	payable	semi-annually	in	cash,	in	arrears	on	April	1	and	October	1	of	each year.

The	7%	Senior	Notes	are	redeemable,	in	whole	or	in	part,	at	any	time	at	a	redemption	price	equal	to	100%	of	the	principal	amount	plus	a	"make-whole"	premium,	as defined	in	the	related	indenture,	together	with	accrued	and	unpaid	interest.

The	7%	Senior	Notes	are:

·																		ranked	equally	in	right	of	payment	with	all	of	DDBS'	and	the	guarantors'	existing	and	future	unsecured	senior	debt;	and

·																		ranked	effectively	junior	to	our	and	the	guarantors'	current	and	future	secured	senior	indebtedness	up	to	the	value	of	the	collateral	securing	such	indebtedness.

The	indenture	related	to	the	7%	Senior	Notes	contains	restrictive	covenants	that,	among	other	things,	impose	limitations	on	the	ability	of	DDBS	and	its	restricted subsidiaries	to:

·												pay	dividends	or	make	distribution	on	DDBS'	capital	stock	or	repurchase	DDBS'	capital	stock;

·												create	liens	or	enter	into	sale	and	leaseback	transactions;

·												enter	into	transactions	with	affiliates;

·												merge	or	consolidate	with	another	company;	and

In	the	event	of	a	change	of	control,	as	defined	in	the	related	indenture,	we	would	be	required	to	make	an	offer	to	repurchase	all	or	any	part	of	a	holder's	7%	Senior	Notes at	a	purchase	price	equal	to	101%	of	the	aggregate	principal	amount	thereof,	together	with	accrued	and	unpaid	interest	thereon,	to	the	date	of	repurchase.

The	6	5/8%	Senior	Notes	are	redeemable,	in	whole	or	in	part,	at	any	time	at	a	redemption	price	equal	to	100%	of	their	principal	amount	plus	a	"make-whole"	premium, as	defined	in	the	related	indenture,	together	with	accrued	and	unpaid	interest.

·																		incur	additional	indebtedness	or	enter	into	sale	and	leaseback	transactions;

The	7	3/4%	Senior	Notes	mature	May	31,	2015.		Interest	accrues	at	an	annual	rate	of	7	3/4%	and	is	payable	semi-annually	in	cash,	in	arrears	on	May	31	and November	30	of	each	year.

The	7	1/8%	Senior	Notes	mature	February	1,	2016.		Interest	accrues	at	an	annual	rate	of	7	1/8%	and	is	payable	semi-annually	in	cash,	in	arrears	on	February	1	and August	1	of	each	year.

On	August	17,	2009,	we	issued	$1.0	billion	aggregate	principal	amount	of	our	ten-year,	7	7/8%	Senior	Notes	due	September	1,	2019	at	an	issue	price	of	97.467%. Interest	accrues	at	an	annual	rate	of	7	7/8%	and	is	payable	semi-annually	in	cash,	in	arrears	on	March	1	and	September	1	of	each	year.

On	October	5,	2009,	we	issued	$400	million	aggregate	principal	amount	of	additional	7	7/8%	Senior	Notes	due	2019	at	an	issue	price	of	101.750%	plus	accrued	interest from	August	17,	2009.		These	notes	were	issued	as	additional	notes	under	the	indenture,	dated	as	of	August	17,	2009,	pursuant	to	which	we	issued	the	$1.0	billion discussed	above.		These	notes	and	the	notes	previously	issued	under	the	related	indenture	will	be	treated	as	a	single	class	of	debt	securities.

The	7	7/8%	Senior	Notes	are	redeemable,	in	whole	or	in	part,	at	any	time	at	a	redemption	price	equal	to	100%	of	the	principal	amount	plus	a	"make-whole"	premium,	as defined	in	the	related	indenture,	together	with	accrued	and	unpaid	interest.		Prior	to	September	1,	2012,	we	may	also	redeem	up	to	35%	of	each	of	the	7	7/8%	Senior Notes	at	specified	premiums	with	the	net	cash	proceeds	from	certain	equity	offerings	or	capital	contributions.

·																		pay	dividends	or	make	distributions	on	DDBS'	capital	stock	or	repurchase	DDBS'	capital	stock;

On	May	5,	2011,	we	issued	$2.0	billion	aggregate	principal	amount	of	our	ten-year,	6	3/4%	Senior	Notes	due	June	1,	2021	at	an	issue	price	of	99.093%.		Interest	accrues at	an	annual	rate	of	6	3/4%	and	is	payable	semi-annually	in	cash,	in	arrears	on	June	1	and	December	1	of	each	year.

The	6	3/4%	Senior	Notes	are	redeemable,	in	whole	or	in	part,	at	any	time	at	a	redemption	price	equal	to	100%	of	the	principal	amount	plus	a	"make-whole"	premium,	as defined	in	the	related	indenture,	together	with	accrued	and	unpaid	interest.		Prior	to	June	1,	2014,	we	may	also	redeem	up	to	35%	of	each	of	the	6	3/4%	Senior	Notes	at specified	premiums	with	the	net	cash	proceeds	from	certain	equity	offerings	or	capital	contributions.

# Interest	on	Long-Term	Debt

|  |  | Annual |
| :--- | :--- | :--- |
|  | Semi-Annual | Debt\tService |
|  | Payment\tDates | Requirements |
|  |  | (In\tthousands) |
| 7%\tSenior\tNotes\tdue\t2013 | April\t1\tand\tOctober\t1 | $35,000 |
| 6\t5/8%\tSenior\tNotes\tdue\t2014 | April\t1\tand\tOctober\t1 | $66,250 |
| 7\t3/4%\tSenior\tNotes\tdue\t2015 | May\t31\tand\tNovember\t30 | $58,125 |

| 7	1/8%	Senior	Notes	due	2016 | February	1	and	August	1 | $106,875 |
| :--- | :--- | :--- |
| 7\t7/8%\tSenior\tNotes\tdue\t2019 | March\t1\tand\tSeptember\t1 | $110,250 |
| 6\t3/4%\tSenior\tNotes\tdue\t2021 | June\t1\tand\tDecember\t1 | $135,000 |

Our	ability	to	meet	our	debt	service	requirements	will	depend	on,	among	other	factors,	the	successful	execution	of	our	business	strategy,	which	is	subject	to uncertainties	and	contingencies	beyond	our	control.

# Fair	Value	of	our	Long-Term	Debt

The	following	table	summarizes	the	carrying	and	fair	values	of	our	debt	facilities	as	of	December	31,	2011	and	2010:

|  | Carrying |  | Carrying |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Value | Fair\tValue | Value | Fair\tValue |
|  |  | (In\tthousands) |  |  |
| 6\t3/8%\tSenior\tNotes\tdue\t2011\t(1) | $— $— | $— $— | $1,000,000 | $1,032,500 |
| 7\t%\tSenior\tNotes\tdue\t2013 | 500,000 | 535,000 | 500,000 | 532,815 |
| 6\t5/8%\tSenior\tNotes\tdue\t2014 | 1,000,000 | 1,060,000 | 1,000,000 | 1,032,500 |
| 7\t3/4%\tSenior\tNotes\tdue\t2015 | 750,000 | 817,500 | 750,000 | 798,750 |
| 7\t1/8%\tSenior\tNotes\tdue\t2016 | 1,500,000 | 1,593,750 | 1,500,000 | 1,548,600 |
| 7\t7/8%\tSenior\tNotes\tdue\t2019 | 1,400,000 | 1,589,000 | 1,400,000 | 1,463,000 |
| 6\t3/4%\tSenior\tNotes\tdue\t2021 | 2,000,000 | 2,140,000 | — | — |
| Mortgages\tand\tother\tnotes\tpayable | 71,871 | 71,871 | 77,965 | 77,965 |
| Subtotal | 7,221,871 | $7,807,121 | 6,227,965 | $6,486,130 |
| Capital\tlease\tobligations\t(2) | 271,908 | NA | 286,971 | NA |
| Total\tlong-term\tdebt\tand\tcapital\tlease |  |  |  |  |
| obligations\t(including\tcurrent\tportion) | $7,493,779 |  | $6,514,936 |  |

(1)										During	September	2011,	we	repurchased	$85	million	of	our	6	3/8%	Senior	Notes	due	2011	in	open	market	transactions	at	amounts	close	to	par	plus	accrued interest.		On	October	3,	2011,	we	redeemed	the	remaining	$915	million	principal	balance	of	our	6	3/8%	Senior	Notes	due	2011.

(2)										Disclosure	regarding	fair	value	of	capital	leases	is	not	required.

# Other	Long-Term	Debt	and	Capital	Lease	Obligations

Other	long-term	debt	and	capital	lease	obligations	consist	of	the	following:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
|  | (In\tthousands) |  |
| Satellites\tand\tother\tcapital\tlease\tobligations | $271,908 | $286,971 |
| 8%\tnote\tpayable\tfor\tEchoStar\tVII\tsatellite\tvendor\tfinancing,\tpayable\tover\t13\tyears\tfrom\tlaunch | 6,286 | 7,577 |
| 6%\tnote\tpayable\tfor\tEchoStar\tX\tsatellite\tvendor\tfinancing,\tpayable\tover\t15\tyears\tfrom\tlaunch | 9,968 | 10,862 |
| 6%\tnote\tpayable\tfor\tEchoStar\tXI\tsatellite\tvendor\tfinancing,\tpayable\tover\t15\tyears\tfrom\tlaunch | 15,106 | 15,951 |
| 6%\tnote\tpayable\tfor\tEchoStar\tXIV\tsatellite\tvendor\tfinancing,\tpayable\tover\t15\tyears\tfrom\tlaunch | 21,055 | 22,000 |
| 6%\tnote\tpayable\tfor\tEchoStar\tXV\tsatellite\tvendor\tfinancing,\tpayable\tover\t15\tyears\tfrom\tlaunch | 17,227 | 18,000 |
| Mortgages\tand\tother\tunsecured\tnotes\tpayable\tdue\tin\tinstallments\tthrough\t2017\twith\tinterest\trates\tranging\tfrom |  |  |
| approximately\t2%\tto\t13% | 2,229 | 3,575 |
| Total | 343,779 | 364,936 |
| Less\tcurrent\tportion | (35,645) | (30,895) |
| Other\tlong-term\tdebt\tand\tcapital\tlease\tobligations,\tnet\tof\tcurrent\tportion | $308,134 | $334,041 |

# Capital	Lease	Obligations

Anik	F3.		Anik	F3,	an	FSS	satellite,	was	launched	and	commenced	commercial	operation	during	April	2007.		This	satellite	is	accounted	for	as	a	capital	lease	and depreciated	over	the	term	of	the	satellite	service	agreement.		We	have	leased	100%	of	the	Ku-band	capacity	on	Anik	F3	for	a	period	of	15	years.

Ciel	II.		Ciel	II,	a	Canadian	DBS	satellite,	was	launched	in	December	2008	and	commenced	commercial	operation	during	February	2009.		This	satellite	is	accounted	for as	a	capital	lease	and	depreciated	over	the	term	of	the	satellite	service	agreement.		We	have	leased	100%	of	the	capacity	on	Ciel	II	for	an	initial	10	year	term.

As	of	December	31,	2011	and	2010,	we	had	$500	million	capitalized	for	the	estimated	fair	value	of	satellites	acquired	under	capital	leases	included	in	"Property	and equipment,	net,"	with	related	accumulated	depreciation	of	$151	million	and	$109	million,	respectively.		In	our	Consolidated	Statements	of	Operations	and Comprehensive	Income	(Loss),	we	recognized	$43	million,	$43	million	and	$40	million	in	depreciation	expense	on	satellites	acquired	under	capital	lease	agreements during	the	years	ended	December	31,	2011,	2010	and	2009,	respectively.

Future	minimum	lease	payments	under	the	capital	lease	obligation,	together	with	the	present	value	of	the	net	minimum	lease	payments	as	of	December	31,	2011	are	as follows	(in	thousands):

# For	the	Years	Ended	December	31,

| For	the	Years	Ended	December	31, |  |
| :--- | :--- |
| 2012 | $84,715 |
| 2013 | 77,893 |
| 2014 | 76,296 |
| 2015 | 75,970 |
| 2016 | 75,970 |
| Thereafter | 314,269 |
| Total\tminimum\tlease\tpayments | 705,113 |
| Less:\tAmount\trepresenting\tlease\tof\tthe\torbital\tlocation\tand\testimated\texecutory\tcosts\t(primarily\tinsurance\tand\tmaintenance)\tincluding\tprofit |  |
| thereon,\tincluded\tin\ttotal\tminimum\tlease\tpayments | (323,382) |
| Net\tminimum\tlease\tpayments | 381,731 |
| Less:\tAmount\trepresenting\tinterest | (109,823) |
| Present\tvalue\tof\tnet\tminimum\tlease\tpayments | 271,908 |
| Less:\tCurrent\tportion | (29,202) |
| Long-term\tportion\tof\tcapital\tlease\tobligations | $242,706 |

The	summary	of	future	maturities	of	our	outstanding	long-term	debt	as	of	December	31,	2011	is	included	in	the	commitments	table	in	Note	16.

# 12.				Income	Taxes	and	Accounting	for	Uncertainty	in	Income	Taxes

Our	income	tax	policy	is	to	record	the	estimated	future	tax	effects	of	temporary	differences	between	the	tax	bases	of	assets	and	liabilities	and	amounts	reported	on	our Consolidated	Balance	Sheets,	as	well	as	probable	operating	loss,	tax	credit	and	other	carryforwards.		Deferred	tax	assets	are	offset	by	valuation	allowances	when	we believe	it	is	more	likely	than	not	that	net	deferred	tax	assets	will	not	be	realized.		We	periodically	evaluate	our	need	for	a	valuation	allowance.		Determining	necessary valuation	allowances	requires	us	to	make	assessments	about	historical	financial	information	as	well	as	the	timing	of	future	events,	including	the	probability	of	expected future	taxable	income	and	available	tax	planning	opportunities.

We	file	consolidated	tax	returns	in	the	U.S.	The	income	taxes	of	domestic	and	foreign	subsidiaries	not	included	in	the	U.S.	tax	group	are	presented	in	our	consolidated financial	statements	based	on	a	separate	return	basis	for	each	tax	paying	entity.

As	of	December	31,	2011,	we	had	no	net	operating	loss	carryforwards	("NOLs")	for	federal	income	tax	purposes	and	$13	million	of	NOL	benefit	for	state	income	tax purposes.		The	state	NOLs	begin	to	expire	in	the	year	2020.		In	addition,	there	are	$5	million	of	tax	benefits	related	to	credit	carryforwards	which	are	partially	offset	by	a valuation	allowance	and	$14	million	benefit	of	capital	loss	carryforwards	which	are	fully	offset	by	a	valuation	allowance.	The	credit	carryforwards	begin	to	expire	in	the year	2012.

As	of	December	31,	2011,	we	had	benefits	of	foreign	tax	credits	and	net	operating	loss	carryforwards	of	approximately	$9	million,	which	are	fully	offset	by	a	valuation allowance.

The	components	of	the	(provision	for)	benefit	from	income	taxes	are	as	follows:

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Current\t(provision)\tbenefit: |  |  |  |
| Federal | $(235,357) | $(287,523) | $(335,958) |
| State | (27,523) | (68,550) | (36,762) |
| Foreign | (4,199) | — | (79) |
|  | (267,079) | (356,073) | (372,799) |
| Deferred\t(provision)\tbenefit: |  |  |  |
| Federal | (590,618) | (227,024) | 15,771 |
| State | (34,128) | 16,341 | (373) |
| Foreign | (4,939) | — | — |
| Decrease\t(increase)\tin\tvaluation\tallowance | 1,758 | 9,283 | (20,028) |
|  | (627,927) | (201,400) | (4,630) |
| Total\tbenefit\t(provision) | $(895,006) | $(557,473) | $(377,429) |

The	actual	tax	provisions	for	2011,	2010	and	2009	reconcile	to	the	amounts	computed	by	applying	the	statutory	Federal	tax	rate	to	income	before	taxes	as	follows:

Of	our	$2.411	billion	of	"Income	(loss)	before	income	taxes"	on	our	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss),	approximately	$28 million	relates	to	our	foreign	operations.

The	temporary	differences,	which	give	rise	to	deferred	tax	assets	and	liabilities	as	of	December	31,	2011	and	2010,	are	as	follows:

| NOL,	credit	and	other	carryforwards | $23,017 | $14,595 |
| :--- | :--- | :--- |
| Unrealized\tlosses\ton\tinvestments | 48,452 | 49,555 |
| Accrued\texpenses | 95,903 | 256,033 |
| Stock-based\tcompensation | 23,365 | 17,730 |
| Deferred\trevenue | 45,556 | 56,324 |
| State\ttaxes\tnet\tof\tfederal\teffect | 4,917 | 29,599 |
| Total\tdeferred\ttax\tassets | 241,210 | 423,836 |
| Valuation\tallowance | (97,501) | (73,126) |
| Deferred\ttax\tasset\tafter\tvaluation\tallowance | 143,709 | 350,710 |
| Deferred\ttax\tliabilities: |  |  |
| Depreciation\tand\tamortization | (1,066,476) | (701,497) |
| Other\tlong-term\tliabilities | (26,943) | — |
| Total\tdeferred\ttax\tliabilities | (1,093,419) | (701,497) |
| Net\tdeferred\ttax\tasset\t(liability) | $(949,710) | $(350,787) |
| Current\tportion\tof\tnet\tdeferred\ttax\tasset | $73,014 | $216,899 |
| Current\tportion\tof\tnet\tdeferred\ttax\tliability | (48,310) | — |
| Noncurrent\tportion\tof\tnet\tdeferred\ttax\tasset\t(liability) | (974,414) | (567,686) |
| Total\tnet\tdeferred\ttax\tasset\t(liability) | $(949,710) | $(350,787) |

In	addition	to	filing	federal	income	tax	returns,	we	and	one	or	more	of	our	subsidiaries	file	income	tax	returns	in	all	states	that	impose	an	income	tax	and	a	small	number of	foreign	jurisdictions	where	we	have	immaterial	operations.		We	are	subject	to	U.S.	federal,	state	and	local	income	tax	examinations	by	tax	authorities	for	the	years beginning	in	2002	due	to	the	carryover	of	previously	incurred	net	operating	losses.		As	of	December	31,	2011,	we	are	currently	under	a	federal	income	tax	examination for	fiscal	year	2008.

A	reconciliation	of	the	beginning	and	ending	amount	of	unrecognized	tax	benefits	is	as	follows:

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| Unrecognized\ttax\tbenefit | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Balance\tas\tof\tbeginning\tof\tperiod | $193,320 | $224,029 | $226,528 |
| Additions\tbased\ton\ttax\tpositions\trelated\tto\tthe\tcurrent\tyear | 44,357 | 7,382 | 7,952 |
| Additions\tbased\ton\ttax\tpositions\trelated\tto\tprior\tyears | 34,762 | 11,800 | 3,665 |
| Reductions\tbased\ton\ttax\tpositions\trelated\tto\tprior\tyears | (1,169) | (45,197) | (6,042) |
| Reductions\tbased\ton\ttax\tpositions\trelated\tto\tsettlements\twith\ttaxing\tauthorities | (1,185) | (493) | (5,899) |
| Reductions\tbased\ton\ttax\tpositions\trelated\tto\tthe\tlapse\tof\tthe\tstatute\tof\tlimitations | (3,382) | (4,201) | (2,175) |
| Balance\tas\tof\tend\tof\tperiod | $266,703 | $193,320 | $224,029 |

We	have	$208	million	in	unrecognized	tax	benefits	that,	if	recognized,	could	favorably	affect	our	effective	tax	rate.		We	do	not	expect	any	portion	of	this	amount	to	be paid	or	settled	within	the	next	twelve	months.

Accrued	interest	and	penalties	on	uncertain	tax	positions	are	recorded	as	a	component	of	"Other,	net"	on	our	Consolidated	Statements	of	Operations	and	Comprehensive Income	(Loss).		During	the	year	ended	December	31,	2011,	we	recorded	$4	million	in	interest	and	penalty	expense	to	earnings.		During	the	year	ended	December	31, 2010,	we	recorded	$3	million	in	interest	and	penalty	benefit	to	earnings.		During	the	year	ended	December	31,	2009,	we	recorded	$9	million	in	interest	and	penalty expense	to	earnings.		Accrued	interest	and	penalties	were	$17	million	and	$13	million	at	December	31,	2011	and	2010,	respectively.		The	above	table	excludes	these amounts.

# Common	Stock

The	Class	A,	Class	B	and	Class	C	common	stock	are	equivalent	except	for	voting	rights.		Holders	of	Class	A	and	Class	C	common	stock	are	entitled	to	one	vote	per share	and	holders	of	Class	B	common	stock	are	entitled	to	10	votes	per	share.		Each	share	of	Class	B	and	Class	C	common	stock	is	convertible,	at	the	option	of	the holder,	into	one	share	of	Class	A	common	stock.		Upon	a	change	in	control	of	DISH	Network,	each	holder	of	outstanding	shares	of	Class	C	common	stock	is	entitled	to 10	votes	for	each	share	of	Class	C	common	stock	held.		Our	principal	stockholder	owns	the	majority	of	all	outstanding	Class	B	common	stock.	Together	with	all	other stockholders,	he	also	owns	outstanding	Class	A	common	stock.		There	are	no	shares	of	Class	C	common	stock	outstanding.

# Common	Stock	Repurchase	Program

Our	Board	of	Directors	previously	authorized	the	repurchase	of	up	to	$1.0	billion	of	our	Class	A	common	stock.		On	November	1,	2011,	our	Board	of	Directors extended	the	plan	and	authorized	an	increase	in	the	maximum	dollar	value	of	shares	that	may	be	repurchased	under	the	plan,	such	that	we	are	currently	authorized	to repurchase	up	to	$1.0	billion	of	our	outstanding	shares	of	our	Class	A	common	stock	through	and	including	December	31,	2012.		As	of	December	31,	2011,	we	may repurchase	up	to	$1.0	billion	under	the	plan.

|  | For	the	Years	Ended	December	31, | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| Class\tA\tCommon\tStock\tRepurchases | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Total\tnumber\tof\tshares\trepurchased | — | 6,020 | 1,948 |
| Dollar\tvalue\tof\tshares\trepurchased | $— | $107,079 | $18,594 |

# Cash	Dividend

On	December	2,	2009,	we	paid	a	cash	dividend	of	$2.00	per	share,	or	approximately	$894	million,	on	our	outstanding	Class	A	and	Class	B	common	stock	to shareholders	of	record	at	the	close	of	business	on	November	20,	2009.

On	December	1,	2011,	we	paid	a	cash	dividend	of	$2.00	per	share,	or	approximately	$893	million,	on	our	outstanding	Class	A	and	Class	B	common	stock	to shareholders	of	record	at	the	close	of	business	on	November	17,	2011.

# 14.				Employee	Benefit	Plans

# Employee	Stock	Purchase	Plan

Our	employees	participate	in	the	DISH	Network	employee	stock	purchase	plan	(the	"ESPP"),	in	which	we	are	authorized	to	issue	1.8	million	shares	of	Class	A	common stock.		At	December	31,	2011,	we	had	0.4	million	shares	of	Class	A	common	stock	which	remain	available	for	issuance	under	this	plan.		Substantially	all	full-time employees	who	have	been	employed	by	us	for	at	least	one	calendar	quarter	are	eligible	to	participate	in	the	ESPP.		Employee	stock	purchases	are	made	through	payroll deductions.		Under	the	terms	of	the	ESPP,	employees	may	not	deduct	an	amount	which	would	permit	such	employee	to	purchase	our	capital	stock	under	all	of	our	stock purchase	plans	at	a	rate	which	would	exceed	$25,000	in	fair	value	of	capital	stock	in	any	one	year.		The	purchase	price	of	the	stock	is	85%	of	the	closing	price	of	the Class	A	common	stock	on	the	last	business	day	of	each	calendar	quarter	in	which	such	shares	of	Class	A	common	stock	are	deemed	sold	to	an	employee	under	the ESPP.			During	the	years	ended	December	31,	2011,	2010	and	2009,	employee	purchases	of	Class	A	common	stock	through	the	ESPP	totaled	approximately	0.1	million, 0.1	million	and	0.2	million	shares,	respectively.

# 401(k)	Employee	Savings	Plan

We	sponsor	a	401(k)	Employee	Savings	Plan	(the	"401(k)	Plan")	for	eligible	employees.		Voluntary	employee	contributions	to	the	401(k)	Plan	may	be	matched	50%	by us,	subject	to	a	maximum	annual	contribution	of	$1,500	per	employee.		Forfeitures	of	unvested	participant	balances	which	are	retained	by	the	401(k)	Plan	may	be	used to	fund	matching	and	discretionary	contributions.		Our	Board	of	Directors	may	also	authorize	an	annual	discretionary	contribution	to	the	plan,	subject	to	the	maximum deductible	limit	provided	by	the	Internal	Revenue	Code	of	1986,	as	amended.		These	contributions	may	be	made	in	cash	or	in	our	stock.

The	following	table	summarizes	the	expense	associated	with	our	matching	contributions	and	discretionary	contributions:

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| Expense\tRecognized\tRelated\tto\tthe\t401(k)\tPlan | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Matching\tcontributions,\tnet\tof\tforfeitures | $2,617 | $1,598 | $6,116 |
| Discretionary\tstock\tcontributions,\tnet\tof\tforfeitures | $22,331 | $24,954 | $29,004 |

# 15.				Stock-Based	Compensation

# Stock	Incentive	Plans

We	maintain	stock	incentive	plans	to	attract	and	retain	officers,	directors	and	key	employees.		Stock	awards	under	these	plans	include	both	performance	and	non- performance	based	stock	incentives.		As	of	December	31,	2011,	we	had	outstanding	under	these	plans	stock	options	to	acquire	21.3	million	shares	of	our	Class	A common	stock	and	1.3	million	restricted	stock	units.		Stock	options	granted	prior	to	and	on	December	31,	2011	were	granted	with	exercise	prices	equal	to	or	greater	than the	market	value	of	our	Class	A	common	stock	at	the	date	of	grant	and	with	a	maximum	term	of	approximately	ten	years.		While	historically	we	have	issued	stock awards	subject	to	vesting,	typically	at	the	rate	of	20%	per	year,	some	stock	awards	have	been	granted	with	immediate	vesting	and	other	stock	awards	vest	only	upon	the achievement	of	certain	company-wide	objectives.		As	of	December	31,	2011,	we	had	73.0	million	shares	of	our	Class	A	common	stock	available	for	future	grant	under our	stock	incentive	plans.

During	December	2009,	we	paid	a	dividend	in	cash	of	$2.00	per	share	on	our	outstanding	Class	A	and	Class	B	common	stock	to	shareholders	of	record	on November	20,	2009.		In	light	of	such	dividend,	during	February	2010,	the	exercise	price	of	20.6	million	stock	options,	affecting	approximately	700	employees,	was reduced	by	$2.00	per	share	(the	"2009	Stock	Option	Adjustment").		Except	as	noted	below,	all	information	discussed	below	reflects	the	2009	Stock	Option	Adjustment.

On	January	1,	2008,	we	completed	the	distribution	of	our	technology	and	set-top	box	business	and	certain	infrastructure	assets	(the	"Spin-off")	into	a	separate	publicly- traded	company,	EchoStar	Corporation	("EchoStar").		DISH	Network	and	EchoStar	operate	as	separate	publicly-traded	companies,	and	neither	entity	has	any	ownership interest	in	the	other.		However,	a	substantial	majority	of	the	voting	power	of	the	shares	of	both	companies	is	owned	beneficially	by	Charles	W.	Ergen,	our	Chairman,	or by	certain	trusts	established	by	Mr.	Ergen	for	the	benefit	of	his	family.

In	connection	with	the	Spin-off,	as	permitted	by	our	existing	stock	incentive	plans	and	consistent	with	the	Spin-off	exchange	ratio,	each	DISH	Network	stock	option	was converted	into	two	stock	options	as	follows:

·																		an	adjusted	DISH	Network	stock	option	for	the	same	number	of	shares	that	were	exercisable	under	the	original	DISH	Network	stock	option,	with	an	exercise price	equal	to	the	exercise	price	of	the	original	DISH	Network	stock	option	multiplied	by	0.831219.

·																		a	new	EchoStar	stock	option	for	one-fifth	of	the	number	of	shares	that	were	exercisable	under	the	original	DISH	Network	stock	option,	with	an	exercise	price equal	to	the	exercise	price	of	the	original	DISH	Network	stock	option	multiplied	by	0.843907.

Similarly,	each	holder	of	DISH	Network	restricted	stock	units	retained	his	or	her	DISH	Network	restricted	stock	units	and	received	one	EchoStar	restricted	stock	unit for	every	five	DISH	Network	restricted	stock	units	that	they	held.

Consequently,	the	fair	value	of	the	DISH	Network	stock	award	and	the	new	EchoStar	stock	award	immediately	following	the	Spin-off	was	equivalent	to	the	fair	value	of such	stock	award	immediately	prior	to	the	Spin-off.

As	of	December	31,	2011,	the	following	stock	awards	were	outstanding:

|  |  | Restricted |  | Restricted |
| :--- | :--- | :--- | :--- | :--- |
|  | Stock | Stock | Stock | Stock |
| Stock\tAwards\tOutstanding | Options | Units | Options | Units |
| Held\tby\tDISH\tNetwork\temployees | 18,630,441 | 1,189,709 | 762,094 | 54,286 |
| Held\tby\tEchoStar\temployees | 2,705,718 | 94,999 | N/A | N/A |
| Total | 21,336,159 | 1,284,708 | 762,094 | 54,286 |

We	are	responsible	for	fulfilling	all	stock	awards	related	to	DISH	Network	common	stock	and	EchoStar	is	responsible	for	fulfilling	all	stock	awards	related	to	EchoStar common	stock,	regardless	of	whether	such	stock	awards	are	held	by	our	or	EchoStar's	employees.		Notwithstanding	the	foregoing,	our	stock-based	compensation expense,	resulting	from	stock	awards	outstanding	at	the	Spin-off	date,	is	based	on	the	stock	awards	held	by	our	employees	regardless	of	whether	such	stock	awards	were issued	by	DISH	Network	or	EchoStar.		Accordingly,	stock-based	compensation	that	we	expense	with	respect	to	EchoStar	stock	awards	is	included	in	"Additional	paid-in capital"	on	our	Consolidated	Balance	Sheets.

Exercise	prices	for	stock	options	outstanding	and	exercisable	as	of	December	31,	2011	are	as	follows:

|  |  | Options	Outstanding |  |  | Options	Exercisable |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Number | Weighted- |  | Number | Weighted- |  |
|  | Outstanding | Average | Weighted- | Exercisable | Average | Weighted- |
|  | as\tof | Remaining | Average | as\tof | Remaining | Average |
|  | December\t31, | Contractual | Exercise | December\t31, | Contractual | Exercise |
|  | 2011 | Life | Price | 2011 | Life | Price |
| $\t\t\t-\t\t\t\t\t\t\t\t-\t\t\t\t\t$\t10.00 | 4,494,455 | 5.68 | $9.01 | 1,439,655 | 5.75 | $8.83 |
| $10.01\t\t\t-\t\t\t\t\t$\t15.00 | 834,288 | 6.49 | $14.01 | 205,651 | 6.41 | $13.96 |
| $15.01\t\t\t-\t\t\t\t\t$\t20.00 | 2,380,215 | 8.15 | $18.15 | 149,676 | 6.61 | $18.16 |
| $20.01\t\t\t-\t\t\t\t\t$\t25.00 | 8,195,584 | 4.10 | $22.56 | 3,908,084 | 3.29 | $22.45 |
| $25.01\t\t\t-\t\t\t\t\t$\t30.00 | 2,651,562 | 5.02 | $26.43 | 1,908,613 | 4.48 | $26.43 |
| $30.01\t\t\t-\t\t\t\t\t$\t35.00 | 2,741,555 | 8.46 | $31.44 | 755,604 | 6.48 | $32.73 |
| $35.01\t\t\t-\t\t\t\t\t$\t40.00 | 38,500 | 5.65 | $36.74 | 22,400 | 5.61 | $36.68 |
| $\t\t\t-\t\t\t\t\t\t\t\t-\t\t\t\t\t$\t40.00 | 21,336,159 | 5.66 | $20.53 | 8,389,683 | 4.41 | $21.70 |

# Stock	Award	Activity

Our	stock	option	activity	was	as	follows:

|  | 2011 |  | 2010 |  | 2009 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Weighted- |  | Weighted- |  | Weighted- |
|  |  | Average |  | Average |  | Average |
|  |  | Exercise |  | Exercise |  | Exercise |
|  | Options | Price | Options | Price | Options | Price |
| Total\toptions\toutstanding,\tbeginning\tof\tperiod\t(1) | 21,918,500 | $18.62 | 21,861,691 | $21.71 | 21,835,687 | $22.50 |
| Granted | 3,246,000 | $28.55 | 2,450,500 | $18.34 | 3,077,000 | $15.69 |
| Exercised | (2,347,341) | $15.73 | (448,729) | $9.23 | (356,793) | $8.95 |
| Forfeited\tand\tcancelled | (1,481,000) | $17.44 | (1,944,962) | $22.26 | (2,694,203) | $22.93 |
| Total\toptions\toutstanding,\tend\tof\tperiod | 21,336,159 | $20.53 | 21,918,500 | $18.62 | 21,861,691 | $21.71 |
| Performance\tbased\toptions\toutstanding,\tend\tof\tperiod |  |  |  |  |  |  |
| (2) | 9,549,375 | $19.20 | 10,978,750 | $15.98 | 9,362,500 | $17.23 |
| Exercisable\tat\tend\tof\tperiod | 8,389,683 | $21.70 | 7,590,264 | $22.83 | 8,062,091 | $27.74 |

(1)										The	beginning	of	period	weighted-average	exercise	price	for	the	year	ended	December	31,	2010	of	$21.71	does	not	reflect	the	2009	Stock	Option	Adjustment,	which occurred	subsequent	to	December	31,	2009.

(2)										These	stock	options	are	included	in	the	caption	"Total	options	outstanding,	end	of	period."		See	discussion	of	the	2005	LTIP,	2008	LTIP	and	other	employee performance	awards	below.

We	realized	tax	benefits	from	stock	awards	exercised	during	the	years	ended	December	31,	2011,	2010	and	2009	as	follows:

Based	on	the	closing	market	price	of	our	Class	A	common	stock	on	December	31,	2011,	the	aggregate	intrinsic	value	of	our	stock	options	was	as	follows:

|  | As	of	December	31,	2011 | As	of	December	31,	2011 |
| :--- | :--- | :--- |
|  | Options | Options |
|  | Outstanding | Exercisable |
|  | (In\tthousands) |  |
| Aggregate\tintrinsic\tvalue | $178,503 | $60,623 |

Our	restricted	stock	unit	activity	was	as	follows:

|  | Restricted<br>Stock<br>Units | Weighted-<br>Average<br>Grant	Date<br>Fair	Value | Restricted<br>Stock<br>Units | Weighted-<br>Average<br>Grant	Date<br>Fair	Value | Restricted<br>Stock<br>Units | Weighted-<br>Average<br>Grant	Date<br>Fair	Value |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Total\trestricted\tstock\tunits\toutstanding, |  |  |  |  |  |  |
| beginning\tof\tperiod | 1,564,332 | $23.00 | 1,246,284 | $25.93 | 1,975,940 | $27.44 |
| Granted | 300,000 | $30.67 | 600,000 | $18.15 | 6,666 | $11.11 |
| Vested | (70,830) | $27.15 | (69,875) | $31.36 | (113,197) | $28.47 |
| Forfeited\tand\tcancelled | (508,794) | $27.32 | (212,077) | $23.77 | (623,125) | $30.09 |
| Total\trestricted\tstock\tunits\toutstanding,\tend |  |  |  |  |  |  |
| of\tperiod | 1,284,708 | $23.25 | 1,564,332 | $23.00 | 1,246,284 | $25.93 |
| Restricted\tPerformance\tUnits\toutstanding, |  |  |  |  |  |  |
| end\tof\tperiod\t(1) | 1,284,708 | $23.25 | 1,494,457 | $22.61 | 1,096,034 | $25.18 |

(1)										These	Restricted	Performance	Units	are	included	in	the	caption	"Total	restricted	stock	units	outstanding,	end	of	period."		See	discussion	of	the	2005	LTIP,	2008 LTIP	and	other	employee	performance	awards	below.

# Long-Term	Performance-Based	Plans

2005	LTIP.		During	2005,	we	adopted	a	long-term,	performance-based	stock	incentive	plan	(the	"2005	LTIP").		The	2005	LTIP	provides	stock	options	and	restricted stock	units,	either	alone	or	in	combination,	which	vest	over	seven	years	at	the	rate	of	10%	per	year	during	the	first	four	years,	and	at	the	rate	of	20%	per	year	thereafter. Exercise	of	the	stock	awards	is	subject	to	the	foregoing	vesting	schedule	and	a	performance	condition	that	a	company-specific	subscriber	goal	is	achieved	by	March	31, 2015.

Contingent	compensation	related	to	the	2005	LTIP	will	not	be	recorded	in	our	financial	statements	unless	and	until	management	concludes	achievement	of	the performance	condition	is	probable.		Given	the	competitive	nature	of	our	business,	small	variations	in	subscriber	churn,	gross	new	subscriber	activation	rates	and	certain other	factors	can	significantly	impact	subscriber	growth.		Consequently,	while	it	was	determined	that	achievement	of	the	goal	was	not	probable	as	of	December	31, 2011,	that	assessment	could	change	in	the	future.

If	all	of	the	stock	awards	under	the	2005	LTIP	were	vested	and	the	goal	had	been	met	or	if	we	had	determined	that	achievement	of	the	goal	was	probable	during	the	year ended	December	31,	2011,	we	would	have	recorded	total	non-cash,	stock-based	compensation	expense	for	our	employees	as	indicated	in	the	table	below.		If	the	goal	is met	and	there	are	unvested	stock	awards	at	that	time,	the	vested	amounts	would	be	expensed	immediately	on	our	Consolidated	Statements	of	Operations	and Comprehensive	Income	(Loss),	with	the	unvested	portion	recognized	ratably	over	the	remaining	vesting	period.

|  |  | Vested |
| :--- | :--- | :--- |
|  | Total | Portion\t(1) |
|  | (In\tthousands) |  |
| DISH\tNetwork\tawards\theld\tby\tDISH\tNetwork\temployees | $35,239 | $25,920 |
| EchoStar\tawards\theld\tby\tDISH\tNetwork\temployees | 6,913 | 5,078 |
| Total | $42,152 | $30,998 |

(1)										Represents	the	amount	of	this	award	that	has	met	the	foregoing	vesting	schedule	and	would	therefore	vest	upon	achievement	of	the	performance	condition.

2008	LTIP.		During	2008,	we	adopted	a	long-term,	performance-based	stock	incentive	plan	(the	"2008	LTIP").		The	2008	LTIP	provides	stock	options	and	restricted stock	units,	either	alone	or	in	combination,	which	vest	based	on	company-specific	subscriber	and	financial	goals.		Exercise	of	the	stock	awards	is	contingent	on achieving	these	goals	by	December	31,	2015.

Although	no	awards	vest	until	the	Company	attains	the	performance	goals,	compensation	related	to	the	2008	LTIP	will	be	recorded	based	on	management's	assessment of	the	probability	of	meeting	the	remaining	goals.		If	the	remaining	goals	are	probable	of	being	achieved,	we	will	begin	recognizing	the	associated	non-cash,	stock-based compensation	expense	on	our	Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss)	over	the	estimated	period	to	achieve	the	goal.		See	table	below titled	"Estimated	Remaining	Non-Cash,	Stock-Based	Compensation	Expense."

During	the	first	quarter	2011,	we	determined	that	all	of	the	2008	LTIP	performance	goals	are	probable	of	achievement.		As	of	December	31,	2011,	approximately	45% of	the	2008	LTIP	awards	had	vested.		We	are	recognizing	the	associated	non-cash	stock-based	compensation	expense	on	our	Consolidated	Statements	of	Operations	and Comprehensive	Income	(Loss)	over	the	estimated	period	for	vesting	of	the	approximately	55%	of	the	awards	remaining,	as	indicated	in	the	table	below	titled	"Non-Cash, Stock-Based	Compensation	Expense	Recognized."

Other	Employee	Performance	Awards.		In	addition	to	the	above	long-term,	performance	stock	incentive	plans,	we	have	other	stock	awards	that	vest	based	on	certain

other	company-specific	subscriber	and	financial	goals.		Exercise	of	these	stock	awards	is	contingent	on	achieving	certain	performance	goals.

Additional	compensation	related	to	these	awards	will	be	recorded	based	on	management's	assessment	of	the	probability	of	meeting	the	remaining	performance	goals.		If the	remaining	goals	are	probable	of	being	achieved,	we	will	begin	recognizing	the	associated	non-cash,	stock-based	compensation	expense	on	our	Consolidated Statements	of	Operations	and	Comprehensive	Income	(Loss)	over	the	estimated	period	to	achieve	the	goal.		See	table	below	titled	"Estimated	Remaining	Non-Cash, Stock-Based	Compensation	Expense."

Although	no	awards	vest	until	the	performance	goals	are	attained,	we	determined	that	certain	goals	were	probable	of	achievement	and,	as	a	result,	recorded	non-cash, stock-based	compensation	expense	for	the	years	ended	December	31,	2011	and	2010,	as	indicated	in	the	table	below	titled	"Non-Cash,	Stock-Based	Compensation Expense	Recognized."

Given	the	competitive	nature	of	our	business,	small	variations	in	subscriber	churn,	gross	new	subscriber	activation	rates	and	certain	other	factors	can	significantly impact	subscriber	growth.		Consequently,	while	it	was	determined	that	achievement	of	certain	company-specific	subscriber	and	financial	goals	was	not	probable	as	of December	31,	2011,	that	assessment	could	change	in	the	future.

The	non-cash	stock-based	compensation	expense	associated	with	these	awards	is	as	follows:

|  |  | Performance |
| :--- | :--- | :--- |
| Estimated\tRemaining\tNon-Cash,\tStock-Based\tCompensation\tExpense | 2008\tLTIP | Awards |
|  | (In\tthousands) |  |
| Expense\testimated\tto\tbe\trecognized\tduring\t2012 | $4,637 | $162 |
| Estimated\tcontingent\texpense\tsubsequent\tto\t2012 | 3,457 | 51,258 |
| Total\testimated\tremaining\texpense\tover\tthe\tterm\tof\tthe\tplan | $8,094 | $51,420 |

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| Non-Cash,\tStock-Based\tCompensation\tExpense\tRecognized | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| 2008\tLTIP | $19,230 | $2,984 | $3,560 |
| Other\temployee\tperformance\tawards | 10 | 271 | 234 |
| Total\tnon-cash,\tstock-based\tcompensation\texpense\trecognized\tfor |  |  |  |
| performance\tbased\tawards | $19,240 | $3,255 | $3,794 |

Of	the	21.3	million	stock	options	and	1.3	million	restricted	stock	units	outstanding	under	our	stock	incentive	plans	as	of	December	31,	2011,	the	following	awards	were outstanding	pursuant	to	our	performance-based	stock	incentive	plans:

|  | Number	of | Exercise |
| :--- | :--- | :--- |
| Performance\tBased\tStock\tOptions | Awards | Price |
| 2005\tLTIP | 3,278,500 | $22.92 |
| 2008\tLTIP | 3,270,875 | $11.84 |
| Other\temployee\tperformance\tawards | 3,000,000 | $23.16 |
| Total | 9,549,375 | $19.20 |

# Restricted	Performance	Units	and	Other

| Restricted	Performance	Units	and	Other |  |
| :--- | :--- |
| 2005\tLTIP | 363,163 |
| 2008\tLTIP | 21,545 |
| Other\temployee\tperformance\tawards | 900,000 |
| Total | 1,284,708 |

During	the	year	ended	December	31,	2010,	we	incurred	$3	million	of	additional	non-cash,	stock-based	compensation	cost	in	connection	with	the	2009	Stock	Option Adjustment	discussed	previously.		This	amount	is	included	in	the	table	below.		Total	non-cash,	stock-based	compensation	expense	for	all	of	our	employees	is	shown	in the	following	table	for	the	years	ended	December	31,	2011,	2010	and	2009	and	was	allocated	to	the	same	expense	categories	as	the	base	compensation	for	such employees:

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Subscriber-related | $1,914 | $1,160 | $1,069 |
| General\tand\tadministrative | 29,607 | 14,227 | 11,158 |
| Total\tnon-cash,\tstock-based\tcompensation | $31,521 | $15,387 | $12,227 |

As	of	December	31,	2011,	our	total	unrecognized	compensation	cost	related	to	our	non-performance	based	unvested	stock	awards	was	$25	million	and	includes compensation	expense	that	we	will	recognize	for	EchoStar	stock	awards	held	by	our	employees	as	a	result	of	the	Spin-off.		This	cost	is	based	on	an	estimated	future forfeiture	rate	of	approximately	3.7%	per	year	and	will	be	recognized	over	a	weighted-average	period	of	approximately	two	years.		Share-based	compensation	expense	is

recognized	based	on	stock	awards	ultimately	expected	to	vest	and	is	reduced	for	estimated	forfeitures.		Forfeitures	are	estimated	at	the	time	of	grant	and	revised,	if necessary,	in	subsequent	periods	if	actual	forfeitures	differ	from	those	estimates.		Changes	in	the	estimated	forfeiture	rate	can	have	a	significant	effect	on	share-based compensation	expense	since	the	effect	of	adjusting	the	rate	is	recognized	in	the	period	the	forfeiture	estimate	is	changed.

# Valuation

The	fair	value	of	each	stock	option	for	the	years	ended	December	31,	2011,	2010	and	2009	was	estimated	at	the	date	of	the	grant	using	a	Black-Scholes	option	valuation model	with	the	following	assumptions:

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| Stock\tOptions | 2011 | 2010 | 2009 |
| Risk-free\tinterest\trate | 0.36%\t-\t3.18% | 1.50%\t-\t2.89% | 1.70%\t-\t3.19% |
| Volatility\tfactor | 31.74%\t-\t45.56% | 33.33%\t-\t38.63% | 29.72%\t-\t45.97% |
| Expected\tterm\tof\toptions\tin\tyears | 3.6\t\t\t-\t10.0 | 5.2\t-\t7.5 | 3.0\t-\t7.3 |
| Weighted-average\tfair\tvalue\tof\toptions\tgranted | $8.73\t\t\t-\t$14.77 | $6.83\t-\t$8.14 | $3.86\t-\t$8.29 |

On	December	2,	2009	and	December	1,	2011,	we	paid	a	$2.00	cash	dividend	per	share	on	our	outstanding	Class	A	and	Class	B	common	stock.		While	we	currently	do not	intend	to	declare	additional	dividends	on	our	common	stock,	we	may	elect	to	do	so	from	time	to	time.		Accordingly,	the	dividend	yield	percentage	used	in	the	Black- Scholes	option	valuation	model	is	set	at	zero	for	all	periods.		The	Black-Scholes	option	valuation	model	was	developed	for	use	in	estimating	the	fair	value	of	traded stock	options	which	have	no	vesting	restrictions	and	are	fully	transferable.		Consequently,	our	estimate	of	fair	value	may	differ	from	other	valuation	models.		Further, the	Black-Scholes	option	valuation	model	requires	the	input	of	highly	subjective	assumptions.		Changes	in	the	subjective	input	assumptions	can	materially	affect	the	fair value	estimate.

As	discussed	in	Note	13,	on	November	1,	2011,	we	declared	a	dividend	of	$2.00	per	share	on	our	outstanding	Class	A	and	Class	B	common	stock.		The	dividend	was paid	in	cash	on	December	1,	2011	to	shareholders	of	record	on	November	17,	2011.		In	light	ofsuch	dividend,	our	Executive	Compensation	Committee,	which administers	our	stock	incentive	plans,	determined	to	adjust	the	exercise	price	of	certain	stock	options	issued	under	the	plans	by	decreasing	the	exercise	price	by	$2.00 per	share;	provided,	that	the	exercise	price	of	eligible	stock	options	will	not	be	reduced	below	$1.00.		As	a	result	of	this	adjustment,	a	majority	of	the	stock	options outstanding	as	of	December	31,	2011	were	adjusted	subsequent

to	the	year	ended	December	31,	2011.		This	adjustment	will	result	in	additional	incremental	non-cash,	stock-based	compensation	expense	of	$23	million,	of	which	$14 million	will	be	expensed	during	first	quarter	2012	and	$9	million	will	be	expensed	over	the	remaining	vesting	period.

We	will	continue	to	evaluate	the	assumptions	used	to	derive	the	estimated	fair	value	of	our	stock	options	as	new	events	or	changes	in	circumstances	become	known.

# 16.				Commitments	and	Contingencies

# Commitments

|  |  |  |  | Payments	due	by	period |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Total | 2012 | 2013 | 2014 | 2015 | 2016 | Thereafter |
|  |  |  |  | (In\tthousands) |  |  |  |
| Long-term\tdebt\tobligations | $7,221,871 | $6,443 | $506,114 | $1,005,778 | $756,160 | $1,504,669 | $3,442,707 |
| Capital\tlease\tobligations | 271,908 | 29,202 | 24,541 | 25,207 | 27,339 | 30,024 | 135,595 |
| Interest\texpense\ton\tlong-term |  |  |  |  |  |  |  |
| debt\tand\tcapital\tlease |  |  |  |  |  |  |  |
| obligations | 3,257,955 | 537,000 | 534,685 | 497,274 | 399,500 | 313,963 | 975,533 |
| Satellite-related\tobligations | 2,224,776 | 220,527 | 248,679 | 248,461 | 248,244 | 248,027 | 1,010,838 |
| Operating\tlease\tobligations |  |  |  |  |  |  |  |
| (1) | 437,897 | 145,050 | 87,414 | 60,243 | 37,311 | 29,508 | 78,371 |
| Purchase\tobligations | 2,911,025 | 1,481,014 | 445,771 | 432,319 | 327,286 | 187,304 | 37,331 |
| Total | $16,325,432 | $2,419,236 | $1,847,204 | $2,269,282 | $1,795,840 | $2,313,495 | $5,680,375 |

(1)	In	connection	with	the	Blockbuster	Acquisition,	we	assumed	or	entered	into	new	leases	that	had	an	aggregate	commitment	of	$254	million	included	in	the	table above.		Certain	of	these	leases	include	favorable	early	termination	rights	for	us,	which	is	reflected	in	the	future	maturity.

The	table	above	does	not	include	$267	million	of	liabilities	associated	with	unrecognized	tax	benefits	which	were	accrued,	as	discussed	in	Note	12	and	are	included	on our	Consolidated	Balance	Sheets	as	of	December	31,	2011.		We	do	not	expect	any	portion	of	this	amount	to	be	paid	or	settled	within	the	next	twelve	months.

During	the	first	half	of	2011,	we	entered	into	a	transaction	to	acquire	100%	of	the	equity	of	reorganized	DBSD	North	America	for	approximately	$1.4	billion	upon DBSD	North	America's	emergence	from	bankruptcy,	which	included	capital	stock	and	convertible	securities	of,	and	certain	claims	related	to,	DBSD	North	America.		In addition,	in	June	2011,	we	entered	into	the	TerreStar	Transaction	for	a	purchase	price	of	$1.375	billion.		We	have	paid	all	but	$30	million	of	the	purchase	price	for	the TerreStar	Transaction	(included	in	the	table	above),	which	will	be	paid	upon	closing	of	the	TerreStar	Transaction,	or	upon	certain	other	conditions	being	met	under	the asset	purchase	agreement.		Additionally,	during	the	fourth	quarter	2011,	we	and	Sprint	entered	into	the	Sprint	Settlement	Agreement	pursuant	to	which	all	disputed	issues relating	to	our	acquisition	of	DBSD	North	America	and	the	TerreStar	Transaction	were	resolved	between	us	and	Sprint,	including,	but	not	limited	to,	issues	relating	to costs	allegedly	incurred	by	Sprint	to	relocate	users	from	the	spectrum	now	licensed	to	DBSD	North	America	and	TerreStar.		Pursuant	to	the	Sprint	Settlement Agreement,	we	made	a

net	payment	of	approximately	$114	million	to	Sprint.		Our	ultimate	acquisition	of	100%	of	the	equity	of	reorganized	DBSD	North	America	and	consummation	of	the TerreStar	Transaction	are	subject	to	certain	conditions,	including	approval	by	the	FCC.

# Guarantees

In	connection	with	the	Spin-off,	we	distributed	certain	satellite	lease	agreements	to	EchoStar	and	remained	the	guarantor	under	those	capital	leases	for	payments	totaling approximately	$185	million	over	approximately	the	next	three	years.

In	addition,	during	the	third	quarter	2009,	EchoStar	entered	into	a	new	satellite	transponder	service	agreement	for	Nimiq	5	through	2024.		We	sublease	this	capacity from	EchoStar	and	also	guarantee	a	certain	portion	of	its	obligation	under	this

agreement	through	2019.		As	of	December	31,	2011,	the	remaining	obligation	under	this	agreement	is	the	guarantee	of	$502	million.

As	of	December	31,	2011,	we	have	not	recorded	a	liability	on	the	balance	sheet	for	any	of	these	guarantees.

Our	2012	purchase	obligations	primarily	consist	of	binding	purchase	orders	for	receiver	systems	and	related	equipment,	digital	broadcast	operations,	satellite	and transponder	leases,	engineering	and	for	products	and	services	related	to	the	operation	of	our	DISH	pay-TV	service.		Our	purchase	obligations	also	include	certain guaranteed	fixed	contractual	commitments	to	purchase	programming	content.		Our	purchase	obligations	can	fluctuate	significantly	from	period	to	period	due	to,	among other	things,	management's	control	of	inventory	levels,	and	can	materially	impact	our	future	operating	asset	and	liability	balances,	and	our	future	working	capital requirements.

In	the	normal	course	of	business,	we	enter	into	contracts	to	purchase	programming	content	in	which	our	payment	obligations	are	fully	contingent	on	the	number	of subscribers	to	whom	we	provide	the	respective	content.		These	programming	commitments	are	not	included	in	the	"Commitments"	table	above.		The	terms	of	our contracts	typically	range	from	one	to	ten	years	with	annual	rate	increases.		Our	programming	expenses	will	continue	to	increase	to	the	extent	we	are	successful	growing our	subscriber	base.		In	addition,	our	margins	may	face	further	downward	pressure	from	price	increases	and	the	renewal	of	long	term	programming	contracts	on	less favorable	pricing	terms.

# Rent	Expense

Total	rent	expense	for	operating	leases	was	$409	million,	$263	million	and	$189	million	in	2011,	2010	and	2009,	respectively.		The	increase	in	rent	expense	from	2010 to	2011	was	primarily	attributable	to	building	rent	expense	associated	with	our	Blockbuster	operations	which	commenced	April	26,	2011.

Patents	and	Intellectual	Property

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

# Contingencies

# Separation	Agreement

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

# Litigation

For	certain	cases	described	on	the	following	pages,	management	is	unable	to	provide	a	meaningful	estimate	of	the	possible	loss	or	range	of	possible	loss	because,	among other	reasons,	(i)	the	proceedings	are	in	various	stages;	(ii)	damages	have	not	been	sought;	(iii)	damages	are	unsupported	and/or	exaggerated;	(iv)	there	is	uncertainty	as to	the	outcome	of	pending	appeals	or	motions;	(v)	there	are	significant	factual	issues	to	be	resolved;	and/or	(vi)	there	are	novel	legal	issues	or	unsettled	legal	theories	to be	presented	or	a	large	number	of	parties	(as	with	many	patent-related	cases).		For	these	cases,	however,	management	does	not	believe,	based	on	currently	available information,	that	the	outcomes	of	these	proceedings	will	have	a	material	adverse	effect	on	our	financial	condition,	though	the	outcomes	could	be	material	to	our operating	results	for	any	particular	period,	depending,	in	part,	upon	the	operating	results	for	such	period.

During	2008,	we	filed	a	lawsuit	against	ESPN,	Inc.,	ESPN	Classic,	Inc.,	ABC	Cable	Networks	Group,	Soapnet	L.L.C.	and	International	Family	Entertainment (collectively,	"ESPN")	for	breach	of	contract	in	New	York	State	Supreme	Court.		Our	complaint	alleges	that	ESPN	failed	to	provide	us	with	certain	high-definition	feeds of	the	Disney	Channel,	ESPN	News,	Toon	and	ABC	Family.		In	October	2011,	the	jury	returned	a	verdict	in	favor	of	the	defendants.		We	intend	to	appeal.

During	August	2010,	Ganas,	L.L.C.	("Ganas")	filed	suit	against	DISH	DBS	Corporation,	our	indirect	wholly	owned	subsidiary,	Sabre	Holdings	Corporation,	SAP America,	Inc.,	SAS	Institute	Inc.,	Scottrade,	Inc.,	TD	Ameritrade,	Inc.,	The	Charles	Schwab	Corporation,	TiVo	Inc.,	Unicoi	Systems	Inc.,	Xerox	Corporation,	Adobe Systems	Inc.,	AOL	Inc.,	Apple	Inc.,	Axibase	Corporation,	DirecTV,	E*Trade	Securities	L.L.C.,	Exinda	Networks,	Fidelity	Brokerage	Services	L.L.C.,	Firstrade Securities	Inc.,	Hewlett-Packard	Company,	iControl	Inc.,	International	Business	Machines	Corporation	and	JPMorgan	Chase	&	Co.	in	the	United	States	District	Court for	the	Eastern	District	of	Texas	alleging	infringement	of

United	States	Patent	Nos.	7,136,913,	7,325,053,	and	7,734,756.		The	patents	relate	to	hypertext	transfer	protocol	and	simple	object	access	protocol.		Ganas	is	an	entity that	seeks	to	license	an	acquired	patent	portfolio	without	itself	practicing	any	of	the	claims	recited	therein.		On	January	23,	2012,	Ganas	dismissed	the	case	against	us with	prejudice	pursuant	to	a	settlement	in	which	our	contribution	was	not	material.

On	July	2,	2009,	NorthPoint	Technology,	Ltd.	("Northpoint")	filed	suit	against	us,	EchoStar	and	DirecTV	in	the	United	States	District	Court	for	the	Western	District	of Texas	alleging	infringement	of	United	States	Patent	No.	6,208,636	(the	"'636	patent").		The	'636	patent	relates	to	the	use	of	multiple	low-noise	block	converter feedhorns,	or	LNBFs,	which	are	antennas	used	for	satellite	reception.		On	April	21,	2011,	the	U.S.	Patent	and	Trademark	Office	issued	an	order	granting	reexamination of	the	'636	patent.		On	June	21,	2011,	the	District	Court	entered	summary	judgment	in	our	favor,	finding	that	all	asserted	claims	of	the	'636	patent	are	invalid. Northpoint	has	appealed.

During	2000,	lawsuits	were	filed	in	Colorado	state	and	federal	courts	attempting	to	certify	nationwide	classes	on	behalf	of	certain	of	our	retailers.		The	plaintiffs requested	that	the	Courts	declare	certain	provisions	of,	and	changes	to,	alleged	agreements	between	us	and	the	retailers	invalid	and	unenforceable,	and	to	award	damages for	lost	incentives	and	payments,	charge	backs	and	other	compensation.		On	September	20,	2010,	we	agreed	to	a	settlement	of	both	lawsuits	that	provides,	among	other things,	for	mutual	releases	of	the	claims	underlying	the	litigation,	payment	by	us	of	up	to	$60	million,	and	the	option	for	certain	class	members	to	elect	to	reinstate	certain monthly	incentive	payments,	which	the	parties	agreed	have	an	aggregate	maximum	value	of	$23	million.		We	cannot	predict	with	any	degree	of	certainty	how

many	class	members	will	elect	to	reinstate	these	monthly	incentive	payments.		As	a	result,	a	$60	million	"Litigation	accrual"	was	recorded	as	of	December	31,	2010	on our	Consolidated	Balance	Sheets.		On	February	9,	2011,	the	court	granted	final	approval	of	the	settlement,	and	we	made	a	$60	million	settlement	payment	on	April	28, 2011.

We	intend	to	vigorously	defend	this	case.		In	the	event	that	a	court	ultimately	determines	that	we	infringe	the	asserted	patent,	we	may	be	subject	to	substantial	damages,

which	may	include	treble	damages,	and/or	an	injunction	that	could	require	us	to	materially	modify	certain	user-friendly	features	that	we	currently	offer	to	consumers. We	cannot	predict	with	any	degree	of	certainty	the	outcome	of	the	suit	or	determine	the	extent	of	any	potential	liability	or	damages.

In	connection	with	our	litigation	with	TiVo	Inc.	("TiVo"),	which	is	described	in	our	periodic	reports	filed	with	the	SEC,	including	in	our	annual	report	on	Form	10-K	for the	year	ended	December	31,	2010	under	the	caption	"Item	3.		Legal	Proceedings	—	TiVo	Inc.,"	on	April	20,	2011,	the	U.S.	Court	of	Appeals	for	the	Federal	Circuit vacated	the	District	Court's	contempt	ruling	on	infringement,	articulated	a	new	standard	for	determining	"colorable	difference"	and	remanded	that	issue	back	to	the District	Court	for	determination.		The	Federal	Circuit	also	vacated	the	District	Court's	amended	injunction	requiring	that	we	inform	the	court	of	any	further	attempts	to design	around	TiVo's	United	States	Patent	No.	6,233,389	(the	'389	patent)	and	seek	approval	from	the	court	before	any	such	design-around	is	implemented.		The Federal	Circuit	also	vacated	the	infringement	damages	for	the	period	after	we	deployed	our	original	alternative	technology	(although	it	did	not	foreclose	that	damages may	be	reinstated	if	upon	remand	a	new	court	or	jury	decision

found	that	the	original	alternative	technology	infringed	TiVo's	'389	patent).		The	Federal	Circuit	affirmed	the	District	Court's	contempt	ruling	on	disablement,	holding that	the	original	2006	injunction	required	that	we	disable	DVR	functionality	in	all	but	approximately	192,000	digital	set-top	boxes	deployed	with	customers	(the "Disablement	Provision")	and	affirmed	the	$90	million	in	contempt	sanctions	awarded	against	us	for	violating	the	Disablement	Provision.

Under	the	settlement	agreement,	all	pending	litigation	has	been	dismissed	with	prejudice	and	all	injunctions	that	permanently	restrain,	enjoin	or	compel	any	action	by	us or	EchoStar	have	been	dissolved.		We	and	EchoStar	are	jointly	responsible	for	making	payments	to	TiVo	in	the	aggregate	amount	of	$500	million,	including	an	initial payment	of	$300	million	and	the	remaining	$200	million	in	six	equal	annual	installments	between	2012	and	2017.		Pursuant	to	the	terms	and	conditions	of	the agreements	entered	into	in	connection	with	the	Spin-off	of	EchoStar	from	us,	we	made	the	initial	payment	to	TiVo	in	May	2011,	except	for	a	contribution	from	EchoStar totaling	approximately	$10	million,	representing	an	allocation	of	liability	relating	to	EchoStar's	sales	of	DVR-enabled	receivers	to	an	international	customer.		Future payments	will	be	allocated	between	us	and	EchoStar	based	on	historical	sales	of	certain	licensed	products,	with	us	being	responsible	for	95%	of	each	annual	payment.

In	January	2008,	Voom	filed	a	lawsuit	against	us	in	New	York	Supreme	Court,	alleging	breach	of	contract	and	other	claims	arising	from	our	termination	of	the affiliation	agreement	governing	carriage	of	certain	Voom	HD	channels	on	the	DISH	pay-TV	service.		At	that	time,	Voom	also	sought	a	preliminary	injunction	to	prevent us	from	terminating	the	agreement.		The	Court	denied	Voom's	request,	finding,	among	other	things,	that	Voom	had	not	demonstrated	that	it	was	likely	to	prevail	on	the merits.		In	April	2010,	we	and	Voom	each	filed	motions	for	summary	judgment.		Voom	later	filed	two	motions	seeking	discovery	sanctions.		On	November	9,	2010,	the

Court	issued	a	decision	denying	both	motions	for	summary	judgment,	but	granting	Voom's	motions	for	discovery	sanctions.		The	Court's	decision	provides	for	an adverse	inference	jury	instruction	at	trial	and	precludes	our	damages	expert	from	testifying	at	trial.		We	appealed	the	grant	of	Voom's	motion	for	discovery	sanctions	to the	New	York	State	Supreme	Court,	Appellate	Division,	First	Department.		On	February	15,	2011,	the	appellate	court	granted	our	motion	to	stay	the	trial	pending	our appeal.		On	January	31,	2012,	the	appellate	court	affirmed	the	order	imposing	discovery	sanctions	and	precluding	our	damages	expert	from	testifying	at	trial.		We	are seeking	leave	to	appeal	to	New	York's	highest	state	court,	the	Court	of	Appeals.		A	trial	date	has	not	been	set.		Voom	is	claiming	over	$2.5	billion	in	damages.		We intend	to	vigorously	defend	this	case.		We	cannot	predict	with	any	degree	of	certainty	the	outcome	of	the	suit	or	determine	the	extent	of	any	potential	liability	or damages.

# 17.				Segment	Reporting

Operating	segments	are	components	of	an	enterprise	for	which	separate	financial	information	is	available	and	regularly	evaluated	by	the	chief	operating	decision maker(s)	of	an	enterprise.		Under	this	definition,	we	operate	two	primary	segments.

·																		DISH.		The	DISH	pay-TV	service	had	13.967	million	subscribers	in	the	United	States	as	of	December	31,	2011.		The	DISH	pay-TV	service	consists	of	FCC licenses	authorizing	us	to	use	DBS	and	FSS	spectrum,	our	owned	and	leased	satellites,	receiver	systems,	third-party	broadcast	operations,	customer	service facilities,	a	leased	fiber	network,	in-home	service	and	call	center	operations,	and	certain	other	assets	utilized	in	our	operations.

·																		Blockbuster.		On	April	26,	2011,	we	completed	the	Blockbuster	Acquisition.		We	acquired	Blockbuster	operations	in	the	United	States	and	in	certain	foreign countries.		Blockbuster	primarily	offers	movies	and	video	games	for	sale	and	rental	through	multiple	distribution	channels	such	as	retail	stores,	by-mail,	digital devices,	the	blockbuster.com	website	and	the	BLOCKBUSTER	On	Demand	service.

|  | As	of	December	31,<br>2011<br>(In	thousands) | 2010 |
| :--- | :--- | :--- |
| Total\tassets: |  |  |
| DISH\tNetwork | $11,104,003 | $9,632,153 |
| Blockbuster | 453,661 | — |
| Eliminations | (87,433) | — |
| Total\tassets | $11,470,231 | $9,632,153 |

|  |  |  | Other	&amp; | Consolidated |
| :--- | :--- | :--- | :--- | :--- |
|  | DISH | Blockbuster\t(1) | Eliminations | Total |
|  |  | (In\tthousands) | (In\tthousands) |  |
| Year\tEnded\tDecember\t31,\t2011 |  |  |  |  |
| Total\trevenue | $13,078,055 | $974,875 | $(4,537) | $14,048,393 |
| Depreciation\tand\tamortization | 911,663 | 10,410 | — | 922,073 |
| Total\tcosts\tand\texpenses | 10,148,930 | 976,046 | (4,537) | 11,120,439 |
| Operating\tincome\t(loss) | 2,929,125 | (1,171) | — | 2,927,954 |
| Net\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | 1,512,402 | 3,505 | — | 1,515,907 |
| Year\tEnded\tDecember\t31,\t2010 |  |  |  |  |
| Total\trevenue | $12,640,744 | $— $— | $— $— | $12,640,744 |
| Depreciation\tand\tamortization | 983,965 | — | — | 983,965 |
| Total\tcosts\tand\texpenses | 10,699,916 | — | — | 10,699,916 |
| Operating\tincome\t(loss) | 1,940,828 | — | — | 1,940,828 |
| Net\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | 984,729 | — | — | 984,729 |
| Year\tEnded\tDecember\t31,\t2009 |  |  |  |  |
| Total\trevenue | $11,664,151 | $— $— | $— $— | $11,664,151 |
| Depreciation\tand\tamortization | 940,033 | — | — | 940,033 |
| Total\tcosts\tand\texpenses | 10,277,221 | — | — | 10,277,221 |
| Operating\tincome\t(loss) | 1,386,930 | — | — | 1,386,930 |
| Net\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | 635,545 | — | — | 635,545 |

Geographic	Information.		Revenues	are	attributed	to	geographic	regions	based	upon	the	location	where	the	goods	and	services	are	provided.		During	the	year	ended December	31,	2011,	our	international	revenue	includes	transactions	with	customers	in	United	Kingdom,	Mexico	and	Denmark	totaling	$242	million,	$117	million	and $45	million,	respectively.

18.				Valuation	and	Qualifying	Accounts

Our	valuation	and	qualifying	accounts	as	of	December	31,	2011,	2010	and	2009	are	as	follows:

|  | Balance	at | Charged	to |  | Balance	at |
| :--- | :--- | :--- | :--- | :--- |
|  | Beginning | Costs\tand |  | End\tof |
| Allowance\tfor\tdoubtful\taccounts | of\tYear | Expenses | Deductions | Year |
|  |  | (In\tthousands) | (In\tthousands) |  |
| For\tthe\tyears\tended: |  |  |  |  |
| December\t31,\t2011 | $29,650 | $100,321 | $(117,621) | $12,350 |
| December\t31,\t2010 | $16,372 | $115,478 | $(102,200) | $29,650 |
| December\t31,\t2009 | $15,207 | $112,025 | $(110,860) | $16,372 |

# 19.				Quarterly	Financial	Data	(Unaudited)

Our	quarterly	results	of	operations	are	summarized	as	follows:

|  |  | For	the	Three	Months	Ended | For	the	Three	Months	Ended |  |
| :--- | :--- | :--- | :--- | :--- |
|  | March\t31 | June\t30 | September\t30 | December\t31 |
|  |  | (In\tthousands,\texcept\tper\tshare\tdata) | (In\tthousands,\texcept\tper\tshare\tdata) |  |
| Year\tended\tDecember\t31,\t2011: |  |  |  |  |
| Total\trevenue | $3,224,131 | $3,590,161 | $3,602,651 | $3,631,450 |
| Operating\tincome\t(loss) | 983,353 | 717,782 | 624,839 | 601,980 |
| Net\tincome\t(loss) | 549,326 | 334,838 | 318,978 | 312,436 |
| Net\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | 549,394 | 334,760 | 319,099 | 312,654 |
| Basic\tnet\tincome\t(loss)\tper\tshare\tattributable\tto\tDISH\tNetwork | $1.24 | $0.75 | $0.72 | $0.70 |
| Diluted\tnet\tincome\t(loss)\tper\tshare\tattributable\tto\tDISH\tNetwork | $1.22 | $0.75 | $0.71 | $0.70 |
| Year\tended\tDecember\t31,\t2010: |  |  |  |  |
| Total\trevenue | $3,057,395 | $3,169,042 | $3,207,728 | $3,206,579 |
| Operating\tincome\t(loss) | 456,979 | 525,810 | 454,657 | 503,382 |
| Net\tincome\t(loss) | 230,915 | 256,984 | 244,978 | 251,855 |
| Net\tincome\t(loss)\tattributable\tto\tDISH\tNetwork | 230,947 | 256,990 | 244,964 | 251,828 |
| Basic\tnet\tincome\t(loss)\tper\tshare\tattributable\tto\tDISH\tNetwork | $0.52 | $0.57 | $0.55 | $0.57 |
| Diluted\tnet\tincome\t(loss)\tper\tshare\tattributable\tto\tDISH\tNetwork | $0.52 | $0.57 | $0.55 | $0.56 |

# 20.				Related	Party	Transactions

# Related	Party	Transactions	with	EchoStar

Following	the	Spin-off,	EchoStar	has	operated	as	a	separate	public	company,	and	we	have	no	continued	ownership	interest	in	EchoStar.		However,	a	substantial	majority of	the	voting	power	of	the	shares	of	both	companies	is	owned

beneficially	by	Charles	W.	Ergen,	our	Chairman,	or	by	certain	trusts	established	by	Mr.	Ergen	for	the	benefit	of	his	family.

EchoStar	is	our	primary	supplier	of	set-top	boxes	and	digital	broadcast	operations	and	our	key	supplier	of	transponder	capacity.		Generally,	the	prices	charged	for products	and	services	provided	under	the	agreements	are	based	on	pricing	equal	to	EchoStar's	cost	plus	a	fixed	margin	(unless	noted	differently	below),	which	will	vary depending	on	the	nature	of	the	products	and	services	provided.

Since	the	Spin-off,	we	and	EchoStar	have	entered	into	certain	agreements	pursuant	to	which	we	obtain	certain	products,	services	and	rights	from	EchoStar,	EchoStar obtains	certain	products,	services	and	rights	from	us,	and	we	and	EchoStar	have	indemnified	each	other	against	certain	liabilities	arising	from	our	respective	businesses. We	also	may	enter	into	additional	agreements	with	EchoStar	in	the	future.		The	following	is	a	summary	of	the	terms	of	the	principal	agreements	that	we	have	entered	into with	EchoStar	that	may	have	an	impact	on	our	financial	position	and	results	of	operations.

# "Equipment	sales	-	EchoStar"

Remanufactured	Receiver	Agreement.		In	connection	with	the	Spin-off,	we	entered	into	a	remanufactured	receiver	agreement	with	EchoStar	pursuant	to	which	EchoStar has	the	right,	but	not	the	obligation,	to	purchase	remanufactured	receivers	and	accessories	from	us	at	cost	plus	a	fixed	margin,	which	varies	depending	on	the	nature	of the	equipment	purchased.		In	November	2011,	we	and	EchoStar	extended	this	agreement	until	December	31,	2012.		EchoStar	may	terminate	the	remanufactured	receiver agreement	for	any	reason	upon	at	least	60	days	notice	to	us.		We	may	also	terminate	this	agreement	if	certain	entities	acquire	us.

# "Services	and	other	revenue	-	EchoStar"

Professional	Services	Agreement.		Prior	to	2010,	in	connection	with	the	Spin-off,	we	entered	into	various	agreements	with	EchoStar	including	the	Transition	Services Agreement,	Satellite	Procurement	Agreement	and	Services	Agreement,	which	all	expired	on	January	1,	2010	and	were	replaced	by	a	Professional	Services	Agreement. During	2009,	we	and	EchoStar	agreed	that	EchoStar	shall	continue	to	have	the	right,	but	not	the	obligation,	to	receive	from	us	the	following	services,	among	others certain	of	which	were	previously	provided	under	the	Transition	Services	Agreement:	information	technology,	travel	and	event	coordination,	internal	audit,	legal, accounting	and	tax,	benefits	administration,	program	acquisition	services	and	other	support	services.		Additionally,	we	and	EchoStar	agreed	that	we	shall	continue	to have	the	right,	but	not	the	obligation,	to	engage	EchoStar	to	manage	the	process	of	procuring	new	satellite	capacity	for	DISH	Network	(previously	provided	under	the Satellite	Procurement	Agreement)	and	receive	logistics,	procurement	and	quality	assurance	services	from	EchoStar	(previously	provided	under	the	Services Agreement).		The	Professional	Services	Agreement	automatically	renewed	on	January	1,	2012	for	an	additional	one-year	period	until	January	1,	2013	and	renews automatically	for	successive	one-year	periods	thereafter,	unless	terminated	earlier	by	either	party	upon	at	least	60	days	notice.		However,	either	party	may	terminate	the Professional	Services	Agreement	in	part	with	respect	to	any	particular	service	it	receives	for	any	reason	upon	at	least	30	days	notice.

Management	Services	Agreement.		We	entered	into	a	Management	Services	Agreement	with	EchoStar	pursuant	to	which	we	make	certain	of	our	officers	available	to provide	services	(which	are	primarily	legal	and	accounting	services)	to	EchoStar.		Specifically,	Paul	W.	Orban	remains	employed	by	us,	but	also	serves	as	EchoStar's Senior	Vice	President	and	Controller.		In	addition,	R.	Stanton	Dodge	also	served	as	EchoStar's	Executive	Vice	President,	General	Counsel	and	Secretary	through November	2011.		EchoStar	makes	payments	to	us	based	upon	an	allocable	portion	of	the	personnel	costs	and	expenses	incurred	by	us	with	respect	to	such	officers (taking	into	account	wages	and	fringe	benefits).		These	allocations	are	based	upon	the	estimated	percentages	of	time	to	be	spent	by	our	executive	officers	performing services	for	EchoStar	under	the	management	services	agreement.		EchoStar	also	reimburses	us	for	direct	out-of-pocket	costs	incurred	by	us	for	management	services

provided	to	EchoStar.		We	and	EchoStar	evaluate	all	charges	for	reasonableness	at	least	annually	and	make	any	adjustments	to	these	charges	as	we	and	EchoStar mutually	agree	upon.

The	management	services	agreement	automatically	renewed	on	January	1,	2012	for	an	additional	one-year	period	until	January	1,	2013	and	renews	automatically	for successive	one-year	periods	thereafter,	unless	terminated	earlier:		(i)	by	EchoStar	at	any	time	upon	at	least	30	days	notice;	(ii)	by	us	at	the	end	of	any	renewal	term,	upon at	least	180	days	notice;	or	(iii)	by	us	upon	notice	to	EchoStar,	following	certain	changes	in	control.

Satellite	Capacity	Leased	to	EchoStar.		During	2009,	we	entered	into	a	satellite	capacity	agreement	pursuant	to	which	EchoStar	leases	certain	satellite	capacity	from	us on	EchoStar	I.		The	fee	for	the	services	provided	under	this	satellite	capacity	agreement	depends,	among	other	things,	upon	the	orbital	location	of	the	satellite	and	the length	of	the	lease.		The	lease	generally	terminates	upon	the	earlier	of:		(i)	the	end	of	life	or	replacement	of	the	satellite	(unless	EchoStar	determines	to	renew	on	a	year- to-year	basis);	(ii)	the	date	the	satellite	fails;	(iii)	the	date	the	transponder	on	which	service	is	being	provided	fails;	or	(iv)	a	certain	date,	which	depends,	among	other things,	upon	the	estimated	useful	life	of	the	satellite,	whether	the	replacement	satellite	fails	at	launch	or	in	orbit	prior	to	being	placed	into	service,	and	the	exercise	of certain	renewal	options.		EchoStar	generally	has	the	option	to	renew	this	lease	on	a	year-to-year	basis	through	the	end	of	the	satellite's	life.		There	can	be	no	assurance that	any	options	to	renew	this	agreement	will	be	exercised.

Real	Estate	Lease	Agreement.		During	2008,	we	entered	into	a	sublease	for	space	at	185	Varick	Street,	New	York,	New	York	to	EchoStar	for	a	period	of	approximately seven	years.		The	rent	on	a	per	square	foot	basis	for	this	sublease	was	comparable	to	per	square	foot	rental	rates	of	similar	commercial	property	in	the	same	geographic area	at	the	time	of	the	sublease,	and	EchoStar	is	responsible	for	its	portion	of	the	taxes,	insurance,	utilities	and	maintenance	of	the	premises.

# "Satellite	and	transmission	expenses	—	EchoStar"

Broadcast	Agreement.		In	connection	with	the	Spin-off,	we	and	EchoStar	entered	into	a	broadcast	agreement	pursuant	to	which	EchoStar	provided	certain	broadcast services	to	us,	including	teleport	services	such	as	transmission	and	downlinking,	channel	origination	services,	and	channel	management	services	for	a	period	ending	on January	1,	2012	(the	"Prior	Broadcast	Agreement").		We	had	the	ability	to	terminate	channel	origination	services	and	channel	management	services	for	any	reason	and without	any	liability	upon	at	least	60	days	notice	to	EchoStar.		If	we	terminated	teleport	services	for	a	reason	other	than	our	breach,	we	were	obligated	to	pay	EchoStar the	aggregate	amount	of	the	remainder	of	the	expected	cost	of	providing	the	teleport	services.		The	fees	for	the	services	provided	under	the	Prior	Broadcast	Agreement were	calculated	at	cost	plus	a	fixed	margin,	which	varied	depending	on	the	nature	of	the	products	and	services	provided.

Effective	January	1,	2012,	we	and	EchoStar	entered	into	a	new	broadcast	agreement	(the	"2012	Broadcast	Agreement")	pursuant	to	which	EchoStar	will	continue	to provide	broadcast	services	to	us,	for	the	period	from	January	1,	2012	to	December	31,	2016.		The	material	terms	of	the	2012	Broadcast	Agreement	are	substantially	the same	as	the	material	terms	of	the	Prior	Broadcast	Agreement,	except	that:		(i)	the	fees	for	services	provided	under	the	2012	Broadcast	Agreement	are	calculated	at either:		(a)	EchoStar's	cost	of	providing	the	relevant	service	plus	a	fixed	dollar	fee,	which	is	subject	to	certain	adjustments;	or	(b)	EchoStar's	cost	of	providing	the relevant	service	plus	a	fixed	margin,	which	will	depend	on	the	nature	of	the	services	provided;	and	(ii)	if	we	terminate	the	teleport	services	provided	under	the	2012 Broadcast	Agreement	for	a	reason	other	than	EchoStar's	breach,	we	are	generally	obligated	to	reimburse	EchoStar	for	any	direct	costs	EchoStar	incurs	related	to	any such	termination	that	it	cannot	reasonably	mitigate.		At	the	commencement	of	the	2012	Broadcast	Agreement	the	aggregate	pricing	for	the	services	provided	thereunder was	substantially	the	same	as	the	aggregate	pricing	for	the	services	provided	under	the	Prior	Broadcast	Agreement	at	the	time	of	its	expiration.

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

Satellite	Capacity	Leased	from	EchoStar.		Since	the	Spin-off,	we	entered	into	certain	satellite	capacity	agreements	pursuant	to	which	we	lease	certain	satellite	capacity on	certain	satellites	owned	or	leased	by	EchoStar.		The	fees	for	the	services	provided	under	these	satellite	capacity	agreements	depend,	among	other	things,	upon	the orbital	location	of	the	applicable	satellite	and	the	length	of	the	lease.		The	term	of	each	lease	is	set	forth	below:

EchoStar	III,	VI,	VIII	and	XII.		We	lease	certain	satellite	capacity	from	EchoStar	on	EchoStar	VI,	VIII	and	XII.		The	leases	generally	terminate	upon	the	earlier	of: (i)	the	end	of	life	or	replacement	of	the	satellite	(unless	we	determine	to	renew	on	a	year-to-year	basis);	(ii)	the	date	the	satellite	fails;	(iii)	the	date	the	transponders on	which	service	is	being	provided	fails;	or	(iv)	a	certain	date,	which	depends	upon,	among	other	things,	the	estimated	useful	life	of	the	satellite,	whether	the replacement	satellite	fails	at	launch	or	in	orbit	prior	to	being	placed	into	service	and	the	exercise	of	certain	renewal	options.		We	generally	have	the	option	to	renew each	lease	on	a	year-to-year	basis	through	the	end	of	the	respective	satellite's	life.		There	can	be	no	assurance	that	any	options	to	renew	such	agreements	will	be exercised.		In	August	2010,	our	lease	of	EchoStar	III	terminated	when	it	was	replaced	by	EchoStar	XV.

EchoStar	IX.		We	lease	certain	satellite	capacity	from	EchoStar	on	EchoStar	IX.		Subject	to	availability,	we	generally	have	the	right	to	continue	to	lease	satellite capacity	from	EchoStar	on	EchoStar	IX	on	a	month-to-month	basis.

EchoStar	XVI.		We	will	lease	certain	satellite	capacity	from	EchoStar	on	EchoStar	XVI	after	its	service	commencement	date	and	this	lease	generally	terminates upon	the	earlier	of:		(i)	the	end	of	life	or	replacement	of	the	satellite;	(ii)	the	date	the	satellite	fails;	(iii)	the	date	the	transponder(s)	on	which	service	is	being provided	under	the	agreement	fails;	or	(iv)	ten	years	following	the	actual	service	commencement	date.		Upon	expiration	of	the	initial	term,	we	have	the	option	to renew	on	a	year-to-year	basis	through	the	end	of	life	of	the	satellite.		There	can	be	no	assurance	that	any	options	to	renew	this	agreement	will	be	exercised. EchoStar	XVI	is	expected	to	be	launched	during	the	second	half	of	2012.

EchoStar	XV.		EchoStar	XV	is	owned	by	us	and	is	operated	at	the	61.5	degree	orbital	location.		The	FCC	has	granted	EchoStar	an	authorization	to	operate	the	satellite	at the	61.5	degree	orbital	location.		For	so	long	as	EchoStar	XV	remains	in	service	at	the	61.5	degree	orbital	location,	we	are	obligated	to	pay	EchoStar	a	fee,	which	varies depending	on	the	number	of	frequencies	being	used	by	EchoStar	XV.

Nimiq	5	Agreement.		During	2009,	EchoStar	entered	into	a	fifteen-year	satellite	service	agreement	with	Telesat	Canada	("Telesat")	to	receive	service	on	all	32	DBS transponders	on	the	Nimiq	5	satellite	at	the	72.7	degree	orbital	location	(the	"Telesat	Transponder	Agreement").		During	2009,	EchoStar	also	entered	into	a	satellite service	agreement	(the	"DISH	Telesat	Agreement")	with	us,	pursuant	to	which	we	currently	receive	service	from	EchoStar	on	all	32	of	the	DBS	transponders	covered	by

the	Telesat	Transponder	Agreement.		We	have	also	guaranteed	certain	obligations	of	EchoStar	under	the	Telesat	Transponder	Agreement.		See	discussion	under "Guarantees"	in	Note	16.

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

QuetzSat-1	Lease	Agreement.		During	2008,	EchoStar	entered	into	a	ten-year	satellite	service	agreement	with	SES	Latin	America	S.A.	("SES"),	which	provides,	among other	things,	for	the	provision	by	SES	to	EchoStar	of	service	on	32	DBS	transponders	on	the	QuetzSat-1	satellite.		During	2008,	EchoStar	also	entered	into	a	transponder service	agreement	("QuetzSat-1	Transponder	Agreement")	with	us	pursuant	to	which	we	will	receive	service	from	EchoStar	on	24	of	the	DBS	transponders.		The QuetzSat-1	Transponder	Agreement	will	be	accounted	for	as	an	operating	lease.		QuetzSat-1	was	launched	on	September	29,	2011	and	was	placed	into	service	during	the fourth	quarter	2011

at	the	67.1	degree	orbital	location	while	we	and	EchoStar	explore	alternative	uses	for	the	QuetzSat-1	satellite.		In	the	interim,	EchoStar	is	providing	us	with	alternate capacity	at	the	77	degree	orbital	location.

Under	the	terms	of	the	QuetzSat-1	Transponder	Agreement,	we	will	make	certain	monthly	payments	to	EchoStar	commencing	when	the	QuetzSat-1	satellite	is	placed into	service	at	the	77	degree	orbital	location	and	continuing	through	the	remainder	of	the	service	term.		Unless	earlier	terminated	under	the	terms	and	conditions	of	the QuetzSat-1	Transponder	Agreement,	the	initial	service	term	will	expire	in	November	2021.		Upon	expiration	of	the	initial	term,	we	have	the	option	to	renew	the QuetzSat-1	Transponder	Agreement	on	a	year-to-year	basis	through	the	end	of	life	of	the	QuetzSat-1	satellite.		Upon	an	in-orbit	failure	or	end	of	life	of	the	QuetzSat-1 satellite,	and	in	certain	other	circumstances,	we	have	certain	rights	to	receive	service	from	EchoStar	on	a	replacement	satellite.		There	can	be	no	assurance	that	any options	to	renew	the	QuetzSat-1	Transponder	Agreement	will	be	exercised	or	that	we	will	exercise	our	option	to	receive	service	on	a	replacement	satellite.

TT&C	Agreement.		In	connection	with	the	Spin-off,	we	entered	into	a	telemetry,	tracking	and	control	("TT&C")	agreement	pursuant	to	which	we	received	TT&C services	from	EchoStar	for	a	period	ending	on	January	1,	2012	(the	"Prior	TT&C	Agreement").		The	fees	for	services	provided	under	the	Prior	TT&C	Agreement	were calculated	at	cost	plus	a	fixed	margin.		We	were	able	to	terminate	the	Prior	TT&C	Agreement	for	any	reason	upon	60	days	notice.

On	January	1,	2012,	we	entered	into	a	TT&C	agreement	pursuant	to	which	we	will	continue	to	receive	TT&C	services	from	EchoStar	for	a	period	ending	on December	31,	2016	(the	"2012	TT&C	Agreement").		The	material	terms	of	the	2012	TT&C	Agreement	are	substantially	the	same	as	the	material	terms	of	the	Prior TT&C	Agreement,	except	that	the	fees	for	services	provided	under	the	2012	TT&C	Agreement	are	calculated	at	either:	(i)	a	fixed	fee;	or	(ii)	cost	plus	a	fixed	margin, which	will	vary	depending	on	the	nature	of	the	services	provided.

# "Cost	of	sales	—	subscriber	promotion	subsidies	—	EchoStar"

Receiver	Agreement.		EchoStar	is	currently	our	sole	supplier	of	set-top	box	receivers.		The	table	below	indicates	the	dollar	value	of	set-top	boxes	and	other	equipment that	we	purchased	from	EchoStar	as	well	as	the	amount	of	purchases	that	are	included	in	"Cost	of	sales	—	subscriber	promotion	subsidies	—	EchoStar"	on	our Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss).		The	remaining	amount	is	included	in	"Inventory"	and	"Property	and	equipment,	net"	on	our Consolidated	Balance	Sheets.

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| Purchases\tfrom\tEchoStar | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Set-top\tboxes\tand\tother\tequipment | $1,158,293 | $1,470,173 | $1,174,763 |
| Set-top\tboxes\tand\tother\tequipment\tincluded\tin\t"Cost\tof\tsales\t—\tsubscriber\npromotion\tsubsidies\t—\tEchoStar" | $249,440 | $175,777 | $188,793 |

In	connection	with	the	Spin-off,	we	and	EchoStar	entered	into	a	receiver	agreement	pursuant	to	which	we	had	the	right,	but	not	the	obligation,	to	purchase	digital	set-top boxes	and	related	accessories,	and	other	equipment	from	EchoStar	for	a	period	ending	on	January	1,	2012	(the	"Prior	Receiver	Agreement").		The	Prior	Receiver Agreement	allowed	us	to	purchase	digital	set-top	boxes,	related	accessories	and	other	equipment	from	EchoStar	at	cost	plus	a	fixed	percentage	margin,	which	varied depending	on	the	nature	of	the	equipment	purchased.		Additionally,	EchoStar	provided	us	with	standard	manufacturer	warranties	for	the	goods	sold	under	the	Prior Receiver	Agreement.		We	were	able	to	terminate	the	Prior	Receiver	Agreement	for	any	reason	upon	at	least	60	days	notice	to	EchoStar.		EchoStar	was	able	to	terminate the	Prior	Receiver	Agreement	if	certain	entities	were	to	acquire	us.		The	Prior	Receiver	Agreement	also	included	an	indemnification	provision,	whereby	the	parties indemnified	each	other	for	certain	intellectual	property	matters.

Effective	January	1,	2012,	we	and	EchoStar	entered	into	a	new	agreement	(the	"2012	Receiver	Agreement")	pursuant	to	which	we	continue	to	have	the	right,	but	not	the obligation,	to	purchase	digital	set-top	boxes,	related	accessories,	and	other	equipment	from	EchoStar	for	the	period	from	January	1,	2012	to	December	31,	2014.		We have	an	option,	but	not	the	obligation,	to	extend	the	2012	Receiver	Agreement	for	one	additional	year	upon	180	days

notice	prior	to	the	end	of	the	term.		The	material	terms	of	the	2012	Receiver	Agreement	are	substantially	the	same	as	the	material	terms	of	the	Prior	Receiver	Agreement, except	that	the	2012	Receiver	Agreement	allows	us	to	purchase	digital	set-top	boxes,	related	accessories	and	other	equipment	from	EchoStar	either:	(i)	at	a	cost (decreasing	as	EchoStar	reduces	costs	and	increasing	as	costs	increase)	plus	a	dollar	mark-up	which	will	depend	upon	the	cost	of	the	product	subject	to	a	collar	on EchoStar's	mark-up;	or	(ii)	at	cost	plus	a	fixed	margin,	which	will	depend	on	the	nature	of	the	equipment	purchased.		Under	the	2012	Receiver	Agreement	EchoStar's margins	will	be	increased	if	they	are	able	to	reduce	the	costs	of	their	digital	set-top	boxes	and	their	margins	will	be	impaired	if	these	costs	increase.		At	the commencement	of	the	2012	Receiver	Agreement,	the	aggregate	pricing	for	the	digital	set-top	boxes,	related	accessories,	and	other	equipment	sold	under	the	2012 Receiver	Agreement	was	substantially	the	same	as	the	aggregate	pricing	for	the	products	and	equipment	sold	under	the	Prior	Receiver	Agreement	at	the	time	of	its expiration.

# "General	and	administrative	expenses	—	EchoStar"

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

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

·																		Inverness	Lease	Agreement.		In	November	2011,	we	and	EchoStar	extended	the	lease	for	certain	space	at	90	Inverness	Circle	East	in	Englewood,	Colorado	for	a period	ending	on	December	31,	2016.		This	agreement	can	be	terminated	by	either	party	upon	six	months	prior	notice.

·																		Santa	Fe	Lease	Agreement.		In	November	2011,	we	and	EchoStar	extended	the	lease	for	all	of	5701	S.	Santa	Fe	Dr.	in	Littleton,	Colorado	for	a	period	ending on	December	31,	2016	with	a	renewal	option	for	one	additional	year.

·																		EchoStar	Data	Networks	Sublease	Agreement.		The	sublease	for	certain	space	at	211	Perimeter	Center	in	Atlanta,	Georgia	is	for	a	period	ending	on	October	31, 2016.

·																		Gilbert	Lease	Agreement.		The	lease	for	certain	space	at	801	N.	DISH	Dr.	in	Gilbert,	Arizona	is	a	month-to-month	lease	and	can	be	terminated	by	either	party upon	30	days	prior	notice.

·																		Cheyenne	Lease	Agreement.		Effective	January	1,	2012,	we	and	EchoStar	entered	into	a	lease	for	certain	space	at	530	EchoStar	Drive	in	Cheyenne,	Wyoming for	a	period	ending	on	December	31,	2031.

DISHOnline.com	Services	Agreement.		Effective	January	1,	2010,	we	entered	into	a	two-year	agreement	with	EchoStar	pursuant	to	which	we	will	receive	certain	services associated	with	an	online	video	portal.		The	fees	for	the	services	provided	under	this	services	agreement	depend,	among	other	things,	upon	the	cost	to	develop	and operate	such	services.		We	have	the	option	to	renew	this	agreement	for	three	successive	one	year	terms	and	the	agreement

may	be	terminated	for	any	reason	upon	at	least	120	days	notice	to	EchoStar.		In	November	2011,	we	exercised	our	right	to	renew	this	agreement	for	a	one-year	period ending	on	December	31,	2012.

DISH	Remote	Access	Services	Agreement.		Effective	February	23,	2010,	we	entered	into	an	agreement	with	EchoStar	pursuant	to	which	we	will	receive,	among	other things,	certain	remote	DVR	management	services.		The	fees	for	the	services	provided	under	this	services	agreement	depend,	among	other	things,	upon	the	cost	to develop	and	operate	such	services.		This	agreement	has	a	term	of	five	years	with	automatic	renewal	for	successive	one	year	terms	and	may	be	terminated	for	any	reason upon	at	least	120	days	notice	to	EchoStar.

SlingService	Services	Agreement.		Effective	February	23,	2010,	we	entered	into	an	agreement	with	EchoStar	pursuant	to	which	we	will	receive	certain	place-shifting services.		The	fees	for	the	services	provided	under	this	services	agreement	depend,	among	other	things,	upon	the	cost	to	develop	and	operate	such	services.		This agreement	has	a	term	of	five	years	with	automatic	renewal	for	successive	one	year	terms	and	may	be	terminated	for	any	reason	upon	at	least	120	days	notice	to	EchoStar.

Blockbuster.		On	April	26,	2011,	we	completed	the	Blockbuster	Acquisition.		During	the	second	quarter	2011,	EchoStar	acquired	Hughes	Communications,	Inc. ("Hughes"),	which	provides	broadband	products	and	services.		During	the	year	ended	December	31,	2011,	Blockbuster	purchased	$2	million	of	broadband	products	and services	from	Hughes.		As	of	December	31,	2011,	we	had	$1	million	payable	to	EchoStar	for	Hughes	providing	these	broadband	products	and	services	to	Blockbuster.

Additionally,	on	August	5,	2011,	we	entered	into	a	letter	agreement	with	EchoStar	pursuant	to	which	certain	assets	used	to	support	Blockbuster's	website	were transferred	to	EchoStar	and	they	agreed	to	provide	certain	technical	and	infrastructure	support	for	the	Blockbuster	website	to	us.		The	fees	for	the	services	provided	under the	letter	agreement	are	calculated	at	cost	plus	a	fixed	margin,	which	varies	depending	upon	the	nature	of	the	services	provided.		The	letter	agreement	provides	that	it shall	continue	in	effect	until	the	completion	of	a	definitive	agreement	between	EchoStar	and	us	setting	forth	the	terms	of	the	support	of	the	Blockbuster	website.

Move	Networks	Services	Agreement.		In	the	fourth	quarter	2011,	EchoStar	granted	us	the	right	to	use	Move	Network's	software	and	video	publishing	systems,	which facilitate	the	streaming,	downloading	and	distribution	of	audio	and	video	content	to	set-top	boxes	via	the	Internet.		The	fees	for	the	services	provided	under	this agreement	are	based	upon	a	fixed	fee	which	varies	based	upon	the	number	of	set-top	boxes	in	a	given	month	that	access	Move	Network's	software.		This	agreement	has a	term	of	five	years	with	automatic	renewal	for	successive	one	year	terms	and	may	be	terminated	for	any	reason	upon	at	least	180	days	notice	to	EchoStar.

# Other	Agreements	—	EchoStar

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

TiVo.		On	April	29,	2011,	we	and	EchoStar	entered	into	a	settlement	agreement	with	TiVo	Inc.		See	Note	16	for	further	discussion.

EchoStar	XV	Launch	Service.		During	2009,	EchoStar	assigned	certain	of	its	rights	under	a	launch	contract	to	us	for	EchoStar's	fair	value	of	$103	million.		This	amount was	paid	to	EchoStar	during	the	first	quarter	2010.		We	recorded	these	rights	at	EchoStar's	net	book	value	of	$89	million	and	recorded	the	$14	million	difference between	EchoStar's	net	book	value	and	our	purchase	price	as	a	capital	transaction	with	EchoStar.		We	used	these	rights	to	launch	EchoStar	XV	in	July	2010.

Weather	Related	Programming	Agreement.		During	May	2010,	we	entered	into	an	agreement	pursuant	to	which,	among	other	things,	EchoStar	agreed	to	develop	certain weather	related	programming	and	we	received	the	right	to	distribute	such	programming.		This	agreement	was	terminated	during	June	2010.		In	July	2010,	we	purchased EchoStar's	interest	in	the	entity	that	was	developing	such	weather	related	programming	for	$5	million.

International	Programming	Rights	Agreement.		During	the	year	ended	December	31,	2011	we	made	no	purchases	and	for	the	years	ended	December	31,	2010	and	2009 we	purchased	$2	million	and	$8	million,	respectively,	of	certain	international	rights	for	sporting	events	from	EchoStar,	included	in	"Subscriber-related	expenses"	on	the Consolidated	Statements	of	Operations	and	Comprehensive	Income	(Loss),	of	which	EchoStar	only	retained	a	certain	portion.

Acquisition	of	South.com,	L.L.C.		During	October	2010,	we	purchased	all	of	South.com,	L.L.C.	from	EchoStar	and	another	party	for	$5	million.		South.com,	L.L.C.	is	an entity	that	holds	certain	authorizations	for	multichannel	video	and	data	distribution	service	("MVDDS")	spectrum	in	the	United	States.

Patent	Cross-License	Agreements.		During	December	2011,	we	and	EchoStar	entered	into	separate	patent	cross-license	agreements	with	the	same	third	party	whereby: (i)	EchoStar	and	such	third	party	licensed	their	respective	patents	to	each	other	subject	to	certain	conditions;	and	(ii)	we	and	such	third	party	licensed	our respective	patents	to	each	other	subject	to	certain	conditions	(each,	a	"Cross-License	Agreement").		Each	Cross	License	Agreement	covers	patents	acquired	by	the respective	party	prior	to	January	1,	2017	and	aggregate	payments	under	both	Cross-License	Agreements	total	less	than	$10	million.	Each	Cross	License	Agreement	also contains	an	option	to	extend	each	Cross-License	Agreement	to	include	patents	acquired	by	the	respective	party	prior	to	January	1,	2022.		If	both	options	are	exercised, the	aggregate	additional	payments	to	such	third	party	would	total	less	than	$3	million.		However,	we	and	EchoStar	may	elect	to	extend	our	respective	Cross-License Agreement	independent	of	each	other.		Since	the	aggregate	payments	under	both	Cross-License	Agreements	were	based	on	the	combined	annual	revenues	of	us	and EchoStar,	we	and	EchoStar	agreed	to	allocate	our	respective	payments	to	such	third	party	based	on	our	respective	percentage	of	combined	total	revenue.

Sprint	Settlement	Agreement.		On	November	3,	2011,	we	and	Sprint	entered	into	the	Sprint	Settlement	Agreement	pursuant	to	which	all	disputed	issues	relating	to	our acquisition	of	DBSD	North	America	and	the	TerreStar	Transaction	were	resolved	between	us	and	Sprint,	including,	but	not	limited	to,	issues	relating	to	the	Sprint Clearing	Costs.		EchoStar	was	a	party	to	the	Sprint	Settlement	Agreement	solely	for	the	purposes	of	executing	a	mutual	release	between	it	and	Sprint	relating	to	the Sprint	Clearing	Costs.		As	of	December	31,	2011,	EchoStar	is	currently	a	holder	of	certain	TerreStar	debt	instruments.		Pursuant	to	the	terms	of	the	Sprint	Settlement Agreement,	we	made	a	net	payment	of	approximately	$114	million	to	Sprint,	which	is	included	on	our	Consolidated	Balance	Sheets	under	the	caption	"Other	noncurrent assets,	net."		As	this	payment	relates	directly	to	our	acquisitions	of	DBSD	North	America	and	TerreStar,	the	$114	million	will	be	allocated	evenly	between	these investments	as	purchase	consideration	on	the	dates	of	the	respective	closings.

# Other	Agreements

In	November	2009,	Mr.	Roger	Lynch	became	employed	by	both	us	and	EchoStar	as	Executive	Vice	President.		Mr.	Lynch	is	responsible	for	the	development	and implementation	of	advanced	technologies	that	are	of	potential	utility	and	importance	to	both	us	and	EchoStar.		Mr.	Lynch's	compensation	consists	of	cash	and	equity compensation	and	is	borne	by	both	EchoStar	and	us.

# Related	Party	Transactions	with	NagraStar	L.L.C.

NagraStar	is	a	joint	venture	between	EchoStar	and	Nagra	USA,	Inc.	that	is	our	provider	of	encryption	and	related	security	systems	intended	to	assure	that	only authorized	customers	have	access	to	our	programming.

The	table	below	summarizes	our	transactions	with	NagraStar.

|  |  | For	the	Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2011 | 2010 | 2009 |
|  |  | (In\tthousands) |  |
| Purchases\t(including\tfees): |  |  |  |
| Purchases\tfrom\tNagraStar | $77,705 | $79,547 | $81,904 |

|  | As	of	December	31, |  |
| :--- | :--- | :--- |
|  | 2011 | 2010 |
|  | (In\tthousands) |  |
| Amounts\tPayable\tand\tCommitments: |  |  |
| Amounts\tpayable\tto\tNagraStar | $5,853 | $13,272 |



Question: for the terrestar acquisition what will the final cash purchase price be in millions paid upon closing?
Calculation:    cash_purchase_price = 1.345
 cash_purchase_price_in_millions = cash_purchase_price * 1000
 tax_paid = 30
 final_purchase_price = cash_purchase_price_in_millions + tax_paid
 answer = final_purchase_price
Answer: 1375