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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO  .
 Commission file number: 333-31929
 EchoStar DBS Corporation
  Colorado
    
    84-1328967(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)9601 South Meridian Boulevard 
Englewood, Colorado
    
    80112(Address of principal executive offices)
    
    (Zip Code)
    o þ
 o þ
 þ o
 o
  Large Accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  The Registrant meets the conditions set forth in General Instructions (I)(1)(a) and (b) of Form 10-K and is therefore filing this Annual report on Form 10-K with the reduced
disclosure format.
 DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS
 PART
IDisclosure regarding forward-looking statements
    
    
    iItem 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    2Item 1B.
    
    Unresolved Staff Comments
    
    
    13Item 2.
    
    Properties
    
    
    14Item 3.
    
    Legal Proceedings
    
    
    15Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    *PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
    
    
    19Item 6.
    
    Selected Financial Data
    
    
    *Item 7.
    
    Managements Narrative Analysis of Results of Operations
    
    
    20Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    35Item 8.
    
    Financial Statements and Supplementary Data
    
    
    36Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
    
    
    36Item 9A.
    
    Controls and Procedures
    
    
    36Item 9B.
    
    Other Information
    
    
    37PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    *Item 11.
    
    Executive Compensation
    
    
    *Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    *Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    *Item 14.
    
    Principal Accountant Fees and Services
    
    
    *PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    38Signatures
    
    
    42Index to Consolidated Financial Statements
    
    
    F-1Section 302 Certification by Chairman and Chief Executive OfficerSection 302 Certification by Executive Vice President and Chief Financial OfficerSection 906 Certification by Chairman and Chief Executive OfficerSection 906 Certification by Executive Vice President and Chief Financial Officer
  
 *
    
    This item has been omitted pursuant to the reduced disclosure format as set forth in General
Instructions (I) (2) (a) and (c) of Form 10-K.




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DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
 Item 1A. Risk Factors.
 
    
    we face intense and increasing competition from satellite and cable television providers
as well as new competitors, including telephone companies; our competitors are increasingly
offering video service bundled with 2-way high-speed Internet access and telephone services
that consumers may find attractive and which are likely to further increase competition.
We also expect to face increasing competition from content and other providers who
distribute video services directly to consumers over the Internet;
    
    as technology changes, and in order to remain competitive, we will have to upgrade or
replace some, or all, subscriber equipment periodically and make substantial investments in
our infrastructure. For example, the increase in demand for high definition (HD)
programming requires not only upgrades to customer premises equipment but also substantial
increases in satellite capacity. We may not be able to pass on to our customers the entire
cost of these upgrades and there can be no assurance that we will be able to effectively
compete with the HD programming offerings of our competitors;
    
    we rely on EchoStar Corporation (EchoStar), which was owned by DISH Network
Corporation (DNC), our ultimate parent company, prior to
its separation from DNC (the
Spin-off) as described in this Annual Report, to design and develop set-top boxes and
other digital equipment for the DISH
Network®. Equipment costs may increase beyond our
current expectations; we may be unable to renew agreements on acceptable terms or at all;
EchoStars inability to develop and produce or our inability to obtain equipment with the
latest technology could affect our subscriber acquisition and churn and cause related
revenue to decline;
    
    DISH Network subscriber growth may decrease and subscriber turnover may increase, which
may occur for a variety of factors, including some, such as worsening economic conditions,
that are outside of our control and others, such as our own operational inefficiencies,
customer satisfaction with our products and services including our customer service
performance, and our spending on promotional packages for new and existing subscribers,
that will require us to invest in additional resources in order to overcome;
    
    subscriber acquisition costs may increase and the competitive environment may require us
to increase promotional spending or accept lower subscriber acquisitions and higher
subscriber churn; we may also have difficulty controlling other costs of continuing to
maintain and grow our subscriber base;
    
    satellite programming signals are subject to theft; and we are vulnerable to subscriber
fraud; theft of service will continue and could increase in the future, causing us to lose
subscribers and revenue, and also resulting in higher costs to us;
    
    we depend on others to produce programming; programming costs may increase beyond our
current expectations; we may be unable to obtain or renew programming agreements on
acceptable terms or at all; existing programming agreements could be subject to
cancellation; we may be denied access to sports programming; foreign programming is
increasingly offered on other platforms; our inability to obtain or renew attractive
programming could cause our subscriber additions and related revenue to decline and could
cause our subscriber turnover to increase;
    
    current dislocations in the credit markets, which have significantly impacted the
availability and pricing of financing, particularly in the high yield debt and leveraged
credit markets, may significantly constrain our ability to obtain financing to support our
growth initiatives. Such financing may not be available on terms that would be attractive
to us or at all;
    
    we depend on Federal Communications Commission (FCC) program access rules and the
Telecommunications Act of 1996 as Amended to secure nondiscriminatory access to programming
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produced by others, neither of which assure that we have fair access to all programming
that we need to remain competitive;
 
    
    our industry is heavily regulated by the FCC. Those regulations could become more
burdensome at any time, causing us to expend additional resources on compliance;
    
    if we are unsuccessful in subsequent appeals in the Tivo case or in defending against
claims that our alternate technology infringes Tivos patent, we could be prohibited from
distributing DVRs or be required to modify or eliminate certain user-friendly DVR features
that we currently offer to consumers. The adverse affect on our business could be
material. We could also have to pay substantial additional damages;
    
    if our EchoStar X satellite experienced a significant failure, we could lose the ability
to deliver local network channels in many markets; if either of our EchoStar VII or the
EchoStar VIII satellite experienced a significant failure, we could lose the ability to
provide certain programming to the continental United States;
    
    our satellite launches may be delayed or fail, or our owned or leased satellites may
fail in orbit prior to the end of their scheduled lives causing extended interruptions of
some of the channels we offer;
    
    we currently do not have commercial insurance covering losses incurred from the failure
of satellite launches and/or in-orbit satellites that we own or that we lease from EchoStar;
    
    service interruptions arising from technical anomalies on satellites or on-ground
components of our direct broadcast satellite system, or caused by war, terrorist activities
or natural disasters, may cause customer cancellations or otherwise harm our business;
    
    we depend heavily on complex information technologies; weaknesses in our information
technology systems could have an adverse impact on our business; we may have difficulty
attracting and retaining qualified personnel to maintain our information technology
infrastructure;
    
    we are a wholly-owned subsidiary of DNC, which controls all of our voting power
and appoints all of our officers and directors; as a result, we may face actual or
perceived conflicts of interest with EchoStar in a number of areas relating to past and
ongoing relationships between DNC and EchoStar, including: (i) cross
officerships, directorships and stock ownership, (ii) intercompany transactions, and (iii)
intercompany agreements between DNC and certain of its subsidiaries and EchoStar
and certain of EchoStars subsidiaries, including those that were entered into in
connection with the Spin-Off and (iv) future business opportunities;
    
    we rely on key personnel including Charles W. Ergen, our chairman and chief executive
officer, and other executives, certain of whom will for some period also have
responsibilities with EchoStar through their positions at EchoStar or DNCs
management services agreement with EchoStar;
    
    we may be unable to obtain needed retransmission consents, FCC authorizations or export
licenses, and we may lose our current or future authorizations;
    
    we are party to various lawsuits which, if adversely decided, could have a significant
adverse impact on our business;
    
    we may be unable to obtain patent licenses from holders of intellectual property or
redesign our products to avoid patent infringement;
    
    we depend on telecommunications providers, independent retailers and others to solicit
orders for DISH Network services. Certain of these resellers account for a significant
percentage of our total new subscriber acquisitions. A number of these resellers are not
exclusive to us and also offer competitors products and services. Loss of one or more of
these relationships could have an adverse effect on our net new subscriber additions and
certain of our other key operating metrics because we may not be able to develop comparable
alternative distribution channels;
    
    we are highly leveraged and subject to numerous constraints on our ability to raise
additional debt;
    
    we may pursue acquisitions, business combinations, strategic partnerships, divestitures
and other significant transactions that involve uncertainties; these transactions may
require us to raise additional
capital, which may not be available on acceptable terms. These transactions, which could
become
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substantial over time, involve a high degree of risk and could expose us to
significant financial losses if the underlying ventures are not successful;
    
    weakness in the global or U.S. economy may harm our business generally, and adverse
political or economic developments, including increased mortgage defaults as a result of
subprime lending practices and increasing oil prices, may impact some of our markets;
    
    DNC periodically evaluates and tests its internal control over financial
reporting in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act.
This evaluation and testing of internal control over financial reporting includes our
operations. Although DNCs management concluded that its internal control over
financial reporting was effective as of December 31, 2007, if in the future DNC is
unable to report that its internal control over financial reporting is effective (or if
DNCs auditors do not agree with DNC managements assessment of the
effectiveness of, or are unable to express an opinion on, DNCs internal control
over financial reporting), investors, customers and business partners could lose confidence
in our financial reports, which could have a material adverse effect on our business; and
    
    we may face other risks described from time to time in periodic and current reports we
file with the Securities and Exchange Commission (SEC).
    iii




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PART I
 
 Item 1. BUSINESS
 Brief Description of Our Business
   ®
    WHERE YOU CAN FIND MORE INFORMATION
  WEBSITE ACCESS
 http://www.dishnetwork.com
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http://www.dishnetwork.com
 
 Item 1A. RISK FACTORS
 The risks and uncertainties described below are not the only ones facing us. Additional risks and
uncertainties that we are unaware of or that we currently believe to be immaterial also may become
important factors that affect us.
 If any of the following events occur, our business, financial condition or results of operations
could be materially and adversely affected.
 We compete with other subscription television service providers and traditional broadcasters, which
could affect our ability to grow and increase our earnings and other operating metrics.
     2




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Increased subscriber turnover could harm our financial performance.
  3




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Increased subscriber acquisition and retention costs could adversely affect our financial
performance.
      Satellite programming signals have been subject to theft, and we are vulnerable to subscriber
fraud, which could cause us to lose subscribers and revenue.
   4




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Our local programming strategy faces uncertainty.
  We depend on the Cable Act for access to others programming.
   We depend on others to produce programming.
  We face increasing competition from other distributors of foreign language programming.
  5




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We are subject to significant regulatory oversight and changes in applicable regulatory
requirements could adversely affect our business.
 Item 1.
Business  Government Regulation  FCC Regulation under the Communications Act
 During January 2008, the U.S. Court of Appeals upheld a Texas jury verdict that certain of our
digital video recorders, or DVRs, infringed a patent held by Tivo.
  We currently have no commercial insurance coverage on the satellites we own.
    Our satellites are subject to risks related to launch.
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We currently have no commercial insurance coverage
on the satellites we own
 Our satellites are subject to significant operational risks.
      Our satellites have minimum design lives of 12 years, but could fail or suffer reduced capacity
before then.
   7




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Complex technology used in our business could become obsolete.
    We may have potential conflicts of interest with EchoStar.
  
    
    Cross officerships, directorships and stock ownership.DNC has significant
overlap in directors and executive officers with EchoStar, which may lead to conflicting
interests for us, as a result of our relationship with DNC. For instance, certain of
DNCs executive officers, including Charles W. Ergen, the Chairman and Chief
Executive Officer of DNC and us, serve as executive officers of EchoStar. Three of
DNCs executive officers provide management services to EchoStar pursuant to a
management services agreement between EchoStar and DNC. These individuals may have
actual or apparent conflicts of interest with respect to matters involving or affecting each
company. Furthermore, DNCs board of directors includes persons who are members of
the board of directors of EchoStar, including Mr. Ergen, who serves as the Chairman of
EchoStar, DNC and us. The executive officers and the members of DNCs board
of directors who overlap with EchoStar will have fiduciary duties to EchoStars shareholders.
For example, there will be 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, DNCs 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
DNC, including Mr. Ergen, who owns approximately 50.0% of the total equity and
controls approximately 80.0% of the voting power of each of EchoStar and DNC. 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 DNC and EchoStar.
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
    
    Intercompany agreements related to the Spin-off.DNC and certain of its
subsidiaries have entered into agreements with EchoStar and certain of its subsidiaries
pursuant to which DNC will provide EchoStar with certain management, administrative,
accounting, tax, legal and other services, for which EchoStar will pay DNC its cost
plus an additional amount that is equal to a fixed percentage of DNCs cost. In
addition, DNC and its subsidiaries have entered into a number of intercompany
agreements covering matters such as tax sharing and EchoStars responsibility for certain
liabilities previously undertaken by DNC for certain of EchoStars businesses. DNC and its subsidiaries have also entered into certain commercial agreements with
EchoStar pursuant to which EchoStar will, among other things, be obligated to sell to a
subsidiary of us at specified prices, set-top boxes and related equipment. The terms of these
agreements were established while EchoStar was a wholly-owned subsidiary of DNC and
were not the result of arms length negotiations. In addition, conflicts could arise between
DNC and EchoStar in the interpretation or any extension or renegotiation of these
existing agreements.
 
    
    Future intercompany transactions.In the future, EchoStar or its affiliates may enter into
transactions with DNC, us or other subsidiaries or affiliates of DNC.
Although the terms of any such transactions will be established based upon negotiations
between EchoStar and DNC and, when appropriate, subject to the approval of the
disinterested directors on DNCs board or a committee of disinterested directors,
there can be no assurance that the terms of any such transactions will be as favorable to DNC, us or other subsidiaries or affiliates of DNC as may otherwise be obtained
in arms length negotiations.
 
    
    Business opportunities.We have retained interests in various U.S. and international
companies that have subsidiaries or controlled affiliates that own or operate domestic or
foreign services that may compete with services offered by 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.
   DNCs agreements with EchoStar may not reflect what two unaffiliated parties might have
agreed to.
  We depend on EchoStar for many services, including the design, manufacture and supply of digital
set-top boxes.
  9




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We rely on key personnel.
  We are controlled by one principal stockholder.
  We may pursue new acquisitions, joint ventures and other transactions to complement or expand our
business which may not be successful.
  
    
    the diversion of our managements attention from our existing business to integrate
the operations and personnel of the acquired or combined business or joint venture;
    
    possible adverse effects on our operating results during the integration process;
and
    
    our possible inability to achieve the intended objectives of the transaction.
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Our business depends substantially on FCC licenses that can expire or be revoked or modified and
applications that may not be granted.
  Our business relies on intellectual property, some of which is owned by third parties, and we may
inadvertently infringe their patents and proprietary rights.
 Item 1. Business  Patents and Trademarks
 We depend on other telecommunications providers, independent retailers and others to solicit orders
for DISH Network services.
   We have substantial debt outstanding and may incur additional debt.
 
 
    
    making it more difficult to satisfy our obligations;
    
    increasing our vulnerability to general adverse economic conditions, including changes
in interest rates;
    
    limiting our ability to obtain additional financing;
    
    requiring us to devote a substantial portion of our available cash and cash flow to make
interest and principal payments on our debt, thereby reducing the amount of available cash
for other purposes;
    
    limiting our financial and operating flexibility in responding to changing economic and
competitive conditions; and
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
    
    placing us at a disadvantage compared to our competitors that have less debt.
  We may need additional capital, which may not be available, in order to continue growing, to
increase earnings and to make payments on our debt.
     We may be unable to manage rapidly expanding operations.
  We cannot be certain that we will sustain profitability.
  12




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We depend on few manufacturers, and in some cases a single manufacturer, for many components of
consumer premises equipment; we may be adversely affected by product shortages.
  We cannot assure you that there will not be deficiencies leading to material weaknesses in our
internal control over financial reporting.
  
 Item 1B. UNRESOLVED STAFF COMMENTS
  13




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Item 2. PROPERTIES
  Segment(s)
    
    
    Approximate
    
    
    Owned orDescription/Use/Location
    
    Using Property
    
    
    Square Footage
    
    
    LeasedCorporate headquarters, Englewood, Colorado*
    
    All
    
    
    476,000
    
    
    OwnedEchoStar Technologies Corporation engineering offices and
service center, Englewood, Colorado*
    
    ETC
    
    
    144,000
    
    
    OwnedEchoStar Technologies Corporation engineering offices,
Englewood, Colorado*
    
    ETC
    
    
    124,000
    
    
    OwnedEchoStar Data Networks engineering offices, Atlanta, Georgia
    
    ETC
    
    
    50,000
    
    
    LeasedDigital broadcast operations center, Cheyenne, Wyoming*
    
   DISH Network
    
    
    143,000
    
    
    OwnedDigital broadcast operations center, Gilbert, Arizona*
    
    DISH Network
    
    
    124,000
    
    
    OwnedRegional digital broadcast operations center, Monee, Illinois*
    
    DISH Network
    
    
    45,000
    
    
    OwnedRegional digital broadcast operations center, New Braunsfels, Texas*
    
    DISH Network
    
    
    35,000
    
    
    OwnedRegional digital broadcast operations center, Quicksberg, Virginia*
    
    DISH Network
    
    
    35,000
    
    
    OwnedRegional digital broadcast operations center, Spokane, Washington*
    
    DISH Network
    
    
    35,000
    
    
    OwnedRegional digital broadcast operations center, Orange, New Jersey
    
    DISH Network
    
    
    8,800
    
    
    OwnedCustomer call center and data center, Littleton, Colorado*
    
    DISH Network
    
    
    202,000
    
    
    OwnedService center, Spartanburg, South Carolina
    
    DISH Network
    
    
    316,000
    
    
    LeasedCustomer call center, warehouse and service center, El Paso, Texas
    
    DISH Network
    
    
    171,000
    
    
    OwnedCustomer call center, McKeesport, Pennsylvania
    
    DISH Network
    
    
    106,000
    
    
    LeasedCustomer call center, Christiansburg, Virginia
    
    DISH Network
    
    
    103,000
    
    
    OwnedCustomer call center and general offices, Tulsa, Oklahoma
    
    DISH Network
    
    
    79,000
    
    
    LeasedCustomer call center and general offices, Pine Brook, New Jersey
    
    DISH Network
    
    
    67,000
    
    
    LeasedCustomer call center, Alvin, Texas
    
    DISH Network
    
    
    60,000
    
    
    LeasedCustomer call center, Thornton, Colorado*
    
    DISH Network
    
    
    55,000
    
    
    OwnedCustomer call center, Harlingen, Texas
    
    DISH Network
    
    
    54,000
    
    
    OwnedCustomer call center, Bluefield, West Virginia
    
    DISH Network
    
    
    50,000
    
    
    OwnedWarehouse, distribution and service center, Atlanta, Georgia
    
    DISH Network
    
    
    250,000
    
    
    LeasedWarehouse and distribution center, Denver, Colorado
    
    DISH Network
    
    
    209,000
    
    
    LeasedWarehouse and distribution center, Sacramento, California
    
    DISH Network
    
    
    82,000
    
    
    OwnedWarehouse and distribution center, Dallas, Texas
    
    DISH Network
    
    
    80,000
    
    
    LeasedWarehouse and distribution center, Denver, Colorado
    
    DISH Network
    
    
    44,000
    
    
    OwnedWarehouse and distribution center, Baltimore, Maryland
    
    DISH Network
    
    
    37,000
    
    
    LeasedEngineering offices and warehouse, Almelo, The Netherlands*
    
    All Other
    
    
    55,000
    
    
    OwnedEngineering offices, Steeton, England*
    
    All Other
    
    
    43,000
    
    
    Owned
 
 *
    
    As of January 1, 2008, these principal properties were transferred to EchoStar in connection
with the Spin-off. Following the Spin-off, we will lease certain of these properties back from
EchoStar at what we believe are market rates.
  14




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Item 3. LEGAL PROCEEDINGS
 Acacia
    Broadcast Innovation, L.L.C.
    15




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Channel Bundling Class Action
  Distant Network Litigation
  Enron Commercial Paper Investment
  Finisar Corporation
    16




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Forgent
  Global Communications
  Katz Communications
  Retailer Class Actions
  17




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Superguide
    Tivo Inc.
     18




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Trans Video
  Other
  
 PART II
 
 Item 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 Market Information.
 Cash
Dividends.
    19




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Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
 EXECUTIVE SUMMARY
 Overview
 ®
     The Spin-off.
 
    
    DNC, through which DNC will retain its pay-TV business (the primary
assets and liabilities of which will be held by DNC through us), and
    
    EchoStar Corporation (EchoStar), formerly known as EchoStar Holding Corporation, which holds the
digital set top box business, certain satellites, uplink and satellite transmission assets,
real estate and other assets and related liabilities formerly held by
DNC.
  20




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Item 7.
MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
   Operational Results and Goals
 Adding
new subscribers
  Minimize existing customer churn.
 Reduce costs.
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Item 7.
MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
    Pursue growth initiatives
  22




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Item 7.
MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
 EXPLANATION OF KEY METRICS AND OTHER ITEMS
 Subscriber-related revenue .
  Equipment sales .
 Other sales.
  Subscriber-related expenses .
 Satellite and transmission expenses .
 Cost of sales  equipment.
 Cost of sales  other.
 Subscriber acquisition costs .
 SAC.
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Item 7.
MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
  General and administrative expenses .
 Interest expense.
 Earnings before interest, taxes, depreciation and amortization (EBITDA).
 DISH Network subscribers.
 Average monthly revenue per subscriber (ARPU) .
 Subscriber churn rate/subscriber turnover .
 Free cash flow .
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Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
 RESULTS OF OPERATIONS
 Year Ended December 31, 2007 Compared to the Year Ended December 31, 2006.
 For the Years EndedDecember 31,
    
    
    Variance2007
    
    
    2006
    
    
    Amount
    
    
    %(In thousands)Statements of Operations DataRevenue:Subscriber-related revenue
    
    $
    10,673,821
    
    
    $
    9,422,271
    
    
    $
    1,251,550
    
    
    
    13.3Equipment sales
    
    
    349,497
    
    
    
    359,856
    
    
    
    (10,359
    )
    
    
    (2.9
    )Other
    
    
    37,165
    
    
    
    30,620
    
    
    
    6,545
    
    
    
    21.4Total revenue
    
    
    11,060,483
    
    
    
    9,812,747
    
    
    
    1,247,736
    
    
    
    12.7Costs and Expenses:Subscriber-related expenses
    
    
    5,488,396
    
    
    
    4,822,310
    
    
    
    666,086
    
    
    
    13.8% of Subscriber-related revenue
    
    
    51.4
    %
    
    
    51.2
    %Satellite and transmission expenses
    
    
    180,446
    
    
    
    144,931
    
    
    
    35,515
    
    
    
    24.5% of Subscriber-related revenue
    
    
    1.7
    %
    
    
    1.5
    %Cost of sales  equipment
    
    
    263,997
    
    
    
    282,831
    
    
    
    (18,834
    )
    
    
    (6.7
    )% of Equipment sales
    
    
    75.5
    %
    
    
    78.6
    %Cost of sales  other
    
    
    5,820
    
    
    
    7,215
    
    
    
    (1,395
    )
    
    
    (19.3
    )Subscriber acquisition costs
    
    
    1,575,424
    
    
    
    1,600,912
    
    
    
    (25,488
    )
    
    
    (1.6
    )General and administrative
    
    
    577,743
    
    
    
    539,630
    
    
    
    38,113
    
    
    
    7.1% of Total revenue
    
    
    5.2
    %
    
    
    5.5
    %Litigation expense
    
    
    33,907
    
    
    
    93,969
    
    
    
    (60,062
    )
    
    
    (63.9
    )Depreciation and amortization
    
    
    1,320,625
    
    
    
    1,110,385
    
    
    
    210,240
    
    
    
    18.9Total costs and expenses
    
    
    9,446,358
    
    
    
    8,602,183
    
    
    
    844,175
    
    
    
    9.8Operating income (loss)
    
    
    1,614,125
    
    
    
    1,210,564
    
    
    
    403,561
    
    
    
    33.3Other income (expense):Interest income
    
    
    103,619
    
    
    
    121,873
    
    
    
    (18,254
    )
    
    
    (15.0
    )Interest expense, net of amounts capitalized
    
    
    (372,612
    )
    
    
    (389,993
    )
    
    
    17,381
    
    
    
    4.5Other
    
    
    (562
    )
    
    
    (7,923
    )
    
    
    7,361
    
    
    
    92.9Total other income (expense)
    
    
    (269,555
    )
    
    
    (276,043
    )
    
    
    6,488
    
    
    
    2.4Income (loss) before income taxes
    
    
    1,344,570
    
    
    
    934,521
    
    
    
    410,049
    
    
    
    43.9Income tax benefit (provision), net
    
    
    (534,176
    )
    
    
    (333,464
    )
    
    
    (200,712
    )
    
    
    (60.2
    )Net income (loss)
    
    $
    810,394
    
    
    $
    601,057
    
    
    $
    209,337
    
    
    
    34.8Other Data:DISH Network subscribers, as of period end (in millions)
    
    
    13.780
    
    
    
    13.105
    
    
    
    0.675
    
    
    
    5.2DISH Network subscriber additions, gross (in millions)
    
    
    3.434
    
    
    
    3.516
    
    
    
    (0.082
    )
    
    
    (2.3
    )DISH Network subscriber additions, net (in millions)
    
    
    0.675
    
    
    
    1.065
    
    
    
    (0.390
    )
    
    
    (36.6
    )Average monthly subscriber churn rate
    
    
    1.70
    %
    
    
    1.64
    %
    
    
    0.06
    %
    
    
    3.7Average monthly revenue per subscriber (ARPU)
    
    $
    65.83
    
    
    $
    62.78
    
    
    $
    3.05
    
    
    
    4.9Average subscriber acquisition costs per subscriber (SAC)
    
    $
    656
    
    
    $
    686
    
    
    $
    (30
    )
    
    
    (4.4
    )EBITDA
    
    $
    2,934,188
    
    
    $
    2,313,026
    
    
    $
    621,162
    
    
    
    26.9
 25




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Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
 DISH Network subscribers .
      Subscriber-related revenue.
 ARPU .
 Equipment sales .
 26




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Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
  Subscriber-related expenses.
  Satellite and transmission expenses .
  Cost of sales  equipment.
 Subscriber acquisition costs.
 27




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Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
 SAC.
     Litigation expense.
 General and administrative expenses
 Depreciation and amortization.
 28




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Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
 Interest income.
 Interest expense, net of amounts capitalized.
 Earnings before interest, taxes, depreciation and amortization .
 For the Years EndedDecember 31,2007
    
    
    2006(In thousands)EBITDA
    
    $
    2,934,188
    
    
    $
    2,313,026Less:Interest expense, net
    
    
    268,993
    
    
    
    268,120Income tax provision (benefit), net
    
    
    534,176
    
    
    
    333,464Depreciation and amortization
    
    
    1,320,625
    
    
    
    1,110,385Net income (loss)
    
    $
    810,394
    
    
    $
    601,057
  Income tax (provision) benefit, net.
 For the Years EndedDecember 31,2007
    
    
    2006(In thousands)Adjusted income tax benefit (provision), net
    
    $
    (518,752
    )
    
    $
    (346,993
    )Less:Deferred corporate liability restructuring
    
    
    15,673
    
    
    
    Current year valuation allowance activity
    
    
    (249
    )
    
    
    (11,109
    )Deferred tax asset for filed returns
    
    
    
    
    
    
    9,065Prior period adjustments to state NOLs
    
    
    
    
    
    
    (6,654
    )Amended state filings
    
    
    
    
    
    
    (4,831
    )Income tax benefit (provision), net
    
    $
    (534,176
    )
    
    $
    (333,464
    )
 29




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Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
 Net income (loss).
 30




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##### Table of Contents



Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
 Year Ended December 31, 2006 Compared to the Year Ended December 31, 2005.
 For the Years EndedDecember 31,
    
    
    Variance2006
    
    
    2005
    
    
    Amount
    
    
    %(In thousands)Statements of Operations DataRevenue:Subscriber-related revenue
    
    $
    9,422,271
    
    
    $
    8,027,651
    
    
    $
    1,394,620
    
    
    
    17.4Equipment sales
    
    
    359,856
    
    
    
    364,515
    
    
    
    (4,659
    )
    
    
    (1.3
    )Other
    
    
    30,620
    
    
    
    51,003
    
    
    
    (20,383
    )
    
    
    (40.0
    )Total revenue
    
    
    9,812,747
    
    
    
    8,443,169
    
    
    
    1,369,578
    
    
    
    16.2Costs and Expenses:Subscriber-related expenses
    
    
    4,822,310
    
    
    
    4,111,230
    
    
    
    711,080
    
    
    
    17.3% of Subscriber-related revenue
    
    
    51.2
    %
    
    
    51.2
    %Satellite and transmission expenses
    
    
    144,931
    
    
    
    131,559
    
    
    
    13,372
    
    
    
    10.2% of Subscriber-related revenue
    
    
    1.5
    %
    
    
    1.6
    %Cost of sales  equipment
    
    
    282,831
    
    
    
    272,623
    
    
    
    10,208
    
    
    
    3.7% of Equipment sales
    
    
    78.6
    %
    
    
    74.8
    %Cost of sales  other
    
    
    7,215
    
    
    
    22,437
    
    
    
    (15,222
    )
    
    
    (67.8
    )Subscriber acquisition costs
    
    
    1,600,912
    
    
    
    1,495,200
    
    
    
    105,712
    
    
    
    7.1General and administrative
    
    
    539,630
    
    
    
    442,290
    
    
    
    97,340
    
    
    
    22.0% of Total revenue
    
    
    5.5
    %
    
    
    5.2
    %Litigation expense
    
    
    93,969
    
    
    
    
    
    
    
    93,969
    
    
    NMDepreciation and amortization
    
    
    1,110,385
    
    
    
    800,060
    
    
    
    310,325
    
    
    
    38.8Total costs and expenses
    
    
    8,602,183
    
    
    
    7,275,399
    
    
    
    1,326,784
    
    
    
    18.2Operating income (loss)
    
    
    1,210,564
    
    
    
    1,167,770
    
    
    
    42,794
    
    
    
    3.7Other income (expense):Interest income
    
    
    121,873
    
    
    
    34,641
    
    
    
    87,232
    
    
    NMInterest expense, net of amounts capitalized
    
    
    (389,993
    )
    
    
    (305,265
    )
    
    
    (84,728
    )
    
    
    (27.8
    )Gain on insurance settlement
    
    
    
    
    
    
    134,000
    
    
    
    (134,000
    )
    
    NMOther
    
    
    (7,923
    )
    
    
    (1,807
    )
    
    
    (6,116
    )
    
    NMTotal other income (expense)
    
    
    (276,043
    )
    
    
    (138,431
    )
    
    
    (137,612
    )
    
    
    (99.4
    )Income (loss) before income taxes
    
    
    934,521
    
    
    
    1,029,339
    
    
    
    (94,818
    )
    
    
    (9.2
    )Income tax benefit (provision), net
    
    
    (333,464
    )
    
    
    107,274
    
    
    
    (440,738
    )
    
    NMNet income (loss)
    
    $
    601,057
    
    
    $
    1,136,613
    
    
    $
    (535,556
    )
    
    
    (47.1
    )Other Data:DISH Network subscribers, as of period end (in millions)
    
    
    13.105
    
    
    
    12.040
    
    
    
    1.065
    
    
    
    8.8DISH Network subscriber additions, gross (in millions)
    
    
    3.516
    
    
    
    3.397
    
    
    
    0.119
    
    
    
    3.5DISH Network subscriber additions, net (in millions)
    
    
    1.065
    
    
    
    1.135
    
    
    
    (0.070
    )
    
    
    (6.2
    )Average monthly subscriber churn rate
    
    
    1.64
    %
    
    
    1.65
    %
    
    
    (0.01
    %)
    
    
    (0.6
    )Average monthly revenue per subscriber (ARPU)
    
    $
    62.78
    
    
    $
    58.34
    
    
    $
    4.44
    
    
    
    7.6Average subscriber acquisition costs per subscriber (SAC)
    
    $
    686
    
    
    $
    693
    
    
    $
    (7
    )
    
    
    (1.0
    )EBITDA
    
    $
    2,313,026
    
    
    $
    2,100,023
    
    
    $
    213,003
    
    
    
    10.1
 31




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##### Table of Contents



Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
 DISH Network subscribers .
  Subscriber-related revenue.
 ARPU
 Equipment sales.
 Subscriber-related expenses.
 Satellite and transmission expenses .
 Cost of sales  equipment.
 Subscriber acquisition costs.
 32




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##### Table of Contents



Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
  SAC.
   General and administrative expenses.
 Depreciation and amortization.
 Interest income.
 Interest expense, net of amounts capitalized .
 Earnings before interest, taxes, depreciation and amortization .
 33




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##### Table of Contents



Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
 For the Years EndedDecember 31,2006
    
    
    2005(In thousands)EBITDA
    
    $
    2,313,026
    
    
    $
    2,100,023Less:Interest expense, net
    
    
    268,120
    
    
    
    270,624Income tax provision (benefit), net
    
    
    333,464
    
    
    
    (107,274
    )Depreciation and amortization
    
    
    1,110,385
    
    
    
    800,060Net income (loss)
    
    $
    601,057
    
    
    $
    1,136,613
  Income tax benefit (provision), net.
 For the Years EndedDecember 31,2006
    
    
    2005(In thousands)Adjusted income tax benefit (provision), net
    
    $
    (346,993
    )
    
    $
    (385,190
    )Less:Valuation
allowance reversal
    
    
    
    
    
    
    (185,200
    )Current year valuation allowance activity
    
    
    (11,109
    )
    
    
    (287,100
    )Deferred tax asset for filed returns
    
    
    9,065
    
    
    
    (20,164
    )Prior period
adjustments for state NOLs
    
    
    (6,654
    )
    
    
    Amended state filings
    
    
    (4,831
    )
    
    
    Income tax benefit (provision), net
    
    $
    (333,464
    )
    
    $
    107,274
 Net income (loss).
 34




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##### Table of Contents



Item 7. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS  Continued
 Seasonality
  Inflation
 
 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market Risks Associated With Financial Instruments
     35




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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Continued
     
  
 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 Item 9A. CONTROLS AND PROCEDURES
  36




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##### Table of Contents



Item 9B. OTHER INFORMATION
  37




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##### Table of Contents



PART IV
 
 Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
  Financial Statements
 PageReport of KPMG LLP, Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets at December 31, 2007 and 2006
    
    
    F-3Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended
December 31, 2007, 2006 and 2005
    
    
    F-4Consolidated Statements of Changes in Stockholders Equity (Deficit) for the years ended
December 31, 2005, 2006 and 2007
    
    
    F-5Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7
 Financial Statement Schedules
  Exhibits
 Exhibit No.
    
    Description3.1(a)*
    
    Articles of Incorporation of EDBS (incorporated by reference to Exhibit 3.4(a) to
the Companys Registration Statement on Form S-4, Registration No. 333-31929).3.1(b)*
    
    Certificate of Amendment of the Articles of Incorporation of EchoStar DBS
Corporation, dated as of August 25, 2003 (incorporated by reference to Exhibit
3.1(b) to the Annual Report on Form 10-K of EDBS for the year ended December 31,
2003, Commission File No. 333-31929).3.1(c)*
    
    Bylaws of EDBS (incorporated by reference to Exhibit 3.4(b) to the Companys
Registration Statement on Form S-4, Registration No. 333-31929).4.1*
    
    Indenture, relating to EDBS 5 3/4% Senior Notes due 2008, dated as of October 2,
2003, between EDBS and U.S. Bank Trust National Association, as Trustee
(incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of
DNC for the quarter ended September 30, 2003, Commission File
No. 0-26176).4.2*
    
    Indenture, relating to EDBS 6 3/8% Senior Notes due 2011, dated as of October 2,
2003, between EDBS and U.S. Bank Trust National Association, as Trustee
(incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q of
DNC for the quarter ended September 30, 2003, Commission File
No. 0-26176).4.3*
    
    First Supplemental Indenture, relating to the 5 3/4% Senior Notes Due 2008, dated
as of December 31, 2003 between EDBS and U.S. Bank Trust National Association, as
Trustee (incorporated by reference to Exhibit 4.13 to the Annual Report on Form
10-K of DNC for the year ended December 31, 2003, Commission File
No. 0-26176).4.4*
    
    First Supplemental Indenture, relating to the 6 3/8% Senior Notes Due 2011, dated
as of December 31, 2003 between EDBS and U.S. Bank Trust National Association, as
Trustee (incorporated by reference to Exhibit 4.14 to the Annual Report on Form
10-K of DNC for the year ended December 31, 2003, Commission File
No. 0-26176).
 38




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##### Table of Contents



Exhibit No.
    
    Description4.5*
    
    Indenture, relating to the 6 5/8% Senior Notes Due 2014, dated October 1, 2004
between EDBS and U.S. Bank Trust National Association, as Trustee (incorporated
by reference to Exhibit 4.1 to the Current Report on Form 8-K of DNC
filed October 1, 2004, Commission File No. 0-26176).4.6*
    
    Indenture, relating to the 7 1/8% Senior Notes Due 2016, dated as of February 2,
2006 between EDBS and U.S. Bank Trust National Association, as Trustee
(incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of
DNC filed February 3, 2006, Commission File No. 0-26176).4.7*
    
    Indenture, relating to the 7% Senior Notes Due 2013, dated as of October 18, 2006
between EDBS and U.S. Bank Trust National Association, as Trustee (incorporated
by reference to Exhibit 4.1 to the Current Report on Form 8-K of DNC
filed October 18, 2006, Commission File No. 0-26176).10.1*
    
    Form of Satellite Launch Insurance Declarations (incorporated by reference to
Exhibit 10.10 to the Registration Statement on Form S-1 of Dish Ltd.,
Registration No. 33-81234).10.2*
    
    DNC 1995 Stock Incentive Plan (incorporated by reference to Exhibit
10.16 to the Registration Statement on Form S-1 of DNC, Registration No. 33-91276).**10.3*
    
    Amended and Restated DNC 1999 Stock Incentive Plan (incorporated by
reference to Appendix A to DNCs Definitive Proxy Statement on Schedule
14A dated August 24, 2005).**10.4*
    
    2002 Class B CEO Stock Option Plan (incorporated by reference to Appendix A to
DNCs Definitive Proxy Statement on Schedule 14A dated April 9, 2002).**10.5*
    
    License and OEM Manufacturing Agreement, dated July 1, 2002, between EchoStar
Satellite Corporation, EchoStar Technologies Corporation and Thomson multimedia,
Inc. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form
10-Q of DNC for the quarter ended September 30, 2002, Commission File
No. 0-26176).10.6*
    
    Amendment No. 19 to License and OEM Manufacturing Agreement, dated July 1, 2002,
between EchoStar Satellite Corporation, EchoStar Technologies Corporation and
Thomson multimedia, Inc. (incorporated by reference to Exhibit 10.57 to the
Annual Report on Form 10-K of DNC for the year ended December 31, 2002,
Commission File No. 0-26176).10.7*
    
    Satellite Service Agreement, dated as of March 21, 2003, between SES Americom,
Inc., EchoStar Satellite Corporation and DISH Network (incorporated by reference
to Exhibit 10.1 to the Quarterly Report on Form 10-Q of DNC for the
quarter ended March 31, 2003, Commission File No. 0-26176).10.8*
    
    Amendment No. 1 to Satellite Service Agreement dated March 31, 2003 between SES
Americom Inc. and DNC (incorporated by reference to Exhibit 10.1 to the
Quarterly Report on Form 10-Q of DNC for the quarter ended September 30,
2003, Commission File No. 0-26176).10.9*
    
    Satellite Service Agreement dated as of August 13, 2003 between SES Americom Inc.
and DNC (incorporated by reference to Exhibit 10.2 to the Quarterly
Report on Form 10-Q of DNC for the quarter ended September 30, 2003,
Commission File No. 0-26176).10.10*
    
    Satellite Service Agreement, dated February 19, 2004, between SES Americom, Inc.
and DNC (incorporated by reference to Exhibit 10.1 to the Quarterly
Report on Form 10-Q of DNC for the quarter ended March 31, 2004,
Commission File No. 0-26176).
 39




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##### Table of Contents



Exhibit No.
    
    Description10.11*
    
    Amendment No. 1 to Satellite Service Agreement, dated March 10, 2004, between SES
Americom, Inc. and DNC (incorporated by reference to Exhibit 10.2 to the
Quarterly Report on Form 10-Q of DNC for the quarter ended March 31,
2004, Commission File No. 0-26176).10.12*
    
    Amendment No. 3 to Satellite Service Agreement, dated February 19, 2004, between
SES Americom, Inc. and DNC (incorporated by reference to Exhibit 10.3 to
the Quarterly Report on Form 10-Q of DNC for the quarter ended March 31,
2004, Commission File No. 0-26176).10.13*
    
    Whole RF Channel Service Agreement, dated February 4, 2004, between Telesat
Canada and DNC (incorporated by reference to Exhibit 10.4 to the
Quarterly Report on Form 10-Q of DNC for the quarter ended March 31,
2004, Commission File No. 0-26176).10.14*
    
    Letter Amendment to Whole RF Channel Service Agreement, dated March 25, 2004,
between Telesat Canada and DNC (incorporated by reference to Exhibit
10.5 to the Quarterly Report on Form 10-Q of DNC for the quarter ended
March 31, 2004, Commission File No. 0-26176).10.15*
    
    Amendment No. 2 to Satellite Service Agreement, dated April 30, 2004, between SES
Americom, Inc. and DNC (incorporated by reference to Exhibit 10.1 to the
Quarterly Report on Form 10-Q of DNC for the quarter ended June 30,
2004, Commission File No. 0-26176).10.16*
    
    Second Amendment to Whole RF Channel Service Agreement, dated May 5, 2004,
between Telesat Canada and DNC (incorporated by reference to Exhibit
10.2 to the Quarterly Report on Form 10-Q of DNC for the quarter ended
June 30, 2004, Commission File No. 0-26176).10.17*
    
    Third Amendment to Whole RF Channel Service Agreement, dated October 12, 2004,
between Telesat Canada and DNC (incorporated by reference to Exhibit
10.22 to the Annual Report on Form 10-K of DNC for the year ended
December 31, 2004, Commission File No. 0-26176).10.18*
    
    Amendment No. 4 to Satellite Service Agreement, dated October 21, 2004, between
SES Americom, Inc. and DNC (incorporated by reference to Exhibit 10.23
to the Annual Report on Form 10-K of DNC for the year ended December 31,
2004, Commission File No. 0-26176).10.19*
    
    Amendment No. 3 to Satellite Service Agreement, dated November 19, 2004 between
SES Americom, Inc. and DNC (incorporated by reference to Exhibit 10.24
to the Annual Report on Form 10-K of DNC for the year ended December 31,
2004, Commission File No. 0-26176).10.20*
    
    Amendment No. 5 to Satellite Service Agreement, dated November 19, 2004, between
SES Americom, Inc. and DNC (incorporated by reference to Exhibit 10.25
to the Annual Report on Form 10-K of DNC for the year ended December 31,
2004, Commission File No. 0-26176).10.21*
    
    Amendment No. 6 to Satellite Service Agreement, dated December 20, 2004, between
SES Americom, Inc. and DNC (incorporated by reference to Exhibit 10.26
to the Annual Report on Form 10-K of DNC for the year ended December 31,
2004, Commission File No. 0-26176).10.22*
    
    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 DNC for the quarter ended March 31, 2005, Commission File No. 0-26176).**10.23*
    
    Description of the 2005 Cash Incentive Plan dated January 22, 2005 (incorporated
by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of DNC
for the quarter ended March 31, 2005, Commission File No. 0-26176).**
 40




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##### Table of Contents



Exhibit No.
    
    Description10.24*
    
    Settlement Agreement and Release effective February 25, 2005 between EchoStar
Satellite L.L.C., EchoStar DBS Corporation and the insurance carriers for the
EchoStar IV satellite (incorporated by reference to Exhibit 10.3 to the Quarterly
Report on Form 10-Q of DNC for the quarter ended March 31, 2005,
Commission File No. 0-26176).10.25*
    
    Amendment No. 4 to Satellite Service Agreement, dated April 6, 2005, between SES
Americom, Inc. and DNC (incorporated by reference to Exhibit 10.1 to the
Quarterly Report on Form 10-Q of DNC for the quarter ended June 30,
2005, Commission File No. 0-26176).10.26*
    
    Amendment No. 5 to Satellite Service Agreement, dated June 20, 2005, between SES
Americom, Inc. and DNC (incorporated by reference to Exhibit 10.2 to the
Quarterly Report on Form 10-Q of DNC for the quarter ended June 30,
2005, Commission File No. 0-26176).10.27*
    
    Incentive Stock Option Agreement (Form A) (incorporated by reference to Exhibit
99.1 to the Current Report on Form 8-K of DNC filed July 7, 2005,
Commission File No. 0-26176).**10.28*
    
    Incentive Stock Option Agreement (Form B) (incorporated by reference to Exhibit
99.2 to the Current Report on Form 8-K of DNC filed July 7, 2005,
Commission File No. 0-26176).**10.29*
    
    Restricted Stock Unit Agreement (Form A) (incorporated by reference to Exhibit
99.3 to the Current Report on Form 8-K of DNC filed July 7, 2005,
Commission File No. 0-26176).**10.30*
    
    Restricted Stock Unit Agreement (Form B) (incorporated by reference to Exhibit
99.4 to the Current Report on Form 8-K of DNC filed July 7, 2005,
Commission File No. 0-26176).**10.31*
    
    Incentive Stock Option Agreement (1999 Long-Term Incentive Plan) (incorporated by
reference to Exhibit 99.5 to the Current Report on Form 8-K of DNC filed
July 7, 2005, Commission File No. 0-26176).**10.32*
    
    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 DNC
filed July 7, 2005, Commission File No. 0-26176).**10.33*
    
    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 DNC filed
July 7, 2005, Commission File No. 0-26176).**10.34*
    
    Description of the 2006 Cash Incentive Plan (incorporated by reference to Exhibit
10.1 to the Quarterly Report on Form 10-Q of DNC for the quarter ended
March 31, 2006, Commission File No. 0-26176).31.1
    
    Section 302 Certification by Chairman and Chief Executive Officer.31.2
    
    Section 302 Certification by Executive Vice President and Chief Financial Officer.32.1
    
    Section 906 Certification by Chairman and Chief Executive Officer.32.2
    
    Section 906 Certification by Executive Vice President and Chief Financial Officer.
 
 
    
    Filed herewith.*
    
    Incorporated by reference.**
    
    Constitutes a management contract or compensatory plan or arrangement. 41




---



##### Table of Contents



SIGNATURES
  ECHOSTAR DBS CORPORATIONBy:
    /s/ Bernard L. HanBernard L. HanExecutive Vice President and Chief Financial Officer   Signature
    
    Title
    
    Date/s/ Charles W. Ergen
    
    Chief Executive Officer and Director
    
    March 5, 2008Charles W. Ergen
    
    (Principal Executive Officer)/s/ Bernard L. Han
    
    Executive Vice President and Chief Financial Officer
    
    March 5, 2008Bernard L. Han
    
    (Principal Financial and Accounting Officer)/s/ James DeFranco
    
    Director
    
    March 5, 2008James DeFranco/s/ R. Stanton Dodge
    
    Director
    
    March 5, 2008R. Stanton Dodge
 42




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##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageConsolidated Financial Statements:Report of KPMG LLP, Independent Registered Public Accounting Firm
    
    F2Consolidated Balance Sheets at December 31, 2007 and 2006
    
    F3Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31,
2007, 2006 and 2005
    
    F4Consolidated Statements of Changes in Stockholders Equity (Deficit) for the years ended December 31, 2005,
2006 and 2007
    
    F5Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005
    
    F6Notes to Consolidated Financial Statements
    
    F7
 F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Accounting for Uncertainty in Income Taxes Considering the Effects
of Prior Year Misstatements when Quantifying Misstatements in the Current Year Financial
Statements. Share-Based Payment
 
 KPMG LLP
 
 F-2




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##### Table of Contents



ECHOSTAR DBS CORPORATION
CONSOLIDATED BALANCE SHEETS
 As of December 31,2007
    
    
    2006AssetsCurrent Assets:Cash and cash equivalents
    
    $
    606,990
    
    
    $
    1,667,130Marketable investment securities
    
    
    495,760
    
    
    
    697,646Trade accounts receivable, net of allowance for uncollectible accounts
of $14,019 and $14,205, respectively
    
    
    685,109
    
    
    
    665,374Advances to affiliates
    
    
    78,578
    
    
    
    107,834Inventories, net
    
    
    295,200
    
    
    
    237,493Current deferred tax assets (Note 6)
    
    
    38,297
    
    
    
    280,325Other current assets
    
    
    77,929
    
    
    
    102,433Total current assets
    
    
    2,277,863
    
    
    
    3,758,235Restricted cash and marketable investment securities
    
    
    159,046
    
    
    
    156,503Property and equipment, net (Note 4)
    
    
    3,471,034
    
    
    
    3,500,155FCC authorizations
    
    
    802,691
    
    
    
    705,228Intangible assets, net (Note 2)
    
    
    150,424
    
    
    
    189,905Other noncurrent assets, net
    
    
    169,319
    
    
    
    117,947Total assets
    
    $
    7,030,377
    
    
    $
    8,427,973Liabilities and Stockholders Equity (Deficit)Current Liabilities:Trade accounts payable
    
    $
    289,649
    
    
    $
    257,460Advances from affiliates
    
    
    85,613
    
    
    
    128,568Deferred revenue and other
    
    
    853,791
    
    
    
    819,773Accrued programming
    
    
    914,074
    
    
    
    913,687Income taxes payable
    
    
    145,747
    
    
    
    35,682Other accrued expenses
    
    
    561,576
    
    
    
    493,2545 3/4% Senior Notes due 2008
    
    
    1,000,000
    
    
    
    Current portion of capital lease obligations, mortgages and other notes payable (Note 5)
    
    
    49,057
    
    
    
    38,435Total current liabilities
    
    
    3,899,507
    
    
    
    2,686,859Long-term obligations, net of current portion:5 3/4% Senior Notes due 2008
    
    
    
    
    
    
    1,000,0006 3/8% Senior Notes due 2011
    
    
    1,000,000
    
    
    
    1,000,0006 5/8% Senior Notes due 2014
    
    
    1,000,000
    
    
    
    1,000,0007 1/8% Senior Notes due 2016
    
    
    1,500,000
    
    
    
    1,500,0007% Senior Notes due 2013
    
    
    500,000
    
    
    
    500,000Capital lease obligations, mortgages and other notes payable, net of current portion (Note 5)
    
    
    547,608
    
    
    
    403,526Deferred tax liabilities
    
    
    327,318
    
    
    
    318,219Long-term deferred revenue, distribution and carriage payments and other long-term liabilities
    
    
    259,656
    
    
    
    275,131Total long-term obligations, net of current portion
    
    
    5,134,582
    
    
    
    5,996,876Total liabilities
    
    
    9,034,089
    
    
    
    8,683,735Commitments and Contingencies (Note 8)Stockholders Equity (Deficit):Common stock, $.01 par value, 1,000,000 shares authorized, 1,015 shares issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    1,121,012
    
    
    
    1,032,925Accumulated other comprehensive income (loss)
    
    
    396
    
    
    
    254Accumulated earnings (deficit)
    
    
    (3,125,120
    )
    
    
    (1,288,941
    )Total stockholders equity (deficit)
    
    
    (2,003,712
    )
    
    
    (255,762
    )Total liabilities and stockholders equity (deficit)
    
    $
    7,030,377
    
    
    $
    8,427,973
  F-3




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##### Table of Contents



ECHOSTAR DBS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
 For the Years Ended December 31,2007
    
    
    2006
    
    
    2005Revenue:Subscriber-related revenue
    
    $
    10,673,821
    
    
    $
    9,422,271
    
    
    $
    8,027,651Equipment sales
    
    
    349,497
    
    
    
    359,856
    
    
    
    364,515Other
    
    
    37,165
    
    
    
    30,620
    
    
    
    51,003Total revenue
    
    
    11,060,483
    
    
    
    9,812,747
    
    
    
    8,443,169Costs and Expenses:Subscriber-related expenses (exclusive of depreciation shown
below  Note 4)
    
    
    5,488,396
    
    
    
    4,822,310
    
    
    
    4,111,230Satellite and transmission expenses (exclusive of depreciation
shown below  Note 4)
    
    
    180,446
    
    
    
    144,931
    
    
    
    131,559Cost of sales  equipment
    
    
    263,997
    
    
    
    282,831
    
    
    
    272,623Cost of sales  other
    
    
    5,820
    
    
    
    7,215
    
    
    
    22,437Subscriber acquisition costs:Cost of sales  subscriber promotion subsidies (exclusive
of depreciation shown below  Note 4)
    
    
    128,739
    
    
    
    138,721
    
    
    
    130,680Other subscriber promotion subsidies
    
    
    1,219,943
    
    
    
    1,246,836
    
    
    
    1,180,516Subscriber acquisition advertising
    
    
    226,742
    
    
    
    215,355
    
    
    
    184,004Total subscriber acquisition costs
    
    
    1,575,424
    
    
    
    1,600,912
    
    
    
    1,495,200General and administrative
    
    
    577,743
    
    
    
    539,630
    
    
    
    442,290Litigation expense
    
    
    33,907
    
    
    
    93,969
    
    
    
    Depreciation and amortization (Note 4)
    
    
    1,320,625
    
    
    
    1,110,385
    
    
    
    800,060Total costs and expenses
    
    
    9,446,358
    
    
    
    8,602,183
    
    
    
    7,275,399Operating income (loss)
    
    
    1,614,125
    
    
    
    1,210,564
    
    
    
    1,167,770Other income (expense):Interest income
    
    
    103,619
    
    
    
    121,873
    
    
    
    34,641Interest expense, net of amounts capitalized
    
    
    (372,612
    )
    
    
    (389,993
    )
    
    
    (305,265
    )Gain on insurance settlement
    
    
    
    
    
    
    
    
    
    
    134,000Other
    
    
    (562
    )
    
    
    (7,923
    )
    
    
    (1,807
    )Total other income (expense)
    
    
    (269,555
    )
    
    
    (276,043
    )
    
    
    (138,431
    )Income (loss) before income taxes
    
    
    1,344,570
    
    
    
    934,521
    
    
    
    1,029,339Income tax benefit (provision), net (Note 6)
    
    
    (534,176
    )
    
    
    (333,464
    )
    
    
    107,274Net income (loss)
    
    $
    810,394
    
    
    $
    601,057
    
    
    $
    1,136,613Foreign currency translation adjustment
    
    
    123
    
    
    
    167
    
    
    
    (155
    )Unrealized holding gains (losses) on available-for-sale securities
    
    
    22
    
    
    
    401
    
    
    
    1,024Recognition of previously unrealized (gains) losses on
available-for-sale securities included in net income (loss)
    
    
    
    
    
    
    
    
    
    
    Deferred income tax (expense) benefit attributable to unrealized
holding gains (losses) on available-for-sale securities
    
    
    (3
    )
    
    
    (134
    )
    
    
    232Comprehensive income (loss)
    
    $
    810,536
    
    
    $
    601,491
    
    
    $
    1,137,714
  F-4




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##### Table of Contents



ECHOSTAR DBS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT)
 AccumulatedDeficit andAccumulatedAdditional
    
    
    OtherCommon Stock
    
    
    Paid-In
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Income (Loss)
    
    
    TotalBalance, December 31, 2004
    
    
    1
    
    
    $
    
    
    
    $
    929,002
    
    
    $
    (2,204,448
    )
    
    $
    (1,275,446
    )Deferred stock-based compensation recognized
    
    
    
    
    
    
    
    
    
    
    302
    
    
    
    
    
    
    
    302Reversal of valuation allowance associated with stock-based
compensation and tax benefits
    
    
    
    
    
    
    
    
    
    
    82,039
    
    
    
    
    
    
    
    82,039Deferred income tax (expense) benefit attributable to
unrealized holding gains (losses) on available-for-sale
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    232
    
    
    
    232Change in unrealized holding gains (losses)
on available-for-sale securities, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,024
    
    
    
    1,024Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (155
    )
    
    
    (155
    )Dividend to EOC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (200,000
    )
    
    
    (200,000
    )Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,136,613
    
    
    
    1,136,613Balance, December 31, 2005
    
    
    1
    
    
    $
    
    
    
    $
    1,011,343
    
    
    $
    (1,266,734
    )
    
    $
    (255,391
    )SAB 108 adjustments, net of tax of $37.4 million
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (62,345
    )
    
    
    (62,345
    )Capital distribution to affiliate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (161,099
    )
    
    
    (161,099
    )Stock-based compensation, net of tax
    
    
    
    
    
    
    
    
    
    
    21,360
    
    
    
    
    
    
    
    21,360Deferred income tax (expense) benefit attributable to
unrealized holding gains (losses) on available-for-sale
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (134
    )
    
    
    (134
    )Change in unrealized holding gains (losses)
on available-for-sale securities, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    401
    
    
    
    401Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167
    
    
    
    167Dividend to EOC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (400,000
    )
    
    
    (400,000
    )Other
    
    
    
    
    
    
    
    
    
    
    222
    
    
    
    
    
    
    
    222Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    601,057
    
    
    
    601,057Balance, December 31, 2006
    
    
    1
    
    
    $
    
    
    
    $
    1,032,925
    
    
    $
    (1,288,687
    )
    
    $
    (255,762
    )Capital contribution from DNC (Note 13)
    
    
    
    
    
    
    
    
    
    
    56,390
    
    
    
    
    
    
    
    56,390Stock-based compensation, net of tax
    
    
    
    
    
    
    
    
    
    
    31,697
    
    
    
    
    
    
    
    31,697Deferred income tax (expense) benefit attributable to
unrealized holding gains (losses) on available-for-sale
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (3
    )Change in unrealized holding gains (losses)
on available-for-sale securities, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    22Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    123
    
    
    
    123Dividend to EOC (Note 13)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,646,753
    )
    
    
    (2,646,753
    )Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    180
    
    
    
    180Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    810,394
    
    
    
    810,394Balance, December 31, 2007
    
    
    1
    
    
    $
    
    
    
    $
    1,121,012
    
    
    $
    (3,124,724
    )
    
    $
    (2,003,712
    )
  F-5




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##### Table of Contents



ECHOSTAR DBS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Years Ended December 31,2007
    
    
    2006
    
    
    2005Cash Flows From Operating Activities:Net income (loss)
    
    $
    810,394
    
    
    $
    601,057
    
    
    $
    1,136,613Adjustments to reconcile net income (loss) to net cash flows from operating activities:Depreciation and amortization
    
    
    1,320,625
    
    
    
    1,110,385
    
    
    
    800,060Equity in losses (earnings) of affiliates
    
    
    831
    
    
    
    
    
    
    
    Gain on insurance settlement
    
    
    
    
    
    
    
    
    
    
    (134,000
    )Non-cash, stock-based compensation recognized
    
    
    21,329
    
    
    
    17,435
    
    
    
    302Deferred tax expense (benefit) (Note 6)
    
    
    255,852
    
    
    
    274,762
    
    
    
    (143,247
    )Amortization of debt discount and deferred financing costs
    
    
    3,650
    
    
    
    7,149
    
    
    
    3,427Other, net
    
    
    5,279
    
    
    
    (4,386
    )
    
    
    (534
    )Change in noncurrent assets
    
    
    2,768
    
    
    
    54,955
    
    
    
    21,757Change in long-term deferred revenue, distribution and carriage payments and other long-term liabilities
    
    
    (15,475
    )
    
    
    50,956
    
    
    
    (31,298
    )Changes in current assets and current liabilities:Trade accounts receivable
    
    
    (20,009
    )
    
    
    (193,564
    )
    
    
    (5,530
    )Allowance for doubtful accounts
    
    
    (186
    )
    
    
    5,406
    
    
    
    370Advances to affiliates
    
    
    71,314
    
    
    
    64,824
    
    
    
    (141,203
    )Inventories
    
    
    (80,841
    )
    
    
    16,707
    
    
    
    71,972Other current assets
    
    
    27,284
    
    
    
    11,144
    
    
    
    (18,316
    )Trade accounts payable
    
    
    30,791
    
    
    
    37,319
    
    
    
    (20,597
    )Advances from affiliates
    
    
    (80,264
    )
    
    
    76,476
    
    
    
    11,632Deferred revenue and other
    
    
    31,305
    
    
    
    62,600
    
    
    
    162Accrued programming and other accrued expenses
    
    
    206,326
    
    
    
    307,207
    
    
    
    161,175Net cash flows from operating activities
    
    
    2,590,973
    
    
    
    2,500,432
    
    
    
    1,712,745Cash Flows From Investing Activities:Purchases of marketable investment securities
    
    
    (2,543,929
    )
    
    
    (1,865,225
    )
    
    
    (626,577
    )Sales and maturities of marketable investment securities
    
    
    2,743,995
    
    
    
    1,480,723
    
    
    
    424,734Purchases of property and equipment
    
    
    (1,111,536
    )
    
    
    (1,429,957
    )
    
    
    (1,392,708
    )Proceeds from insurance settlement
    
    
    
    
    
    
    
    
    
    
    240,000Change in restricted cash and marketable investment securities
    
    
    (701
    )
    
    
    (48,799
    )
    
    
    (3,305
    )FCC authorizations
    
    
    (97,463
    )
    
    
    
    
    
    
    (8,961
    )Purchase of technology-based intangibles
    
    
    
    
    
    
    
    
    
    
    (25,500
    )Purchase of strategic investments included in noncurrent assets and other
    
    
    (21,775
    )
    
    
    (560
    )
    
    
    Other
    
    
    3,469
    
    
    
    (843
    )
    
    
    (7
    )Net cash flows from investing activities
    
    
    (1,027,940
    )
    
    
    (1,864,661
    )
    
    
    (1,392,324
    )Cash Flows From Financing Activities:Proceeds from issuance of 7 1/8% Senior Notes due 2016
    
    
    
    
    
    
    1,500,000
    
    
    
    Proceeds from issuance of 7% Senior Notes due 2013
    
    
    
    
    
    
    500,000
    
    
    
    Redemption of Floating Rate Senior Notes due 2008
    
    
    
    
    
    
    (500,000
    )
    
    
    Redemption and repurchases of 9 1/8% Senior Notes due 2009, respectively
    
    
    
    
    
    
    (441,964
    )
    
    
    (4,189
    )Deferred debt issuance costs
    
    
    
    
    
    
    (14,210
    )
    
    
    Capital contribution from DNC (Note 13)
    
    
    53,642
    
    
    
    
    
    
    
    Dividend to EOC (Note 13)
    
    
    (2,645,805
    )
    
    
    (400,000
    )
    
    
    (200,000
    )Capital distribution to affiliate
    
    
    
    
    
    
    (161,099
    )
    
    
    Repayment of capital lease obligations, mortgages and other notes payable
    
    
    (43,515
    )
    
    
    (40,642
    )
    
    
    (45,826
    )Excess tax benefits recognized on stock option exercises
    
    
    12,505
    
    
    
    6,888
    
    
    
    Net cash flows from financing activities
    
    
    (2,623,173
    )
    
    
    448,973
    
    
    
    (250,015
    )Net increase (decrease) in cash and cash equivalents
    
    
    (1,060,140
    )
    
    
    1,084,744
    
    
    
    70,406Cash and cash equivalents, beginning of period
    
    
    1,667,130
    
    
    
    582,386
    
    
    
    511,980Cash and cash equivalents, end of period
    
    $
    606,990
    
    
    $
    1,667,130
    
    
    $
    582,386
  F-6




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Organization and Business Activities
  Principal Business
  
    
    The DISH Network  which provides a direct broadcast satellite (DBS) subscription
television service in the United States; and
    
    EchoStar Technologies Corporation(ETC)  which designs and develops DBS receivers,
antennae and other digital equipment for the DISH Network. We refer to this equipment
collectively as receiver systems. ETC also designs, develops and distributes similar
equipment for international customers.
  Spin-off of Technology and Certain Infrastructure Assets
  
    
    DNC, which retains its subscription television business, and
    
    EchoStar Corporation, which holds the digital set-top box business, certain satellites,
uplink and satellite transmission assets, real estate and other assets and related
liabilities formerly held by DNC.
  F-7




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 Organization and Legal Structure
  Referred toLegal Entity
    
    Herein As
    
    ParentDISH Network Corporation
    
    DNC
    
    Publicly ownedEchoStar Orbital Corporation
    
    EOC
    
    ECCEchoStar Orbital Corporation II
    
    EOC II
    
    EOCEchoStar DBS Corporation
    
    EDBS
    
    EOCEchoStar Satellite L.L.C.
    
    ESLLC
    
    EDBSEchoStar Satellite Operating Corporation
    
    SATCO
    
    ESLLCEchosphere L.L.C.
    
    Echosphere
    
    EDBSEchoStar Technologies Corporation
    
    ETC
    
    EDBSDISH Network Service L.L.C.
    
    DNSLLC
    
    EDBS
  2. Summary of Significant Accounting Policies
 Principles of Consolidation and Basis of Presentation
  Use of Estimates
  F-8




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 Foreign Currency Translation
  Statements of Cash Flows Data
  For the Years Ended December 31,2007
    
    2006
    
    2005(In thousands)Cash paid for interest
    
    $
    375,718
    
    
    $
    345,296
    
    
    $
    299,062Capitalized interest
    
    
    7,434
    
    
    
    12,079
    
    
    
    Cash received for interest
    
    
    103,619
    
    
    
    121,873
    
    
    
    34,641Cash paid for income taxes
    
    
    37,510
    
    
    
    14,903
    
    
    
    15,498Capital distribution for EchoStar X to EOC
    
    
    
    
    
    
    161,099
    
    
    
    Satellite financed under capital lease obligations
    
    
    198,219
    
    
    
    
    
    
    
    191,950Satellite and other vendor financing
    
    
    
    
    
    
    15,000
    
    
    
    1,940
 Cash and Cash Equivalents
  Marketable and Non-Marketable Investment Securities and Restricted Cash
  F-9




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  As of December 31, 2007Less than Six Months
    
    
    Six to Nine Months
    
    
    Nine Months or MorePrimary
    
    
    MaturityInvestment
    
    Reason for
    
    
    in
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedCategory
    
    Unrealized Loss
    
    
    Months
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    Loss(In thousands)Temporary marketCorporate bonds
    
    fluctuations
    
    
    1-13
    
    
    $
    277,478
    
    
    $
    (5,504
    )
    
    $
    125,344
    
    
    $
    (1,466
    )
    
    $
    
    
    
    $
    Total
    
    
    
    
    
    
    
    
    
    $
    277,478
    
    
    $
    (5,504
    )
    
    $
    125,344
    
    
    $
    (1,466
    )
    
    $
    
    
    
    $
    
 As of December 31, 2006(In thousands)Changes in InterestGovernment bonds
    
    rates
    
    
    1-24
    
    
    $
    75,572
    
    
    $
    (227
    )
    
    $
    
    
    
    $
    
    
    
    $
    26,211
    
    
    $
    (12
    )Total
    
    
    
    
    
    
    
    
    
    $
    75,572
    
    
    $
    (227
    )
    
    $
    
    
    
    $
    
    
    
    $
    26,211
    
    
    $
    (12
    )
 Other Investment Securities.
  Restricted Cash and Marketable Investment Securities.
  Marketable Investment Securities
    
    
    Restricted CashAs of December 31,
    
    
    As of December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Government bonds
    
    $
    
    
    
    $
    237,814
    
    
    $
    54,076
    
    
    $
    137,723Corporate notes and
bonds
    
    
    495,760
    
    
    
    459,832
    
    
    
    
    
    
    
    Restricted cash
    
    
    
    
    
    
    
    
    
    
    104,970
    
    
    
    18,780$
    495,760
    
    
    $
    697,646
    
    
    $
    159,046
    
    
    $
    156,503
 F-10




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  Inventories
  As of December 31,2007
    
    2006(In thousands)Finished goods  DBS
    
    $
    159,894
    
    
    $
    132,533Raw materials
    
    
    66,058
    
    
    
    49,958Work-in-process  service repair and refurbishment
    
    
    67,542
    
    
    
    51,870Work-in-process  new
    
    
    13,417
    
    
    
    14,203Consignment
    
    
    2,963
    
    
    
    1,669Subtotal
    
    $
    309,874
    
    
    $
    250,233Inventory allowance
    
    
    (14,674
    )
    
    
    (12,740
    )Inventories, net
    
    $
    295,200
    
    
    $
    237,493
 Property and Equipment
  Long-Lived Assets
  F-11




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 Goodwill and Other Intangible Assets
  
    
    FCC spectrum is a non-depleting asset;
    
    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 in order to obtain future cash flows are not significant;
    
    DBS licenses are not technologically dependent; and
    
    We intend to use these assets indefinitely.
    As ofDecember 31, 2007
    
    
    December 31, 2006Intangible
    
    
    Accumulated
    
    
    Intangible
    
    
    AccumulatedAssets
    
    
    Amortization
    
    
    Assets
    
    
    Amortization(In thousands)Contract based
    
    $
    188,205
    
    
    $
    (60,381
    )
    
    $
    189,286
    
    
    $
    (45,842
    )Customer relationships
    
    
    73,298
    
    
    
    (68,466
    )
    
    
    73,298
    
    
    
    (50,142
    )Technology-based
    
    
    25,500
    
    
    
    (7,732
    )
    
    
    25,500
    
    
    
    (5,555
    )Total
    
    $
    287,003
    
    
    $
    (136,579
    )
    
    $
    288,084
    
    
    $
    (101,539
    )
  F-12




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  For the Years Ending December 31,2008
    
    $
    22,5022009
    
    
    17,6712010
    
    
    17,6712011
    
    
    17,6712012
    
    
    17,671Thereafter
    
    
    57,238Total
    
    $
    150,424
 Long-Term Deferred Revenue, Distribution and Carriage Payments
   Sales Taxes
  Income Taxes
  Accounting for Uncertainty in Income Taxes
   F-13




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
   Balance as of January 1, 2007
    
    $
    10,445Additions based on tax positions related to the current year
    
    
    6,875Additions for tax positions of prior years
    
    
    2,840Balance as of December 31, 2007
    
    $
    20,160
   Fair Value of Financial Instruments
   As of December 31,
    
    
    As of December 31,2007
    
    
    2006Book Value
    
    
    Fair Value
    
    
    Book Value
    
    
    Fair Value(In thousands)5 3/4% Senior Notes due 2008
    
    $
    1,000,000
    
    
    $
    997,500
    
    
    $
    1,000,000
    
    
    $
    993,7506 3/8% Senior Notes due 2011
    
    
    1,000,000
    
    
    
    1,019,000
    
    
    
    1,000,000
    
    
    
    993,7506 5/8% Senior Notes due 2014
    
    
    1,000,000
    
    
    
    995,000
    
    
    
    1,000,000
    
    
    
    971,2507 1/8% Senior Notes due 2016
    
    
    1,500,000
    
    
    
    1,522,500
    
    
    
    1,500,000
    
    
    
    1,494,3757 % Senior Notes due 2013
    
    
    500,000
    
    
    
    505,000
    
    
    
    500,000
    
    
    
    497,500Mortgages and other notes payable
    
    
    33,118
    
    
    
    33,118
    
    
    
    37,019
    
    
    
    37,019Subtotal
    
    
    5,033,118
    
    
    
    5,072,118
    
    
    
    5,037,019
    
    
    
    4,987,644Capital lease obligations (1)
    
    
    563,547
    
    
    
    N/A
    
    
    
    404,942
    
    
    
    N/ATotal
    
    $
    5,596,665
    
    
    $
    5,072,118
    
    
    $
    5,441,961
    
    
    $
    4,987,644
 
 (1)
    
    Pursuant to SFAS No. 107 Disclosures about Fair Value of Financial Instruments,
disclosure regarding fair value of capital leases is not required.  Deferred Debt Issuance Costs
  F-14




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 Revenue Recognition
    Subscriber Acquisition Promotions
 Subscriber-Related Expenses
   Subscriber Acquisition Promotions
  F-15




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 Equipment Lease Promotion.
 Subscriber Acquisition Costs.
 
    
    Cost of sales  subscriber promotion subsidies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.
    
    Subscriber acquisition advertisingincludes advertising and marketing expenses related
to the acquisition of new DISH Network subscribers. Advertising costs are expensed as
incurred.
  Research and Development Costs
  New Accounting Pronouncements
 Revised Business Combinations
  F-16




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 Noncontrolling Interests in Consolidated Financial Statements
  Fair Value Measurements
  The Fair Value Option for Financial Assets and Financial Liabilities
  3. Stock-Based Compensation
   F-17




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 For the Year EndedDecember 31,2005(In thousands)Net income (loss), as reported
    
    $
    1,136,613Add: Stock-based employee compensation expense included
in reported net income (loss), net of related tax effect
    
    
    190Deduct: Total stock-based employee compensation expense determined
under fair value based method for all awards, net of related tax effect
    
    
    (21,013
    )Pro forma net income (loss)
    
    $
    1,115,790
 Stock Incentive Plans
   2007
    
    2006
    
    2005Weighted- Average
    
    
    
    
    
    Weighted- Average
    
    
    
    
    
    Weighted- AverageOptions
    
    Exercise Price
    
    Options
    
    Exercise Price
    
    Options
    
    Exercise PriceOptions outstanding, beginning of period
    
    
    22,002,305
    
    
    $
    25.65
    
    
    
    24,304,951
    
    
    $
    24.36
    
    
    
    17,134,684
    
    
    $
    20.82Granted
    
    
    1,493,526
    
    
    
    42.77
    
    
    
    2,066,000
    
    
    
    32.48
    
    
    
    10,121,250
    
    
    
    29.20Exercised
    
    
    (2,029,258
    )
    
    
    24.98
    
    
    
    (1,481,946
    )
    
    
    14.15
    
    
    
    (905,228
    )
    
    
    30.08Forfeited and cancelled
    
    
    (1,554,356
    )
    
    
    19.42
    
    
    
    (2,886,700
    )
    
    
    25.63
    
    
    
    (2,045,755
    )
    
    
    25.82Options outstanding, end of period
    
    
    19,912,217
    
    
    
    27.53
    
    
    
    22,002,305
    
    
    
    25.65
    
    
    
    24,304,951
    
    
    
    24.36Performance based options outstanding, end of period *
    
    
    9,910,250
    
    
    
    20.47
    
    
    
    10,615,250
    
    
    
    19.06
    
    
    
    10,974,250
    
    
    
    17.81Exercisable at end of year
    
    
    5,528,097
    
    
    
    35.02
    
    
    
    6,138,455
    
    
    
    32.88
    
    
    
    6,409,601
    
    
    
    29.27
 
 *
    
    These options, which are also included in the caption Total options outstanding, end of period,
are pursuant to two separate long-term, performance-based stock incentive plans, discussed below.
Vesting of these options is contingent upon meeting certain long-term goals which DNCs
management has determined are not probable as of December 31, 2007.  F-18




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  2007
    
    2006Weighted-Weighted-
    
    
    
    
    
    AverageRestricted
    
    Average
    
    Restricted
    
    GrantShare
    
    Grant Date
    
    Share
    
    Date FairUnits
    
    Fair Value
    
    Units
    
    ValueTotal restricted stock awards outstanding, beginning of period
    
    
    839,798
    
    
    $
    30.90
    
    
    
    632,970
    
    
    $
    29.46Granted
    
    
    39,580
    
    
    
    43.43
    
    
    
    327,496
    
    
    
    33.30Exercised
    
    
    (30,000
    )
    
    
    31.16
    
    
    
    (20,000
    )
    
    
    30.16Forfeited
    
    
    (137,800
    )
    
    
    30.44
    
    
    
    (100,668
    )
    
    
    29.83Total restricted stock awards outstanding, end of period
    
    
    711,578
    
    
    
    35.18
    
    
    
    839,798
    
    
    
    30.90Restricted performance units outstanding, end of period *
    
    
    611,578
    
    
    
    31.70
    
    
    
    709,798
    
    
    
    30.82
 
 *
    
    These restricted performance units, which are also included in the caption Total restricted stock
awards outstanding, end of period, are pursuant to a long-term, performance-based stock incentive
plan, discussed below. Vesting of these restricted performance units is contingent upon meeting a
long-term goal which DNCs management has determined is not probable as of December 31,
2007.  Options Outstanding
    
    
    Options ExercisableNumber
    
    
    Weighted-
    
    
    
    
    
    
    
    
    
    
    Weighted-Outstanding
    
    
    Average
    
    
    Weighted-
    
    
    Number
    
    
    Average
    
    
    Weighted-as of
    
    
    Remaining
    
    
    Average
    
    
    Exercisable as
    
    
    Remaining
    
    
    AverageDecember 31,
    
    
    Contractual
    
    
    Exercise
    
    
    of December 31,
    
    
    Contractual
    
    
    Exercise2007
    
    
    Life
    
    
    Price
    
    
    2007
    
    
    Life
    
    
    Price$
    2.75
    -
    $
    6.00
    
    
    
    4,023,265
    
    
    
    1.13
    
    
    $
    5.99
    
    
    
    151,265
    
    
    
    1.09
    
    
    $
    5.84$
    6.01
    -
    $
    20.00
    
    
    
    715,655
    
    
    
    1.40
    
    
    
    13.76
    
    
    
    155,655
    
    
    
    1.56
    
    
    
    12.73$
    20.01
    -
    $
    29.00
    
    
    
    1,662,157
    
    
    
    6.91
    
    
    
    27.67
    
    
    
    1,419,857
    
    
    
    7.15
    
    
    
    27.59$
    29.01
    -
    $
    31.00
    
    
    
    8,249,218
    
    
    
    7.30
    
    
    
    29.85
    
    
    
    1,565,568
    
    
    
    6.94
    
    
    
    30.44$
    31.01
    -
    $
    40.00
    
    
    
    3,056,048
    
    
    
    7.71
    
    
    
    33.94
    
    
    
    1,252,652
    
    
    
    6.76
    
    
    
    33.75$
    40.01
    -
    $
    79.00
    
    
    
    2,205,874
    
    
    
    5.87
    
    
    
    53.63
    
    
    
    983,100
    
    
    
    2.46
    
    
    
    62.69$
    2.75
    -
    $
    79.00
    
    
    
    19,912,217
    
    
    
    5.71
    
    
    
    27.53
    
    
    
    5,528,097
    
    
    
    5.84
    
    
    
    35.02
 Long-Term Performance-Based Plans
    F-19




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
   Stock-Based Compensation
  For the Years Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands)Subscriber-related
    
    $
    583
    
    
    $
    549
    
    
    $
    Satellite and transmission
    
    
    389
    
    
    
    319
    
    
    
    General and administrative
    
    
    11,890
    
    
    
    10,018
    
    
    
    190Total non-cash, stock based compensation
    
    $
    12,862
    
    
    $
    10,886
    
    
    $
    190
   For the Years Ended December 31,2007
    
    2006
    
    2005Risk-free interest rate
    
    3.51%  5.19%
    
    4.49%  5.22%
    
    
    3.74%  4.50%Volatility factor
    
    18.63%  24.84%
    
    24.71%  25.20%
    
    
    20.75%  27.05%Expected term of options in years
    
    5.95  10.00
    
    6.04  10.00
    
    
    4.38  10.00Weighted-average fair value of options granted
    
    $10.55  $21.41
    
    $11.06  $17.78
    
    
    $5.97  $14.12
  F-20




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  4. Property and Equipment
  DepreciableLife
    
    
    As of December 31,(In Years)
    
    
    2007
    
    
    2006(In thousands)Equipment leased to customers
    
    
    2-5
    
    
    $
    2,773,085
    
    
    $
    2,374,121EchoStar I
    
    
    12
    
    
    
    201,607
    
    
    
    201,607EchoStar II
    
    
    12
    
    
    
    228,694
    
    
    
    228,694EchoStar III
    
    
    12
    
    
    
    234,083
    
    
    
    234,083EchoStar IV  fully depreciated
    
    
    N/A
    
    
    
    78,511
    
    
    
    78,511EchoStar V
    
    
    9
    
    
    
    203,511
    
    
    
    205,996EchoStar VI
    
    
    12
    
    
    
    244,305
    
    
    
    245,022EchoStar VII
    
    
    12
    
    
    
    177,000
    
    
    
    177,000EchoStar VIII
    
    
    12
    
    
    
    175,801
    
    
    
    175,801EchoStar IX
    
    
    12
    
    
    
    127,376
    
    
    
    127,376EchoStar X
    
    
    12
    
    
    
    177,192
    
    
    
    177,192EchoStar XII
    
    
    10
    
    
    
    190,051
    
    
    
    190,051Satellites acquired under capital leases (Note 5)
    
    
    10-15
    
    
    
    775,051
    
    
    
    551,628Furniture, fixtures, equipment and other
    
    
    1-10
    
    
    
    979,990
    
    
    
    938,856Buildings and improvements
    
    
    1-40
    
    
    
    192,757
    
    
    
    185,843Land
    
    
    
    
    
    
    7,816
    
    
    
    7,204Construction in progress
    
    
    
    
    
    
    276,215
    
    
    
    250,704Total property and equipment
    
    
    
    
    
    
    7,043,045
    
    
    
    6,349,689Accumulated depreciation
    
    
    
    
    
    
    (3,572,011
    )
    
    
    (2,849,534
    )Property and equipment, net
    
    
    
    
    
    $
    3,471,034
    
    
    $
    3,500,155
  As of December 31,2007
    
    
    2006(In thousands)Progress amounts for satellite construction, including certain
amounts
prepaid under satellite service agreements and launch costs
    
    $
    191,454
    
    
    $
    197,386Regional digital broadcast operations centers
    
    
    49,036
    
    
    
    Software related projects
    
    
    8,802
    
    
    
    21,429Other
    
    
    26,923
    
    
    
    31,889Construction in progress
    
    $
    276,215
    
    
    $
    250,704
  For the Years Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands)Equipment leased to customers
    
    $
    854,533
    
    
    $
    686,125
    
    
    $
    437,586Satellites
    
    
    245,349
    
    
    
    231,977
    
    
    
    197,495Furniture, fixtures, equipment and other
    
    
    176,842
    
    
    
    150,186
    
    
    
    123,548Identifiable intangible assets subject to amortization
    
    
    36,031
    
    
    
    36,677
    
    
    
    37,877Buildings and improvements
    
    
    7,870
    
    
    
    5,420
    
    
    
    3,554Total depreciation and amortization
    
    $
    1,320,625
    
    
    $
    1,110,385
    
    
    $
    800,060
 F-21




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  Our Satellites
  Degree
    
    UsefulLaunch
    
    Orbital
    
    Life/Satellites
    
    Transferred (1)
    
    Retained
    
    Date
    
    Location
    
    Lease TermOwned:EchoStar I
    
    
    
    X
    
    December 1995
    
    
    148
    
    
    
    12EchoStar II
    
    
    
    X
    
    September 1996
    
    
    148
    
    
    
    12EchoStar III (2)
    
    X
    
    
    
    October 1997
    
    
    61.5
    
    
    
    12EchoStar IV
    
    X
    
    
    
    May 1998
    
    
    77
    
    
    
    N/AEchoStar V
    
    
    
    X
    
    September 1999
    
    
    129
    
    
    
    9EchoStar VI (2)
    
    X
    
    
    
    July 2000
    
    
    110
    
    
    
    12EchoStar VII
    
    
    
    X
    
    February 2002
    
    
    119
    
    
    
    12EchoStar VIII (2)
    
    X
    
    
    
    August 2002
    
    
    110
    
    
    
    12EchoStar IX (2)
    
    X
    
    
    
    August 2003
    
    
    121
    
    
    
    12EchoStar X
    
    
    
    X
    
    February 2006
    
    
    110
    
    
    
    12EchoStar XII (2)
    
    X
    
    
    
    July 2003
    
    
    61.5
    
    
    
    10Leased:AMC-15 (2)
    
    X
    
    
    
    December 2004
    
    
    105
    
    
    
    10AMC-16
    
    X
    
    
    
    January 2005
    
    
    85
    
    
    
    10Anik F3
    
    
    
    X
    
    April 2007
    
    
    118.7
    
    
    
    15Under Construction:EchoStar XI
    
    
    
    X
    
    Mid-Year 2008EchoStar XIV
    
    
    
    X
    
    Late 2009AMC-14
    
    X
    
    
    
    March 2008Ciel 2
    
    
    
    X
    
    Late 2008Three Ka/Ku band Satellites
    
    X
    
    
    
    2009  2011
 
 (1)
    
    As of January 1, 2008, these satellites were transferred to EchoStar in connection with
the Spin-off.(2)
    
    After the Spin-off, one of our subsidiaries entered into satellite capacity agreements
with EchoStar to lease satellite capacity on these satellites now owned or leased by
EchoStar. Satellite Anomalies
  F-22




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
   EchoStar I Long-Lived Satellite Assets
 EchoStar II. Long-Lived Satellite Assets
 EchoStar III Long-Lived
Satellite Assets
 EchoStar IV. Long-Lived Satellite Assets
 EchoStar V. Long-Lived Satellite Assets
 F-23




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 EchoStar VI. Long-Lived Satellite Assets
 EchoStar VII Long-Lived Satellite Assets
 EchoStar VIII Long-Lived Satellite Assets
 EchoStar IX. Long-Lived Satellite Assets
 EchoStar X Long-Lived Satellite Assets
 F-24




---



##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 EchoStar XII. Long-Lived Satellite Assets
 Long-Lived Satellite Assets. Accounting
for the Impairment or Disposal of Long-Lived Assets
 5. Long-Term Debt
 5 3/4% Senior Notes due 2008
    
    
    general unsecured senior obligations of EDBS;
    
    ranked equally in right of payment with all of EDBS 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.
  
    
    incur additional indebtedness or enter into sale and leaseback transactions;
    
    pay dividends or make distribution on EDBS capital stock or repurchase EDBS
capital stock;
    
    make certain investments;
    
    create liens;
    
    enter into transactions with affiliates;
    
    merge or consolidate with another company; and
    
    transfer and sell assets.
  F-25




---



##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  6 3/8% Senior Notes due 2011
    
    
    general unsecured senior obligations of EDBS;
    
    ranked equally in right of payment with all of EDBS 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.
  
    
    incur additional indebtedness or enter into sale and leaseback transactions;
    
    pay dividends or make distribution on EDBS capital stock or repurchase EDBS
capital stock;
    
    make certain investments;
    
    create liens;
    
    enter into transactions with affiliates;
    
    merge or consolidate with another company; and
    
    transfer and sell assets.
  6 5/8% Senior Notes due 2014
    
    
    general unsecured senior obligations of EDBS;
    
    ranked equally in right of payment with all of EDBS 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.
  
    
    incur additional indebtedness or enter into sale and leaseback transactions;
    
    pay dividends or make distribution on EDBS capital stock or repurchase EDBS
capital stock;
    
    make certain investments;
    
    create liens;
 F-26




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 
    
    enter into transactions with affiliates;
    
    merge or consolidate with another company; and
    
    transfer and sell assets.
  7 1/8% Senior Notes due 2016
    
    
    general unsecured senior obligations of EDBS;
    
    ranked equally in right of payment with all of EDBS 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.
  
    
    incur additional debt;
    
    pay dividends or make distribution on EDBS capital stock or repurchase EDBS
capital stock;
    
    make certain investments;
    
    create liens or enter into sale and leaseback transactions;
    
    enter into transactions with affiliates;
    
    merge or consolidate with another company; and
    
    transfer and sell assets.
  7% Senior Notes due 2013
   F-27




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  
    
    general unsecured senior obligations of EDBS;
    
    ranked equally in right of payment with all of EDBS 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.
  
    
    incur additional debt;
    
    pay dividends or make distribution on EDBS capital stock or repurchase EDBS
capital stock;
    
    make certain investments;
    
    create liens or enter into sale and leaseback transactions;
    
    enter into transactions with affiliates;
    
    merge or consolidate with another company; and
    
    transfer and sell assets.
  Interest on Long-Term Debt
 AnnualSemi-Annual
    
    Debt ServicePayment Dates
    
    Requirements5 3/4% Senior Notes due 2008
    
    April 1 and October 1
    
    $
    57,500,0006 3/8% Senior Notes due 2011
    
    April 1 and October 1
    
    $
    63,750,0006 5/8% Senior Notes due 2014
    
    April 1 and October 1
    
    $
    66,250,0007 1/8% Senior Notes due 2016
    
    February 1 and August 1
    
    $
    106,875,0007 % Senior Notes due 2013
    
    April 1 and October 1
    
    $
    35,000,000
  Capital Lease Obligations, Mortgages and Other Notes Payable
  As of December 31,2007
    
    
    2006(In thousands)Satellites financed under capital lease obligations
    
    $
    563,547
    
    
    $
    404,9428% note payable for EchoStar VII satellite vendor financing, payable over 13 years from launch
    
    
    10,906
    
    
    
    11,8568% note payable for EchoStar IX satellite vendor financing, payable over 14 years from launch
    
    
    8,139
    
    
    
    8,6596% note payable for EchoStar X satellite vendor financing, payable over 15 years from launch
    
    
    13,248
    
    
    
    13,955Mortgages and other unsecured notes payable due in installments through 2017
with interest rates ranging from approximately 4% to 13%
    
    
    825
    
    
    
    2,549Total
    
    
    596,665
    
    
    
    441,961Less current portion
    
    
    (49,057
    )
    
    
    (38,435
    )Capital lease obligations, mortgages and other notes payable, net of current portion
    
    $
    547,608
    
    
    $
    403,526
 F-28




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 Capital Lease Obligations
  AMC-15.
 AMC-16.
 Anik F3
   For the Year Ending December 31,2008
    
    $
    134,3512009
    
    
    134,3512010
    
    
    134,3512011
    
    
    134,3512012
    
    
    134,351Thereafter
    
    
    616,025Total minimum lease payments
    
    
    1,287,780Less: Amount representing lease of the orbital location and estimated executory costs (primarily
insurance and maintenance) including profit thereon, included in total minimum lease payments
    
    
    (475,576
    )Net minimum lease payments
    
    
    812,204Less: Amount representing interest
    
    
    (248,657
    )Present value of net minimum lease payments
    
    
    563,547Less: Current portion
    
    
    (46,415
    )Long-term portion of capital lease obligations
    
    $
    517,132
 F-29




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  Payments due by periodTotal
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    Thereafter(In thousands)Long-term debt obligations
    
    $
    5,000,000
    
    
    $
    1,000,000
    
    
    $
    
    
    
    $
    
    
    
    $
    1,000,000
    
    
    $
    
    
    
    $
    3,000,000Capital lease obligations, mortgages
and other notes payable
    
    
    596,665
    
    
    
    49,040
    
    
    
    54,049
    
    
    
    59,230
    
    
    
    65,176
    
    
    
    71,657
    
    
    
    297,513Total
    
    $
    5,596,665
    
    
    $
    1,049,040
    
    
    $
    54,049
    
    
    $
    59,230
    
    
    $
    1,065,176
    
    
    $
    71,657
    
    
    $
    3,297,513
 Guarantees
  6. Income Taxes
      F-30




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  For the Years Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands)Current (provision) benefit:Federal
    
    $
    (204,590
    )
    
    $
    (21,418
    )
    
    $
    (18,908
    )State
    
    
    (71,756
    )
    
    
    (35,764
    )
    
    
    (15,364
    )Foreign
    
    
    (1,978
    )
    
    
    (1,520
    )
    
    
    (1,701
    )(278,324
    )
    
    
    (58,702
    )
    
    
    (35,973
    )Deferred (provision) benefit:Federal
    
    
    (233,729
    )
    
    
    (310,688
    )
    
    
    (319,304
    )State
    
    
    (22,372
    )
    
    
    24,817
    
    
    
    (9,754
    )Decrease (increase) in valuation allowance
    
    
    249
    
    
    
    11,109
    
    
    
    472,305(255,852
    )
    
    
    (274,762
    )
    
    
    143,247Total benefit (provision)
    
    $
    (534,176
    )
    
    $
    (333,464
    )
    
    $
    107,274
  For the Years Ended December 31,2007
    
    2006
    
    2005% of pre-tax (income)/lossStatutory rate
    
    
    (35.0
    )
    
    
    (35.0
    )
    
    
    (35.0
    )State income taxes, net of Federal benefit
    
    
    (4.1
    )
    
    
    (0.8
    )
    
    
    (1.6
    )Foreign taxes and income not U. S. taxable
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (0.1
    )Stock option compensation
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.4
    )Deferred tax asset adjustment for filed returns
    
    
    
    
    
    
    (0.9
    )
    
    
    1.9Other
    
    
    (0.3
    )
    
    
    (0.1
    )
    
    
    (0.3
    )Decrease (increase) in valuation allowance
    
    
    
    
    
    
    1.2
    
    
    
    45.9Total benefit (provision) for income taxes
    
    
    (39.7
    )
    
    
    (35.7
    )
    
    
    10.4
  F-31




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  As of December 31,2007
    
    
    2006(In thousands)Deferred tax assets:NOL, credit and other carryforwards
    
    $
    1,327
    
    
    $
    254,680Unrealized losses on investments
    
    
    2,100
    
    
    
    2,100Accrued expenses
    
    
    71,450
    
    
    
    95,904Stock compensation
    
    
    10,041
    
    
    
    8,127Deferred revenue
    
    
    63,684
    
    
    
    51,825FIN 48
amounts
    
    
    5,876
    
    
    
    Other
    
    
    19,512
    
    
    
    12,499Total deferred tax assets
    
    
    173,990
    
    
    
    425,135Valuation allowance
    
    
    
    
    
    
    (249
    )Deferred tax asset after valuation allowance
    
    
    173,990
    
    
    
    424,886Deferred tax liabilities:Equity method investments
    
    
    (18,455
    )
    
    
    (18,445
    )Depreciation and amortization
    
    
    (417,767
    )
    
    
    (430,949
    )State taxes net of federal tax effect
    
    
    (25,056
    )
    
    
    (13,799
    )Other
    
    
    (1,733
    )
    
    
    413Total deferred tax liabilities
    
    
    (463,011
    )
    
    
    (462,780
    )Net deferred tax asset (liability)
    
    $
    (289,021
    )
    
    $
    (37,894
    )Current portion of net deferred tax asset (liability)
    
    $
    38,297
    
    
    $
    280,325Noncurrent portion of net deferred tax asset (liability)
    
    
    (327,318
    )
    
    
    (318,219
    )Total net deferred tax asset (liability)
    
    $
    (289,021
    )
    
    $
    (37,894
    )
  7. Employee Benefit Plans
 Employee Stock Purchase Plan
  F-32




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 401(k) Employee Savings Plan
   8. Commitments and Contingencies
 Commitments
  Payments due by periodTotal
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    Thereafter(In thousands)Satellite-related obligations
    
    $
    1,395,579
    
    
    $
    117,238
    
    
    $
    184,117
    
    
    $
    142,291
    
    
    $
    110,272
    
    
    $
    78,557
    
    
    $
    763,104Operating lease obligations
    
    
    69,002
    
    
    
    26,434
    
    
    
    18,392
    
    
    
    12,786
    
    
    
    6,163
    
    
    
    2,416
    
    
    
    2,811Purchase obligations
    
    
    1,524,899
    
    
    
    1,405,978
    
    
    
    55,921
    
    
    
    40,290
    
    
    
    11,000
    
    
    
    11,000
    
    
    
    710Total
    
    $
    2,989,480
    
    
    $
    1,549,650
    
    
    $
    258,430
    
    
    $
    195,367
    
    
    $
    127,435
    
    
    $
    91,973
    
    
    $
    766,625
  Satellites under Construction.
 
    
    During 2004, we entered into a contract for the construction of EchoStar XI which is
expected to be launched mid-year 2008.
    
    Three additional Ka and/or Ku-band satellites are contractually scheduled to be
completed between 2009 and 2011. These contracts were transferred to EchoStar in the
Spin-off.
    
    During 2007, we entered into a contract for the construction of EchoStar XIV, an SSL DBS
satellite, which is expected to be completed during 2009.
 Leased Satellites.
 
    
    An SES Americom DBS satellite (AMC-14) is currently expected to launch in March 2008
and to commence commercial operation at the 61.5 degree orbital location. The initial
ten-year lease for all of the capacity on the satellite, which was transferred to EchoStar
in connection with the Spin-off.
 F-33




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 We expect to
enter into an initial ten-year lease with EchoStar for all of the capacity of AMC-14.
Future commitments related to this satellite are not included in the table above under
Satellite-related obligations.
    
    A Canadian DBS satellite (Ciel 2) is currently expected to be launched in late 2008
and commence commercial operation at the 129 degree orbital location. We will lease at
least 50% of the capacity of this satellite for an initial ten-year term. The lease will
be accounted for as a capital lease.
 Purchase Obligations
  Programming Contracts
  Rent Expense
  Patents and Intellectual Property
  Contingencies
 Acacia
   F-34




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
   Broadcast Innovation, L.L.C.
    Channel Bundling Class Action
  Distant Network Litigation
  F-35




---



##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
  Enron Commercial Paper Investment
  Finisar Corporation
    Forgent
  Global Communications
  F-36




---



##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 Katz Communications
  Retailer Class Actions
  Superguide
    F-37




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 Tivo Inc.
     Trans Video
  Other
  9. Financial Information for Subsidiary Guarantors
  F-38




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 10. Segment Reporting
 Financial Data by Business Unit
  EchoStar
    
    
    
    
    
    
    
    
    
    DNC
    
    
    
    
    
    EDBSDISH
    
    Technologies
    
    All
    
    
    
    
    
    Consolidated
    
    Other
    
    AndNetwork
    
    Corporation
    
    Other
    
    Eliminations
    
    Total
    
    Activities(1)
    
    SubsidiariesYear Ended December 31, 2007Total revenue
    
    $
    10,808,753
    
    
    $
    177,774
    
    
    $
    141,100
    
    
    $
    (37,252
    )
    
    $
    11,090,375
    
    
    $
    (29,892
    )
    
    $
    11,060,483Depreciation and amortization
    
    
    1,215,626
    
    
    
    8,238
    
    
    
    105,546
    
    
    
    
    
    
    
    1,329,410
    
    
    
    (8,785
    )
    
    
    1,320,625Total costs and expenses
    
    
    9,198,397
    
    
    
    232,382
    
    
    
    123,972
    
    
    
    (37,780
    )
    
    
    9,516,971
    
    
    
    (70,613
    )
    
    
    9,446,358Interest income
    
    
    134,136
    
    
    
    40
    
    
    
    3,696
    
    
    
    
    
    
    
    137,872
    
    
    
    (34,253
    )
    
    
    103,619Interest expense, net of amounts
capitalized
    
    
    (404,628
    )
    
    
    (43
    )
    
    
    (648
    )
    
    
    
    
    
    
    (405,319
    )
    
    
    32,707
    
    
    
    (372,612
    )Other
    
    
    (39,732
    )
    
    
    23
    
    
    
    (15,567
    )
    
    
    (528
    )
    
    
    (55,804
    )
    
    
    55,242
    
    
    
    (562
    )Income tax benefit (provision), net
    
    
    (545,047
    )
    
    
    31,565
    
    
    
    19,383
    
    
    
    
    
    
    
    (494,099
    )
    
    
    (40,077
    )
    
    
    (534,176
    )Net income (loss)
    
    
    755,085
    
    
    
    (23,023
    )
    
    
    23,992
    
    
    
    
    
    
    
    756,054
    
    
    
    54,340
    
    
    
    810,394Year Ended December 31, 2006Total revenue
    
    $
    9,514,347
    
    
    $
    186,984
    
    
    $
    146,190
    
    
    $
    (29,035
    )
    
    $
    9,818,486
    
    
    $
    (5,739
    )
    
    $
    9,812,747Depreciation and amortization
    
    
    1,038,744
    
    
    
    4,546
    
    
    
    71,004
    
    
    
    
    
    
    
    1,114,294
    
    
    
    (3,909
    )
    
    
    1,110,385Total costs and expenses
    
    
    8,326,513
    
    
    
    219,299
    
    
    
    84,338
    
    
    
    (29,035
    )
    
    
    8,601,115
    
    
    
    1,068
    
    
    
    8,602,183Interest income
    
    
    123,995
    
    
    
    4
    
    
    
    2,402
    
    
    
    
    
    
    
    126,401
    
    
    
    (4,528
    )
    
    
    121,873Interest expense, net of amounts
capitalized
    
    
    (457,149
    )
    
    
    (74
    )
    
    
    (927
    )
    
    
    
    
    
    
    (458,150
    )
    
    
    68,157
    
    
    
    (389,993
    )Income tax benefit (provision), net
    
    
    (310,408
    )
    
    
    22,887
    
    
    
    (27,222
    )
    
    
    
    
    
    
    (314,743
    )
    
    
    (18,721
    )
    
    
    (333,464
    )Net income (loss)
    
    
    581,342
    
    
    
    (9,498
    )
    
    
    36,428
    
    
    
    
    
    
    
    608,272
    
    
    
    (7,215
    )
    
    
    601,057Year Ended December 31, 2005Total revenue
    
    $
    8,172,592
    
    
    $
    174,195
    
    
    $
    113,899
    
    
    $
    (13,511
    )
    
    $
    8,447,175
    
    
    $
    (4,006
    )
    
    $
    8,443,169Depreciation and amortization
    
    
    744,624
    
    
    
    4,597
    
    
    
    56,352
    
    
    
    
    
    
    
    805,573
    
    
    
    (5,513
    )
    
    
    800,060Total costs and expenses
    
    
    7,039,054
    
    
    
    190,479
    
    
    
    63,905
    
    
    
    (13,511
    )
    
    
    7,279,927
    
    
    
    (4,528
    )
    
    
    7,275,399Interest income
    
    
    42,316
    
    
    
    
    
    
    
    1,202
    
    
    
    
    
    
    
    43,518
    
    
    
    (8,877
    )
    
    
    34,641Interest expense, net of amounts
capitalized
    
    
    (372,752
    )
    
    
    (105
    )
    
    
    (987
    )
    
    
    
    
    
    
    (373,844
    )
    
    
    68,579
    
    
    
    (305,265
    )Income tax benefit (provision), net
    
    
    514,048
    
    
    
    (2,712
    )
    
    
    (3,887
    )
    
    
    
    
    
    
    507,449
    
    
    
    (400,175
    )
    
    
    107,274Net income (loss)
    
    
    1,487,467
    
    
    
    (19,097
    )
    
    
    46,170
    
    
    
    
    
    
    
    1,514,540
    
    
    
    (377,927
    )
    
    
    1,136,613
 
 (1)
    
    Other Activities represents the activity of
affiliates consolidated in DNCs
consolidated financial statements but not included in our consolidated financial statements. F-39




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 Geographic Information and Transactions with Major Customers
 United States
    
    
    International
    
    
    Total(In thousands)Long-lived assets, including FCC authorizations2007
    
    $
    4,421,739
    
    
    $
    2,410
    
    
    $
    4,424,1492006
    
    $
    4,392,760
    
    
    $
    2,528
    
    
    $
    4,395,288Revenue2007
    
    $
    10,972,020
    
    
    $
    88,463
    
    
    $
    11,060,4832006
    
    $
    9,752,078
    
    
    $
    60,669
    
    
    $
    9,812,7472005
    
    $
    8,401,273
    
    
    $
    41,896
    
    
    $
    8,443,169
  Transactions with Major Customers
  For the Years Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands)Total revenue:Bell ExpressVu
    
    $
    165,410
    
    
    $
    186,577
    
    
    $
    178,427Other
    
    
    10,895,073
    
    
    
    9,626,170
    
    
    
    8,264,742Total revenue
    
    $
    11,060,483
    
    
    $
    9,812,747
    
    
    $
    8,443,169Percentage of total revenue:Bell ExpressVu
    
    
    1.5
    %
    
    
    1.9
    %
    
    
    2.1
    %
  F-40




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
 11. Valuation and Qualifying Accounts
  Balance at
    
    Charged toBeginning of
    
    Costs
    
    
    
    
    
    Balance atYear
    
    and Expenses
    
    Deductions
    
    End of Year(In thousands)Year ended December 31, 2007:Assets:Allowance for doubtful accounts
    
    $
    14,205
    
    
    $
    101,914
    
    
    $
    (102,100
    )
    
    $
    14,019Reserve for inventory
    
    
    12,740
    
    
    
    2,642
    
    
    
    (708
    )
    
    
    14,674Year ended December 31, 2006:Assets:Allowance for doubtful accounts
    
    $
    8,799
    
    
    $
    68,643
    
    
    $
    (63,237
    )
    
    $
    14,205Reserve for inventory
    
    
    9,987
    
    
    
    10,093
    
    
    
    (7,340
    )
    
    
    12,740Year ended December 31, 2005:Assets:Allowance for doubtful accounts
    
    $
    8,429
    
    
    $
    57,340
    
    
    $
    (56,970
    )
    
    $
    8,799Reserve for inventory
    
    
    10,221
    
    
    
    3,917
    
    
    
    (4,151
    )
    
    
    9,987
 12. Quarterly Financial Data (Unaudited)
  For the Three Months EndedMarch 31
    
    June 30
    
    September 30
    
    December 31(In thousands)(Unaudited)Year ended December 31, 2007:Total revenue
    
    $
    2,639,703
    
    
    $
    2,755,407
    
    
    $
    2,789,835
    
    
    $
    2,875,538Operating
income
    
    
    339,185
    
    
    
    443,254
    
    
    
    398,097
    
    
    
    433,589Net income (loss)
    
    
    172,749
    
    
    
    232,246
    
    
    
    205,126
    
    
    
    200,273Year ended December 31, 2006:Total revenue
    
    $
    2,298,768
    
    
    $
    2,465,438
    
    
    $
    2,471,234
    
    
    $
    2,577,307Operating income
    
    
    273,905
    
    
    
    347,489
    
    
    
    275,547
    
    
    
    313,623Net income (loss)
    
    
    114,841
    
    
    
    181,291
    
    
    
    134,163
    
    
    
    170,762
 13. Related Party Transactions
      F-41




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##### Table of Contents



ECHOSTAR DBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
      14. Subsequent Events
  F-42




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description3.1(a)*
    
    Articles of Incorporation of EDBS (incorporated by reference to
Exhibit 3.4(a) to the Companys Registration Statement on Form
S-4, Registration No. 333-31929).3.1(b)*
    
    Certificate of Amendment of the Articles of Incorporation of
EchoStar DBS Corporation, dated as of August 25, 2003
(incorporated by reference to Exhibit 3.1(b) to the Annual Report
on Form 10-K of EDBS for the year ended December 31, 2003,
Commission File No. 333-31929).3.1(c)*
    
    Bylaws of EDBS (incorporated by reference to Exhibit 3.4(b) to
the Companys Registration Statement on Form S-4, Registration
No. 333-31929).4.1*
    
    Indenture, relating to EDBS 5 3/4% Senior Notes due 2008, dated
as of October 2, 2003, between EDBS and U.S. Bank Trust National
Association, as Trustee (incorporated by reference to Exhibit 4.1
to the Quarterly Report on Form 10-Q of DNC for the
quarter ended September 30, 2003, Commission File No. 0-26176).4.2*
    
    Indenture, relating to EDBS 6 3/8% Senior Notes due 2011, dated
as of October 2, 2003, between EDBS and U.S. Bank Trust National
Association, as Trustee (incorporated by reference to Exhibit 4.2
to the Quarterly Report on Form 10-Q of DNC for the
quarter ended September 30, 2003, Commission File No. 0-26176).4.3*
    
    First Supplemental Indenture, relating to the 5 3/4% Senior Notes
Due 2008, dated as of December 31, 2003 between EDBS and U.S.
Bank Trust National Association, as Trustee (incorporated by
reference to Exhibit 4.13 to the Annual Report on Form 10-K of
DNC for the year ended December 31, 2003, Commission
File No. 0-26176).4.4*
    
    First Supplemental Indenture, relating to the 6 3/8% Senior Notes
Due 2011, dated as of December 31, 2003 between EDBS and U.S.
Bank Trust National Association, as Trustee (incorporated by
reference to Exhibit 4.14 to the Annual Report on Form 10-K of
DNC for the year ended December 31, 2003, Commission
File No. 0-26176).




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##### Table of Contents



Exhibit No.
    
    Description4.5*
    
    Indenture, relating to the 6 5/8% Senior Notes Due 2014, dated
October 1, 2004 between EDBS and U.S. Bank Trust National
Association, as Trustee (incorporated by reference to Exhibit 4.1
to the Current Report on Form 8-K of DNC filed October
1, 2004, Commission File No. 0-26176).4.6*
    
    Indenture, relating to the 7 1/8% Senior Notes Due 2016, dated as
of February 2, 2006 between EDBS and U.S. Bank Trust National
Association, as Trustee (incorporated by reference to Exhibit 4.1
to the Current Report on Form 8-K of DNC filed February
3, 2006, Commission File No. 0-26176).4.7*
    
    Indenture, relating to the 7% Senior Notes Due 2013, dated as of
October 18, 2006 between EDBS and U.S. Bank Trust National
Association, as Trustee (incorporated by reference to Exhibit 4.1
to the Current Report on Form 8-K of DNC filed October
18, 2006, Commission File No. 0-26176).10.1*
    
    Form of Satellite Launch Insurance Declarations (incorporated by
reference to Exhibit 10.10 to the Registration Statement on Form
S-1 of Dish Ltd., Registration No. 33-81234).10.2*
    
    DNC 1995 Stock Incentive Plan (incorporated by reference
to Exhibit 10.16 to the Registration Statement on Form S-1 of
DNC, Registration No. 33-91276).**10.3*
    
    Amended and Restated DNC 1999 Stock Incentive Plan
(incorporated by reference to Appendix A to DNCs
Definitive Proxy Statement on Schedule 14A dated August 24,
2005).**10.4*
    
    2002 Class B CEO Stock Option Plan (incorporated by reference to
Appendix A to DNCs Definitive Proxy Statement on
Schedule 14A dated April 9, 2002).**10.5*
    
    License and OEM Manufacturing Agreement, dated July 1, 2002,
between EchoStar Satellite Corporation, EchoStar Technologies
Corporation and Thomson multimedia, Inc. (incorporated by
reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of
DNC for the quarter ended September 30, 2002, Commission
File No. 0-26176).10.6*
    
    Amendment No. 19 to License and OEM Manufacturing Agreement,
dated July 1, 2002, between EchoStar Satellite Corporation,
EchoStar Technologies Corporation and Thomson multimedia, Inc.
(incorporated by reference to Exhibit 10.57 to the Annual Report
on Form 10-K of DNC for the year ended December 31,
2002, Commission File No. 0-26176).10.7*
    
    Satellite Service Agreement, dated as of March 21, 2003, between
SES Americom, Inc., EchoStar Satellite Corporation and DNC (incorporated by reference to Exhibit 10.1 to the
Quarterly Report on Form 10-Q of DNC for the quarter
ended March 31, 2003, Commission File No. 0-26176).10.8*
    
    Amendment No. 1 to Satellite Service Agreement dated March 31,
2003 between SES Americom Inc. and DNC (incorporated by
reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of
DNC for the quarter ended September 30, 2003, Commission
File No. 0-26176).10.9*
    
    Satellite Service Agreement dated as of August 13, 2003 between
SES Americom Inc. and DNC (incorporated by reference to
Exhibit 10.2 to the Quarterly Report on Form 10-Q of DNC
for the quarter ended September 30, 2003, Commission File
No. 0-26176).10.10*
    
    Satellite Service Agreement, dated February 19, 2004, between SES
Americom, Inc. and DNC (incorporated by reference to
Exhibit 10.1 to the Quarterly Report on Form 10-Q of DNC
for the quarter ended March 31, 2004, Commission File
No. 0-26176).




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##### Table of Contents



Exhibit No.
    
    Description10.11*
    
    Amendment No. 1 to Satellite Service Agreement, dated March 10,
2004, between SES Americom, Inc. and DNC (incorporated
by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q
of DNC for the quarter ended March 31, 2004, Commission
File No. 0-26176).10.12*
    
    Amendment No. 3 to Satellite Service Agreement, dated February
19, 2004, between SES Americom, Inc. and DNC
(incorporated by reference to Exhibit 10.3 to the Quarterly
Report on Form 10-Q of DNC for the quarter ended March
31, 2004, Commission File No. 0-26176).10.13*
    
    Whole RF Channel Service Agreement, dated February 4, 2004,
between Telesat Canada and DNC (incorporated by
reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of
DNC for the quarter ended March 31, 2004, Commission
File No. 0-26176).10.14*
    
    Letter Amendment to Whole RF Channel Service Agreement, dated
March 25, 2004, between Telesat Canada and DNC
(incorporated by reference to Exhibit 10.5 to the Quarterly
Report on Form 10-Q of DNC for the quarter ended March
31, 2004, Commission File No. 0-26176).10.15*
    
    Amendment No. 2 to Satellite Service Agreement, dated April 30,
2004, between SES Americom, Inc. and DNC (incorporated
by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q
of DNC for the quarter ended June 30, 2004, Commission
File No. 0-26176).10.16*
    
    Second Amendment to Whole RF Channel Service Agreement, dated May
5, 2004, between Telesat Canada and DNC (incorporated by
reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of
DNC for the quarter ended June 30, 2004, Commission File
No. 0-26176).10.17*
    
    Third Amendment to Whole RF Channel Service Agreement, dated
October 12, 2004, between Telesat Canada and DNC
(incorporated by reference to Exhibit 10.22 to the Annual Report
on Form 10-K of DNC for the year ended December 31,
2004, Commission File No. 0-26176).10.18*
    
    Amendment No. 4 to Satellite Service Agreement, dated October 21,
2004, between SES Americom, Inc. and DNC (incorporated
by reference to Exhibit 10.23 to the Annual Report on Form 10-K
of DNC for the year ended December 31, 2004, Commission
File No. 0-26176).10.19*
    
    Amendment No. 3 to Satellite Service Agreement, dated November
19, 2004 between SES Americom, Inc. and DNC
(incorporated by reference to Exhibit 10.24 to the Annual Report
on Form 10-K of DNC for the year ended December 31,
2004, Commission File No. 0-26176).10.20*
    
    Amendment No. 5 to Satellite Service Agreement, dated November
19, 2004, between SES Americom, Inc. and DNC
(incorporated by reference to Exhibit 10.25 to the Annual Report
on Form 10-K of DNC for the year ended December 31,
2004, Commission File No. 0-26176).10.21*
    
    Amendment No. 6 to Satellite Service Agreement, dated December
20, 2004, between SES Americom, Inc. and DNC
(incorporated by reference to Exhibit 10.26 to the Annual Report
on Form 10-K of DNC for the year ended December 31,
2004, Commission File No. 0-26176).10.22*
    
    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 DNC for the quarter
ended March 31, 2005, Commission File No. 0-26176).**10.23*
    
    Description of the 2005 Cash Incentive Plan dated January 22,
2005 (incorporated by reference to Exhibit 10.2 to the Quarterly
Report on Form 10-Q of DNC for the quarter ended March
31, 2005, Commission File No. 0-26176).**




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##### Table of Contents



Exhibit No.
    
    Description10.24*
    
    Settlement Agreement and Release effective February 25, 2005
between EchoStar Satellite L.L.C., EchoStar DBS Corporation and
the insurance carriers for the EchoStar IV satellite
(incorporated by reference to Exhibit 10.3 to the Quarterly
Report on Form 10-Q of DNC for the quarter ended March
31, 2005, Commission File No. 0-26176).10.25*
    
    Amendment No. 4 to Satellite Service Agreement, dated April 6,
2005, between SES Americom, Inc. and DNC (incorporated
by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q
of DNC for the quarter ended June 30, 2005, Commission
File No. 0-26176).10.26*
    
    Amendment No. 5 to Satellite Service Agreement, dated June 20,
2005, between SES Americom, Inc. and DNC (incorporated
by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q
of DNC for the quarter ended June 30, 2005, Commission
File No. 0-26176).10.27*
    
    Incentive Stock Option Agreement (Form A) (incorporated by
reference to Exhibit 99.1 to the Current Report on Form 8-K of
DNC filed July 7, 2005, Commission File No. 0-26176).**10.28*
    
    Incentive Stock Option Agreement (Form B) (incorporated by
reference to Exhibit 99.2 to the Current Report on Form 8-K of
DNC filed July 7, 2005, Commission File No. 0-26176).**10.29*
    
    Restricted Stock Unit Agreement (Form A) (incorporated by
reference to Exhibit 99.3 to the Current Report on Form 8-K of
DNC filed July 7, 2005, Commission File No. 0-26176).**10.30*
    
    Restricted Stock Unit Agreement (Form B) (incorporated by
reference to Exhibit 99.4 to the Current Report on Form 8-K of
DNC filed July 7, 2005, Commission File No. 0-26176).**10.31*
    
    Incentive Stock Option Agreement (1999 Long-Term Incentive Plan)
(incorporated by reference to Exhibit 99.5 to the Current Report
on Form 8-K of DNC filed July 7, 2005, Commission File
No. 0-26176).**10.32*
    
    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 DNC filed July 7, 2005, Commission
File No. 0-26176).**10.33*
    
    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 DNC filed July 7, 2005, Commission File
No. 0-26176).**10.34*
    
    Description of the 2006 Cash Incentive Plan (incorporated by
reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of
DNC for the quarter ended March 31, 2006, Commission
File No. 0-26176).31.1●
    
    Section 302 Certification by Chairman and Chief Executive Officer.31.2●
    
    Section 302 Certification by Executive Vice President and Chief
Financial Officer.32.1●
    
    Section 906 Certification by Chairman and Chief Executive Officer.32.2●
    
    Section 906 Certification by Executive Vice President and Chief
Financial Officer.
 
 ●
    
    Filed herewith.*
    
    Incorporated by reference.**
    
    Constitutes a management contract or compensatory plan or
arrangement.