EXHIBIT 99.2

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

<Table>

Item 1. Financial Statements

Condensed Consolidated Balance Sheets -
December 31, 2000 and March 31, 2001 (Unaudited)........................... 1

Condensed Consolidated Statements of Operations for the
three months ended March 31, 2000 and 2001 (Unaudited)..................... 2

Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 2000 and 2001 (Unaudited)..................... 3

Notes to Condensed Consolidated Financial Statements (Unaudited)............. 4
</Table>

ECHOSTAR COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

<Table>
<Caption>
DECEMBER 31, MARCH 31,
2000 2001
------------ -----------
(Unaudited)
AS RETROACTIVELY ADJUSTED
(NOTE 7)

ASSETS
Current Assets:
Cash and cash equivalents ...................................................... $ 856,818 $ 801,081
Marketable investment securities ............................................... 607,357 493,544
Trade accounts receivable, net of allowance for uncollectible accounts of
$31,241 and $21,766, respectively ............................................ 278,614 251,800
Insurance receivable ........................................................... 106,000 106,000
Inventories .................................................................... 161,161 149,243
Other current assets ........................................................... 50,656 50,830
------------ -----------
Total current assets .............................................................. 2,060,606 1,852,498
Restricted cash and marketable investment securities .............................. 3,000 3,000
Cash reserved for satellite insurance (Note 4) .................................... 82,393 78,295
Property and equipment, net ....................................................... 1,511,303 1,619,556
FCC authorizations, net ........................................................... 709,984 705,374
Other noncurrent assets ........................................................... 269,549 202,687
------------ -----------
Total assets ................................................................. $ 4,636,835 $ 4,461,410
============ ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Trade accounts payable ......................................................... $ 226,568 $ 120,339
Deferred revenue ............................................................... 283,895 330,000
Accrued expenses ............................................................... 691,482 689,594
Current portion of long-term debt .............................................. 21,132 17,375
------------ -----------
Total current liabilities ......................................................... 1,223,077 1,157,308

Long-term obligations, net of current portion:
9 1/4% Seven Year Notes ........................................................ 375,000 375,000
9 3/8% Ten Year Notes .......................................................... 1,625,000 1,625,000
4 7/8% Convertible Notes ...................................................... 1,000,000 1,000,000
10 3/8% Seven Year Notes ....................................................... 1,000,000 1,000,000
Mortgages and other notes payable, net of current portion ...................... 14,812 14,585
Long-term deferred distribution and carriage revenue and other long-term
liabilities .................................................................. 56,329 75,974
------------ -----------
Total long-term obligations, net of current portion ............................... 4,071,141 4,090,559
------------ -----------
Total liabilities ............................................................ 5,294,218 5,247,867

Commitments and Contingencies (Note 5)

Stockholders' Deficit:
6 3/4% Series C Cumulative Convertible Preferred Stock, 218,951 and 199,182
shares issued and outstanding, respectively ................................... 10,948 9,959
Class A Common Stock, $.01 par value, 1,600,000,000 shares authorized,
235,749,557 and 236,360,794 shares issued and outstanding, respectively ....... 2,357 2,364
Class B Common Stock, $.01 par value, 800,000,000 shares authorized,
238,435,208 shares issued and outstanding .................................... 2,384 2,384
Class C common Stock, $.01 par value, 800,000,000 shares authorized, none
outstanding .................................................................. -- --
Additional paid-in capital ..................................................... 1,700,367 1,702,246
Deferred stock-based compensation .............................................. (58,193) (50,137)
Accumulated other comprehensive loss ........................................... (60,580) (28,562)
Accumulated deficit ............................................................ (2,254,666) (2,424,711)
------------ -----------
Total stockholders' deficit ....................................................... (657,383) (786,457)
------------ -----------
Total liabilities and stockholders' deficit .................................. $ 4,636,835 $ 4,461,410
============ ===========
</Table>

See accompanying Notes to Condensed Consolidated Financial Statements.

ECHOSTAR COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

<Table>
<Caption>
THREE MONTHS ENDED MARCH 31,
----------------------------
2000 2001
------------ ------------

AS
RETROACTIVELY
ADJUSTED
REVENUE: (NOTE 7)
DISH Network:
Subscription television services .............................. $ 476,874 $ 794,448
Other ......................................................... 1,313 2,483
------------ ------------
Total DISH Network .............................................. 478,187 796,931
DTH equipment sales and integration services .................... 62,704 41,019
Other ........................................................... 24,830 23,980
------------ ------------
Total revenue ...................................................... 565,721 861,930

COSTS AND EXPENSES:
DISH Network Operating Expenses:
Subscriber-related expenses ................................... 201,574 316,335
Customer service center and other ............................. 56,049 64,782
Satellite and transmission .................................... 12,476 9,095
------------ ------------
Total DISH Network operating expenses ........................... 270,099 390,212
Cost of sales - DTH equipment and integration services .......... 46,222 28,836
Cost of sales - other ........................................... 8,116 15,929
Marketing:
Subscriber promotion subsidies - promotional DTH
equipment .................................................... 172,138 190,265
Subscriber promotion subsidies - other ........................ 77,949 82,966
Advertising and other ......................................... 23,170 26,927
------------ ------------
Total marketing expenses ........................................ 273,257 300,158
General and administrative ...................................... 55,577 75,672
Non-cash, stock-based compensation .............................. 14,009 7,456
Depreciation and amortization ................................... 40,458 58,850
------------ ------------
Total costs and expenses ........................................... 707,738 877,113
------------ ------------

Operating loss ..................................................... (142,017) (15,183)

Other Income (Expense):
Interest income ................................................. 18,998 24,564
Interest expense ................................................ (61,513) (83,097)
Other ........................................................... (543) (96,102)
------------ ------------
Total other income (expense) ....................................... (43,058) (154,635)
------------ ------------

Loss before income taxes ........................................... (185,075) (169,818)
Income tax provision, net .......................................... (55) (49)
------------ ------------
Net loss ........................................................... (185,130) (169,867)

6 3/4% Series C Cumulative Convertible Preferred Stock
dividends ....................................................... (493) (178)
------------ ------------
Numerator for basic and diluted loss per share - loss
attributable to common shareholders ............................. $ (185,623) $ (170,045)
============ ============
Denominator for basic and diluted loss per share -
weighted-average common shares outstanding ...................... 465,768 474,563
============ ============

Net loss per common share:
Basic and diluted net loss ...................................... $ (0.40) $ (0.36)
============ ============
</Table>

See accompanying Notes to Condensed Consolidated Financial Statements.

ECHOSTAR COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

<Table>
<Caption>
THREE MONTHS ENDED MARCH 31,
------------------------------
2000 2001
------------ ------------
AS
RETROACTIVELY
ADJUSTED
(NOTE 7)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss .......................................................................... $ (185,130) $ (169,867)
Adjustments to reconcile net loss to net cash flows from operating activities:
Equity in losses of affiliates ................................................. -- 12,826
Deferred stock-based compensation recognized ................................... 13,709 7,456
Loss due to decline in the estimated fair value of strategic investments ....... -- 81,803
Depreciation and amortization .................................................. 40,458 58,850
Amortization of debt discount and deferred financing costs ..................... 1,534 1,878
Employee benefits funded by issuance of Class A Common Stock ................... 7,280 --
Change in reserve for excess and obsolete inventory ............................ 303 679
Change in long-term deferred satellite services revenue and other long-term
liabilities .................................................................. 7,448 19,645
Other, net ..................................................................... 990 1,348
Changes in current assets and current liabilities, net ......................... 8,831 (34,941)
------------ ------------
Net cash flows from operating activities .......................................... (104,577) (20,323)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable investment securities ..................................... (218,888) (706,698)
Sales of marketable investment securities ......................................... 198,107 820,126
Purchases of property and equipment ............................................... (36,900) (148,600)
Change in cash reserved for satellite insurance due to depreciation on related
satellites (Note 4) ............................................................ -- 4,098
Investment in Wildblue Communications ............................................. (50,000) --
Investment in Replay TV ........................................................... (10,000) --
Other ............................................................................. (694) (1,675)
------------ ------------
Net cash flows from investing activities .......................................... (118,375) (32,749)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of mortgage indebtedness and notes payable........................ (4,236) (3,984)
Net proceeds from Class A Common Stock options exercised and Class A Common
Stock issued to Employee Stock Purchase Plan.............................. 2,170 1,497
Other........................................................................ (493) (178)
------------ ------------
Net cash flows from financing activities..................................... (2,559) (2,665)
------------ ------------

Net increase (decrease) in cash and cash equivalents......................... (225,511) (55,737)
Cash and cash equivalents, beginning of period............................... 905,299 856,818
------------ ------------
Cash and cash equivalents, end of period..................................... $ 679,788 $ 801,081
============ ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
6 3/4% Series C Cumulative Convertible Preferred Stock dividends.......... $ -- $ 178
Conversion of 6 3/4% Series C Cumulative Convertible Preferred Stock to
Class A common stock.................................................... -- 989
Forfeitures of deferred non-cash, stock-based compensation................ -- 600
Class A Common Stock issued related to acquisition of Kelly Broadcasting
Systems, Inc........................................................... 31,556 --
</Table>

See accompanying Notes to Condensed Consolidated Financial Statements.

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. ORGANIZATION AND BUSINESS ACTIVITIES

Principal Business

The operations of EchoStar Communications Corporation ("ECC," and together
with its subsidiaries, or referring to particular subsidiaries in certain
circumstances, "EchoStar" or the "Company") include two interrelated business
units (Note 6):

o The DISH Network - a direct broadcast satellite ("DBS") subscription
television service in the United States. As of March 31, 2001, we had
approximately 5.7 million DISH Network subscribers.

o EchoStar Technologies Corporation ("ETC") - engaged in the design,
development, distribution and sale of DBS set-top boxes, antennae and
other digital equipment for the DISH Network ("EchoStar receiver
systems"), the design, development and distribution of similar equipment
for international direct-to-home ("DTH") satellite and other systems and
the provision of uplink center design, construction oversight and other
project integration services for international DTH ventures.

Since 1994, EchoStar has deployed substantial resources to develop the
"EchoStar DBS System." The EchoStar DBS System consists of EchoStar's
FCC-allocated DBS spectrum, six DBS satellites ("EchoStar I," "EchoStar II,"
"EchoStar III," "EchoStar IV," "EchoStar V," and "EchoStar VI"), EchoStar
receiver systems, digital broadcast operations centers, customer service
facilities, and other assets utilized in its operations. EchoStar's principal
business strategy is to continue developing its subscription television service
in the United States to provide consumers with a fully competitive alternative
to cable television service.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
and with the instructions to Form 10-Q and Article 10 of Regulation S-X for
interim financial information. Accordingly, these statements do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. All significant intercompany
accounts and transactions have been eliminated in consolidation. Operating
results for the three months ended March 31, 2001 are not necessarily indicative
of the results that may be expected for the year ending December 31, 2001. For
further information, refer to the consolidated financial statements and
footnotes thereto included in EchoStar's Annual Report on Form 10-K for the year
ended December 31, 2000. Certain amounts have been reclassified to conform with
the current year presentation.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses for each reporting
period. Actual results could differ from those estimates.

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(UNAUDITED)

Investment Securities

As of March 31, 2001, EchoStar has classified all marketable investment
securities as available-for-sale. The fair market value of marketable investment
securities approximates the carrying value and represents the quoted market
prices at the balance sheet dates. Related unrealized gains and losses are
reported as a separate component of stockholders' deficit, net of related
deferred income taxes, if applicable. The specific identification method is used
to determine cost in computing realized gains and losses. Such unrealized losses
totaled approximately $29 million as of March 31, 2001. Approximately $19
million of these unrealized losses relate to a decline in the value of OpenTV.
EchoStar acquired that stock in connection with the establishment of a strategic
relationship with OpenTV which did not involve an investment of cash by
EchoStar.

In accordance with generally accepted accounting principles, declines
in the market value of a marketable investment security which are estimated to
be "other than temporary" must be recognized in the statement of operations,
thus establishing a new cost basis for such investment. EchoStar reviewed the
fair value of its marketable investment securities as of March 31, 2001 and
determined that some declines in market value have occurred which may be other
than temporary. As such, EchoStar established a new cost basis for these
securities, and accordingly reduced its previously recorded unrealized loss and
recorded a charge to earnings of approximately $32.4 million during the three
months ended March 31, 2001.

EchoStar also has made strategic equity investments in certain
non-marketable investment securities including Wildblue Communications, StarBand
Communications, VisionStar, Inc. and Replay TV. The original cost basis of
EchoStar's investments in these non-marketable investment securities totaled
approximately $116 million. The securities of these companies are not publicly
traded. EchoStar's ability to create realizable value for its strategic
investments in companies that are not public is dependent on the success of
their business plans and ability to obtain sufficient capital to execute their
business plans. StarBand and Wildblue recently cancelled their planned initial
public stock offerings. As a result of the cancellation of those offerings and
other factors, during the three months ended March 31, 2001, EchoStar recorded a
non-recurring charge of approximately $49.4 million to reduce the carrying value
of certain of these non-marketable investment securities to their estimated fair
values. StarBand and Wildblue need to obtain significant additional capital in
the near term. Absent such funding, additional write-downs of EchoStar's
investments could be necessary.

Comprehensive Income (Loss)

The components of comprehensive loss, net of tax, are as follows (in
thousands):

<Table>
<Caption>
THREE MONTHS ENDED
MARCH 31,
-----------------------------
2000 2001
---------- ----------------
(Unaudited)
AS RETROACTIVELY
ADJUSTED (NOTE 7)

Net loss...................................................................... $ (185,130) $ (169,867)
Unrealized holding losses on available-for-sale securities arising during
period..................................................................... 1,463 (385)
Reclassification adjustment for impairment losses on available-for-sale
securities included in net loss........................................... -- 32,403
---------- ----------
Comprehensive loss............................................................ $ (183,667) $ (137,849)
========== ==========
</Table>

Accumulated other comprehensive income presented on the accompanying
condensed consolidated balance sheets consists of the accumulated net unrealized
gains (losses) on available-for-sale securities, net of deferred taxes.

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(UNAUDITED)

Basic and Diluted Loss Per Share

Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" ("FAS No. 128") requires entities to present both basic earnings per
share ("EPS") and diluted EPS. Basic EPS excludes dilution and is computed by
dividing income (loss) available to common shareholders by the weighted-average
number of common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur if stock options or warrants were exercised
or convertible securities were converted to common stock, resulting in the
issuance of common stock that then would share in any earnings of the Company.
We had net losses for the three months ending March 31, 2000 and 2001.
Therefore, the effect of the common stock equivalents and convertible securities
is excluded from the computation of diluted earnings (loss) per share since the
effect is anti-dilutive.

As of March 31, 2001 and 2000, options to purchase a total of
approximately 24,825,000 and 27,861,000 shares of Class A common stock were
outstanding, respectively. Approximately 3,269,000 and 5,713,000 shares of Class
A common stock were issuable upon conversion of the 6 3/4% Series C Cumulative
Convertible Preferred Stock as of March 31, 2001 and 2000, respectively. As of
March 31, 2001, the 4 7/8% Convertible Subordinated Notes are convertible into
approximately 22 million shares of Class A common stock.

3. INVENTORIES

Inventories consist of the following (in thousands):

<Table>
<Caption>
DECEMBER 31, MARCH 31,
2000 2001
------------ -----------

Finished goods - DBS....................................... $ 96,362 $ 88,727
Raw materials.............................................. 40,247 43,195
Finished goods - reconditioned and other................... 23,101 18,905
Work-in-process............................................ 8,879 6,178
Consignment................................................ 2,478 1,465
Reserve for excess and obsolete inventory.................. (9,906) (9,227)
------------ -----------
$ 161,161 $ 149,243
============ ===========
</Table>

4. SATELLITE INSURANCE

As a result of the failure of EchoStar IV solar arrays to fully deploy
and the failure of 28 transponders to date, a maximum of approximately 14 of the
44 transponders on EchoStar IV are available for use at this time. Due to the
normal degradation of the solar arrays, the number of available transponders
will further decrease over time. In addition to the transponder and solar array
failures, EchoStar IV experienced anomalies affecting its thermal systems and
propulsion system. There can be no assurance that further material degradation,
or total loss of use, of EchoStar IV will not occur in the immediate future.

In September 1998, EchoStar filed a $219.3 million insurance claim for
a constructive total loss under the launch insurance policies covering EchoStar
IV. The satellite insurance consists of separate identical policies with
different carriers for varying amounts which, in combination, create a total
insured amount of $219.3 million.

The insurance carriers offered EchoStar a total of approximately $88
million, or 40% of the total policy amount, in settlement of the EchoStar IV
insurance claim. The insurers allege that all other impairment to the satellite
occurred after expiration of the policy period and is not covered. EchoStar
strongly disagrees with the position of the insurers and has filed an
arbitration claim against them for breach of contract, failure to pay a valid
insurance claim and bad faith denial of a valid claim, among other things. There
can be no assurance that EchoStar will receive the amount claimed or, if
EchoStar does, that EchoStar will retain title to EchoStar IV with its reduced
capacity.

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(UNAUDITED)

At the time EchoStar filed its claim in 1998, EchoStar recognized an
impairment loss of $106 million to write-down the carrying value of the
satellite and related costs, and simultaneously recorded an insurance claim
receivable for the same amount. EchoStar continues to believe it will ultimately
recover at least the amount originally recorded and does not intend to adjust
the amount of the receivable until there is greater certainty with respect to
the amount of the final settlement.

As a result of the thermal and propulsion system anomalies, EchoStar
reduced the estimated remaining useful life of EchoStar IV to approximately 4
years during January 2000. EchoStar will continue to evaluate the performance of
EchoStar IV and may modify its loss assessment as new events or circumstances
develop.

The in-orbit insurance policies for EchoStar I, EchoStar II, and
EchoStar III expired July 25, 2000. The insurers have to date refused to renew
insurance on EchoStar I, EchoStar II and EchoStar III on reasonable terms. Based
on, among other things, the insurance carriers' unanimous refusal to negotiate
reasonable renewal insurance coverage, EchoStar believes that the carriers
colluded and conspired to boycott EchoStar unless EchoStar accepts their offer
to settle the EchoStar IV claim for $88 million.

Based on the carriers' actions, EchoStar has added causes of action in
its EchoStar IV demand for arbitration for breach of the duty of good faith and
fair dealing, and unfair claim practices. Additionally, EchoStar filed a lawsuit
against the insurance carriers in the United States District Court for the
District of Colorado asserting causes of action for violation of Federal and
State Antitrust laws. While EchoStar believes it is entitled to the full amount
claimed under the EchoStar IV insurance policy and believes the insurance
carriers are in violation of Antitrust laws and have committed further acts of
bad faith in connection with their refusal to negotiate reasonable insurance
coverage on EchoStar's other satellites, there can be no assurance as to the
outcome of these proceedings. During March 2001, EchoStar voluntarily dismissed
the antitrust lawsuit without prejudice. EchoStar has the right to re-file an
antitrust action against the insurers again in the future.

The indentures related to the outstanding senior notes of EDBS contain
restrictive covenants that require EchoStar to maintain satellite insurance with
respect to at least half of the satellites it owns. Insurance coverage is
therefore required for at least three of EchoStar's six satellites currently in
orbit. EchoStar has procured normal and customary launch insurance for EchoStar
VI. This launch insurance policy provides for insurance of $225.0 million. The
EchoStar VI launch insurance policy expires in July 2001. EchoStar is currently
self-insuring EchoStar I, EchoStar II, EchoStar III, EchoStar IV and EchoStar V.
To satisfy insurance covenants related to the outstanding EDBS senior notes, as
of March 31, 2001, EchoStar has reclassified approximately $78 million from cash
and cash equivalents to restricted cash and marketable investment securities on
its balance sheet. The reclassification will continue until such time, if ever,
as the insurers are again willing to insure EchoStar's satellites on
commercially reasonable terms. The amount of cash reserved for satellite
insurance will be increased by approximately $60 million in the event EchoStar
has not procured satellite insurance by July 2001. EchoStar believes it has
in-orbit satellite capacity sufficient to expeditiously recover transmission of
most programming in the event one of its in-orbit satellites was to fail.
However, the cash reserved for satellite insurance is not adequate to fund the
construction, launch and insurance for a replacement satellite in the event of a
complete loss of a satellite and programming continuity could not be assured in
the event of multiple satellite losses.

5. COMMITMENTS AND CONTINGENCIES

VisionStar

During November 2000, one of EchoStar's wholly owned subsidiaries
purchased a 49.9% interest in VisionStar, Inc. VisionStar holds an FCC license,
and is constructing a Ka-band satellite, to launch into the 113 W.L. orbital
slot. Together with VisionStar, EchoStar has requested FCC approval to acquire
control over VisionStar by increasing its ownership of VisionStar to 90%, for a
total purchase price of approximately $2.8 million. EchoStar has also provided
loans to VisionStar totaling less than $10 million to date for the construction
of their satellite and expects to provide additional funding to VisionStar in
the future. EchoStar is not obligated to

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(UNAUDITED)

finance the full remaining cost to construct and launch the VisionStar
satellite, but VisionStar's FCC license currently requires construction of the
satellite to be completed by April 30, 2002 or the license could be revoked.
EchoStar currently expects to continue to fund loans and equity contributions
for construction of the satellite in the near term from cash on hand, and
expects that it may spend approximately $79.5 million during 2001 for that
purpose subject to, among other things, FCC action.

DirecTV

During February 2000, EchoStar filed suit against DirecTV and Thomson
Consumer Electronics/RCA in the Federal District Court of Colorado. The suit
alleges that DirecTV has utilized improper conduct in order to fend off
competition from the DISH Network. According to the complaint, DirecTV has
demanded that certain retailers stop displaying EchoStar's merchandise and has
threatened to cause economic damage to retailers if they continue to offer both
product lines in head-to-head competition. The suit alleges, among other things,
that DirecTV has acted in violation of federal and state anti-trust laws in
order to protect DirecTV's market share. EchoStar is seeking injunctive relief
and monetary damages. EchoStar subsequently amended the Complaint adding claims
against Circuit City, Radio Shack and Best Buy, alleging that these retailers
are engaging in improper conduct that has had an anti-competitive impact on
EchoStar. It is too early in the litigation to make an assessment of the
probable outcome. During October 2000, DirecTV filed a motion for summary
judgment asking that the Court enter judgment in DirecTV's favor on certain of
EchoStar's claims. DirecTV's motion for summary judgment remains pending.

The DirecTV defendants filed a counterclaim against EchoStar. DirecTV
alleges that EchoStar tortiously interfered with a contract that DirecTV
allegedly had with Kelly Broadcasting Systems, Inc. ("KBS"). DirecTV alleges
that EchoStar "merged" with KBS, in contravention of DirecTV's contract with
KBS. DirecTV also alleges that EchoStar has falsely advertised to consumers
about its right to offer network programming. DirecTV further alleges that
EchoStar improperly used certain marks owned by PrimeStar, now owned by DirecTV.
Finally, DirecTV alleges that EchoStar has been marketing National Football
League games in a misleading manner. Discovery has been stayed until the next
scheduling conference on June 13, 2001. The amount of damages DirecTV is seeking
is as yet unquantified. However, in an arbitration proceeding related to
DirecTV's allegations with respect to KBS, DirecTV has claimed damages totaling
hundreds of millions of dollars. It is too early in the litigation to make an
assessment of the probable outcome. EchoStar and KBS intend to vigorously defend
against DirecTV's allegations in the litigation and in the arbitration.

Fee Dispute

EchoStar had a contingent fee arrangement with the attorneys who
represented EchoStar in the litigation with News Corporation. The contingent fee
arrangement provides for the attorneys to be paid a percentage of any net
recovery obtained by EchoStar in the News Corporation litigation. The attorneys
have asserted that they may be entitled to receive payments totaling hundreds of
millions of dollars under this fee arrangement.

During mid-1999, EchoStar initiated litigation against the attorneys in
the Arapahoe County, Colorado, District Court arguing that the fee arrangement
is void and unenforceable. In December 1999, the attorneys initiated an
arbitration proceeding before the American Arbitration Association. The
litigation has been stayed while the arbitration is ongoing. The arbitration
hearing commenced April 2, 2001 and continued through April 13, 2001. The
hearing could not be completed during that time period and has been continued
until August 7, 2001, when it will resume until it is presumably completed.
While there can be no assurance that the attorneys will not continue to claim a
right to hundreds of millions of dollars, the damage model the attorneys
presented during the arbitration was for $56 million. EchoStar believes that
even that amount significantly overstates the amount the attorneys should
reasonably be entitled to receive under the fee agreement but it is not possible
for EchoStar to predict what the decision of the three person arbitrator panel
will be with any degree of certainty. EchoStar continues to vigorously contest
the attorneys' interpretation of the fee arrangement, which EchoStar believes
significantly overstates the magnitude of its liability.

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(UNAUDITED)

WIC Premium Television Ltd.

During July 1998, a lawsuit was filed by WIC Premium Television Ltd.,
an Alberta corporation, in the Federal Court of Canada Trial Division, against
General Instrument Corporation, HBO, Warner Communications, Inc., John Doe,
Showtime, United States Satellite Broadcasting Company, Inc., EchoStar
Communications Corporation, and two of EchoStar's wholly-owned subsidiaries,
Echosphere Corporation and Dish, Ltd. The lawsuit seeks, among other things, an
interim and permanent injunction prohibiting the defendants from activating
receivers in Canada and from infringing any copyrights held by WIC. It is too
early to determine whether or when any other lawsuits or claims will be filed.

During September 1998, WIC filed another lawsuit in the Court of
Queen's Bench of Alberta Judicial District of Edmonton against certain
defendants, including EchoStar. WIC is a company authorized to broadcast certain
copyrighted work, such as movies and concerts, to residents of Canada. WIC
alleges that the defendants engaged in, promoted, and/or allowed satellite dish
equipment from the United States to be sold in Canada and to Canadian residents
and that some of the defendants allowed and profited from Canadian residents
purchasing and viewing subscription television programming that is only
authorized for viewing in the United States. The lawsuit seeks, among other
things, an interim and permanent injunction prohibiting the defendants from
importing hardware into Canada and from activating receivers in Canada, together
with damages in excess of $175 million.

EchoStar filed motions to dismiss each of the actions for lack of
personal jurisdiction. The Court in the Alberta action recently denied
EchoStar's Motion to Dismiss, which EchoStar appealed. The Alberta Court also
granted a motion to add more EchoStar parties to the lawsuit. EchoStar Satellite
Corporation, EDBS, EchoStar Technologies Corporation, and EchoStar Satellite
Broadcast Corporation have been added as defendants in the litigation. The newly
added defendants have also challenged jurisdiction. The Court of Appeals denied
EchoStar's appeal and the Alberta Court has asserted jurisdiction over all of
the EchoStar defendants. The Court in the Federal action has stayed that case
pending the outcome of the Alberta action. The case is now currently in
discovery. EchoStar intends to vigorously defend the suit. It is too early to
make an assessment of the probable outcome of the litigation or to determine the
extent of any potential liability or damages.

Broadcast network programming

Until July 1998, EchoStar obtained distant broadcast network channels
(ABC, NBC, CBS and FOX) for distribution to its customers through PrimeTime 24.
In December 1998, the United States District Court for the Southern District of
Florida entered a nationwide permanent injunction requiring PrimeTime 24 to shut
off distant network channels to many of its customers, and henceforth to sell
those channels to consumers in accordance with certain stipulations in the
injunction.

In October 1998, EchoStar filed a declaratory judgment action against
ABC, NBC, CBS and FOX in Denver Federal Court. EchoStar asked the court to enter
a judgment declaring that its method of providing distant network programming
did not violate the Satellite Home Viewer Act and hence did not infringe the
networks' copyrights. In November 1998, the networks and their affiliate groups
filed a complaint against EchoStar in Miami Federal Court alleging, among other
things, copyright infringement. The court combined the case that EchoStar filed
in Colorado with the case in Miami and transferred it to the Miami court. The
case remains pending in Miami. While the networks have not sought monetary
damages, they have sought to recover attorney fees if they prevail.

In February 1999, the networks filed a "Motion for Temporary
Restraining Order, Preliminary Injunction and Contempt Finding" against DirecTV,
Inc. in Miami related to the delivery of distant network channels to DirecTV
customers by satellite. DirecTV settled this lawsuit with the networks. Under
the terms of the settlement between DirecTV and the networks, some DirecTV
customers were scheduled to lose access to their satellite-provided distant
network channels by July 31, 1999, while other DirecTV customers were to be
disconnected by December 31, 1999. Subsequently, PrimeTime 24 and substantially
all providers of satellite-delivered network

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(UNAUDITED)

programming other than EchoStar agreed to this cut-off schedule, although
EchoStar does not know if they adhered to this schedule.

In December 1998, the networks filed a Motion for Preliminary
Injunction against EchoStar in the Miami court, and asked the court to enjoin
EchoStar from providing network programming except under limited circumstances.
A preliminary injunction hearing was held on September 21, 1999. The court took
the issues under advisement to consider the networks' request for an injunction,
whether to hear live testimony before ruling upon the request, and whether to
hear argument on why the Satellite Home Viewer Act may be unconstitutional,
among other things.

In March 2000, the networks filed an emergency motion again asking the
court to issue an injunction requiring EchoStar to turn off network programming
to certain of its customers. At that time, the networks also argued that
EchoStar's compliance procedures violate the Satellite Home Viewer Improvement
Act. EchoStar opposed the networks' motion and again asked the court to hear
live testimony before ruling upon the networks' injunction request.

During September 2000, the Court granted the Networks' motion for
preliminary injunction, denied the Network's emergency motion and denied
EchoStar's request to present live testimony and evidence. The Court's original
order required EchoStar to terminate network programming to certain subscribers
"no later than February 15, 1999," and contained other dates which would be
physically impossible to comply with. The order imposes restrictions on
EchoStar's past and future sale of distant ABC, NBC, CBS and Fox channels
similar to those imposed on PrimeTime 24 (and, EchoStar believes, on DirecTV and
others). Some of those restrictions go beyond the statutory requirements imposed
by the Satellite Home Viewer Act and the Satellite Home Viewer Improvement Act.
For these and other reasons EchoStar believes the Court's order is, among other
things, fundamentally flawed, unconstitutional and should be overturned.
However, it is very unusual for a Court of Appeals to overturn a lower court's
order and there can be no assurance whatsoever that it will be overturned.

On October 3, 2000, and again on October 25, 2000, the Court amended
its original preliminary injunction order in an effort to fix some of the errors
in the original order. The twice amended preliminary injunction order required
EchoStar to shut off, by February 15, 2001, all subscribers who are ineligible
to receive distant network programming under the court's order. EchoStar has
appealed the September 2000 preliminary injunction order and the October 3, 2000
amended preliminary injunction order. On November 22, 2000, the United States
Court of Appeals for the Eleventh Circuit stayed the Florida Court's preliminary
injunction order pending EchoStar's appeal. At that time, the Eleventh Circuit
also expedited its consideration of EchoStar's appeal.

During November 2000, EchoStar filed its appeal brief with the Eleventh
Circuit. During December 2000, the Satellite Broadcasting and Communications
Association submitted an amicus brief in support of EchoStar's appeal. The
Consumer Federation of America and the Media Access Project have also submitted
an amicus brief in support of EchoStar's appeal. The Networks have responded to
EchoStar's appeal brief and the amicus briefs filed by the Consumer Federation
of America and the Media Access Project and the Satellite Broadcasting and
Communications Association. In December 2000, the Department of Justice filed a
motion to intervene with respect to EchoStar's constitutional challenge of the
Satellite Home Viewers Act, and the National Association of Broadcasters filed
an amicus brief in support of the Networks' position in the appeal. During
January 2001, EchoStar filed its reply appeal brief and asked the Eleventh
Circuit for an opportunity to respond to the amicus brief filed by the National
Association of Broadcasters and the brief filed by the Department of Justice. On
January 11, 2001, the Networks advised the Eleventh Circuit that they did not
object to EchoStar's filing a response to the National Association of
Broadcasters' amicus brief or the Department of Justice's brief. On January 19,
2001, EchoStar filed its supplemental brief responding to the Department of
Justice's brief. On January 23, 2001, the Department of Justice filed a motion
to strike EchoStar's supplemental brief or for an opportunity to reply to
EchoStar's supplemental brief. On February 2, 2001, without explanation, the
Eleventh Circuit issued an order striking EchoStar's supplemental reply and
denying EchoStar an opportunity to file a response to the Department of
Justice's motion to intervene. The Eleventh Circuit has currently set oral
argument for May 24, 2001. EchoStar

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(UNAUDITED)

cannot predict when the Eleventh Circuit will rule on its appeal, but it could
be as early as May 2001. EchoStar's appeal effort may not be successful and
EchoStar may be required to comply with the Court's preliminary injunction order
on short notice. The preliminary injunction could force EchoStar to terminate
delivery of distant network channels to a substantial portion of its distant
network subscriber base, which could also cause many of these subscribers to
cancel their subscription to EchoStar's other services. Such terminations would
result in a small reduction in EchoStar's reported average monthly revenue per
subscriber and could result in a temporary increase in churn.

Starsight

During October 2000, Starsight Telecast, Inc., a subsidiary of
Gemstar-TV Guide, filed a suit for patent infringement against EchoStar and
certain of its subsidiaries in the United States District Court for the Western
District of North Carolina, Asheville Division. The suit alleges infringement of
United States Patent No. 4,706,121 (the "121 Patent") which relates to certain
electronic program guide functions. EchoStar has examined this patent and
believes that it is not infringed by any of its products or services.

In December 2000, EchoStar filed suit against Gemstar - TV Guide
International, Inc. (and certain of its subsidiaries) in the United States
District Court for the District of Colorado alleging violations by Gemstar of
various federal and state anti-trust laws and laws governing unfair competition.
The lawsuit seeks an injunction and monetary damages. The Court recently denied
a motion by Gemstar to transfer this case to the Western District of North
Carolina.

In February 2001, Gemstar filed patent infringement actions against
EchoStar in District Court in Atlanta, Georgia and in the International Trade
Commission (ITC). These suits allege infringement of United States Patent Nos.
5,252,066, 5,479,268 and 5,809,204 which all relate to certain electronic
program guide functions. In addition, the ITC action alleges infringement of the
121 Patent which is asserted in the North Carolina case. In the Atlanta District
Court case, Gemstar seeks damages and an injunction. We expect the Atlanta and
North Carolina cases will be stayed pending resolution of the ITC action. ITC
actions typically proceed according to an expedited schedule. EchoStar expects
the ITC action to go to trial by the end of 2001. EchoStar further expects that
the ITC will issue an initial determination by March of 2002 and that a final
determination will be issued by June 2002. While the ITC cannot award damages,
it can issue exclusion orders that would prevent the importation of articles
that are found to infringe the asserted patents. In addition, it can issue cease
and desist orders that would prohibit the sale of infringing products that had
been previously imported. EchoStar has examined these patents and believes they
are not infringed by any of EchoStar's products or services. EchoStar will
vigorously contest the ITC, North Carolina and Atlanta allegations of
infringement and will, among other things, challenge both the validity and
enforceability of the asserted patents.

During 2000, Superguide Corp. also filed suit against EchoStar, DirecTv
and others in the same North Carolina Court, alleging infringement of United
States Patent Nos. 5,038,211, 5,293,357 and 4,751,578 which relate to certain
electronic program guide functions, including the use of electronic program
guides to control VCRs. It is EchoStar's understanding that these patents may be
licensed by Superguide to Gemstar, although Gemstar has not asserted the patents
against EchoStar. Nevertheless, Gemstar was recently added by the Court as a
party to this lawsuit. EchoStar has examined these patents and believes that
they are not infringed by any of its products or services. EchoStar intends to
vigorously defend against this action and assert a variety of counterclaims.

In the event it is ultimately determined that EchoStar infringes on any
of the aforementioned patents EchoStar may be subject to substantial damages,
and/or an injunction that could require EchoStar to materially modify certain
user friendly electronic programming guide and related features it currently
offers to consumers. It is too early to make an assessment of the probable
outcome of the suits.

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(UNAUDITED)

IPPV Enterprises

IPPV Enterprises, LLC and MAAST, Inc. filed a patent infringement suit
against EchoStar in the United States District Court for the District of
Delaware. The suit alleges infringement of 5 patents. The patents disclose
various systems for the implementation of features such as impulse-pay-per view,
parental control and category lock-out. One patent relates to an encryption
technique. Three of the patents have expired. The trial is expected to commence
July 9, 2001. EchoStar is vigorously defending against the suit based, among
other things, on non-infringement, invalidity and failure to provide notice of
alleged infringement.

In the event it is ultimately determined that EchoStar infringes on any
of these patents, EchoStar may be subject to substantial damages, and/or an
injunction with respect to the two unexpired patents, that could require
EchoStar to materially modify certain user friendly features it currently offers
to consumers. It is too early to make an assessment of the probable outcome of
the suit.

Retailer Class Actions

EchoStar has been sued by retailers in three separate class actions. In
two separate lawsuits filed in the District Court, Arapahoe County, State of
Colorado and the United States District Court for the District of Colorado,
respectively, Air Communication & Satellite, Inc. and John DeJong, et. al. filed
lawsuits on October 6, 2000 on behalf of themselves and a class of persons
similarly situated. The plaintiffs are attempting to certify nationwide classes
allegedly brought on behalf of persons, primarily retail dealers, who were
alleged signatories to certain retailer agreements with EchoStar Satellite
Corporation. The plaintiffs are requesting the Court to declare certain
provisions of the alleged agreements invalid and unenforceable, to declare that
certain changes to the agreements are invalid and unenforceable, and to award
damages for lost commissions and payments, charge backs, and other compensation.
The plaintiffs are alleging breach of contract and breach of the covenant of
good faith and fair dealing and are seeking declaratory relief, compensatory
damages, injunctive relief, and pre-judgment and post-judgment interest.
EchoStar intends to vigorously defend against the suits and to assert a variety
of counterclaims. It is too early to make an assessment of the probable outcome
of the litigation or to determine the extent of any potential liability or
damages.

Satellite Dealers Supply, Inc. filed a lawsuit in the United States
District Court for the Eastern District of Texas on September 25, 2000, on
behalf of itself and a class of persons similarly situated. The plaintiff is
attempting to certify a nationwide class on behalf of sellers, installers, and
servicers of satellite equipment who contract with EchoStar and claims the
alleged class has been "subject to improper chargebacks." The plaintiff alleges
that (1) EchoStar charged back certain fees paid by members of the class to
professional installers in violation of contractual terms; (2) EchoStar
manipulated the accounts of subscribers to deny payments to class members; and
(3) EchoStar misrepresented to class members who owns certain equipment related
to the provision of satellite television service. The plaintiff is requesting a
permanent injunction and monetary damages. EchoStar intends to vigorously defend
the lawsuit and to assert a variety of counterclaims. It is too early to make an
assessment of the probable outcome of the litigation or to determine the extent
of any potential liability or damages.

EchoStar is subject to various other legal proceedings and claims which
arise in the ordinary course of business. In the opinion of management, the
amount of ultimate liability with respect to those actions will not materially
affect EchoStar's financial position or results of operations.

Meteoroid Events

Meteoroid events pose a potential threat to all in orbit geosynchronous
satellites including EchoStar's DBS satellites. While the probability that
EchoStar's satellites will be damaged by meteoroids is very small, that
probability increases significantly when the Earth passes through the
particulate stream left behind by various comets.

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(UNAUDITED)

Due to the current peak in the 11-year solar cycle, increased solar
activity is likely for the next year. Some of these solar storms pose a
potential threat to all in-orbit geosynchronous satellites including EchoStar's
DBS satellites. The probability that the effects from the storms will damage our
satellites or cause service interruptions is generally very small.

Some decommissioned spacecraft are in uncontrolled orbits which pass
through the geostationary belt at various points, and present hazards to
operational spacecraft including EchoStar's DBS satellites. The locations of
these hazards are generally well known and may require EchoStar to perform
maneuvers to avoid collisions.

6. SEGMENT REPORTING

Financial Data by Business Unit (in thousands)

Statement of Financial Accounting Standard No. 131, "Disclosures About
Segments of an Enterprise and Related Information" ("FAS No. 131") establishes
standards for reporting information about operating segments in annual financial
statements of public business enterprises and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. Operating segments are components of an
enterprise about which separate financial information is available and regularly
evaluated by the chief operating decision maker(s) of an enterprise. During
2000, under this definition, we were operating as three separate business units.
However, beginning 2001, it was determined that the chief operating decision
maker of our Company regularly evaluates the following two separate business
units. All prior year amounts have been restated to conform to the current year
presentation.

<Table>
<Caption>
ECHOSTAR ELIMINATIONS
DISH TECHNOLOGIES AND OTHER, CONSOLIDATED
NETWORK CORPORATION NET TOTAL
--------- ------------ ------------ ------------

THREE MONTHS ENDED MARCH 31, 2000
Revenue.............................. $ 484,448 $ 52,469 $ 28,804 $ 565,721
Net income (loss).................... (190,764) (4,494) 10,128 (185,130)

THREE MONTHS ENDED MARCH 31, 2001
AS RETROACTIVELY ADJUSTED (NOTE 7)
Revenue.............................. $ 817,991 $ 18,728 $ 25,211 $ 861,930
Net income (loss).................... (224,693) (7,788) 62,614 (169,867)
</Table>

7. SUBSEQUENT EVENTS

EchoStar VI

EchoStar VI is equipped with a total of 48 transponders, including 16
spares. During April, 2001, EchoStar VI experienced a series of anomalous events
resulting in a temporary interruption of service. The satellite was quickly
restored to normal operations mode. However, spare transponders and a
station-keeping thruster were activated while the anomaly investigation period
proceeds. The satellite is equipped with a substantial number of backup
transponders and thrusters. Consequently, the anomalous events have not impacted
commercial operation of the satellite. However, until the root cause of the most
recent anomaly is finally determined, there can be no assurance future similar
anomalies will not cause further losses which could impact commercial operation
of the satellite.

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(UNAUDITED)

Retroactive Application of Equity Method of Accounting

Effective September 27, 2001, EchoStar invested an additional $50
million in StarBand, increasing its equity interest from approximately 19% to
approximately 32%. If and when construction is commenced for a next generation
satellite to be allocated for StarBand's service, EchoStar's equity interest
would increase to approximately 60%. EchoStar originally invested $50 million in
StarBand in April 2000. As a result of the increased equity stake, this
investment is now accounted for using the equity method of accounting. As
required by APB Opinion No. 18, the equity method accounting has been
retroactively applied back to April 2000, the date of EchoStar's original
investment in StarBand. This retroactive application resulted in an increase in
previously reported net loss and basic and diluted loss per share for the three
months ended March 31, 2001 as follows (in thousands):

<Table>
<Caption>
THREE MONTHS
ENDED
MARCH 31, 2001
----------------
(Unaudited)

Net loss........................................... $ (2,826)
========

Basic and diluted net loss per common share........ $ (0.01)
========
</Table>