EXHIBIT 99.3

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

<Table>

Item 1. Financial Statements

Condensed Consolidated Balance Sheets -
December 31, 2000 and June 30, 2001 (Unaudited)........................ 1

Condensed Consolidated Statements of Operations for the
three and six months ended June 30, 2000 and 2001 (Unaudited).......... 2

Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 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, JUNE 30,
2000 2001
------------ -----------
(Unaudited)
AS RETROACTIVELY
ADJUSTED (NOTE 8)

ASSETS
Current Assets:
Cash and cash equivalents ...................................................... $ 856,818 $ 1,492,560
Marketable investment securities ............................................... 607,357 823,307
Trade accounts receivable, net of allowance for uncollectible accounts of
$31,241 and $25,940, respectively ............................................ 278,614 273,689
Insurance receivable ........................................................... 106,000 106,000
Inventories .................................................................... 161,161 150,319
Other current assets ........................................................... 50,656 60,640
------------ -----------
Total current assets .............................................................. 2,060,606 2,906,515
Restricted cash and marketable investment securities .............................. 3,000 2,035
Cash reserved for satellite insurance (Note 4) .................................... 82,393 74,196
Property and equipment, net ....................................................... 1,511,303 1,716,077
FCC authorizations, net ........................................................... 709,984 700,264
Other noncurrent assets ........................................................... 269,549 207,515
------------ -----------
Total assets ................................................................. $ 4,636,835 $ 5,606,602
============ ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Trade accounts payable ......................................................... $ 226,568 $ 186,515
Deferred revenue ............................................................... 283,895 339,769
Accrued expenses ............................................................... 691,482 734,918
Current portion of long-term debt .............................................. 21,132 15,794
------------ -----------
Total current liabilities ......................................................... 1,223,077 1,276,996

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
10 3/8% Seven Year Notes ...................................................... 1,000,000 1,000,000
4 7/8% Convertible Notes ...................................................... 1,000,000 1,000,000
5 3/4% Convertible Notes ....................................................... -- 1,000,000
Mortgages and other notes payable, net of current portion ...................... 14,812 13,388
Long-term deferred distribution and carriage revenue and other long-term
liabilities .................................................................. 56,329 80,633
------------ -----------
Total long-term obligations, net of current portion ............................... 4,071,141 5,094,021
------------ -----------
Total liabilities ............................................................ 5,294,218 6,371,017

Commitments and Contingencies (Note 5)

Stockholders' Deficit:
6 3/4% Series C Cumulative Convertible Preferred Stock, 218,951 and 111,566
shares issued and outstanding, respectively ................................... 10,948 5,578
Class A Common Stock, $.01 par value, 1,600,000,000 shares authorized,
235,749,557 and 238,446,218 shares issued and outstanding, respectively ....... 2,357 2,384
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 1,709,706
Deferred stock-based compensation .............................................. (58,193) (41,680)
Accumulated other comprehensive loss ........................................... (60,580) (12,063)
Accumulated deficit ............................................................ (2,254,666) (2,430,724)
------------ -----------
Total stockholders' deficit ....................................................... (657,383) (764,415)
------------ -----------
Total liabilities and stockholders' deficit .................................. $ 4,636,835 $ 5,606,602
============ ===========
</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 JUNE 30, SIX MONTHS ENDED JUNE 30,
---------------------------- ----------------------------
2000 2001 2000 2001
------------ ------------ ------------ ------------
AS RETROACTIVELY ADJUSTED (NOTE 8)

REVENUE:
DISH Network:
Subscription television services .......................... $ 555,309 $ 883,055 $ 1,032,183 $ 1,677,503
Other ..................................................... 2,169 3,245 3,482 5,728
------------ ------------ ------------ ------------
Total DISH Network .......................................... 557,478 886,300 1,035,665 1,683,231
DTH equipment sales and integration services ................ 60,034 47,159 122,738 88,178
Other ....................................................... 28,617 32,813 53,447 56,793
------------ ------------ ------------ ------------
Total revenue .................................................. 646,129 966,272 1,211,850 1,828,202

COSTS AND EXPENSES:
DISH Network Operating Expenses:
Subscriber-related expenses ............................... 231,450 358,634 433,024 674,969
Customer service center and other ......................... 68,371 69,914 124,420 134,696
Satellite and transmission ................................ 13,895 8,821 26,371 17,916
------------ ------------ ------------ ------------
Total DISH Network operating expenses ....................... 313,716 437,369 583,815 827,581
Cost of sales - DTH equipment and integration services ...... 46,320 31,160 92,542 59,996
Cost of sales -other ........................................ 7,120 22,572 15,236 38,501
Marketing:
Subscriber promotion subsidies - promotional DTH
equipment ............................................... 154,568 105,488 326,706 295,753
Subscriber promotion subsidies - other .................... 73,257 121,366 151,206 204,332
Advertising and other ..................................... 24,471 26,877 47,641 53,804
------------ ------------ ------------ ------------
Total marketing expenses .................................... 252,296 253,731 525,553 553,889
General and administrative .................................. 58,176 87,677 113,753 163,349
Non-cash, stock-based compensation .......................... 13,022 7,011 27,031 14,467
Depreciation and amortization ............................... 41,710 62,839 82,168 121,689
------------ ------------ ------------ ------------
Total costs and expenses ....................................... 732,360 902,359 1,440,098 1,779,472
------------ ------------ ------------ ------------

Operating income (loss) ........................................ (86,231) 63,913 (228,248) 48,730

Other Income (Expense):
Interest income ............................................. 16,947 22,196 35,945 46,760
Interest expense, net of amounts capitalized ................ (61,502) (86,058) (123,015) (169,155)
Other ....................................................... (8,141) (5,858) (8,684) (101,960)
------------ ------------ ------------ ------------
Total other expense ............................................ (52,696) (69,720) (95,754) (224,355)
------------ ------------ ------------ ------------

Loss before income taxes ....................................... (138,927) (5,807) (324,002) (175,625)
Income tax provision, net ...................................... (36) (48) (91) (97)
------------ ------------ ------------ ------------
Net loss ....................................................... (138,963) (5,855) (324,093) (175,722)

6 3/4% Series C Cumulative Convertible Preferred Stock
dividends ................................................... (240) (158) (733) (336)
------------ ------------ ------------ ------------
Numerator for basic and diluted loss per share - loss
attributable to common shareholders ......................... $ (139,203) $ (6,013) $ (324,826) $ (176,058)
============ ============ ============ ============
Denominator for basic and diluted loss per share -
weighted-average common shares outstanding .................. 471,555 475,768 468,661 475,169
============ ============ ============ ============

Basic and diluted net loss per common share ................. $ (0.30) $ (0.01) $ (0.69) $ (0.37)
============ ============ ============ ============
</Table>

See accompanying Notes to Condensed Consolidated Financial Statements.

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

<Table>
<Caption>
SIX MONTHS ENDED JUNE 30,
-----------------------------------
2000 2001
------------ ------------
AS RETROACTIVELY ADJUSTED (NOTE 8)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss .......................................................................... $ (324,093) $ (175,722)
Adjustments to reconcile net loss to net cash flows from operating activities:
Equity in losses of affiliates ................................................. 6,103 20,930
Deferred stock-based compensation recognized ................................... 27,031 14,467
Loss due to decline in the estimated fair value of strategic investments ....... -- 82,683
Depreciation and amortization .................................................. 82,168 121,689
Amortization of debt discount and deferred financing costs ..................... 3,068 3,756
Employee benefits funded by issuance of Class A Common Stock ................... 7,280 1,200
Change in long-term deferred distribution and carriage revenue and other
long-term liabilities ........................................................ 6,433 24,304
Other, net ..................................................................... 1,958 9,813
Changes in current assets and current liabilities, net ......................... 52,758 51,146
------------ ------------
Net cash flows from operating activities .......................................... (137,294) 154,266

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable investment securities ..................................... (478,825) (1,298,036)
Sales of marketable investment securities ......................................... 422,782 1,097,344
Purchases of property and equipment ............................................... (114,709) (302,276)
Change in cash reserved for satellite insurance due to depreciation on related
satellites (Note 4) ............................................................. -- 8,197
Investment in Wildblue Communications ............................................. (50,000) --
Investment in Replay TV ........................................................... (10,000) --
Investment in StarBand Communications ............................................. (50,045) --
Other ............................................................................. (1,445) (1,497)
------------ ------------
Net cash flows from investing activities .......................................... (282,242) (496,268)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of 5 3/4% Convertible Notes ............................ -- 980,000
Repayments of mortgage indebtedness and notes payable ............................. (7,982) (6,762)
Net proceeds from Class A Common Stock options exercised and Class A Common
Stock issued to Employee Stock Purchase Plan ................................... 9,103 4,843
Other ............................................................................. (732) (337)
------------ ------------
Net cash flows from financing activities .......................................... 389 977,744
------------ ------------

Net (decrease) increase in cash and cash equivalents .............................. (419,147) 635,742
Cash and cash equivalents, beginning of period .................................... 905,299 856,818
------------ ------------
Cash and cash equivalents, end of period .......................................... $ 486,152 $ 1,492,560
============ ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Conversion of 6 3/4% Series C Cumulative Convertible Preferred Stock to
Class A common stock ......................................................... $ 32,879 $ 5,370
Forfeitures of deferred non-cash, stock-based compensation ..................... 5,994 2,046
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 7):

o The DISH Network - a direct broadcast satellite ("DBS") subscription
television service in the United States. As of June 30, 2001, we had
approximately 6.07 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 six months ended June 30, 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.

Investment Securities

As of June 30, 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

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

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 $12 million as of
June 30, 2001. Approximately $9 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 June 30, 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 $856,000 during the three months
ended June 30, 2001. During the six months ended June 30, 2001, EchoStar
recorded an aggregate charge to earnings for other than temporary declines of
approximately $33.3 million.

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 cancelled their planned initial public
stock offerings. As a result of the cancellation of those offerings and other
factors, during the six months ended June 30, 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. During July 2001, EchoStar announced its
intention to invest an additional $50 million in StarBand (Note 8).

Comprehensive Income (Loss)

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

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
----------------------------------
2000 2001
---------- ----------
(Unaudited)
AS RETROACTIVELY ADJUSTED (NOTE 8)

Net loss........................................................... $ (324,093) $ (175,722)
Unrealized holding (losses) gains on available-for-sale
securities arising during period................................ (676) 15,258
Reclassification adjustment for impairment losses on
available-for-sale securities included in net loss.............. -- 33,259
---------- ----------
Comprehensive loss................................................. $ (324,769) $ (127,205)
========== ==========
</Table>

Accumulated other comprehensive loss 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.

As of June 30, 2001 and 2000, options to purchase a total of
approximately 24,206,000 and 25,569,000 shares of Class A common stock were
outstanding, respectively. Approximately 1,831,000 and 4,121,000 shares of Class
A common stock were issuable upon conversion of the 6 3/4% Series C Cumulative
Convertible Preferred Stock, respectively. As of June 30, 2001, the 4 7/8%
Convertible Subordinated Notes and the 5 3/4% Convertible Subordinated Notes
were convertible into approximately 22 million shares and approximately 23
million shares of Class A common stock, respectively.

3. INVENTORIES

Inventories consist of the following (in thousands):

<Table>
<Caption>
DECEMBER 31, JUNE 30,
2000 2001
------------ ---------

Finished goods - DBS ......................... $ 96,362 $ 83,590
Raw materials ................................ 40,247 42,442
Finished goods - reconditioned and other ..... 23,101 20,195
Work-in-process .............................. 8,879 11,536
Consignment .................................. 2,478 1,697
Reserve for excess and obsolete inventory .... (9,906) (9,141)
------------ ---------
$ 161,161 $ 150,319
============ =========
</Table>

4. PROPERTY AND EQUIPMENT

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. As a result of the anomaly, we believe that
one stationkeeping thruster and a pair of transponders are unusable. The
satellite is equipped with a substantial number of backup transponders and
thrusters. EchoStar VI has also experienced anomalies resulting in the loss of
two solar array strings. The satellite has a total of approximately 112 solar
array strings and approximately 106 are required to assure full power
availability for the 12-year design life of the satellite. An investigation of
the anomalies, none of which have impacted commercial operation of the satellite
to date, is continuing. Until the root cause of the anomalies is finally
determined, there can be no assurance future 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)

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.

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 on July 25, 2000. The insurers 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 accepted their offer to settle the
EchoStar IV claim for $88 million.

Based on the carriers' actions, EchoStar 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 had procured normal and customary launch insurance for EchoStar
VI, which expired on July 14, 2001. As a result, EchoStar is currently
self-insuring EchoStar I, EchoStar II, EchoStar III, EchoStar IV, EchoStar V and
EchoStar VI. To satisfy insurance

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

covenants related to the outstanding EDBS senior notes, as of June 30, 2001,
EchoStar had reclassified approximately $74 million from cash and cash
equivalents to restricted cash and marketable investment securities on its
balance sheet. Cash reserved for satellite insurance increased by approximately
$60 million on July 14, 2001 as a result of the expiration of the EchoStar VI
launch insurance policy. The reclassification will continue until such time, if
ever, as EchoStar can again insure its satellites on acceptable terms and for
acceptable amounts. 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 fails. 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. 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
for, and is constructing a Ka-band satellite to launch into, the 113 degree
orbital location. 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 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 antitrust 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 on certain of EchoStar's claims. DirecTV's motion 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 trademarks owned by PrimeStar, which is 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 August 21, 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. The
arbitration between DirecTV and KBS was held in June 2001, with closing
arguments held on July 3, 2001. On July 10, 2001, the parties submitted
post-hearing briefs. The arbitration

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

panel has indicated that a ruling in the arbitration will be issued in late
August or early September 2001. DirecTV has alleged damages in the arbitration
in excess of $200 million.

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 EchoStar cannot
predict with certainty what the arbitration panel will decide. EchoStar
continues to vigorously contest the attorneys' interpretation of the fee
arrangement, which EchoStar believes significantly overstates the magnitude of
liability.

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. EchoStar Satellite Corporation, EchoStar
DBS Corporation, EchoStar Technologies Corporation, and EchoStar Satellite
Broadcast Corporation were subsequently added as defendants. The lawsuit seeks,
among other things, interim and permanent injunctions 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.

The Court in the Alberta action recently denied EchoStar's Motion to
Dismiss, which EchoStar appealed. 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

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

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 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 with which it would
be physically impossible to comply. 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.

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

During November 2000, EchoStar filed its appeal brief with the Eleventh
Circuit. Oral argument before the Eleventh Circuit was held on May 24, 2001. At
the oral argument, the parties agreed to participate in a court supervised
mediation and that the mediator was to report back to the Eleventh Circuit on
July 11, 2001. The Eleventh Circuit indicated that it would not rule on the
pending appeal until after July 11, 2001. Since May 24, 2001, the parties
participated in the court supervised mediation. On July 11, 2001, the mediator
reported to the Eleventh Circuit the status of the parties' mediation efforts.
On July 16, 2001, the Eleventh Circuit issued an order for the parties to engage
in further mediation efforts until August 10, 2001. On August 10, 2001, the
mediator is expected to report to the Eleventh Circuit the status of any
continued mediation efforts by the parties.

EchoStar cannot predict when the Eleventh Circuit will rule on its
appeal, but it will not be before August 10, 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. Management has determined that 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. If EchoStar loses the case at
trial, the judge could, as one of many possible remedies, prohibit all future
sales of distant network programming by EchoStar, which would have a material
adverse affect on EchoStar's business.

Gemstar

During October 2000, Starsight Telecast, Inc., a subsidiary of
Gemstar-TV Guide International, Inc., 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. EchoStar will vigorously defend against this suit.

In December 2000, EchoStar filed suit against Gemstar - TV Guide (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. Gemstar recently filed counterclaims in this
lawsuit alleging infringement of United States Patent Nos. 5,923,362 and
5,684,525 which relate to certain electronic program guide functions. EchoStar
has examined these patents and believes they are not infringed by any of
EchoStar's products or services. EchoStar will vigorously contest these
counterclaims.

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 all of which 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. The North Carolina case has
been stayed pending resolution of the ITC action and EchoStar expects that the
Atlanta action will also 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 April 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. Portions of EchoStar's
receivers are currently manufactured outside the United States. 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.

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

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. Gemstar has been added as a party to this
case and is now asserting these patents against EchoStar. EchoStar has examined
these patents and believes that they are not infringed by any of its products or
services. A Markman hearing is currently scheduled for July 23, 2001. 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,
including the potential for treble 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.

IPPV Enterprises

IPPV Enterprises, LLC and MAAST, Inc. filed a patent infringement suit
against EchoStar, and its conditional access vendor Nagra, in the United States
District Court for the District of Delaware. The suit alleged 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. One patent was subsequently dropped by
plaintiffs. The Court entered summary judgment in favor of EchoStar that the
encryption patent, with respect to which the plaintiffs claimed $80 million in
damages, was not infringed by EchoStar. On July 13, 2001, a jury found that the
remaining three patents were infringed and awarded damages of $15 million. The
jury also found that one of the patents was willfully infringed which means that
the judge is entitled to increase the award of damages. EchoStar intends to
appeal the decision and plaintiffs have indicated they will appeal as well. Any
final award of damages would be split between EchoStar and Nagra in percentages
to be agreed upon between EchoStar and Nagra.

California Actions

A purported class action was filed against EchoStar in the California
State Superior Court for Alameda County during May 2001 by Andrew A. Werby. The
complaint, relating to late fees, alleges unlawful, unfair and fraudulent
business practices in violation of California Business and Professions Code
Section 17200 et seq., false and misleading advertising in violation of
California Business and Professions Code Section 17500, and violation of the
California Consumer Legal Remedies Act. EchoStar has not yet filed a responsive
pleading. It is too early in the litigation to make an assessment of the
probable outcome of the litigation or to determine the extent of any potential
liability or damages. EchoStar intends to deny all liability and intends to
vigorously defend the lawsuit.

A purported class action relating to the use of terms such as "crystal
clear digital video," "CD-quality audio," and "on-screen program guide", and
with respect to the number of channels available in various programming
packages, has also been filed against EchoStar in the California State Superior
Court for Los Angeles County by David Pritikin and by Consumer Advocates, a
nonprofit unincorporated association. The complaint alleges breach of express
warranty and violation of the California Consumer Legal Remedies Act, Civil Code
Sections 1750, et. seq., and the California Business & Professions Code Sections
17500, 17200. EchoStar has filed an answer and the case is currently in
discovery. No motion for class certification has been filed to date. It is too
early in the litigation to make an assessment of the probable outcome of the
litigation or to determine the extent of any potential liability or damages.
EchoStar denies all liability and intends to vigorously defend the lawsuit.

Retailer Class Actions

EchoStar has been sued by retailers in three separate purported 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

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

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 allege breach of contract and breach of the
covenant of good faith and fair dealing and seek 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 EchoStar: (1) charged back certain fees paid by members of the class to
professional installers in violation of contractual terms; (2) manipulated the
accounts of subscribers to deny payments to class members; and (3)
misrepresented to class members who own 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.

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. LONG - TERM DEBT

5 3/4% Convertible Notes

On May 24, 2001, EchoStar sold $1 billion principal amount of 5 3/4/%
Convertible Subordinated Notes due 2008 (the "5 3/4% Convertible Notes").
Interest accrues at an annual rate of 5 3/4% on the 5 3/4% Convertible Notes and
is payable semi-annually in cash, in arrears on May 15 and November 15 of each
year, commencing November 15, 2001.

The 5 3/4% Convertible Notes are general unsecured obligations, which
rank junior in right of payment to:

o all existing and future senior obligations;
o all of EchoStar's secured debts to the extent of the value of the
assets securing those debts; and
o all existing and future debts and other liabilities or EchoStar's
subsidiaries.

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

In addition, the 5 3/4% Convertible Notes rank equal to EchoStar's
4 7/8% Convertible Subordinated Notes due 2007.

Except under certain circumstances requiring prepayment premiums, and
in other limited circumstances, the 5 3/4% Convertible Notes are not redeemable
at EchoStar's option prior to May 15, 2004. Thereafter, the 5 3/4% Convertible
Notes will be subject to redemption, at the option of the Company, in whole or
in part, at redemption prices decreasing from 103.286% during the year
commencing May 15, 2004 to 100% on or after May 15, 2008, together with accrued
and unpaid interest thereon to the redemption date.

The 5 3/4% Convertible Notes, unless previously redeemed, are
convertible at the option of the holder any time after 90 days following the
date of their original issuance and prior to maturity into shares of EchoStar's
class A common stock at a conversion price of $43.29 per share.

The indenture related to the 5 3/4% Convertible Notes (the "5 3/4%
Convertible Notes Indenture") contains certain restrictive covenants that do not
impose material limitations on EchoStar.

In the event of a change of control, as defined in the 5 3/4%
Convertible Notes Indenture, EchoStar will be required to make an offer to
repurchase all or any part of the holder's 5 3/4% Convertible Notes at a
purchase price equal to 101% of the aggregate principal amount thereof, together
with accrued and unpaid interest thereon, to the date of repurchase.

7. 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. Eliminations and other primarily consists of intercompany
eliminations. These amounts also consist of revenue and expenses from other
immaterial operating segments for which the disclosure requirements of FAS No.
131 do not apply.

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

<Table>
<Caption>
ECHOSTAR ELIMINATIONS
DISH TECHNOLOGIES AND OTHER, CONSOLIDATED
AS RETROACTIVELY ADJUSTED (NOTE 8) NETWORK CORPORATION NET TOTAL
----------- ------------ ------------ ------------

THREE MONTHS ENDED JUNE 30, 2000
Revenue.............................. $ 572,786 $ 48,045 $ 25,298 $ 646,129
Net income (loss).................... (156,067) 4,139 12,965 (138,963)

THREE MONTHS ENDED JUNE 30, 2001
Revenue.............................. $ 906,590 $ 25,760 $ 33,922 $ 966,272
Net income (loss).................... 25,433 (7,469) (23,819) (5,855)

SIX MONTHS ENDED JUNE 30, 2000
Revenue.............................. $ 1,057,234 $ 100,514 $ 54,102 $ 1,211,850
Net income (loss).................... (346,831) (355) 23,093 (324,093)

SIX MONTHS ENDED JUNE 30, 2001
Revenue.............................. $ 1,724,581 $ 44,488 $ 59,133 $ 1,828,202
Net income (loss).................... (199,260) (15,257) 38,795 (175,722)
</Table>

8. SUBSEQUENT EVENTS

DirecTV

EchoStar has had discussions with representatives of Hughes Electronics
Corporation and its DirecTV subsidiary concerning the possible spin off of all
or a portion of Hughes and a possible transaction between Hughes and EchoStar.
Hughes and DirecTV management recently informed EchoStar that General Motors is
unwilling to further consider EchoStar's proposal.

EchoStar V

EchoStar V is equipped with a total of three momentum wheels, including
one spare. During July 2001, EchoStar V experienced an anomaly resulting in the
loss of one momentum wheel. The satellite was quickly restored to normal
operations mode. While no further momentum wheel losses are expected, until the
root cause of the anomaly is finally determined, there can be no assurance
future anomalies will not cause further losses which could impact commercial
operation of the satellite. The extent to which the loss of an additional
momentum wheel would impair commercial operation has not yet been finally
determined, but terms for in-orbit insurance, if procured, could be impacted.

Series C Preferred Stock Redemption

Effective July 6, 2001, EchoStar redeemed, for cash, all of its
remaining outstanding 6 3/4% Series C Cumulative Convertible Preferred Stock
(the "Series C Preferred Stock") at a total redemption price of approximately
$2,400 or $51.929 per share.

StarBand

On July 11, 2001, EchoStar announced that, subject, among other things,
to customary regulatory approvals, it intends to increase its equity stake in
StarBand Communications Inc. to approximately 32% and acquire four out of seven
seats on the StarBand Board of Directors. In exchange, EchoStar would invest an
additional $50 million in StarBand. Further, EchoStar would lease transponder
capacity to StarBand from a next generation satellite. In accordance with the
agreement and subject to customary regulatory approvals, EchoStar's equity stake
would increase to approximately 60% upon commencement of the construction of the
next generation satellite. This investment is expected to be accounted for using
the equity method of accounting, which will be retroactively applied during the
third quarter 2001.

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
and six-month periods ended June 30, 2000 and June 30, 2001 as follows (in
thousands):

<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- --------------------
2000 2001 2000 2001
-------- -------- -------- ---------
(Unaudited)

Net loss................................................... $ (6,103) $ (8,104) $ (6,103) $ (10,930)
======== ======== ======== =========

Basic and diluted net loss per common share................ $ (0.02) $ (0.01) $ (0.01) $ (0.02)
======== ======== ======== =========
</Table>