Dish Network 1997 Annual Report Download - page 54

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ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F–7
1. Organization and Business Activities
Principal Business
The operations of EchoStar Communications Corporation (“ ECC,” and together with its subsidiaries,
“ EchoStar” or the “ Company”) include three interrelated business units:
• The DISH Network – a DBS subscription television service in the United States. As of December 31,
1997, EchoStar had approximately 1,040,000 DISH Network subscribers.
• Technology – the design, manufacture, distribution and sale of DBS set-top boxes, antennae and other
digital equipment for the DISH Network (“ EchoStar Receiver Systems”), and the design, manufacture
and distribution of similar equipment for direct-to-home (“ DTH” ) projects of others internationally,
together with the provision of uplink center design, construction oversight and other project integration
services for international DTH ventures.
• Satellite Services – the turn-key delivery of video, audio and data services to business television
customers and other satellite users. These services include satellite uplink services, satellite
transponder space usage, and other services.
Since 1994, EchoStar has deployed substantial resources to develop the “ EchoStar DBS System.” The
EchoStar DBS System consists of EchoStar’s FCC-allocated orbital spectrum, DBS satellites (“EchoStar I,”
“ EchoStar II,” “ EchoStar III,” and “ EchoStar IV,” respectively), digital satellite receivers, digital broadcast operations
center, 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 U.S. to provide consumers with a fully viable alternative
to cable television service.
Organization and Legal Structure
Certain companies principally owned and controlled by Mr. Charles W. Ergen were reorganized in 1993 into Dish, Ltd.
(together with its subsidiaries, “ Dish, Ltd.” ). In April 1995, ECC was formed to complete an initial public offering (the “ IPO” ) of
its Class A Common Stock. Concurrently, Mr. Ergen exchanged all of his then outstanding shares of Class B Common Stock and
8% Series A Cumulative Preferred Stock of Dish, Ltd. for like shares of ECC (the “Exchange” ). In December 1995, ECC
merged Dish, Ltd. with a wholly-owned subsidiary of ECC (the “ Merger”). Substantially all of EchoStar’s operations are
conducted by subsidiaries of Dish, Ltd. The following table summarizes the organizational structure of EchoStar and its principle
subsidiaries as of December 31, 1997:
Legal Entity
Referred to
Herein As
EchoStar Communications Corporation ECC Publicly owned
EchoStar DBS Corporation DBS Corp ECC
EchoStar Satellite Broadcasting Corporation ESBC DBS Corp
Dish, Ltd. Dish, Ltd. ESBC
EchoStar Satellite Corporation ESC Dish, Ltd.
Echosphere Corporation Echosphere Dish, Ltd.
Houston Tracker Systems, Inc. HTS Dish, Ltd.
EchoStar International Corporation EIC Dish, Ltd.