Dish Network 2000 Annual Report Download - page 32

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
All statements contained herein, as well as statements made in press releases and oral statements that may
be made by us or by officers, directors or employees acting on our behalf, that are not statements of historical fact
constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause
our actual results to be materially different from historical results or from any future results expressed or implied by
such forward-looking statements. Among the factors that could cause our actual results to differ materially are the
following: a total or partial loss of one or more satellites due to operational failures, space debris or otherwise;
delays in the construction of our seventh, eighth or ninth satellites; an unsuccessful deployment of future satellites;
inability to settle outstanding claims with insurers; a decrease in sales of digital equipment and related services to
international direct-to-home service providers; a decrease in DISH Network subscriber growth; an increase in
subscriber turnover; an increase in subscriber acquisition costs; an inability to obtain certain retransmission
consents; our inability to retain necessary authorizations from the FCC; an inability to obtain patent licenses from
holders of intellectual property or redesign our products to avoid patent infringement; an increase in competition
from cable as a result of digital cable or otherwise, direct broadcast satellite, other satellite system operators, and
other providers of subscription television services; the introduction of new technologies and competitors into the
subscription television business; a change in the regulations governing the subscription television service industry;
the outcome of any litigation in which we may be involved; general business and economic conditions; and other
risk factors described from time to time in our reports and statements filed with the Securities and Exchange
Commission. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to
consider statements that include the terms “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends” or the
like to be uncertain and forward-looking. All cautionary statements made herein should be read as being applicable
to all forward-looking statements wherever they appear. In this connection, investors should consider the risks
described herein and should not place undue reliance on any forward-looking statements.
Results of Operations
Year Ended December 31, 2000 Compared to the Year Ended December 31, 1999.
Revenue. Total revenue for the year ended December 31, 2000 was $2.715 billion, an increase of
$1.112 billion compared to total revenue for the year ended December 31, 1999 of $1.603 billion. The increase in total
revenue was primarily attributable to DISH Network subscriber growth. We expect that our revenues will continue to
increase significantly as the number of DISH Network subscribers increases.
DISH Network subscription television services revenue totaled $2.347 billion for the year ended
December 31, 2000, an increase of $1.003 billion compared to the same period in 1999. DISH Network subscription
television services revenue principally consists of revenue from basic, premium and pay-per-view subscription
television services. This increase was directly attributable to the increase in the number of DISH Network subscribers
and higher average revenue per subscriber. DISH Network added approximately 1.85 million net new subscribers for
the year ended December 31, 2000, an increase of approximately 26% compared to approximately 1.47 million net
subscriber additions during 1999. As of December 31, 2000, we had approximately 5.26 million DISH Network
subscribers compared to approximately 3.4 million at December 31, 1999, an increase of 54%. The strong subscriber
growth reflects the impact of aggressive marketing promotions, including our free installation program, together with
increased interest in satellite television resulting from the availability of local network channels by satellite, and
positive momentum for the DISH Network. DISH Network subscription television services revenue will continue to
increase to the extent we are successful in increasing the number of DISH Network subscribers and maintaining or
increasing revenue per subscriber. While there can be no assurance, assuming the U.S. economy continues to grow at a
slow pace, we expect to add approximately 1.5 to 2.0 million net new subscribers during 2001, and to obtain a majority
of all net new DBS subscribers.
Monthly average revenue per subscriber was approximately $45.33 during the year ended December 31, 2000
and approximately $42.71 during the same period in 1999. The increase in monthly average revenue per subscriber is
primarily attributable to a $1.00 price increase in America’s Top 100 CD, our most popular programming package,
during May 2000, the increased availability of local channels by satellite together with the earlier successful