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ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–9
rather than undertaking the merger or the tender offer, EchoStar must make offers for all PanAmSat shares that
remain outstanding. EchoStar expects that its acquisition of Hughes’ interest in PanAmSat, which is at a price of
$22.47 per share, together with its assumed purchase of the remaining outstanding PanAmSat shares and payment of
the termination fee to Hughes would require at least $3.4 billion of cash and approximately $600 million of
EchoStar’s class A common stock. EchoStar expects that it would meet this cash requirement by utilizing a portion
of cash on hand.
Organization and Legal Structure
In December 1995, ECC merged Dish, Ltd. with another wholly-owned subsidiary of ECC. During 1999,
EchoStar placed ownership of all of its direct broadcast satellites and related FCC licenses into subsidiaries of
EchoStar DBS Corporation. Dish, Ltd. and EchoStar Satellite Broadcasting Company were merged into EchoStar
DBS Corporation. EchoStar IV and the related FCC licenses were transferred to ESC. During September 2000,
EchoStar Broadband Corporation was formed for the purposes of issuing new debt. Contracts for the construction
and launch of EchoStar VII, EchoStar VIII and EchoStar IX are held in EchoStar Orbital Corporation. Substantially
all of EchoStar’s operations are conducted by subsidiaries of EDBS.
The following table summarizes the organizational structure of EchoStar and its principal subsidiaries as of
December 31, 2001:
Legal Entity
Referred to
Herein As
EchoStar Communications Corporation ECC Publicly owned
EchoStar Broadband Corporation EBC ECC
EchoStar DBS Corporation EDBS EBC
EchoStar Orbital Corporation EOC EBC
EchoStar Satellite Corporation ESC EDBS
Echosphere Corporation Echosphere EDBS
EchoStar Technologies Corporation ETC EDBS
Significant Risks and Uncertainties
Substantial Leverage. EchoStar is highly leveraged, which makes it vulnerable to changes in general
economic conditions. As of December 31, 2001, EchoStar had outstanding long-term debt (including both the
current and long-term portions) totaling approximately $5.7 billion. EchoStar has semi-annual cash debt service
obligations for all of its outstanding long-term debt securities, as follows:
Semi-Annual Payment
Dates
Semi-Annual Debt
Service Requirements
9 1/4% Senior Notes due 2006 (“9 1/4% Seven Year Notes”)....... February 1 and August 1 $ 17,343,750
9 3/8% Senior Notes due 2009 (“9 3/8% Ten Year Notes”).......... February 1 and August 1 76,171,875
10 3/8% Senior Notes due 2007 (“10 3/8% Seven Year Notes”)..... April 1 and October 1 51,875,000
9 1/8% Senior Notes due 2009 (“9 1/8% Seven Year Notes”)....... January 15 and July 15 31,937,500
4 7/8% Convertible Subordinated Notes due 2007 (“4 7/8%
Convertible Notes”) ................................................................ January 1 and July 1 24,375,000
5 3/4% Convertible Subordinated Notes due 2008 (“5 3/4%
Convertible Notes”) ................................................................ May 15 and November 15 28,750,000