Dish Network 2002 Annual Report Download - page 76

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ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-16
Deferred Revenue
Deferred revenue principally consists of prepayments received from subscribers for DISH Network
programming. Such amounts are recognized as revenue in the period the programming is provided to the subscriber.
Accrued Expenses
Accrued expenses consist of the following (in thousands):
December 31,
2001 2002
Programming......................................................................................... $ 250,795 $ 301,282
Interest ................................................................................................... 142,789 170,108
Royalties and copyright fees ................................................................. 145,140 93,156
Marketing and dealer commissions....................................................... 67,996 89,221
Taxes...................................................................................................... 17,933 31,244
Other...................................................................................................... 234,640 238,206
$ 859,293 $ 923,217
Long-Term Deferred Carriage Payments
Certain programmers provide us up-front carriage payments. Such amounts are deferred and recognized as
reductions to Subscriber-related expenses on a straight-line basis over the relevant contract term (up to 10 years).
Income Taxes
EchoStar establishes a provision for income taxes currently payable or receivable and for income tax
amounts deferred to future periods in accordance with Statement of Financial Accounting Standards No. 109,
“Accounting for Income Taxes” (“FAS 109”). FAS 109 requires that deferred tax assets or liabilities be recorded for
the estimated future tax effects of differences that exist between the book and tax basis of assets and liabilities.
Deferred tax assets are offset by valuation allowances in accordance with FAS 109.
Fair Value of Financial Instruments
Fair values for EchoStar’s high-yield debt are based on quoted market prices. The fair values of EchoStar’s
mortgages and other notes payable are estimated using discounted cash flow analyses. The interest rates assumed in
such discounted cash flow analyses reflect interest rates currently being offered for loans with similar terms to borrowers
of similar credit quality.