Dish Network 2003 Annual Report Download - page 103

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–36
401(k) Employee Savings Plan
We sponsor a 401(k) Employee Savings Plan (the “401(k) Plan”) for eligible employees. Voluntary employee
contributions to the 401(k) Plan may be matched 50% by us, subject to a maximum annual contribution by us of
$1,000 per employee. Forfeitures of unvested participant balances which are retained by the 401(k) Plan may be
used to fund matching and discretionary contributions. Expense recognized related to matching 401(k)
contributions, net of forfeitures, totaled approximately $632 thousand, $993 thousand and $429 thousand during the
years ended December 31, 2003, 2002 and 2001, respectively. We also may make an annual discretionary
contribution to the plan with approval by our Board of Directors, subject to the maximum deductible limit provided
by the Internal Revenue Code of 1986, as amended. These contributions may be made in cash or in our stock.
Discretionary contributions, net of forfeitures, were approximately $15.4 million, $16.9 million and $225 thousand
relating to the 401(k) Plan years ended December 31, 2003, 2002 and 2001, respectively.
10. Commitments and Contingencies
Commitments
Future maturities of our contractual obligations are summarized as follows:
For the Years Ended December 31,
2004 2005 2006 2007 2008 Thereafter Total
(In thousands)
Satellite-related obligations..................... 193,698$ 138,857$ 155,824$ 199,679$ 199,561$ 1,578,807$ 2,466,426$
Purchase obligations ............................... 641,384 44 44 20 - - 641,492
Operating leases ...................................... 17,858 14,506 10,190 6,911 2,962 3,652 56,079
Total ....................................................... 852,940$ 153,407$ 166,058$ 206,610$ 202,523$ 1,582,459$ 3,163,997$
Satellite-Related Obligations
During July 2003, we entered into a contract for the construction of EchoStar X, a Lockheed Martin A2100 class
DBS satellite. Construction is expected to be completed during 2005. EchoStar X will enable better bandwidth
utilization, provide back-up protection for our existing local channel offerings, allow us to offer local channels by
satellite in additional markets; and could allow DISH Network to offer other value-added services.
During March 2003 we entered into a satellite service agreement with SES Americom for all of the capacity on a
new FSS satellite, which may be located at the 105 degree orbital location or certain other orbital locations. We
also agreed to lease all of the capacity on an existing in-orbit FSS satellite at the 105 degree orbital location
beginning August 1, 2003 and continuing at least until the new satellite is launched. In connection with this
agreement, we prepaid $50.0 million to SES Americom to partially fund construction of the new satellite. The ten-
year satellite service agreement for the new satellite is renewable by us on a year to year basis following the initial
term, and provides us with certain rights to replacement satellites. We are required to make monthly payments to
SES Americom for both the existing in-orbit FSS satellite and also for the new satellite for the ten-year period
following its launch. During August 2003, we exercised our option under the SES Americom agreement to also
lease for an initial ten-year term all of the capacity on a new DBS satellite at an orbital location to be determined at
a future date. We anticipate that this satellite will be launched during the fourth quarter of 2005.
During February 2004, we entered into two additional satellite service agreements for capacity on FSS satellites.
Pending the successful launch and entry into service of the previously described new FSS satellite, the satellite
under the first of these agreements is scheduled for launch during the first half of 2005. This agreement is a ten-
year satellite service agreement that is renewable by us on a year to year basis following the initial term, and
provides us with certain rights to replacement satellites. We are required to make monthly payments for this
satellite for the ten-year period following its launch. The satellite under the second of these agreements is planned
for launch during the second half of 2006 and is contingent upon, among other things, obtaining necessary