Dish Network 2003 Annual Report Download - page 88

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ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–21
Construction in progress consists of the following:
As of December 31,
2003 2002
(In thousands)
Progress amounts for satellite construction, launch, and launch insurance:
EchoStar IX .......................................................................................................... $ - 100,745
EchoStar X............................................................................................................ 24,303 -
Software related projects............................................................................................ 35,148 -
Uplink center equipment............................................................................................ 8,413 -
Other ......................................................................................................................... 18,626 20,948
Construction in progress........................................................................................ 86,490$ 121,693$
Depreciation and amortization expense consists of the following:
For the Years Ended December 31,
2003 2002 2001
(In thousands)
Digital Home Plan equipment ......................................... $ 138,637 $ 130,760 $ 65,652
Satellites .......................................................................... 145,232 128,155 113,279
Furniture, fixtures and equipment ................................... 93,030 92,180 64,082
FCC licenses and other amortizable intangibles ............. 10,346 11,123 29,485
Buildings and improvements ........................................... 4,098 3,399 2,763
Tooling and other ............................................................ 6,863 7,341 3,391
398,206$ 372,958$ 278,652$
Cost of sales and operating expense categories included in our accompanying consolidated statements of operations and
comprehensive income (loss) do not include depreciation expense related to satellites or Digital Home Plan equipment.
EchoStar I and II
EchoStar I and EchoStar II are both Series 7000 class satellites designed and manufactured by Lockheed Martin
Corporation. While both of those satellites are currently functioning properly in orbit, a similar Lockheed Series
7000 class satellite owned by Loral Skynet recently experienced total in-orbit failure. While we currently do not
have sufficient information available to reach any conclusions as to whether other satellites of the Series 7000 class
might be at increased risk of suffering a similar malfunction, no telemetry or other data indicates EchoStar I or
EchoStar II would be expected to experience a similar failure. During December 2003, a spare Traveling Wave
Tube Amplifier (“TWTA”) was switched in to support operations on transponder 25 on EchoStar I due to degraded
operation of the primary TWTA. There are a total of 23 remaining TWTA’s available to support the 16 operational
transponders on EchoStar I. During 2003, one of the spare TWTA’s on EchoStar II which had been found to be
suspect during original In Orbit Test Operations in 1996 was declared failed. There are a total of 23 remaining
TWTA’s available to support the 16 operational transponders on EchoStar II. EchoStar I and II are currently
located at the 148 west orbital location.
EchoStar III
During January 2004, a TWTA pair on EchoStar III failed, resulting in a loss of service on one of our licensed
transponders. Including the seven TWTA pairs that malfunctioned in prior years, these anomalies have resulted in the
failure of a total of 16 TWTA’s on the satellite to date. While originally designed to operate a maximum of 32
transponders at any given time, the satellite was equipped with a total of 44 TWTA’s to provide redundancy. EchoStar
III can now operate a maximum of 28 transponders but due to redundancy switching limitations and the specific