Dish Network 2004 Annual Report Download - page 105

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
approximately $66.7 million, along with unamortized debt issuance costs of approximately $10.8 million, was
recorded as charges to earnings and is included in interest expense in the consolidated statements of operations and
comprehensive income (loss).
Effective October 1, 2004, we redeemed all of our outstanding 10 3/8% Senior Notes due 2007. In accordance with
the terms of the indenture governing the notes, the $1.0 billion principal amount of the notes was redeemed at
105.188%, for a total of approximately $1.052 billion. As a result of this redemption, we have been discharged and
released from our obligations under the related indenture. The premium paid of approximately $51.9 million, along
with unamortized debt issuance costs of approximately $4.1 million, was recorded as charges to earnings and is
included in interest expense in the consolidated statements of operations and comprehensive income (loss).
5 3/4% Convertible Subordinated Notes due 2008
The 5 3/4% Convertible Subordinated Notes mature May 15, 2008. Interest accrues at an annual rate of 5 3/4% and is
payable semi-annually in cash, in arrears on May 15 and November 15 of each year.
The 5 3/4% Convertible Subordinated Notes are general unsecured obligations and junior in right of payment to:
• all existing and future senior obligations;
• all of our secured debts to the extent of the value of the assets securing those debts; and
• all existing and future debts and other liabilities or our subsidiaries.
Except under certain circumstances requiring prepayment premiums, and in other limited circumstances, the 5 3/4%
Convertible Subordinated Notes were not redeemable at our option prior to May 15, 2004. Beginning May 15, 2004,
the 5 3/4% Convertible Subordinated Notes became subject to redemption, at our option, in whole or in part, at
redemption prices decreasing annually from 103.286% to 100% on May 15, 2008, together with accrued and unpaid
interest thereon to the redemption date.
The 5 3/4% Convertible Notes, unless previously redeemed, are convertible at the option of the holder any time after 90
days following the date of their original issuance and prior to maturity into shares of our Class A common stock at a
conversion price of $43.29 per share.
The indenture related to the 5 3/4% Convertible Subordinated Notes (the “5 3/4% Convertible Subordinated Notes
Indenture”) contains certain restrictive covenants that do not impose material limitations on us.
In the event of a change of control, as defined in the 5 3/4% Convertible Subordinated Notes Indenture, we will be
required to make an offer to repurchase all or any part of the holder’s 5 3/4% Convertible Subordinated Notes at a
purchase price equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest
thereon, to the date of repurchase.
9 1/8% Senior Notes due 2009
The 9 1/8% Senior Notes mature January 15, 2009. Interest accrues at an annual rate of 9 1/8% and is payable semi-
annually in cash, in arrears on January 15 and July 15 of each year.
Effective September 3, 2003, we redeemed $245.0 million principal amount of our 9 1/8% Senior Notes due 2009,
fully exercising our optional partial redemption right. During the second quarter of 2004, we repurchased in open
market transactions approximately $8.8 million principal amount of our 9 1/8% Senior Notes due 2009. The
approximate $1.1 million difference between the market price paid and the principal amount of the notes, together
with approximately $0.1 million of unamortized debt issuance costs related to the notes repurchased during 2004,
were recorded as charges to earnings and are included in interest expense in the consolidated statements of
operations and comprehensive income (loss). The outstanding principal amount of the notes after the redemption
and repurchase is $446.2 million. As a portion of the 9 1/8% Senior Notes remains outstanding as of December 31,
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