Dish Network 2004 Annual Report Download - page 120

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
In the event the Court of Appeals upholds the injunction, and if we do not reach private settlement agreements with
additional stations, we will attempt to assist subscribers in arranging alternative means to receive network channels,
including migration to local channels by satellite where available, and free off air antenna offers in other markets.
However, we cannot predict with any degree of certainty how many subscribers would cancel their primary DISH
Network programming as a result of termination of their distant network channels. We could be required to
terminate distant network programming to all subscribers in the event the plaintiffs prevail on their cross-appeal and
we are permanently enjoined from delivering all distant network channels. Termination of distant network
programming to subscribers would result, among other things, in a reduction in average monthly revenue per
subscriber and a temporary increase in subscriber churn.
Satellite Insurance
Several years ago, we filed a $219.3 million insurance claim for a total loss under the launch insurance policies
covering our EchoStar IV satellite. The satellite insurance consists of separate substantially identical policies with
different carriers for varying amounts that, in combination, create a total insured amount of $219.3 million. The
insurance carriers include La Reunion Spatiale; AXA Reinsurance Company (n/k/a AXA Corporate Solutions
Reinsurance Company), United States Aircraft Insurance Group; Assurances Generales De France I.A.R.T. (AGF);
Certain Underwriters at Lloyd’s, London; Great Lakes Reinsurance (U.K.) PLC; British Aviation Insurance Group; If
Skaadeforsikring (previously Storebrand); Hannover Re (a/k/a International Hannover); The Tokio Marine & Fire
Insurance Company, Ltd.; Marham Space Consortium (a/k/a Marham Consortium Management); Ace Global Markets
(a/k/a Ace London); M.C. Watkins Syndicate; Goshawk Syndicate Management Ltd.; D.E. Hope Syndicate 10009
(Formerly Busbridge); Amlin Aviation; K.J. Coles & Others; H.R. Dumas & Others; Hiscox Syndicates, Ltd.; Cox
Syndicate; Hayward Syndicate; D.J. Marshall & Others; TF Hart; Kiln; Assitalia Le Assicurazioni D’Italia S.P.A.
Roma; La Fondiaria Assicurazione S.P.A., Firenze; Vittoria Assicurazioni S.P.A., Milano; Ras - Riunione Adriatica Di
Sicurta S.P.A., Milano; Societa Cattolica Di Assicurazioni, Verano; Siat Assicurazione E Riassicurazione S.P.A,
Genova; E. Patrick; ZC Specialty Insurance; Lloyds of London Syndicates 588 NJM, 1209 MEB and 861 MEB;
Generali France Assurances; Assurance France Aviation; and Ace Bermuda Insurance Ltd.
The insurance carriers offered us a total of approximately $88.0 million, or 40% of the total policy amount, in
settlement of the EchoStar IV insurance claim. We rejected this settlement offer and submitted our claim to
arbitration pursuant to the terms of the insurance policies.
On March 4, 2005, we agreed to settle our insurance claim and related claims for accrued interest and bad faith with
all carriers who agree to pay their proportionate share of an aggregate net amount of $240.0 million. We retained
title to and use of the EchoStar IV satellite. Payment from each settling carrier is due on or before April 26, 2005,
with interest commencing to accrue on April 12, 2005. Currently, we have received signed agreements back from
insurers representing over 90% of the aggregate amount. While we believe the remaining insurers will each sign the
agreement shortly, the arbitration will continue with respect to any insurers who decline to settle.
Gemstar
During October 2000, Starsight Telecast, Inc., a subsidiary of Gemstar-TV Guide International, Inc. (“Gemstar”),
filed a suit for patent infringement against us and certain of our subsidiaries in the United States District Court for
the Western District of North Carolina, Asheville Division.
In December 2000, we filed suit against Gemstar-TV Guide (and certain of its subsidiaries) in the United States District
Court for the District of Colorado alleging violations by Gemstar of various federal and state anti-trust laws and laws
governing unfair competition. Gemstar filed counterclaims alleging infringement of additional patents and asserted
new patent infringement counterclaims.
In February 2001, Gemstar filed additional patent infringement actions against us in the District Court in Atlanta,
Georgia and with the ITC. We settled all of the litigation with Gemstar during 2004 (Note 2).
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