Dish Network 2004 Annual Report Download - page 60

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Continued
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The decrease from 2002 to 2003 of approximately $1.079 billion primarily resulted from an increase in net purchases
of marketable investment securities related to the investment of the net proceeds from our 2003 financings discussed
below. In addition, cash flows from investing activities for the year ended December 31, 2002 includes cash used for
merger-related costs of approximately $38.6 million. The decrease in net cash flows from investing activities was
partially offset by a decrease in purchases of property and equipment driven by reduced spending on the construction of
satellites and capitalization of less equipment under our new subscriber equipment lease program in 2003 as compared
to 2002.
Cash flows from financing activities. Our financing activities include net proceeds related to the issuance of long-term
debt, and cash used for the repurchase or redemption of long-term debt and mortgages or other notes payable,
repurchases of our Class A common stock and our 2004 dividend payment. For the years ended December 31, 2004,
2003 and 2002, we reported net cash flows from financing activities of negative $2.666 billion, $994.1 million and
$420.8 million, respectively.
The decrease from 2003 to 2004 of approximately $3.660 billion principally resulted from the following 2004
financing activities:
• Effective February 2, 2004, we redeemed the remaining $1.423 billion outstanding principal amount of our 9
3/8% Senior Notes due 2009.
• Effective October 1, 2004, we redeemed all of our $1.0 billion outstanding principal amount of the 10 3/8%
Senior Notes due 2007.
• During 2004, we repurchased approximately 25.9 million shares of our Class A common stock in open market
transactions for a total cost of approximately $809.6 million.
• On December 14, 2004, we paid a cash dividend of $455.7 million to holders of our Class A and Class B
common stock.
This decrease from 2003 to 2004 was partially offset by the following financing sources of cash:
• On October 1, 2004, we sold $1.0 billion principal amount of our 6 5/8% Senior Notes due 2014.
• On August 25, 2004, we sold a $25.0 million 3% Convertible Subordinated Note due 2011 to CenturyTel
Service Group L.L.C.
In addition to the 2004 financing activities described above, the decrease in net cash flows from financing activities
from 2003 to 2004 was also partially due to $1.178 billion in net cash flows received during 2003 from the issuance of
long-term debt as described below.
The increase from 2002 to 2003 of approximately $573.2 million principally resulted from the following 2003
financing activities:
• On July 21, 2003, we sold a $500.0 million 3% Convertible Subordinated Note due 2010 to SBC
Communications, Inc.
• On October 2, 2003, we sold (i) $1.0 billion principal amount of our 5 3/4% Senior Notes due 2008; (ii) $1.0
billion principal amount of our 6 3/8% Senior Notes due 2011; and (iii) $500.0 million principal amount of
our Floating Rate Senior Notes due 2008.
This increase from 2002 to 2003 was partially offset by the following financing uses of cash:
• Effective February 1, 2003, we redeemed all of the $375.0 million outstanding principal amounts of our 9
1/4% Senior Notes due 2006.
• Effective September 3, 2003, we redeemed $245.0 million of the $700.0 million outstanding principal
amount of our 9 1/8 % Senior Notes due 2009.
• Effective October 20, 2003, we redeemed all of the $1.0 billion outstanding principal amount of our 4 7/8%
Convertible Subordinated Notes due 2007.
• During the fourth quarter of 2003, we repurchased approximately $201.6 million of the $1.625 billion
principal amount outstanding on our 9 3/8% Senior Notes due 2009 in open market transactions.