Dish Network 2007 Annual Report Download - page 68

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Table of Contents
—
Business — Our Satellites.” Future commitments related to these satellites are included in the table above under “Satellite-related
obligations.”
In certain circumstances the dates on which we are obligated to make these payments could be delayed. These amounts will increase to the
extent we procure insurance for our satellites or contract for the construction, launch or lease of additional satellites. Further, as of
December 31, 2006, we had not procured launches for six of the above satellites. Our obligations will increase as we procure launches for these
satellites.
Capital Lease Obligations
AMC
-15. We make monthly payments to SES Americom to lease all of the capacity on AMC-15, an FSS satellite, which commenced
commercial operation during January 2005. The ten-year satellite service agreement is renewable by us on a year to year basis following the
initial term, and provides us with certain rights to replacement satellites.
AMC
-16. We also make monthly payments to SES Americom to lease all of the capacity on AMC-16, an FSS satellite, which commenced
commercial operation during February 2005. The ten-year satellite service agreement is renewable by us on a year to year basis following the
initial term, and provides us with certain rights to replacement satellites.
In accordance with Statement of Financial Accounting Standards No. 13, “Accounting for Leases” (“SFAS 13”), we have accounted for the
satellite component of these agreements as a capital lease (see Note 5 in the Notes to the Consolidated Financial Statements in Item 15 of this
Annual Report on Form 10-K). The commitment related to the present value of the net future minimum lease payments for the satellite
component of the agreement is included under Capital Lease Obligations in the table above. The commitment related to future minimum
payments designated for the lease of the orbital slots and other executory costs is included under Satellite-Related Obligations in the table
above. The commitment related to the amount representing interest is included under Interest on Long-Term Debt in the table above.
Purchase Obligations
Our 2007 purchase obligations primarily consist of binding purchase orders for EchoStar receiver systems and related equipment, and for
products and services related to the operation of our DISH Network. Our purchase obligations also include certain guaranteed fixed contractual
commitments to purchase programming content. Our purchase obligations can fluctuate significantly from period to period due to, among other
things, management’s control of inventory levels, and can materially impact our future operating asset and liability balances, and our future
working capital requirements.
60
Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS —
Continued
• We are currently leasing all of the capacity on an existing in-orbit FSS satellite, AMC-2, at the 85 degree orbital location. Our lease of
this satellite is expected to continue through 2007 and has been accounted for as an operating lease.
• An SES Americom DBS satellite, AMC-14, which is currently expected to launch during late 2007 and commence commercial
operation at an orbital location to be determined at a future date. The initial ten-year lease for all of the capacity on the satellite will be
accounted for as a capital lease.
• A Telesat FSS satellite, Anik F3, which is currently expected to launch during the second quarter of 2007. We are required to make
monthly payments for the 15-year period following commencement of commercial operation. We will account for the Telesat Anik F3
satellite agreement as a capital lease.
• A Canadian DBS satellite, Ciel 2, which is currently expected to launch during 2009 and commence commercial operation at the 129
degree orbital location. Our initial ten
-
year term lease for at least 50% capacity on the satellite will be accounted for as a capital lease.