Dish Network 1999 Annual Report Download - page 79

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–31
14. Quarterly Financial Data (Unaudited)
EchoStar’s quarterly results of operations are summarized as follows (in thousands):
Three Months Ended
March 31 June 30 September 30 December 31
Year Ended December 31, 1998:
Total revenue ............................. $ 214,439 $ 245,838 $ 235,407 $ 286,982
Operating loss............................ (21,165) (16,244) (15,350) (70,132)
Net loss ..................................... (49,886) (45,717) (51,971) (113,308)
Basic and diluted loss per share ... $ (0.33) $ (0.30) $ (0.34) $ (0.68)
Year Ended December 31, 1999:
Total revenue ............................. $ 309,576 $ 350,217 $ 428,180 $ 514,868
Operating loss............................ (55,682) (50,989) (79,455) (160,965)
Net loss ..................................... (372,331) (76,129) (124,401) (219,986)
Basic and diluted loss per share ... $ (2.07) $ (0.40) $ (0.55) $ (0.97)
The portion of the revenue received from certain Satellite Services customers, over and above guaranteed
minimum channel lease payments, has been reclassified to subscription television services for each of the first three
quarters. The total amount of the reclassification was approximately $9.6 million. The related expense items have
been similarly reclassified.
15. Subsequent Events
On February 1, 2000, EchoStar filed suit against DirecTV and Thomson Consumer Electronics/RCA in the
Federal District Court of Colorado. The suit alleges that DirecTV has utilized improper conduct in order to fend off
competition. According to the complaint, DirecTV has demanded that certain retailers stop displaying EchoStar
merchandise and has threatened to cause economic damage to retailers if they continued to offer both product lines
in head-to-head competition. The suit alleges that DirecTV has acted in violation of federal and state anti-trust laws
in order to protect DirecTV’s market share. EchoStar is seeking injunctive relief and monetary damages. It is too
early in the litigation to make an assessment of the probable outcome.
During February 2000, EchoStar announced the formation of a joint venture with OpenTV Corp. intended
to offer DISH Network customers and other video platforms around the world a low cost, interactive digital receiver
with a built-in hard disk drive that will permit viewers to pause and record live programs without the need for video
tape. The new set-top box is expected to be available during the fourth quarter of 2000. In connection with
formation of the joint venture, OpenTV and EchoStar licensed certain intellectual property rights to the joint venture
and EchoStar was issued 2,252,252 shares of OpenTV common stock. The shares of OpenTV common stock are
subject to forfeiture if EchoStar fails to activate the OpenTV system in at least 500,000 set top boxes on or before
February 23, 2003.
During February 2000, EchoStar also announced agreements for the construction and delivery of three new
satellites. Two of these satellites, EchoStar VII and EchoStar VIII, will be advanced, high-powered DBS satellites.
Both will include spot-beam technology which could allow DISH Network to offer local channels or other value
added services in as many as 60 or more markets across the United States. The third satellite, EchoStar IX, will be a
hybrid Ku/Ka-band satellite, which may provide EchoStar with increased opportunities to attract business customers
and may provide DISH Network customers with expanded services such as Internet, data and potentially two-way
wireless communications.
On February 28, 2000, EchoStar announced a two-for-one split of its outstanding class A and class B
common stock effective March 22, 2000 to shareholders of record as of the close of business on March 10, 2000.