Dish Network 2001 Annual Report Download - page 96

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–31
Exercise prices for options outstanding as of December 31, 2001 are as follows:
Options Outstanding Options Exercisable
Range of
Exercise Prices
Number
Outstanding
as of
December 31,
2001
Weighted-
Average
Remaining
Contractual
Life
Weighted-
Average
Exercise Price
Number
Exercisable
as of
December 31,
2001
Weighted-
Average
Exercise Price
$ 1.167 - $ 2.750 3,294,790 4.48 $ 2.21 2,174,862 $ 2.14
3.000 - 3.434 148,904 5.69 3.01 35,704 3.05
5.486 - 6.600 12,221,723 7.08 6.01 1,216,399 6.02
10.203 - 19.180 3,060,976 6.81 13.75 570,392 12.33
22.703 - 27.688 608,200 8.41 23.42 91,400 22.71
32.420 - 39.500 1,818,000 7.32 35.50 272,000 34.30
48.750 - 52.750 442,000 8.11 49.31 126,000 48.94
60.125 - 79.000 1,153,000 8.42 65.90 214,600 64.93
$ 1.1667 - $ 79.000 22,747,593 * 6.80 $ 13.18 4,701,357 $ 10.77
* This amount includes 9.7 million shares outstanding pursuant to the Long Term Incentive Plan.
Accounting for Stock-Based Compensation
EchoStar has elected to follow Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
Employees,” (“APB 25”) and related interpretations in accounting for its stock-based compensation plans. Under APB
25, EchoStar generally does not recognize compensation expense on the issuance of stock under its Stock Incentive
Plan because the option terms are typically fixed and typically the exercise price equals or exceeds the market price of
the underlying stock on the date of grant. In October 1995, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 123, “Accounting and Disclosure of Stock-Based Compensation,” (“FAS No. 123”) which
established an alternative method of expense recognition for stock-based compensation awards to employees based on
fair values. EchoStar elected to not adopt FAS No. 123 for expense recognition purposes.
Pro forma information regarding net income and earnings per share is required by FAS No. 123 and has been
determined as if EchoStar had accounted for its stock-based compensation plans using the fair value method prescribed
by that statement. For purposes of pro forma disclosures, the estimated fair value of the options is amortized to
expense over the options’ vesting period. All options are initially assumed to vest. Compensation previously
recognized is reversed to the extent applicable to forfeitures of unvested options. EchoStar’s pro forma net loss
attributable to common shares and pro forma basic and diluted loss per common share were as follows (in thousands,
except per share amounts):
Year Ended December 31,
1999 2000 2001
Net loss attributable to common shares .................................. $(749,836) $(622,925) $ (224,229)
Basic and diluted loss per share............................................. $ (1.80) $ (1.32) $ (0.47)
The pro forma net loss for 1999 and 2000 is less than the loss reported in the statement of operations because
of the $61 million and $51 million charge, respectively, for the post-grant appreciation of stock-based compensation,
determined under APB 25 and reported by EchoStar, is greater than the amount of stock-based compensation that
would have been reported by EchoStar under the provisions of FAS No. 123.