Dish Network 2002 Annual Report Download - page 74

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ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-14
sales and marketing relationship with StarBand and ceased subsidizing StarBand equipment. StarBand subsequently
filed for bankruptcy during June 2002.
Restricted cash and marketable investment securities, as reflected in the accompanying consolidated balance
sheets, include restricted cash placed in trust for the purpose of repaying a note payable as of December 31, 2001
and restricted cash related to insurance premium requirements as of December 31, 2002.
The major components of marketable investment securities and restricted cash are as follow (in thousands):
Marketable Investment Securities Restricted Cash
December 31, December 31,
2001 2002 2001 2002
Government bonds ....................................... $ 43,659 $ 712,521 $ – $ 9,962
Corporate notes and bonds........................... 550,364 470,633 – –
Corporate equity securities........................... 40,633 20,763 – –
Commercial paper ........................................ 515,752 – – –
Restricted cash.............................................. – – 1,288 10
$ 1,150,408 $1,203,917 $ 1,288 $ 9,972
As of December 31, 2002, marketable investment securities and restricted cash include debt securities of $478
million with contractual maturities of one year or less, $692 million with contractual maturities between one and five
years and $23 million with contractual maturities greater than five years. Actual maturities may differ from contractual
maturities as a result of EchoStar’s ability to sell these securities prior to maturity.
Inventories
Inventories are stated at the lower of cost or market value. Cost is determined using the first-in, first-out
method. Proprietary products are built by contract manufacturers to EchoStar’s specifications. Manufactured
inventories include materials, labor, freight-in, royalties and manufacturing overhead. Inventories consist of the
following (in thousands):
December 31,
2001 2002
Finished goods - DBS .......................................................................... $ 127,186 $ 104,769
Raw materials ....................................................................................... 45,725 25,873
Finished goods - remanufactured and other......................................... 19,548 16,490
Work-in-process ................................................................................... 7,924 7,964
Consignment......................................................................................... 3,611 5,161
Reserve for excess and obsolete inventory .......................................... (13,247) (9,967)
$ 190,747 $ 150,290
Property and Equipment
Property and equipment are stated at cost. Cost includes capitalized interest of approximately $5 million, $26
million and $24 million during the years ended December 31, 2000, 2001 and 2002, respectively. The costs of satellites
under construction are capitalized during the construction phase, assuming the eventual successful launch and in-orbit
operation of the satellite. If a satellite were to fail during launch or while in-orbit, the resultant loss would be charged to
expense in the period such loss was incurred. The amount of any such loss would be reduced to the extent of insurance
proceeds received, if any, as a result of the launch or in-orbit failure. Depreciation is recorded on a straight-line basis