Dish Network 2004 Annual Report Download - page 100

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ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
Subordinated Notes due 2010 and 2011 are not included in the diluted EPS calculation as the effect of the
conversion of the notes would be anti-dilutive. Of the options outstanding as of December 31, 2004, options to
purchase approximately 7.0 million shares were outstanding under a long term incentive plan. Vesting of these
options is contingent upon meeting certain longer-term goals which have not yet been achieved. As such, the long-
term incentive options are not included in the diluted EPS calculation.
New Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards
No. 123 (Revised 2004), “Share Based Payment” (“SFAS 123(R)”) which (i) revises SFAS No. 123, “Accounting
for Stock-Based Compensation,” (“SFAS 123”) to eliminate the disclosure only provisions of that statement and the
alternative to follow the intrinsic value method of accounting under Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued to Employees” (“APB 25”) and its related implementation guidance, and (ii) requires
a public entity to measure the cost of employee services received in exchange for an award of equity instruments,
including grants of employee stock options, based on the grant-date fair value of the award and recognize that cost
in its results of operations over the period during which an employee is required to provide the requisite service in
exchange for that award. The statement is effective for financial statements as of the beginning of the first interim
period that begins after June 15, 2005. Companies may elect to apply this statement either prospectively, or on a
modified version of retrospective application under which financial statements for prior periods are adjusted on a
basis consistent with the pro forma disclosures required for those periods under SFAS 123. We are currently
evaluating which transitional provision and fair value methodology we will follow. However, we expect that any
expense associated with the adoption of the provisions of SFAS 123(R) will have a material negative impact on our
results of operations.
3. Property and Equipment
Property and equipment consist of the following:
Depreciable
Life As of December 31,
(In Years) 2004 2003
(In thousands)
EchoStar I ................................................................................ 12 201,607$ 201,607$
EchoStar II ............................................................................... 12 228,694 228,694
EchoStar III .............................................................................. 12 234,083 234,083
EchoStar IV .............................................................................. 4 78,511 78,511
EchoStar V ............................................................................... 12 210,446 210,446
EchoStar VI .............................................................................. 12 246,022 246,022
EchoStar VII ............................................................................ 12 177,000 177,000
EchoStar VIII ........................................................................... 12 175,801 189,513
EchoStar IX .............................................................................. 12 127,376 127,376
AMC-15 satellite acquired under capital lease (Note 4)........... 10 330,800 -
Furniture, fixtures and equipment ............................................ 2-10 664,778 613,789
Buildings and improvements .................................................... 5-40 159,662 147,191
Equipment leased to customers................................................. 3-4 1,045,949 543,954
Tooling and other ..................................................................... 1-5 14,191 5,100
Land ......................................................................................... - 29,583 27,024
Vehicles ................................................................................... 7 3,414 3,445
Construction in progress .......................................................... - 273,153 86,490
Total property and equipment ............................................. $ 4,201,070 $ 3,120,245
Accumulated depreciation ........................................................ (1,560,902) (1,243,786)
Property and equipment, net ............................................... 2,640,168$ 1,876,459$
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