Dish Network 2004 Annual Report Download - page 118

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
satellite will be launched during 2006 and could be used as additional backup capacity and to offer other value-
added services.
As a result of our recent agreements with fixed satellite service providers and for the construction of EchoStar X,
EchoStar XI, and the Ka-band satellites, our obligations for payments related to satellites have increased
substantially. In certain circumstances the dates on which we are obligated to make these payments could be
delayed. These amounts will increase when we commence payments for the launches of EchoStar XI and the Ka-
band satellites, and would further increase to the extent we procure insurance for our satellites or contract for the
construction, launch or lease of additional satellites.
Purchase Obligations
Our 2005 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.
Programming Contracts
In the normal course of business, we have also entered into numerous contracts to purchase programming content
whereby our payment obligations are fully contingent on the number of subscribers to which we provide the
respective content. These programming commitments are not included in the table above. The terms of our
contracts typically range from one to ten years. Our programming expenses will continue to increase to the extent we
are successful growing our subscriber base. Programming expenses are included in “Subscriber-related expenses” in
the accompanying consolidated statements of operations and comprehensive income (loss).
Rent Expense
Total rent expense for operating leases approximated $59.1 million, $32.2 million and $17.9 million in 2004, 2003
and 2002, respectively.
Patents and Intellectual Property
Many entities, including some of our competitors, now have and may in the future obtain patents and other intellectual
property rights that cover or affect products or services directly or indirectly related to those that we offer. We may not
be aware of all patents and other intellectual property rights that our products may potentially infringe. Damages in
patent infringement cases can include a tripling of actual damages in certain cases. Further, we cannot estimate the
extent to which we may be required in the future to obtain licenses with respect to patents held by others and the
availability and cost of any such licenses. Various parties have asserted patent and other intellectual property rights
with respect to components within our direct broadcast satellite system. We cannot be certain that these persons do not
own the rights they claim, that our products do not infringe on these rights, that we would be able to obtain licenses
from these persons on commercially reasonable terms or, if we were unable to obtain such licenses, that we would be
able to redesign our products to avoid infringement.
Contingencies
Distant Network Litigation
Until July 1998, we obtained feeds of distant broadcast network channels (ABC, NBC, CBS and FOX) for distribution
to our customers through PrimeTime 24. In December 1998, the United States District Court for the Southern District
of Florida in Miami entered a nationwide permanent injunction requiring PrimeTime 24 to shut off distant network
channels to many of its customers, and henceforth to sell those channels to consumers in accordance with the
injunction.
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