Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | ||
Sep. 30, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | |
Class A common stock | Class B common stock | ||
Entity Registrant Name | 'DISH Network CORP | ' | ' |
Entity Central Index Key | '0001001082 | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 30-Sep-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 219,368,931 | 238,435,208 |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'Q3 | ' | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash and cash equivalents | $4,793,453 | $3,606,140 |
Marketable investment securities | 5,508,737 | 3,631,637 |
Trade accounts receivable - other, net of allowance for doubtful accounts of $18,725 and $16,945, respectively | 895,944 | 842,905 |
Trade accounts receivable - EchoStar, net of allowance for doubtful accounts of zero | 32,907 | 26,960 |
Inventory | 580,714 | 623,720 |
Deferred tax assets | 99,222 | 99,854 |
Prepaid income taxes | 135,514 | 110,608 |
Other current assets (Note 2) | 292,497 | 117,329 |
Total current assets | 12,338,988 | 9,059,153 |
Noncurrent Assets: | ' | ' |
Restricted cash and marketable investment securities | 95,154 | 134,410 |
Property and equipment, net of accumulated depreciation of $3,183,169 and $3,043,609, respectively | 4,055,871 | 4,402,360 |
FCC authorizations | 3,296,665 | 3,296,665 |
Marketable and other investment securities | 141,960 | 119,051 |
Other noncurrent assets, net | 416,602 | 367,969 |
Total noncurrent assets | 8,006,252 | 8,320,455 |
Total assets | 20,345,240 | 17,379,608 |
Current Liabilities: | ' | ' |
Trade accounts payable - other | 265,377 | 298,722 |
Trade accounts payable - EchoStar | 336,164 | 281,875 |
Deferred revenue and other | 862,942 | 857,280 |
Accrued programming | 1,204,038 | 1,096,908 |
Accrued interest | 232,400 | 224,383 |
Litigation accrual | ' | 70,999 |
Other accrued expenses | 535,112 | 556,599 |
Current portion of long-term debt and capital lease obligations | 487,039 | 537,701 |
Total current liabilities | 3,923,072 | 3,924,467 |
Long-Term Obligations, Net of Current Portion: | ' | ' |
Long-term debt and capital lease obligations, net of current portion | 13,624,285 | 11,350,399 |
Deferred tax liabilities | 1,801,081 | 1,662,732 |
Long-term deferred revenue, distribution and carriage payments and other long-term liabilities | 270,966 | 370,382 |
Total long-term obligations, net of current portion | 15,696,332 | 13,383,513 |
Total liabilities | 19,619,404 | 17,307,980 |
Commitments and Contingencies (Note 12) | ' | ' |
Stockholders' Equity (Deficit): | ' | ' |
Additional paid-in capital | 2,569,043 | 2,440,626 |
Accumulated other comprehensive income (loss) | 205,081 | 188,803 |
Accumulated earnings (deficit) | -508,739 | -1,028,193 |
Treasury stock, at cost | -1,569,459 | -1,569,459 |
Total DISH Network stockholders' equity (deficit) | 701,064 | 36,867 |
Noncontrolling interest | 24,772 | 34,761 |
Total stockholders' equity (deficit) | 725,836 | 71,628 |
Total liabilities and stockholders' equity (deficit) | 20,345,240 | 17,379,608 |
Class A common stock | ' | ' |
Stockholders' Equity (Deficit): | ' | ' |
Common stock | 2,754 | 2,706 |
Class B common stock | ' | ' |
Stockholders' Equity (Deficit): | ' | ' |
Common stock | 2,384 | 2,384 |
Class C common stock | ' | ' |
Stockholders' Equity (Deficit): | ' | ' |
Common stock | ' | ' |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Current Assets: | ' | ' |
Allowance for doubtful accounts on trade accounts receivable - other | $18,725 | $16,945 |
Allowance for doubtful accounts on trade accounts receivable - EchoStar | 0 | 0 |
Noncurrent Assets: | ' | ' |
Property and equipment, accumulated depreciation | $3,183,169 | $3,043,609 |
Class A common stock | ' | ' |
Common stock | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 1,600,000,000 | 1,600,000,000 |
Common stock, shares issued | 275,448,372 | 270,613,262 |
Common stock, shares outstanding | 219,330,112 | 214,495,002 |
Class B common stock | ' | ' |
Common stock | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 238,435,208 | 238,435,208 |
Common stock, shares outstanding | 238,435,208 | 238,435,208 |
Class C common stock | ' | ' |
Common stock | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue: | ' | ' | ' | ' |
Subscriber-related revenue | $3,466,611 | $3,267,380 | $10,275,697 | $9,787,676 |
Equipment and merchandise sales, rental and other revenue | 118,898 | 251,905 | 460,043 | 872,899 |
Equipment sales, services and other revenue - EchoStar | 16,068 | 4,062 | 27,194 | 16,407 |
Total revenue | 3,601,577 | 3,523,347 | 10,762,934 | 10,676,982 |
Costs and Expenses (exclusive of depreciation shown separately below - Note 7): | ' | ' | ' | ' |
Subscriber-related expenses | 1,976,712 | 1,808,285 | 5,812,325 | 5,393,202 |
Satellite and transmission expenses: | ' | ' | ' | ' |
EchoStar | 131,263 | 104,631 | 369,902 | 321,567 |
Other | 10,177 | 10,915 | 30,615 | 31,772 |
Cost of sales - equipment, merchandise, services, rental and other | 81,521 | 120,852 | 257,830 | 393,175 |
Subscriber acquisition costs: | ' | ' | ' | ' |
Cost of sales - subscriber promotion subsidies | 69,579 | 67,720 | 214,811 | 203,989 |
Other subscriber acquisition costs | 426,739 | 387,749 | 1,179,943 | 1,057,660 |
Total subscriber acquisition costs | 496,318 | 455,469 | 1,394,754 | 1,261,649 |
General and administrative expenses - EchoStar | 23,459 | 20,763 | 68,636 | 47,635 |
General and administrative expenses | 224,069 | 309,601 | 725,512 | 986,571 |
Litigation expense | ' | 730,457 | ' | 730,457 |
Depreciation and amortization (Note 7) | 260,637 | 235,403 | 795,438 | 743,220 |
Impairment of long-lived assets (Note 7) | ' | ' | 437,575 | ' |
Total costs and expenses | 3,204,156 | 3,796,376 | 9,892,587 | 9,909,248 |
Operating income (loss) | 397,421 | -273,029 | 870,347 | 767,734 |
Other Income (Expense): | ' | ' | ' | ' |
Interest income | 39,994 | 34,304 | 121,331 | 61,597 |
Interest expense, net of amounts capitalized | -189,474 | -143,818 | -565,730 | -391,132 |
Other, net | 105,747 | 69,831 | 212,728 | 172,665 |
Total other income (expense) | -43,733 | -39,683 | -231,671 | -156,870 |
Income (loss) before income taxes | 353,688 | -312,712 | 638,676 | 610,864 |
Income tax (provision) benefit, net | -42,698 | 149,383 | -132,084 | -188,471 |
Net income (loss) | 310,990 | -163,329 | 506,592 | 422,393 |
Less: Net income (loss) attributable to noncontrolling interest | -3,918 | -4,868 | -12,862 | -5,188 |
Net income (loss) attributable to DISH Network | 314,908 | -158,461 | 519,454 | 427,581 |
Weighted-average common shares outstanding - Class A and B common stock: | ' | ' | ' | ' |
Basic (in shares) | 457,377 | 451,042 | 455,372 | 449,547 |
Diluted (in shares) | 460,715 | 451,042 | 458,396 | 452,319 |
Earnings per share - Class A and B common stock: | ' | ' | ' | ' |
Basic net income (loss) per share attributable to DISH Network (in dollars per share) | $0.69 | ($0.35) | $1.14 | $0.95 |
Diluted net income (loss) per share attributable to DISH Network (in dollars per share) | $0.68 | ($0.35) | $1.13 | $0.95 |
Comprehensive Income (Loss): | ' | ' | ' | ' |
Net income (loss) | 310,990 | -163,329 | 506,592 | 422,393 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Foreign currency translation adjustments | -4,570 | 3,990 | 1,029 | 5,278 |
Unrealized holding gains (losses) on available-for-sale securities | 40,692 | 141,781 | 77,760 | 123,409 |
Recognition of previously unrealized (gains) losses on available-for-sale securities included in net income (loss) | -49,221 | -68,899 | -54,565 | -152,921 |
Deferred income tax (expense) benefit, net | 3,647 | ' | -7,946 | ' |
Total other comprehensive income (loss), net of tax | -9,452 | 76,872 | 16,278 | -24,234 |
Comprehensive income (loss) | 301,538 | -86,457 | 522,870 | 398,159 |
Less: Comprehensive income (loss) attributable to noncontrolling interest | -3,918 | -4,868 | -12,862 | -5,188 |
Comprehensive income (loss) attributable to DISH Network | $305,456 | ($81,589) | $535,732 | $403,347 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash Flows From Operating Activities: | ' | ' |
Net income (loss) | $506,592 | $422,393 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ' | ' |
Depreciation and amortization | 795,438 | 743,220 |
Impairment of long-lived assets | 437,575 | ' |
Realized and unrealized losses (gains) on investments | -207,592 | -171,203 |
Non-cash, stock-based compensation | 26,111 | 36,957 |
Deferred tax expense (benefit) | 4,277 | 395,079 |
Other, net | 55,239 | 15,902 |
Change in noncurrent assets | -14,559 | -77,437 |
Changes in current assets and current liabilities, net | 29,235 | 669,131 |
Net cash flows from operating activities | 1,632,316 | 2,034,042 |
Cash Flows From Investing Activities: | ' | ' |
Purchases of marketable investment securities | -5,009,859 | -3,292,823 |
Sales and maturities of marketable investment securities | 3,207,640 | 1,618,843 |
Purchases and prepaid funding of derivative financial instruments (Note 2) | -696,000 | ' |
Settlement of derivative financial instruments and prepaid funding (Note 2) | 822,510 | ' |
Purchases of property and equipment | -912,904 | -681,925 |
Change in restricted cash and marketable investment securities | 38,771 | -1,739 |
DBSD North America Transaction, less cash acquired of $5,230 | ' | -40,015 |
TerreStar Transaction | ' | -36,942 |
Other | -193,051 | -56,553 |
Net cash flows from investing activities | -2,742,893 | -2,491,154 |
Cash Flows From Financing Activities: | ' | ' |
Proceeds from issuance of long-term debt | 2,300,000 | 2,900,000 |
Proceeds from issuance of restricted debt | 2,600,000 | ' |
Repurchases of 7% Senior Notes due 2013 | -48,552 | ' |
Redemption of restricted debt | -2,600,000 | ' |
Funding of restricted debt escrow | -2,596,750 | ' |
Release of restricted debt escrow | 2,596,771 | ' |
Debt issuance costs | -11,427 | -6,681 |
Repayment of long-term debt and capital lease obligations | -29,585 | -28,599 |
Net proceeds from Class A common stock options exercised and stock issued under the Employee Stock Purchase Plan | 66,598 | 61,404 |
Other | 20,822 | 7,572 |
Net cash flows from financing activities | 2,297,877 | 2,933,696 |
Effect of exchange rates on cash and cash equivalents | 13 | 1,947 |
Net increase (decrease) in cash and cash equivalents | 1,187,313 | 2,478,531 |
Cash and cash equivalents, beginning of period | 3,606,140 | 609,108 |
Cash and cash equivalents, end of period | 4,793,453 | 3,087,639 |
Supplemental Disclosure of Cash Flow Information: | ' | ' |
Cash paid for interest (including capitalized interest) | 666,970 | 385,518 |
Capitalized interest | 101,265 | 72,061 |
Cash received for interest | 120,852 | 26,209 |
Cash paid for income taxes | 235,981 | 270,042 |
Employee benefits paid in Class A common stock | 24,230 | 22,280 |
Satellites and other assets financed under capital lease obligations | $904 | $850 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ' |
DBSD North America Transaction, cash acquired | $5,230 |
7 % Senior Notes due 2013 | ' |
Debt Instrument | ' |
Senior Notes due 2013, interest rate (as a percent) | 7.00% |
Organization_and_Business_Acti
Organization and Business Activities | 9 Months Ended |
Sep. 30, 2013 | |
Organization and Business Activities | ' |
Organization and Business Activities | ' |
1. Organization and Business Activities | |
Principal Business | |
DISH Network Corporation is a holding company. Its subsidiaries (which together with DISH Network Corporation are referred to as “DISH Network,” the “Company,” “we,” “us” and/or “our,” unless otherwise required by the context) operate three primary business segments. | |
· DISH. The DISH® branded direct broadcast satellite (“DBS”) pay-TV service had 14.049 million subscribers in the United States as of September 30, 2013. The DISH branded pay-TV service consists of Federal Communications Commission (“FCC”) licenses authorizing us to use DBS and Fixed Satellite Service (“FSS”) spectrum, our owned and leased satellites, receiver systems, third party broadcast operations, customer service facilities, a leased fiber network, in-home service and call center operations, and certain other assets utilized in our operations. In addition, we market broadband services under the dishNET™ brand. | |
· Blockbuster. On April 26, 2011, we completed the acquisition of most of the assets of Blockbuster, Inc. (the “Blockbuster Acquisition”). Blockbuster primarily offers movies and video games for sale and rental through multiple distribution channels such as retail stores, by-mail, digital devices, the blockbuster.com website and the BLOCKBUSTER On Demand® service. On November 6, 2013, we announced that Blockbuster expects to close all of its remaining company-owned domestic retail stores and discontinue the Blockbuster by-mail service by early January 2014. See Note 9 for further information. | |
· Wireless. In 2008, we paid $712 million to acquire certain 700 MHz wireless spectrum licenses, which were granted to us by the FCC in February 2009 subject to certain interim and final build-out requirements. On March 9, 2012, we completed the acquisitions of 100% of the equity of reorganized DBSD North America Inc. (“DBSD North America”) and substantially all of the assets of TerreStar Networks, Inc. (“TerreStar”), pursuant to which we acquired, among other things, 40 MHz of AWS-4 wireless spectrum licenses held by DBSD North America (the “DBSD Transaction”) and TerreStar (the “TerreStar Transaction”). The financial results of DBSD North America and TerreStar are included in our financial results beginning March 9, 2012. The total consideration to acquire the DBSD North America and TerreStar assets was approximately $2.860 billion. On February 15, 2013, the FCC issued an order, which became effective on March 7, 2013, modifying our AWS-4 licenses to expand our terrestrial operating authority. The FCC’s order of modification has imposed certain limitations on the use of a portion of the spectrum and also mandated certain interim and final build-out requirements for the licenses. See Note 12 for further information. | |
We currently generate an immaterial amount of revenue and incur expenses associated with certain satellite operations and regulatory compliance matters from our wireless spectrum assets. As we review our options for the commercialization of this wireless spectrum, we may incur significant additional expenses and may have to make significant investments related to, among other things, research and development, wireless testing and wireless network infrastructure. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | ' |
2. Summary of Significant Accounting Policies | |
Basis of Presentation | |
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required for complete financial statements prepared under GAAP. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012 (“2012 10-K”). Certain prior period amounts have been reclassified to conform to the current period presentation. | |
Principles of Consolidation | |
We consolidate all majority owned subsidiaries, investments in entities in which we have controlling influence and variable interest entities where we have been determined to be the primary beneficiary. Non-majority owned investments are accounted for using the equity method when we have the ability to significantly influence the operating decisions of the investee. When we do not have the ability to significantly influence the operating decisions of an investee, the cost method is used. All significant intercompany accounts and transactions have been eliminated in consolidation. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense for each reporting period. Estimates are used in accounting for, among other things, allowances for doubtful accounts, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, the useful lives and residual value surrounding our rental library inventory, estimated accruals related to revenue-sharing titles that are subject to performance guarantees, fair value of financial instruments, fair value of options granted under our stock-based compensation plans, fair value of assets and liabilities acquired in business combinations, fair value of multi-element arrangements, capital leases, asset impairments, estimates of future cash flows used to evaluate impairments, useful lives of property, equipment and intangible assets, asset retirement obligations, retailer incentives, programming expenses, subscriber lives and royalty obligations. Weak economic conditions have increased the inherent uncertainty in the estimates and assumptions indicated above. Actual results may differ from previously estimated amounts, and such differences may be material to our Condensed Consolidated Financial Statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected prospectively in the period they occur. | |
Fair Value Measurements | |
We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We apply the following hierarchy in determining fair value: | |
· Level 1, defined as observable inputs being quoted prices in active markets for identical assets, including U.S. treasury notes; | |
· Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and derivative financial instruments indexed to marketable investment securities; and | |
· Level 3, defined as unobservable inputs for which little or no market data exists, consistent with reasonably available assumptions made by other participants therefore requiring assumptions based on the best information available. | |
As of September 30, 2013 and December 31, 2012, the carrying value for cash and cash equivalents, marketable investment securities, trade accounts receivable (net of allowance for doubtful accounts), derivative financial instruments, and current liabilities (excluding the “Current portion of long-term debt and capital lease obligations”) is equal to or approximates fair value due to their short-term nature or proximity to current market rates. See Note 5 for the fair value of our marketable investment securities. | |
Fair values for our publicly traded debt securities are based on quoted market prices, when available. The fair values of private debt are estimated based on an analysis in which we evaluate market conditions, related securities, various public and private offerings, and other publicly available information. In performing this analysis, we make various assumptions regarding, among other things, credit spreads, and the impact of these factors on the value of the debt securities. See Note 10 for the fair value of our long-term debt. | |
Derivative Financial Instruments | |
We may purchase and hold derivative financial instruments for, among other reasons, strategic or speculative purposes. We record all derivative financial instruments on our Condensed Consolidated Balance Sheets at fair value as either assets or liabilities. Changes in the fair values of derivative financial instruments are recognized in our results of operations and included in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). We currently have not designated any derivative financial instrument for hedge accounting. | |
During the first and second quarters 2013, we purchased an aggregate notional amount of $592 million of derivative financial instruments that were indexed to the trading price of the common equity securities of Sprint Corporation (“Sprint”). On July 10, 2013, Sprint completed its merger with Softbank Corp. Subsequently, during the third quarter 2013, we settled these derivative financial instruments for cash and common equity securities of Sprint. These common equity securities are classified as available-for-sale and included in “Marketable investment securities” on our Condensed Consolidated Balance Sheets. See Note 5 for further information. | |
Advertising Costs | |
Our advertising costs associated with acquiring new Pay-TV and Broadband subscribers and Blockbuster customers are expensed as incurred. During the three months ended September 30, 2013 and 2012, we recorded advertising costs of $118 million and $134 million, respectively, and during the nine months ended September 30, 2013 and 2012, we recorded advertising costs of $370 million and $364 million, respectively. Advertising costs are included in “Other subscriber acquisition costs” and “General and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). | |
Deferred Cost of Sales | |
On May 22, 2013, we launched a promotion whereby qualifying new Pay-TV subscribers may choose either an Apple® iPad® 2 or programming credits when they, among other things, commit to a two-year contract. The costs of the iPad 2 are recorded as short-term or long-term deferred cost of sales expense within “Other current assets” and “Other noncurrent assets, net,” respectively, on our Condensed Consolidated Balance Sheets and are amortized on a straight-line basis over the related contract term to “Cost of sales — equipment, merchandise, services, rental and other” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). | |
New Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2013-11, Income Taxes (Topic 740) - Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward or Tax Credit Carryforward Exists. ASU 2013-11 requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. This standard is effective for reporting periods beginning after December 15, 2013, with early adoption permitted. We do not expect the adoption of ASU 2013-11 to have a material impact on our financial position or results of operations. | |
Basic_and_Diluted_Net_Income_L
Basic and Diluted Net Income (Loss) Per Share | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Basic and Diluted Net Income (Loss) Per Share | ' | |||||||||||||
Basic and Diluted Net Income (Loss) Per Share | ' | |||||||||||||
3. Basic and Diluted Net Income (Loss) Per Share | ||||||||||||||
We present both basic earnings per share (“EPS”) and diluted EPS. Basic EPS excludes potential dilution and is computed by dividing “Net income (loss) attributable to DISH Network” by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock awards were exercised. The potential dilution from stock awards was computed using the treasury stock method based on the average market value of our Class A common stock. The following table presents EPS amounts for all periods and the basic and diluted weighted-average shares outstanding used in the calculation. | ||||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands, except per share amounts) | ||||||||||||||
Net income (loss) attributable to DISH Network | $ | 314,908 | $ | (158,461 | ) | $ | 519,454 | $ | 427,581 | |||||
Weighted-average common shares outstanding - Class A and B common stock: | ||||||||||||||
Basic | 457,377 | 451,042 | 455,372 | 449,547 | ||||||||||
Dilutive impact of stock awards outstanding | 3,338 | — | 3,024 | 2,772 | ||||||||||
Diluted | 460,715 | 451,042 | 458,396 | 452,319 | ||||||||||
Earnings per share - Class A and B common stock: | ||||||||||||||
Basic net income (loss) per share attributable to DISH Network | $ | 0.69 | $ | (0.35 | ) | $ | 1.14 | $ | 0.95 | |||||
Diluted net income (loss) per share attributable to DISH Network | $ | 0.68 | $ | (0.35 | ) | $ | 1.13 | $ | 0.95 | |||||
As of September 30, 2013 and 2012, there were stock awards to purchase 0.8 million and 3.2 million shares, respectively, of Class A common stock outstanding, not included in the weighted-average common shares outstanding above, as their effect is anti-dilutive. | ||||||||||||||
Vesting of options and rights to acquire shares of our Class A common stock granted pursuant to our performance-based stock incentive plans (“Restricted Performance Units”) is contingent upon meeting certain goals, some of which are not yet probable of being achieved. As a consequence, the following are also not included in the diluted EPS calculation. | ||||||||||||||
As of September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
Performance-based options | 7,806 | 7,943 | ||||||||||||
Restricted Performance Units | 1,969 | 1,190 | ||||||||||||
Total | 9,775 | 9,133 | ||||||||||||
Other_Comprehensive_Income_Los
Other Comprehensive Income (Loss) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Other Comprehensive Income (Loss) | ' | |||||||||||||||||||
Other Comprehensive Income (Loss) | ' | |||||||||||||||||||
4. Other Comprehensive Income (Loss) | ||||||||||||||||||||
The following tables present the tax effect on each component of “Other comprehensive income (loss).” A full valuation allowance was established against any deferred tax assets that were capital in nature during 2012. | ||||||||||||||||||||
For the Three Months | ||||||||||||||||||||
Ended September 30, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Before | Tax | Net | Before | Tax | Net | |||||||||||||||
Tax | (Expense) | of Tax | Tax | (Expense) | of Tax | |||||||||||||||
Amount | Benefit | Amount | Amount | Benefit | Amount | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Foreign currency translation adjustments | $ | (4,570 | ) | $ | — | $ | (4,570 | ) | $ | 3,990 | $ | — | $ | 3,990 | ||||||
Unrealized holding gains (losses) on available-for-sale securities | 40,692 | 3,647 | 44,339 | 141,781 | — | 141,781 | ||||||||||||||
Recognition of previously unrealized (gains) losses on available-for-sale securities included in net income (loss) | (49,221 | ) | — | (49,221 | ) | (68,899 | ) | — | (68,899 | ) | ||||||||||
Other comprehensive income (loss) | $ | (13,099 | ) | $ | 3,647 | $ | (9,452 | ) | $ | 76,872 | $ | — | $ | 76,872 | ||||||
For the Nine Months | ||||||||||||||||||||
Ended September 30, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Before | Tax | Net | Before | Tax | Net | |||||||||||||||
Tax | (Expense) | of Tax | Tax | (Expense) | of Tax | |||||||||||||||
Amount | Benefit | Amount | Amount | Benefit | Amount | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Foreign currency translation adjustments | $ | 1,029 | $ | — | $ | 1,029 | $ | 5,278 | $ | — | $ | 5,278 | ||||||||
Unrealized holding gains (losses) on available-for-sale securities | 77,760 | (7,946 | ) | 69,814 | 123,409 | — | 123,409 | |||||||||||||
Recognition of previously unrealized (gains) losses on available-for-sale securities included in net income (loss) | (54,565 | ) | — | (54,565 | ) | (152,921 | ) | — | (152,921 | ) | ||||||||||
Other comprehensive income (loss) | $ | 24,224 | $ | (7,946 | ) | $ | 16,278 | $ | (24,234 | ) | $ | — | $ | (24,234 | ) | |||||
The “Accumulated other comprehensive income (loss)” is detailed in the following table. | ||||||||||||||||||||
Foreign | Unrealized/ | |||||||||||||||||||
Currency | Recognized | |||||||||||||||||||
Translation | Gains | |||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Adjustment | (Losses) | Total | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance as of December 31, 2012 | $ | (5,033 | ) | $ | 193,836 | $ | 188,803 | |||||||||||||
Other comprehensive income (loss) before reclassification | 1,029 | 77,760 | 78,789 | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | (54,565 | ) | (54,565 | ) | |||||||||||||||
Tax (expense) benefit | — | (7,946 | ) | (7,946 | ) | |||||||||||||||
Balance as of September 30, 2013 | $ | (4,004 | ) | $ | 209,085 | $ | 205,081 | |||||||||||||
Marketable_Investment_Securiti
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | ' | |||||||||||||||||||||||||
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | ' | |||||||||||||||||||||||||
5. Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | ||||||||||||||||||||||||||
Our marketable investment securities, restricted cash and cash equivalents, and other investment securities consisted of the following: | ||||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable investment securities: | ||||||||||||||||||||||||||
Current marketable investment securities - VRDNs | $ | 149,920 | $ | 130,306 | ||||||||||||||||||||||
Current marketable investment securities - strategic | 1,377,727 | 1,261,015 | ||||||||||||||||||||||||
Current marketable investment securities - other | 3,981,090 | 2,240,316 | ||||||||||||||||||||||||
Total current marketable investment securities | 5,508,737 | 3,631,637 | ||||||||||||||||||||||||
Restricted marketable investment securities (1) | 72,800 | 51,366 | ||||||||||||||||||||||||
Noncurrent marketable investment securities - ARS and other (2) | 126,856 | 106,172 | ||||||||||||||||||||||||
Total marketable investment securities | 5,708,393 | 3,789,175 | ||||||||||||||||||||||||
Restricted cash and cash equivalents (1) | 22,354 | 83,044 | ||||||||||||||||||||||||
Other investment securities: | ||||||||||||||||||||||||||
Other investment securities - cost method (2) | 15,104 | 12,879 | ||||||||||||||||||||||||
Total other investment securities | 15,104 | 12,879 | ||||||||||||||||||||||||
Total marketable investment securities, restricted cash and cash equivalents, and other investment securities | $ | 5,745,851 | $ | 3,885,098 | ||||||||||||||||||||||
(1) Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash and marketable investment securities” on our Condensed Consolidated Balance Sheets. | ||||||||||||||||||||||||||
(2) Noncurrent marketable investment securities — auction rate securities (“ARS”) and other investment securities are included in “Marketable and other investment securities” on our Condensed Consolidated Balance Sheets. | ||||||||||||||||||||||||||
Marketable Investment Securities | ||||||||||||||||||||||||||
Our marketable investment securities portfolio consists of various debt and equity instruments, all of which are classified as available-for-sale, except as specified below. | ||||||||||||||||||||||||||
Current Marketable Investment Securities - VRDNs | ||||||||||||||||||||||||||
Variable rate demand notes (“VRDNs”) are long-term floating rate municipal bonds with embedded put options that allow the bondholder to sell the security at par plus accrued interest. All of the put options are secured by a pledged liquidity source. Our VRDN portfolio is comprised mainly of investments in municipalities, which are backed by financial institutions or other highly rated obligors that serve as the pledged liquidity source. While they are classified as marketable investment securities, the put option allows VRDNs to be liquidated generally on a same day or on a five business day settlement basis. | ||||||||||||||||||||||||||
Current Marketable Investment Securities - Strategic | ||||||||||||||||||||||||||
Our current strategic marketable investment securities include strategic and financial debt and equity investments in public companies that are highly speculative and have experienced and continue to experience volatility. As of September 30, 2013, our strategic investment portfolio consisted of securities of a small number of issuers, and as a result the value of that portfolio depends, among other things, on the performance of those issuers. For example, a significant portion of the value of these investments was concentrated in the debt securities of Clearwire Corporation (“Clearwire”). The adjusted cost basis of these Clearwire securities as of September 30, 2013 and December 31, 2012 was $763 million and $751 million, respectively. The fair value of these Clearwire securities as of September 30, 2013 and December 31, 2012 was $932 million and $951 million, respectively. Clearwire has multiple call options on certain of these debt securities upon 30 days notice. The call option price may be less than the fair market value of these debt securities and, if exercised, proceeds could be less than our recorded fair market value as of September 30, 2013 and therefore, reduce our unrealized gains recorded as a separate component of “Accumulated other comprehensive income (loss)” within “Total stockholders’ equity (deficit),” on our Condensed Consolidated Balance Sheets. The fair value of certain of the debt and equity securities in our investment portfolio, including the debt securities of Clearwire, can be adversely impacted by, among other things, the issuers’ respective performance and ability to obtain any necessary additional financing on acceptable terms, or at all. | ||||||||||||||||||||||||||
Current Marketable Investment Securities - Other | ||||||||||||||||||||||||||
Our current marketable investment securities portfolio includes investments in various debt instruments including corporate and government bonds. | ||||||||||||||||||||||||||
Restricted Cash and Marketable Investment Securities | ||||||||||||||||||||||||||
As of September 30, 2013 and December 31, 2012, our restricted marketable investment securities, together with our restricted cash, included amounts required as collateral for our letters of credit or surety bonds and for litigation. During the first quarter 2013, we released $42 million of restricted cash related to litigation. See Note 12 for further information. | ||||||||||||||||||||||||||
Noncurrent Marketable Investment Securities — ARS and Other Investment Securities | ||||||||||||||||||||||||||
We have investments in ARS and other investment securities which are either classified as available-for-sale securities or are accounted for under the fair value method. Previous events in the credit markets reduced or eliminated current liquidity for certain of our ARS and other investment securities. As a result, we classify these investments as noncurrent assets, as we intend to hold these investments until they recover or mature. | ||||||||||||||||||||||||||
The valuation of our ARS and other investment securities investments portfolio is subject to uncertainties that are difficult to estimate. Due to the lack of observable market quotes for identical assets, we utilize analyses that rely on Level 2 and/or Level 3 inputs, as defined in “Fair Value Measurements.” These inputs include, among other things, observed prices on similar assets as well as our assumptions and estimates related to the counterparty credit quality, default risk underlying the security and overall capital market liquidity. These securities were also compared, when possible, to other observable market data for financial instruments with similar characteristics. | ||||||||||||||||||||||||||
Fair Value Election. As of September 30, 2013, our ARS and other noncurrent marketable investment securities portfolio of $127 million included $81 million of securities accounted for under the fair value method. | ||||||||||||||||||||||||||
Other Investment Securities | ||||||||||||||||||||||||||
We have strategic investments in certain debt and equity securities that are included in noncurrent “Marketable and other investment securities” on our Condensed Consolidated Balance Sheets and accounted for using the cost, equity and/or fair value methods of accounting. | ||||||||||||||||||||||||||
Our ability to realize value from our strategic investments in companies that are not publicly traded depends on the success of those companies’ businesses and their ability to obtain sufficient capital, on acceptable terms or at all, and to execute their business plans. Because private markets are not as liquid as public markets, there is also increased risk that we will not be able to sell these investments, or that when we desire to sell them we will not be able to obtain fair value for them. | ||||||||||||||||||||||||||
Unrealized Gains (Losses) on Marketable Investment Securities | ||||||||||||||||||||||||||
As of September 30, 2013 and December 31, 2012, we had accumulated net unrealized gains of $230 million and $207 million, respectively. These amounts, net of related tax effect, were $209 million and $194 million, respectively. All of these amounts are included in “Accumulated other comprehensive income (loss)” within “Total stockholders’ equity (deficit).” The components of our available-for-sale investments are summarized in the table below. | ||||||||||||||||||||||||||
As of September 30, 2013 | As of December 31, 2012 | |||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||
Value | Gains | Losses | Net | Value | Gains | Losses | Net | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt securities: | ||||||||||||||||||||||||||
VRDNs | $ | 149,920 | $ | — | $ | — | $ | — | $ | 130,306 | $ | — | $ | — | $ | — | ||||||||||
ARS and other | 45,430 | 1,200 | (5,150 | ) | (3,950 | ) | 43,921 | 1,375 | (8,033 | ) | (6,658 | ) | ||||||||||||||
ARS fair value election | 81,426 | — | — | — | 62,251 | — | — | — | ||||||||||||||||||
Other (including restricted) | 4,989,642 | 175,922 | (1,507 | ) | 174,415 | 3,287,317 | 208,208 | (1,203 | ) | 207,005 | ||||||||||||||||
Equity securities | 441,975 | 75,012 | (15,555 | ) | 59,457 | 265,380 | 17,918 | (11,537 | ) | 6,381 | ||||||||||||||||
Total | $ | 5,708,393 | $ | 252,134 | $ | (22,212 | ) | $ | 229,922 | $ | 3,789,175 | $ | 227,501 | $ | (20,773 | ) | $ | 206,728 | ||||||||
As of September 30, 2013, restricted and non-restricted marketable investment securities included debt securities of $3.553 billion with contractual maturities within one year, $1.533 billion with contractual maturities after one year through five years and $180 million with contractual maturities after ten years. Actual maturities may differ from contractual maturities as a result of our ability to sell these securities prior to maturity. | ||||||||||||||||||||||||||
Marketable Investment Securities in a Loss Position | ||||||||||||||||||||||||||
The following table reflects the length of time that the individual securities, accounted for as available-for-sale, have been in an unrealized loss position, aggregated by investment category. As of September 30, 2013, the unrealized losses on our investments in equity securities represent investments in a company in the telecommunications industry. We are not aware of any specific factors which indicate the unrealized losses in these investments are due to anything other than temporary market fluctuations. As of September 30, 2013 and December 31, 2012, the unrealized losses on our investments in debt securities primarily represent investments in ARS. We have the ability to hold and do not intend to sell our investments in these debt securities before they recover or mature, and it is more likely than not that we will hold these investments until that time. In addition, we are not aware of any specific factors indicating that the underlying issuers of these debt securities would not be able to pay interest as it becomes due or repay the principal at maturity. Therefore, we believe that these changes in the estimated fair values of these marketable investment securities are related to temporary market fluctuations. | ||||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||
Value | Loss | Value | Loss | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt Securities: | ||||||||||||||||||||||||||
Less than 12 months | $ | 1,679,098 | $ | (936 | ) | $ | 761,551 | $ | (909 | ) | ||||||||||||||||
12 months or more | 121,978 | (5,721 | ) | 72,395 | (8,327 | ) | ||||||||||||||||||||
Equity Securities: | ||||||||||||||||||||||||||
Less than 12 months | 137,995 | (15,555 | ) | 154,566 | (11,537 | ) | ||||||||||||||||||||
12 months or more | — | — | — | — | ||||||||||||||||||||||
Total | $ | 1,939,071 | $ | (22,212 | ) | $ | 988,512 | $ | (20,773 | ) | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||||
Our investments measured at fair value on a recurring basis were as follows: | ||||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Cash equivalents (including restricted) | $ | 4,480,912 | $ | 305,875 | $ | 4,175,037 | $ | — | $ | 3,386,929 | $ | 67,833 | $ | 3,319,096 | $ | — | ||||||||||
Debt securities: | ||||||||||||||||||||||||||
VRDNs | $ | 149,920 | $ | — | $ | 149,920 | $ | — | $ | 130,306 | $ | — | $ | 130,306 | $ | — | ||||||||||
ARS and other | 126,856 | — | 740 | 126,116 | 106,172 | — | 955 | 105,217 | ||||||||||||||||||
Other (including restricted) | 4,989,642 | 11,033 | 4,975,142 | 3,467 | 3,287,317 | 11,182 | 3,276,135 | — | ||||||||||||||||||
Equity securities | 441,975 | 441,975 | — | — | 265,380 | 265,380 | — | — | ||||||||||||||||||
Total | $ | 5,708,393 | $ | 453,008 | $ | 5,125,802 | $ | 129,583 | $ | 3,789,175 | $ | 276,562 | $ | 3,407,396 | $ | 105,217 | ||||||||||
As of September 30, 2013 and December 31, 2012, our Level 3 investments consisted predominately of ARS and other investment securities. On a quarterly basis we evaluate the reasonableness of significant unobservable inputs used in those measurements. The valuation models used for some of our ARS investments require an evaluation of the underlying instruments held by the trusts that issue these securities. For our other ARS and other investment securities, our evaluation uses, among other things, the terms of the underlying instruments, the credit ratings of the issuers, current market conditions, and other relevant factors. Based on these factors, we assess the risk of realizing expected cash flows and we apply an observable discount rate that reflects this risk. We may also reduce our valuations to reflect a liquidity discount based on the lack of an active market for these securities. | ||||||||||||||||||||||||||
Changes in Level 3 instruments were as follows: | ||||||||||||||||||||||||||
Level 3 | ||||||||||||||||||||||||||
Investment | ||||||||||||||||||||||||||
Securities | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 105,217 | ||||||||||||||||||||||||
Net realized and unrealized gains (losses) included in earnings | 19,289 | |||||||||||||||||||||||||
Net realized and unrealized gains (losses) included in other comprehensive income (loss) | 2,961 | |||||||||||||||||||||||||
Purchases | 3,480 | |||||||||||||||||||||||||
Settlements | (1,364 | ) | ||||||||||||||||||||||||
Issuances | — | |||||||||||||||||||||||||
Transfers into or out of Level 3 | — | |||||||||||||||||||||||||
Balance as of September 30, 2013 | $ | 129,583 | ||||||||||||||||||||||||
During the nine months ended September 30, 2013, we had no transfers in or out of Level 1 and Level 2 fair value measurements. | ||||||||||||||||||||||||||
Gains and Losses on Sales and Changes in Carrying Values of Investments | ||||||||||||||||||||||||||
“Other, net” within “Other Income (Expense)” included on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) included primarily changes in the carrying amount of our marketable and non-marketable investments as follows: | ||||||||||||||||||||||||||
For the Three Months | For the Nine Months | |||||||||||||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||||||||||||
Other Income (Expense): | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable investment securities - gains (losses) on sales/exchanges | $ | 49,223 | $ | 111,709 | $ | 63,405 | $ | 119,445 | ||||||||||||||||||
Marketable investment securities - unrealized gains (losses) on investments accounted for at fair value | 8,689 | 667 | 19,175 | (2,395 | ) | |||||||||||||||||||||
Marketable investment securities - gains (losses) on conversion of DBSD North America Notes (1) | — | — | — | 99,445 | ||||||||||||||||||||||
Derivative financial instruments - net realized and/or unrealized gains (losses) | 42,301 | — | 126,832 | — | ||||||||||||||||||||||
Marketable investment securities - other-than-temporary impairments | — | (42,811 | ) | (1,919 | ) | (45,292 | ) | |||||||||||||||||||
Other | 5,534 | 266 | 5,235 | 1,462 | ||||||||||||||||||||||
Total | $ | 105,747 | $ | 69,831 | $ | 212,728 | $ | 172,665 | ||||||||||||||||||
(1) During the nine months ended September 30, 2012, we recognized a $99 million non-cash gain related to the conversion of our DBSD North America 7.5% Convertible Senior Secured Notes due 2009 in connection with the completion of the DBSD Transaction. |
Inventory
Inventory | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory | ' | |||||||
Inventory | ' | |||||||
6. Inventory | ||||||||
Inventory consisted of the following: | ||||||||
As of | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
DISH: | ||||||||
Finished goods - DBS | $ | 282,714 | $ | 259,307 | ||||
Raw materials | 116,108 | 122,769 | ||||||
Work-in-process | 125,002 | 82,361 | ||||||
Total DISH inventory (1) | 523,824 | 464,437 | ||||||
Blockbuster: | ||||||||
Rental library | 34,567 | 81,956 | ||||||
Merchandise | 22,323 | 76,180 | ||||||
Total Blockbuster inventory (2) | 56,890 | 158,136 | ||||||
Wireless: | ||||||||
Finished goods | — | 1,147 | ||||||
Total Wireless inventory | — | 1,147 | ||||||
Total inventory | $ | 580,714 | $ | 623,720 | ||||
(1) The increase in “Total DISH inventory” as of September 30, 2013 primarily related to an increase in Hopper® set-top boxes and broadband equipment. | ||||||||
(2) The decrease in “Total Blockbuster inventory” as of September 30, 2013 primarily related to the deconsolidation of Blockbuster UK on January 16, 2013, Blockbuster domestic store closings during the nine months ended September 30, 2013, and the write down of inventory associated with our Blockbuster operations in Mexico (“Blockbuster Mexico”) during the third quarter 2013. See Note 9 for further information. | ||||||||
Property_and_Equipment_and_Int
Property and Equipment and Intangible Assets | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Property and Equipment and Intangible Assets | ' | |||||||||||||
Property and Equipment and Intangible Assets | ' | |||||||||||||
7. Property and Equipment and Intangible Assets | ||||||||||||||
Property and Equipment | ||||||||||||||
As we prepare for commercialization of our AWS-4 wireless spectrum licenses which are recorded in FCC Authorizations, interest expense related to their carrying value is being capitalized within “Property and equipment, net” on our Condensed Consolidated Balance Sheets based on our average borrowing rate for our debt. During the three months ended September 30, 2013 and 2012, we recorded capitalized interest of $32 million and $33 million, respectively, primarily related to our AWS-4 wireless spectrum licenses. During the nine months ended September 30, 2013 and 2012, we recorded capitalized interest of $101 million and $72 million, respectively, primarily related to our AWS-4 wireless spectrum licenses. | ||||||||||||||
Depreciation and amortization expense consisted of the following: | ||||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Equipment leased to customers | $ | 195,843 | $ | 165,959 | $ | 555,653 | $ | 481,876 | ||||||
Satellites | 33,866 | 38,782 | 101,598 | 111,235 | ||||||||||
Buildings, furniture, fixtures, equipment and other (1) | 30,928 | 30,662 | 138,187 | 82,333 | ||||||||||
148 degree orbital location (2) | — | — | — | 67,776 | ||||||||||
Total depreciation and amortization | $ | 260,637 | $ | 235,403 | $ | 795,438 | $ | 743,220 | ||||||
(1) During the second quarter 2013, we ceased operations of our TerreStar Mobile Satellite Services (“MSS”) business, which had less than 2,000 customers and had less than $1 million in revenue. As a result, we accelerated the depreciable lives of certain assets designed to support this business and the remaining net book value of $53 million was fully depreciated in the second quarter 2013. | ||||||||||||||
(2) During the second quarter 2012, we recorded $68 million of “Depreciation and amortization” expense related to the termination of our license by the FCC for use of the 148 degree orbital location. | ||||||||||||||
Cost of sales and operating expense categories included in our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) do not include depreciation expense related to satellites or equipment leased to customers. | ||||||||||||||
DBS Satellites. We currently utilize 15 satellites in geostationary orbit approximately 22,300 miles above the equator, six of which we own and depreciate over the useful life of each satellite. We currently utilize capacity on seven satellites from EchoStar, which are accounted for as operating leases. See Note 14 for further discussion of our satellite leases with EchoStar. We also lease two satellites from third parties, which are accounted for as capital leases and are depreciated over the shorter of the economic life of the satellite or the term of the satellite agreement. | ||||||||||||||
AWS-4 Satellites. As a result of the DBSD Transaction and the TerreStar Transaction, three AWS-4 satellites were added to our satellite fleet, including two in-orbit satellites (D1 and T1) and one satellite under construction (T2). Based on the FCC’s recently issued rules applicable to our AWS-4 authorizations no longer requiring an integrated satellite component or ground spare and on our evaluation of the satellite capacity needed for our wireless segment, among other things, during the second quarter 2013, we concluded that T2 and D1 represented excess satellite capacity for the potential commercialization of our wireless spectrum. As a result, during the second quarter 2013, we wrote down the net book value of T2 from $270 million to $40 million and the net book value of D1 from $358 million to $150 million, and recorded an impairment charge in our wireless segment of $438 million in “Impairment of long-lived assets” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the nine months ended September 30, 2013. Our fair value estimates for these satellites were determined based upon, among other things, probability-weighted analyses utilizing the income and/or the cost approaches. The estimates used in our fair value analysis are considered Level 3 in the fair value hierarchy. While the FCC’s recently issued rules applicable to our AWS-4 authorizations no longer require an integrated satellite component or ground spare, we are currently planning on using T1 in the commercialization of our wireless spectrum or for other commercial purposes. If T1 is not used in the commercialization of our wireless spectrum, we may need to impair it in the future. As of September 30, 2013, the net book value for T1 was $359 million. | ||||||||||||||
EchoStar XVIII Launch Service. Pursuant to the Professional Services Agreement we entered into with EchoStar in 2010, we have the right, but not the obligation, to engage EchoStar to manage the process of procuring new satellite capacity for us, which includes the procurement of satellite launch services. During November 2012, EchoStar entered into an agreement with ArianeSpace S.A. (“Ariane”) for certain launch services, pursuant to which we were designated in September 2013 by EchoStar to receive certain launch services from Ariane. During October 2013, we entered into an agreement directly with Ariane for these launch services. In total, we expect to pay EchoStar and Ariane approximately $120 million for these launch services. We plan to use these launch services for EchoStar XVIII, a DBS satellite with spot beam technology designed, among other things, for HD programming. EchoStar XVIII is expected to be launched during 2015. | ||||||||||||||
Satellite Anomalies. Operation of our DISH branded pay-TV service requires that we have adequate DBS satellite transmission capacity for the programming we offer. Moreover, current competitive conditions require that we continue to expand our offering of new programming. While we generally have had in-orbit DBS satellite capacity sufficient to transmit our existing channels and some backup capacity to recover the transmission of certain critical programming, our backup capacity is limited. | ||||||||||||||
In the event of a failure or loss of any of our satellites, we may need to acquire or lease additional satellite capacity or relocate one of our other satellites and use it as a replacement for the failed or lost satellite. Such a failure could result in a prolonged loss of critical programming or a significant delay in our plans to expand programming as necessary to remain competitive and thus may have a material adverse effect on our business, financial condition and results of operations. | ||||||||||||||
Prior to 2013, certain of our owned and leased satellites have experienced anomalies, some of which have had a significant adverse impact on their remaining useful life and/or commercial operation. There can be no assurance that future anomalies will not further impact the remaining useful life and/or commercial operation of any of the satellites in our fleet. See “Long-Lived DBS Satellite Assets” below for further discussion of evaluation of impairment of our DISH branded pay-TV DBS satellite fleet. There can be no assurance that we can recover critical transmission capacity in the event one or more of our in-orbit satellites were to fail. We generally do not carry commercial insurance for any of the in-orbit satellites that we use, other than certain satellites leased from third parties, and therefore, we will bear the risk associated with any uninsured in-orbit satellite failures. Recent developments with respect to certain of our satellites are discussed below. | ||||||||||||||
Leased Satellites | ||||||||||||||
EchoStar XII. Prior to 2010, EchoStar XII experienced anomalies resulting in the loss of electrical power available from its solar arrays, which reduced the number of transponders that could be operated. In September 2012, November 2012, and January 2013, EchoStar XII experienced additional solar array anomalies, which further reduced the electrical power available. During the third quarter 2013, EchoStar informed us that EchoStar XII will likely experience further loss of available electrical power that will impact its operational capability, and EchoStar reduced the remaining estimated useful life of the satellite to 18 months. Pursuant to our satellite lease agreement with EchoStar, we are entitled to a reduction in our monthly recurring lease payments in the event of a partial loss of satellite capacity or complete failure of the satellite. Since the number of useable transponders on EchoStar XII depends on, among other things, whether EchoStar XII is operated in CONUS, spot beam, or hybrid CONUS/spot beam mode, we are unable to determine at this time the actual number of transponders that will be available at any given time or how many transponders can be used during the remaining estimated life of the satellite. This satellite is currently not in service and serves as an in-orbit spare. | ||||||||||||||
Long-Lived DBS Satellite Assets. We evaluate our DISH branded pay-TV DBS satellite fleet for impairment as one asset group and test for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. While certain of the anomalies discussed above, and previously disclosed, may be considered to represent a significant adverse change in the physical condition of an individual satellite, based on the redundancy designed within each satellite and considering the asset grouping, these anomalies are not considered to be significant events that would require evaluation for impairment recognition. Unless and until a specific satellite is abandoned or otherwise determined to have no service potential, the net carrying amount related to the satellite would not be written off. | ||||||||||||||
Intangible Assets | ||||||||||||||
As of September 30, 2013 and December 31, 2012, our identifiable intangibles subject to amortization consisted of the following: | ||||||||||||||
As of | ||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Intangible | Accumulated | Intangible | Accumulated | |||||||||||
Assets | Amortization | Assets | Amortization | |||||||||||
(In thousands) | ||||||||||||||
Technology-based | $ | 34,078 | $ | (10,537 | ) | $ | 39,066 | $ | (8,345 | ) | ||||
Trademarks | 18,236 | (5,813 | ) | 18,236 | (3,907 | ) | ||||||||
Contract-based | 9,082 | (9,082 | ) | 11,275 | (10,127 | ) | ||||||||
Customer relationships | 4,294 | (4,294 | ) | 6,974 | (5,736 | ) | ||||||||
Total | $ | 65,690 | $ | (29,726 | ) | $ | 75,551 | $ | (28,115 | ) | ||||
These identifiable intangibles are included in “Other noncurrent assets, net” on our Condensed Consolidated Balance Sheets. Amortization of these intangible assets is recorded on a straight line basis over an average finite useful life primarily ranging from approximately one to ten years. Amortization was $4 million and $6 million for the three months ended September 30, 2013 and 2012, respectively. Amortization was $11 million and $12 million for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||||||||
Estimated future amortization of our identifiable intangible assets as of September 30, 2013 is as follows (in thousands): | ||||||||||||||
For the Years Ended December 31, | ||||||||||||||
2013 (remaining three months) | $ | 2,278 | ||||||||||||
2014 | 9,096 | |||||||||||||
2015 | 8,983 | |||||||||||||
2016 | 8,362 | |||||||||||||
2017 | 3,138 | |||||||||||||
Thereafter | 4,107 | |||||||||||||
Total | $ | 35,964 | ||||||||||||
Goodwill | ||||||||||||||
The excess of our investments in consolidated subsidiaries over net tangible and identifiable intangible asset value at the time of the investment is recorded as goodwill and is not subject to amortization but is subject to impairment testing annually or whenever indicators of impairment arise. In conducting our annual impairment test in 2012, we determined that the fair value was substantially in excess of the carrying value. As of September 30, 2013 and December 31, 2012, our goodwill was $126 million, which primarily related to our wireless segment. | ||||||||||||||
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2013 | |
Acquisitions | ' |
Acquisitions | ' |
8. Acquisitions | |
DBSD North America and TerreStar Transactions | |
On March 2, 2012, the FCC approved the transfer of 40 MHz of AWS-4 wireless spectrum licenses held by DBSD North America and TerreStar to us. On March 9, 2012, we completed the DBSD Transaction and the TerreStar Transaction, pursuant to which we acquired, among other things, certain satellite assets and wireless spectrum licenses held by DBSD North America and TerreStar. In addition, during the fourth quarter 2011, we and Sprint entered into a mutual release and settlement agreement (the “Sprint Settlement Agreement”) pursuant to which all issues then being disputed relating to the DBSD Transaction and the TerreStar Transaction were resolved between us and Sprint, including, but not limited to, issues relating to costs allegedly incurred by Sprint to relocate users from the spectrum then licensed to DBSD North America and TerreStar. The total consideration to acquire the DBSD North America and TerreStar assets was approximately $2.860 billion. This amount includes $1.364 billion for the DBSD Transaction, $1.382 billion for the TerreStar Transaction, and the net payment of $114 million to Sprint pursuant to the Sprint Settlement Agreement. See Note 12 for further information. | |
As a result of these acquisitions, we recognized the acquired assets and assumed liabilities based on our estimates of fair value at their acquisition date, including $102 million in an uncertain tax position in “Long-term deferred revenue, distribution and carriage payments and other long-term liabilities” on our Condensed Consolidated Balance Sheets. Subsequently, in the third quarter 2013, this uncertain tax position was resolved. During the three and nine months ended September 30, 2013, $102 million was reversed and recorded as a decrease in “Income tax (provision) benefit, net” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). | |
LightSquared LP | |
On July 23, 2013, L-Band Acquisition, LLC (“LBAC”), our wholly-owned subsidiary, formed to make a bid to acquire assets of LightSquared LP, entered into a Plan Support Agreement (the “PSA”) with certain senior secured lenders to LightSquared LP, which contemplates the purchase by LBAC of substantially all of the assets of the LightSquared LP Entities (as defined below) for a purchase price of $2.22 billion in cash, plus the assumption of certain liabilities pursuant to the terms and conditions of a proposed asset purchase agreement (the “Proposed APA”). SP Special Opportunities, LLC, an entity controlled by Charles W. Ergen, our Chairman, is a senior secured lender to LightSquared LP and holds a substantial portion of LightSquared LP’s senior secured debt. We are a party to the PSA solely with respect to certain guaranty obligations. Our Board of Directors (the “Board”) approved entering into the PSA, which would implement the Proposed APA, based, among other things, on the recommendation of a special committee of the Board (the “Special Committee”) and a fairness opinion that was prepared by a financial advisory firm at the request of the Special Committee. | |
Pursuant to the PSA, LBAC and such lenders have agreed, subject to the terms and conditions set forth therein, to support and pursue confirmation of a plan of reorganization (the “LightSquared LP Plan”) for LightSquared LP and certain of its subsidiaries that are debtors and debtors in possession (collectively, the “LightSquared LP Entities”) in pending bankruptcy cases under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), which cases are jointly administered under the caption In re LightSquared Inc., et. al., Case No. 12-12080 (SCC). | |
LBAC’s purchase offer under the LightSquared LP Plan is subject to the submission of higher and better offers in accordance with certain bid procedures that were approved by the Bankruptcy Court on October 1, 2013 as further discussed below. In addition, the LightSquared LP Plan is subject to confirmation by the Bankruptcy Court. The Proposed APA has not been accepted or executed by the LightSquared LP Entities. Consummation of the acquisition contemplated under the Proposed APA is subject to, among other things, Bankruptcy Court, FCC and Canadian federal Department of Industry (“Industry Canada”) approvals. However, funding of the purchase price under the Proposed APA is not conditioned upon receipt of approvals from the FCC or Industry Canada. We would be a party to the Proposed APA solely with respect to certain guaranty obligations. | |
On August 6, 2013, Harbinger Capital Partners LLC and other affiliates of Harbinger (collectively, “Harbinger”), the majority and controlling shareholders of LightSquared Inc. and its subsidiaries, filed an adversary proceeding against us, LBAC, EchoStar, Charles W. Ergen (our Chairman), other affiliates of Mr. Ergen, and certain other parties, in the Bankruptcy Court. On October 29, 2013, the Bankruptcy Court dismissed all of the claims in Harbinger’s adversary proceeding in their entirety. See Note 12 for further information. | |
On October 1, 2013, the Bankruptcy Court issued an order confirming LBAC as a qualified bidder and establishing certain bid protections for LBAC, including payment of a break-up fee of $52 million and reimbursement of expenses of up to $2 million in the event LBAC is not the successful bidder at auction. Further, the Bankruptcy Court’s order established, among other things: (i) bid procedures for the sale of all or substantially all of the assets of the LightSquared LP Entities; (ii) November 20, 2013 as the deadline for potential bidders to submit bids (the “Bid Deadline”), subject to extension under certain circumstances, but in no event beyond November 25, 2013; and (iii) if a qualified bid is received prior to the Bid Deadline, November 25, 2013 as the date to hold an auction to solicit higher or otherwise better bids for the LightSquared LP Entities’ assets, subject to extension under certain circumstances, but in no event beyond December 6, 2013. The Bankruptcy Court also scheduled a confirmation hearing on December 10, 2013 to consider the sale of the LightSquared LP Entities’ assets. | |
There can be no assurance that we will ultimately be able to complete the acquisition contemplated under the Proposed APA. Further, to the extent that we complete the acquisition contemplated under the Proposed APA, there can be no assurance that we would be able to develop and implement a business model that would realize a return on the acquired assets or that we would be able to profitably deploy the acquired assets, which could affect the carrying value of these assets and our future financial condition or results of operations. If we are unable to successfully address these challenges and risks, our business, financial condition or results of operations could suffer. | |
Furthermore, if we enter into the Proposed APA, our funding of the purchase price is not conditioned upon receipt of approvals from the FCC or Industry Canada. If the required approvals are not obtained, subject to certain exceptions, we would have the right to direct and require a sale of some or all of the assets of the LightSquared LP Entities to a third party and we would be entitled to the proceeds of such a sale. These proceeds could, however, be substantially less than our proposed funding for the purchase. Therefore, if we fail to obtain these necessary regulatory approvals, we may suffer significant financial losses. | |
Blockbuster
Blockbuster | 9 Months Ended |
Sep. 30, 2013 | |
Blockbuster | ' |
Blockbuster | ' |
9. Blockbuster | |
Blockbuster - Domestic | |
Since the Blockbuster Acquisition, we have continually evaluated the impact of certain factors, including, among other things, competitive pressures, the ability of significantly fewer company-owned domestic retail stores to continue to support corporate administrative costs, and other issues impacting the store-level financial performance of our company-owned domestic retail stores. These factors, among others, have previously led us to close a significant number of company-owned domestic retail stores. As of September 30, 2013, Blockbuster operated approximately 400 company-owned retail stores in the United States. On November 6, 2013, we announced that Blockbuster expects to close all of its remaining company-owned domestic retail stores and discontinue the Blockbuster by-mail service by early January 2014. As a result, we expect to incur future losses estimated to range from $15 million to $30 million. These estimated losses are based on a number of factors, including, among others, lease terminations and inventory liquidation. Our actual losses may differ from our estimates. | |
Blockbuster - Mexico | |
During the third quarter 2013, we determined that Blockbuster Mexico is “held for sale,” consistent with U.S. GAAP. We have written down our “Inventory” and “Property and equipment” on our Condensed Consolidated Balance Sheets by $18 million and $3 million, respectively, to record these assets at their estimated fair value less estimated selling costs. These charges were recorded in “Cost of sales - equipment, merchandise, services, rental and other” and “Depreciation and amortization” expense on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), respectively, during the three months ended September 30, 2013. | |
Blockbuster UK Administration | |
Blockbuster Entertainment Limited and Blockbuster GB Limited, our Blockbuster operating subsidiaries in the United Kingdom (collectively, the “Blockbuster UK Operating Entities”), entered into administration proceedings in the United Kingdom on January 16, 2013 (the “Administration”). Administrators were appointed by the English courts to sell or liquidate the assets of the Blockbuster UK Operating Entities for the benefit of their creditors. Since we no longer exercise control over operating decisions for the Blockbuster UK Operating Entities, we were required to deconsolidate our Blockbuster entities in the United Kingdom (collectively, “Blockbuster UK”) on January 16, 2013. As a result of the Administration, we wrote down the assets of Blockbuster UK to their estimated net realizable value on our Consolidated Balance Sheets as of December 31, 2012. In total, we recorded charges of approximately $46 million on a pre-tax basis including $25 million in “Other, net” within “Other Income (Expense)” and $21 million in “Cost of sales — equipment, merchandise, services, rental and other” on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2012 related to the Administration. | |
For the three and nine months ended September 30, 2012, Blockbuster UK had $67 million and $207 million, respectively, of revenue and an operating loss of $1 million and $6 million, respectively. Upon deconsolidation on January 16, 2013, the revenue and expenses related to the operations of Blockbuster UK are no longer recorded in our Condensed Consolidated Financial Statements. | |
LongTerm_Debt
Long-Term Debt | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Long-Term Debt | ' | |||||||||||||
Long-Term Debt | ' | |||||||||||||
10. Long-Term Debt | ||||||||||||||
5% Senior Notes due 2017 | ||||||||||||||
On May 28, 2013, we issued $1.25 billion aggregate principal amount of our four-year, 5% Senior Notes due May 15, 2017 at an issue price of 100%. The net proceeds from the 5% Senior Notes due 2017 were placed into escrow to finance a portion of the cash consideration for our proposed merger with Sprint. On June 21, 2013, we abandoned our efforts to acquire Sprint and, on June 24, 2013, we redeemed all of the 5% Senior Notes due 2017 at a redemption price equal to 100% of the aggregate principal amount of the 5% Senior Notes due 2017, plus accrued and unpaid interest. | ||||||||||||||
During the second quarter 2013, we recorded $7 million in interest expense and deferred financing costs related to the issuance and redemption of our 5% Senior Notes due 2017 as “Interest expense, net of amounts capitalized” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). | ||||||||||||||
4 1/4% Senior Notes due 2018 | ||||||||||||||
On April 5, 2013, we issued $1.2 billion aggregate principal amount of our five-year, 4 1/4% Senior Notes due April 1, 2018 at an issue price of 100%. Interest accrues at an annual rate of 4 1/4% and is payable semi-annually in cash in arrears on April 1 and October 1 of each year, commencing on October 1, 2013. | ||||||||||||||
The 4 1/4% Senior Notes due 2018 are redeemable, in whole or in part, at any time at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. Prior to April 1, 2016, we may also redeem up to 35.0% of the 4 1/4% Senior Notes due 2018 at a specified premium with the net cash proceeds from certain equity offerings or capital contributions. | ||||||||||||||
The 4 1/4% Senior Notes due 2018 are: | ||||||||||||||
· general unsecured senior obligations of DISH DBS; | ||||||||||||||
· ranked equally in right of payment with all of DISH DBS’ and the guarantors’ existing and future unsecured senior debt; and | ||||||||||||||
· ranked effectively junior to DISH DBS’ and the guarantors’ current and future secured senior indebtedness up to the value of the collateral securing such indebtedness. | ||||||||||||||
The indenture related to the 4 1/4% Senior Notes due 2018 contains restrictive covenants that, among other things, impose limitations on the ability of DISH DBS and its restricted subsidiaries to: | ||||||||||||||
· incur additional debt; | ||||||||||||||
· pay dividends or make distributions on DISH DBS’ capital stock or repurchase DISH DBS’ capital stock; | ||||||||||||||
· make certain investments; | ||||||||||||||
· create liens or enter into sale and leaseback transactions; | ||||||||||||||
· enter into transactions with affiliates; | ||||||||||||||
· merge or consolidate with another company; and | ||||||||||||||
· transfer or sell assets. | ||||||||||||||
In the event of a change of control, as defined in the related indenture, we would be required to make an offer to repurchase all or any part of a holder’s 4 1/4% Senior Notes due 2018 at a purchase price equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon, to the date of repurchase. | ||||||||||||||
5 1/8% Senior Notes due 2020 | ||||||||||||||
On April 5, 2013, we issued $1.1 billion aggregate principal amount of our seven-year, 5 1/8% Senior Notes due May 1, 2020 at an issue price of 100%. Interest accrues at an annual rate of 5 1/8% and is payable semi-annually in cash in arrears on May 1 and November 1 of each year, commencing on November 1, 2013. | ||||||||||||||
The 5 1/8% Senior Notes due 2020 are redeemable, in whole or in part, at any time at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. Prior to May 1, 2016, we may also redeem up to 35.0% of the 5 1/8% Senior Notes due 2020 at a specified premium with the net cash proceeds from certain equity offerings or capital contributions. | ||||||||||||||
The 5 1/8% Senior Notes due 2020 are: | ||||||||||||||
· general unsecured senior obligations of DISH DBS; | ||||||||||||||
· ranked equally in right of payment with all of DISH DBS’ and the guarantors’ existing and future unsecured senior debt; and | ||||||||||||||
· ranked effectively junior to DISH DBS’ and the guarantors’ current and future secured senior indebtedness up to the value of the collateral securing such indebtedness. | ||||||||||||||
The indenture related to the 5 1/8% Senior Notes due 2020 contains restrictive covenants that, among other things, impose limitations on the ability of DISH DBS and its restricted subsidiaries to: | ||||||||||||||
· incur additional debt; | ||||||||||||||
· pay dividends or make distributions on DISH DBS’ capital stock or repurchase DISH DBS’ capital stock; | ||||||||||||||
· make certain investments; | ||||||||||||||
· create liens or enter into sale and leaseback transactions; | ||||||||||||||
· enter into transactions with affiliates; | ||||||||||||||
· merge or consolidate with another company; and | ||||||||||||||
· transfer or sell assets. | ||||||||||||||
In the event of a change of control, as defined in the related indenture, we would be required to make an offer to repurchase all or any part of a holder’s 5 1/8% Senior Notes due 2020 at a purchase price equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon, to the date of repurchase. | ||||||||||||||
6 1/4% Senior Notes due 2023 | ||||||||||||||
On May 28, 2013, we issued $1.35 billion aggregate principal amount of our ten-year, 6 1/4% Senior Notes due May 15, 2023 at an issue price of 100%. The net proceeds from the 6 1/4% Senior Notes due 2023 were placed into escrow to finance a portion of the cash consideration for our proposed merger with Sprint. On June 21, 2013, we abandoned our efforts to acquire Sprint and, on June 24, 2013, we redeemed all of the 6 1/4% Senior Notes due 2023 at a redemption price equal to 101% of the aggregate principal amount of the 6 1/4% Senior Notes due 2023, plus accrued and unpaid interest. | ||||||||||||||
During the second quarter 2013, we recorded $23 million in premiums, interest expense and deferred financing costs related to the issuance and redemption of our 6 1/4% Senior Notes due 2023 as “Interest expense, net of amounts capitalized” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). | ||||||||||||||
Fair Value of our Long-Term Debt | ||||||||||||||
The following table summarizes the carrying and fair values of our debt facilities as of September 30, 2013 and December 31, 2012: | ||||||||||||||
As of | ||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Carrying | Carrying | |||||||||||||
Value | Fair Value | Value | Fair Value | |||||||||||
(In thousands) | ||||||||||||||
7 % Senior Notes due 2013 (1) | $ | 451,448 | $ | 451,498 | $ | 500,000 | $ | 521,875 | ||||||
6 5/8% Senior Notes due 2014 | 1,000,000 | 1,055,050 | 1,000,000 | 1,078,500 | ||||||||||
7 3/4% Senior Notes due 2015 | 750,000 | 821,100 | 750,000 | 844,725 | ||||||||||
7 1/8% Senior Notes due 2016 | 1,500,000 | 1,649,595 | 1,500,000 | 1,683,750 | ||||||||||
4 5/8% Senior Notes due 2017 | 900,000 | 920,250 | 900,000 | 940,500 | ||||||||||
4 1/4% Senior Notes due 2018 | 1,200,000 | 1,203,000 | — | — | ||||||||||
7 7/8% Senior Notes due 2019 | 1,400,000 | 1,598,100 | 1,400,000 | 1,669,500 | ||||||||||
5 1/8% Senior Notes due 2020 | 1,100,000 | 1,081,135 | — | — | ||||||||||
6 3/4% Senior Notes due 2021 | 2,000,000 | 2,108,600 | 2,000,000 | 2,280,000 | ||||||||||
5 7/8% Senior Notes due 2022 | 2,000,000 | 2,019,900 | 2,000,000 | 2,150,000 | ||||||||||
5% Senior Notes due 2023 | 1,500,000 | 1,393,125 | 1,500,000 | 1,548,750 | ||||||||||
Mortgages and other notes payable | 82,321 | 82,321 | 88,955 | 88,955 | ||||||||||
Subtotal | 13,883,769 | $ | 14,383,674 | 11,638,955 | $ | 12,806,555 | ||||||||
Capital lease obligations (2) | 227,555 | NA | 249,145 | NA | ||||||||||
Total long-term debt and capital lease obligations (including current portion) | $ | 14,111,324 | $ | 11,888,100 | ||||||||||
(1) During the three months ended September 30, 2013, we repurchased $49 million of our 7% Senior Notes due 2013 in open market transactions. On October 1, 2013, we redeemed the remaining $451 million principal balance of our 7% Senior Notes due 2013. | ||||||||||||||
(2) Disclosure regarding fair value of capital leases is not required. | ||||||||||||||
We estimated the fair value of our publicly traded long-term debt using market prices in less active markets (Level 2). | ||||||||||||||
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Stock-Based Compensation | ' | |||||||||||||
11. Stock-Based Compensation | ||||||||||||||
Stock Incentive Plans | ||||||||||||||
We maintain stock incentive plans to attract and retain officers, directors and key employees. Stock awards under these plans include both performance and non-performance based stock incentives. As of September 30, 2013, we had outstanding under these plans stock options to acquire 14.6 million shares of our Class A common stock and 2.0 million restricted stock units. Stock options granted prior to September 30, 2013 were granted with exercise prices equal to or greater than the market value of our Class A common stock at the date of grant and with a maximum term of approximately ten years. While historically we have issued stock awards subject to vesting, typically at the rate of 20% per year, some stock awards have been granted with immediate vesting and other stock awards vest only upon the achievement of certain company-specific subscriber, operational and/or financial goals. As of September 30, 2013, we had 69.7 million shares of our Class A common stock available for future grant under our stock incentive plans. | ||||||||||||||
On December 28, 2012, we paid a dividend in cash of $1.00 per share on our outstanding Class A and Class B common stock to shareholders of record on December 14, 2012. In light of such dividend, during January 2013, the exercise price of 16.3 million stock options, affecting approximately 550 employees, was reduced by $0.77 per share (the “2012 Stock Option Adjustment”). Except as noted below, all information discussed below reflects the 2012 Stock Option Adjustment. | ||||||||||||||
On January 1, 2008, we completed the distribution of our technology and set-top box business and certain infrastructure assets (the “Spin-off”) into a separate publicly-traded company, EchoStar. In connection with the Spin-off, each DISH Network stock award was converted into an adjusted DISH Network stock award and a new EchoStar stock award consistent with the Spin-off exchange ratio. We are responsible for fulfilling all stock awards related to DISH Network common stock and EchoStar is responsible for fulfilling all stock awards related to EchoStar common stock, regardless of whether such stock awards are held by our or EchoStar’s employees. Notwithstanding the foregoing, our stock-based compensation expense, resulting from stock awards outstanding at the Spin-off date, is based on the stock awards held by our employees regardless of whether such stock awards were issued by DISH Network or EchoStar. Accordingly, stock-based compensation that we expense with respect to EchoStar stock awards is included in “Additional paid-in capital” on our Condensed Consolidated Balance Sheets. As of March 31, 2013, we have recognized all of our stock-based compensation expense resulting from EchoStar stock awards outstanding at the Spin-off date held by our employees except for the 2005 LTIP performance awards, which were determined not to be probable as of September 30, 2013. See discussion of the 2005 LTIP below. | ||||||||||||||
The following stock awards were outstanding: | ||||||||||||||
As of September 30, 2013 | ||||||||||||||
DISH Network Awards | EchoStar Awards | |||||||||||||
Stock Awards Outstanding | Stock | Restricted | Stock | Restricted | ||||||||||
Options | Stock | Options | Stock | |||||||||||
Units | Units | |||||||||||||
Held by DISH Network employees | 13,238,936 | 1,892,331 | 607,361 | 44,954 | ||||||||||
Held by EchoStar employees | 1,315,415 | 76,999 | N/A | N/A | ||||||||||
Total | 14,554,351 | 1,969,330 | 607,361 | 44,954 | ||||||||||
Stock Award Activity | ||||||||||||||
Our stock option activity was as follows: | ||||||||||||||
For the Nine Months | ||||||||||||||
Ended September 30, 2013 | ||||||||||||||
Options | Weighted- | |||||||||||||
Average | ||||||||||||||
Exercise Price | ||||||||||||||
Total options outstanding, beginning of period (1) | 16,399,870 | $ | 19.04 | |||||||||||
Granted | 2,206,500 | $ | 36.68 | |||||||||||
Exercised | (3,941,219 | ) | $ | 16.06 | ||||||||||
Forfeited and cancelled | (110,800 | ) | $ | 28.02 | ||||||||||
Total options outstanding, end of period | 14,554,351 | $ | 21.6 | |||||||||||
Performance-based options outstanding, end of period (2) | 7,805,500 | $ | 24.03 | |||||||||||
Exercisable at end of period | 4,812,350 | $ | 17 | |||||||||||
(1) The beginning of period weighted-average exercise price of $19.04 does not reflect the 2012 Stock Option Adjustment, which occurred subsequent to December 31, 2012. | ||||||||||||||
(2) These stock options are included in the caption “Total options outstanding, end of period.” See discussion of the 2005 LTIP, 2013 LTIP and Other Employee Performance Awards below. | ||||||||||||||
We realized tax benefits from stock awards exercised as follows: | ||||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Tax benefit from stock awards exercised | $ | 16,889 | $ | 3,366 | $ | 33,986 | $ | 15,313 | ||||||
Based on the closing market price of our Class A common stock on September 30, 2013, the aggregate intrinsic value of our stock options was as follows: | ||||||||||||||
As of September 30, 2013 | ||||||||||||||
Options | Options | |||||||||||||
Outstanding | Exercisable | |||||||||||||
(In thousands) | ||||||||||||||
Aggregate intrinsic value | $ | 340,769 | $ | 134,797 | ||||||||||
Our restricted stock unit activity was as follows: | ||||||||||||||
For the Nine Months | ||||||||||||||
Ended September 30, 2013 | ||||||||||||||
Restricted | Weighted- | |||||||||||||
Stock | Average | |||||||||||||
Units | Grant Date | |||||||||||||
Fair Value | ||||||||||||||
Total restricted stock units outstanding, beginning of period | 1,185,080 | $ | 22.99 | |||||||||||
Granted | 985,000 | $ | 36.48 | |||||||||||
Vested | (135,250 | ) | $ | 29.19 | ||||||||||
Forfeited and cancelled | (65,500 | ) | $ | 30.51 | ||||||||||
Total restricted stock units outstanding, end of period | 1,969,330 | $ | 29.06 | |||||||||||
Restricted Performance Units outstanding, end of period (1) | 1,969,330 | $ | 29.06 | |||||||||||
(1) These Restricted Performance Units are included in the caption “Total restricted stock units outstanding, end of period.” See discussion of the 2005 LTIP, 2013 LTIP and Other Employee Performance Awards below. | ||||||||||||||
Long-Term Performance-Based Plans | ||||||||||||||
2005 LTIP. During 2005, we adopted a long-term, performance-based stock incentive plan (the “2005 LTIP”). The 2005 LTIP provides stock options and restricted stock units, either alone or in combination, which vest over seven years at the rate of 10% per year during the first four years, and at the rate of 20% per year thereafter. Exercise of the stock awards is subject to the foregoing vesting schedule and a performance condition that a company-specific subscriber goal is achieved by March 31, 2015. | ||||||||||||||
Contingent compensation related to the 2005 LTIP will not be recorded in our financial statements unless and until management concludes achievement of the performance condition is probable. Given the competitive nature of our business, small variations in subscriber churn, gross new subscriber activation rates and certain other factors can significantly impact subscriber growth. Consequently, while it was determined that achievement of the goal was not probable as of September 30, 2013, that assessment could change in the future. | ||||||||||||||
If all of the stock awards under the 2005 LTIP were vested and the goal had been met or if we had determined that achievement of the goal was probable during the nine months ended September 30, 2013, we would have recorded total non-cash, stock-based compensation expense for our employees as indicated in the table below. If the goal is met and there are unvested stock awards at that time, the vested amounts would be expensed immediately on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), with the unvested portion recognized ratably over the remaining vesting period. | ||||||||||||||
2005 LTIP | ||||||||||||||
Total | Vested | |||||||||||||
Portion (1) | ||||||||||||||
(In thousands) | ||||||||||||||
DISH Network awards held by DISH Network employees | $ | 36,924 | $ | 35,205 | ||||||||||
EchoStar awards held by DISH Network employees | 6,372 | 6,183 | ||||||||||||
Total | $ | 43,296 | $ | 41,388 | ||||||||||
(1) Represents the amount of this award that has met the foregoing vesting schedule and would therefore vest upon achievement of the performance condition. | ||||||||||||||
2008 LTIP. During 2008, we adopted a long-term, performance-based stock incentive plan (the “2008 LTIP”). The 2008 LTIP provided stock options and restricted stock units, either alone or in combination, which vested based on company-specific subscriber and financial goals. As of June 30, 2013, 100% of the eligible 2008 LTIP awards had vested. | ||||||||||||||
2013 LTIP. During 2013, we adopted a long-term, performance-based stock incentive plan (the “2013 LTIP”). The 2013 LTIP provides stock options and restricted stock units in combination, which vest based on company-specific subscriber and financial goals. Exercise of the stock awards is contingent on achieving these goals by September 30, 2022. Regardless of when achieved, no vesting will occur or payment will be made under the 2013 LTIP for any performance goals prior to March 31, 2014. | ||||||||||||||
Although no awards vest until the Company attains the performance goals, compensation related to the 2013 LTIP will be recorded based on management’s assessment of the probability of meeting the goals. If the goals are probable of being achieved, we will begin recognizing the associated non-cash, stock-based compensation expense on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) over the estimated period to achieve the goal. | ||||||||||||||
During the third quarter 2013, we determined that 20% of the 2013 LTIP performance goals were probable of achievement. As a result, we recorded non-cash, stock-based compensation expense for the three and nine months ended September 30, 2013, as indicated in the table below titled “Non-Cash, Stock-Based Compensation Expense Recognized.” | ||||||||||||||
Other Employee Performance Awards. In addition to the above long-term, performance stock incentive plans, we have other stock awards that vest based on certain other company-specific subscriber, operational and/or financial goals. Exercise of these stock awards is contingent on achieving certain performance goals. | ||||||||||||||
Additional compensation related to these awards will be recorded based on management’s assessment of the probability of meeting the remaining performance goals. If the remaining goals are probable of being achieved, we will begin recognizing the associated non-cash, stock-based compensation expense on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) over the estimated period to achieve the goal. See table below titled “Estimated Remaining Non-Cash, Stock-Based Compensation Expense.” | ||||||||||||||
Although no awards vest until the performance goals are attained, we determined that certain goals were probable of achievement and, as a result, recorded non-cash, stock-based compensation expense for the three and nine months ended September 30, 2013 and 2012, as indicated in the table below titled “Non-Cash, Stock-Based Compensation Expense Recognized.” | ||||||||||||||
Given the competitive nature of our business, small variations in subscriber churn, gross new subscriber activation rates and certain other factors can significantly impact subscriber growth. Consequently, while it was determined that achievement of certain other company-specific subscriber, operational and/or financial goals was not probable as of September 30, 2013, that assessment could change in the future. | ||||||||||||||
The non-cash, stock-based compensation expense associated with these awards was as follows: | ||||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
Non-Cash, Stock-Based Compensation Expense Recognized | 2013 | 2012 | 2013 | 2012 | ||||||||||
(In thousands) | ||||||||||||||
2008 LTIP | $ | — | $ | 2,515 | $ | 3,071 | $ | 10,694 | ||||||
2013 LTIP | 6,567 | — | 6,567 | — | ||||||||||
Other employee performance awards | 1,186 | 1,279 | 4,049 | 5,851 | ||||||||||
Total non-cash, stock-based compensation expense recognized for performance-based awards | $ | 7,753 | $ | 3,794 | $ | 13,687 | $ | 16,545 | ||||||
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | 2013 LTIP | Other | ||||||||||||
Employee | ||||||||||||||
Performance | ||||||||||||||
Awards | ||||||||||||||
(In thousands) | ||||||||||||||
Remaining expense estimated to be recognized during 2013 | $ | 2,234 | $ | 231 | ||||||||||
Estimated contingent expense subsequent to 2013 | 58,223 | 41,929 | ||||||||||||
Total estimated remaining expense over the term of the plan | $ | 60,457 | $ | 42,160 | ||||||||||
Of the 14.6 million stock options and 2.0 million restricted stock units outstanding under our stock incentive plans, the following awards were outstanding pursuant to our performance-based stock incentive plans: | ||||||||||||||
As of September 30, 2013 | ||||||||||||||
Number of | Weighted- | |||||||||||||
Awards | Average | |||||||||||||
Exercise Price | ||||||||||||||
Performance-Based Stock Options | ||||||||||||||
2005 LTIP | 3,200,500 | $ | 20.33 | |||||||||||
2013 LTIP | 1,935,000 | $ | 36.48 | |||||||||||
Other employee performance awards | 2,670,000 | $ | 19.46 | |||||||||||
Total | 7,805,500 | $ | 24.03 | |||||||||||
Restricted Performance Units | ||||||||||||||
2005 LTIP | 301,830 | |||||||||||||
2013 LTIP | 967,500 | |||||||||||||
Other employee performance awards | 700,000 | |||||||||||||
Total | 1,969,330 | |||||||||||||
Stock-Based Compensation | ||||||||||||||
In connection with the 2012 Stock Option Adjustment, discussed previously, we recognized incremental non-cash, stock-based compensation expense of $5 million during the first quarter 2013 and will expense an additional $3 million over the remaining vesting period of the respective stock awards. | ||||||||||||||
Total non-cash, stock-based compensation expense for all of our employees is shown in the following table and was allocated to the same expense categories as the base compensation for such employees: | ||||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Subscriber-related | $ | 941 | $ | 312 | $ | 1,610 | $ | 1,506 | ||||||
General and administrative | 9,808 | 6,446 | 24,501 | 35,451 | ||||||||||
Total non-cash, stock-based compensation | $ | 10,749 | $ | 6,758 | $ | 26,111 | $ | 36,957 | ||||||
As of September 30, 2013, our total unrecognized compensation cost related to our non-performance based unvested stock awards was $16 million. This cost is based on an estimated future forfeiture rate of approximately 3.7% per year and will be recognized over a weighted-average period of approximately two years. Share-based compensation expense is recognized based on stock awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Changes in the estimated forfeiture rate can have a significant effect on share-based compensation expense since the effect of adjusting the rate is recognized in the period the forfeiture estimate is changed. | ||||||||||||||
Valuation | ||||||||||||||
The fair value of each stock option granted for the three and nine months ended September 30, 2013 and 2012 was originally estimated at the date of the grant using a Black-Scholes option valuation model with the following assumptions: | ||||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
Stock Options | 2013(1) | 2012 (2) | 2013 | 2012 | ||||||||||
Risk-free interest rate | N/A | 0.78% | 0.91% - 1.93% | 0.41% - 1.29% | ||||||||||
Volatility factor | N/A | 38.90% | 32.37% - 39.87% | 33.15% - 39.34% | ||||||||||
Expected term of options in years | N/A | 5.8 | 5.7 - 10.0 | 3.1 - 5.9 | ||||||||||
Weighted-average fair value of options granted | N/A | $11.44 | $14.49 - $16.85 | $6.72 - $12.69 | ||||||||||
(1) During the three months ended September 30, 2013, there were no stock options granted. | ||||||||||||||
(2) During the three months ended September 30, 2012, all stock options granted had the same vesting period. | ||||||||||||||
On December 28, 2012 and December 1, 2011, we paid a $1.00 and a $2.00 cash dividend per share on our outstanding Class A and Class B common stock, respectively. While we currently do not intend to declare additional dividends on our common stock, we may elect to do so from time to time. Accordingly, the dividend yield percentage used in the Black-Scholes option valuation model is set at zero for all periods. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded stock options which have no vesting restrictions and are fully transferable. Consequently, our estimate of fair value may differ from other valuation models. Further, the Black-Scholes option valuation model requires the input of highly subjective assumptions. Changes in these subjective input assumptions can materially affect the fair value estimate. | ||||||||||||||
We will continue to evaluate the assumptions used to derive the estimated fair value of our stock options as new events or changes in circumstances become known. | ||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
12. Commitments and Contingencies | |
Commitments | |
Wireless Spectrum | |
On March 2, 2012, the FCC approved the transfer of 40 MHz of AWS-4 wireless spectrum licenses held by DBSD North America and TerreStar to us. On March 9, 2012, we completed the DBSD Transaction and the TerreStar Transaction, pursuant to which we acquired, among other things, certain satellite assets and wireless spectrum licenses held by DBSD North America and TerreStar. The total consideration to acquire the DBSD North America and TerreStar assets was approximately $2.860 billion. | |
Our consolidated FCC applications for approval of the license transfers from DBSD North America and TerreStar were accompanied by requests for waiver of the FCC’s MSS “integrated service” and spare satellite requirements and various technical provisions. On March 21, 2012, the FCC released a Notice of Proposed Rule Making proposing the elimination of the integrated service, spare satellite and various technical requirements associated with the AWS-4 licenses. On December 11, 2012, the FCC approved rules that eliminated these requirements and gave notice of its proposed modification of our AWS-4 authorizations to, among other things, allow us to offer single-mode terrestrial terminals to customers who do not desire satellite functionality. On February 15, 2013, the FCC issued an order, which became effective on March 7, 2013, modifying our AWS-4 licenses to expand our terrestrial operating authority. The FCC’s order of modification has imposed certain limitations on the use of a portion of this spectrum, including interference protections for other spectrum users and power and emission limits that we presently believe could render 5 MHz of our uplink spectrum (2000-2005 MHz) effectively unusable for terrestrial services and limit our ability to fully utilize the remaining 15 MHz of our uplink spectrum (2005-2020 MHz) for terrestrial services. These limitations could, among other things, impact the ongoing development of technical standards associated with our wireless business, and may have a material adverse effect on our ability to commercialize these licenses. The new rules also mandated certain interim and final build-out requirements for the licenses. By March 2017, we must provide terrestrial signal coverage and offer terrestrial service to at least 40% of the aggregate population represented by all of the areas covered by the licenses (the “AWS-4 Interim Build-Out Requirement”). By March 2020, we must provide terrestrial signal coverage and offer terrestrial service to at least 70% of the population in each area covered by an individual license (the “AWS-4 Final Build-Out Requirement”). Based on an extension request we filed with the FCC, as discussed below, these build-out requirements may change. In addition, the FCC has adopted rules for a spectrum band that is adjacent to our AWS-4 licenses, known as the “H Block.” Depending on the outcome of the standard-setting process for the H Block, the rules that the FCC adopted could further impact the remaining 15 MHz of our uplink spectrum (2005-2020 MHz), which may have a material adverse effect on our ability to commercialize the AWS-4 licenses. | |
In 2008, we paid $712 million to acquire certain 700 MHz wireless spectrum licenses, which were granted to us by the FCC in February 2009. At the time they were granted, these licenses were subject to certain interim and final build-out requirements. By June 2013, we were required to provide signal coverage and offer service to at least 35% of the geographic area in each area covered by each individual license (the “700 MHz Interim Build-Out Requirement”). By June 2019, we were required to provide signal coverage and offer service to at least 70% of the geographic area in each area covered by each individual license (the “700 MHz Final Build-Out Requirement”). As discussed below, these requirements have since been modified by the FCC. | |
On September 9, 2013, we filed a letter with the FCC in support of a voluntary industry solution to resolve certain interoperability issues affecting the lower 700 MHz spectrum band (the “Interoperability Solution”). In connection with our letter, we also filed a petition and an extension request with the FCC that outlined certain conditions upon which we would support the Interoperability Solution. | |
On October 29, 2013, the FCC issued an order approving the Interoperability Solution (the “Interoperability Solution Order”), which requires us to reduce power emissions on our 700 MHz licenses. As part of the Interoperability Solution Order, the FCC, among other things, approved our request to modify the 700 MHz Interim Build-Out Requirement so that by March 2017 (rather than the previous deadline of June 2013), we must provide signal coverage and offer service to at least 40% of our total E Block population (the “Modified 700 MHz Interim Build-Out Requirement”). The FCC also approved our request to modify the 700 MHz Final Build-Out Requirement so that by March 2021 (rather than the previous deadline of June 2019), we must provide signal coverage and offer service to at least 70% of the population in each of our E Block license areas (the “Modified 700 MHz Final Build-Out Requirement”). These requirements replaced the previous build-out requirements associated with our 700 MHz licenses. While the modifications to our 700 MHz licenses would provide us additional time to complete the build-out requirements, the reduction in power emissions could have an adverse impact on our ability to fully utilize our 700 MHz licenses. If we fail to meet the Modified 700 MHz Interim Build-Out Requirement, the Modified 700 MHz Final Build-Out Requirement may be accelerated by one year, from March 2021 to March 2020, and we could face the reduction of license area(s). If we fail to meet the Modified 700 MHz Final Build-Out Requirement, we may be subject to automatic license termination for the geographic portion of each license in which we are not providing service. | |
Also in connection with our support of the Interoperability Solution, we requested that the FCC modify our AWS-4 spectrum licenses to provide flexibility to repurpose 20 MHz of our uplink spectrum (2000-2020 MHz) for downlink (the “AWS-4 Waiver”), and extend the AWS-4 Final Build-Out Requirement by one year to March 2021 (the “AWS-4 Extension”). The FCC, however, has not yet issued a ruling on the AWS-4 Waiver or the AWS-4 Extension, and we cannot predict the timing or outcome of any FCC action on the AWS-4 Waiver or the AWS-4 Extension. As a precaution, we intend to appeal the Interoperability Solution Order, reserving our right to withdraw the appeal in the event the FCC grants the AWS-4 Waiver and the AWS-4 Extension. | |
If the FCC grants the AWS-4 Extension and we fail to meet the AWS-4 Interim Build-Out Requirement, the AWS-4 Final Build-Out Requirement may be accelerated by one year, from March 2021 to March 2020. If we fail to meet the AWS-4 Final Build-Out Requirement, our terrestrial authorization for each license area in which we fail to meet the requirement may terminate. | |
In addition, contingent upon the FCC approving the AWS-4 Waiver and the AWS-4 Extension at least 30 days prior to the commencement of the FCC’s planned H Block auction, we agreed to participate in the H Block auction and bid at least a net clearing price equal to an aggregate nationwide reserve price established by the FCC, not to exceed $0.50 per MHz/POP (approximately $1.56 billion). | |
We will need to make significant additional investments or partner with others to, among other things, finance the commercialization and build-out requirements of these licenses and our integration efforts, including compliance with regulations applicable to the acquired licenses. Depending on the nature and scope of such commercialization, build-out, and integration efforts, any such investment or partnership could vary significantly. There can be no assurance that we will be able to develop and implement a business model that will realize a return on these spectrum licenses or that we will be able to profitably deploy the assets represented by these spectrum licenses, which may affect the carrying value of these assets and our future financial condition or results of operations. | |
Guarantees | |
In connection with the Spin-off, we distributed certain satellite lease agreements to EchoStar and remained the guarantor under those capital leases for payments totaling approximately $63 million over approximately the next 17 months. | |
In addition, during the third quarter 2009, EchoStar entered into a new satellite transponder service agreement for Nimiq 5 through 2024. We sublease this capacity from EchoStar and also guarantee a certain portion of EchoStar’s obligation under their satellite transponder service agreement through 2019. As of September 30, 2013, the remaining obligation of our guarantee is $391 million. | |
As of September 30, 2013, we have not recorded a liability on the balance sheet for any of these guarantees. | |
Contingencies | |
Separation Agreement | |
In connection with the Spin-off, we entered into a separation agreement with EchoStar that provides, among other things, for the division of certain liabilities, including liabilities resulting from litigation. Under the terms of the separation agreement, EchoStar has assumed certain liabilities that relate to its business including certain designated liabilities for acts or omissions that occurred prior to the Spin-off. Certain specific provisions govern intellectual property related claims under which, generally, EchoStar will only be liable for its acts or omissions following the Spin-off and we will indemnify EchoStar for any liabilities or damages resulting from intellectual property claims relating to the period prior to the Spin-off as well as our acts or omissions following the Spin-off. | |
Litigation | |
We are involved in a number of legal proceedings (including those described below) concerning matters arising in connection with the conduct of our business activities. Many of these proceedings are at preliminary stages, and many of these proceedings seek an indeterminate amount of damages. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss or an additional loss may have been incurred and to determine if accruals are appropriate. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of the possible loss or range of possible loss can be made. | |
For certain cases described on the following pages, management is unable to provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons, (i) the proceedings are in various stages; (ii) damages have not been sought; (iii) damages are unsupported and/or exaggerated; (iv) there is uncertainty as to the outcome of pending appeals or motions; (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties (as with many patent-related cases). For these cases, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on our financial condition, though the outcomes could be material to our operating results for any particular period, depending, in part, upon the operating results for such period. | |
c4cast.com, Inc. | |
On May 7, 2012, c4cast.com, Inc. filed a complaint against us and our wholly-owned subsidiary, Blockbuster L.L.C., in the United States District Court for the Eastern District of Texas alleging infringement of United States Patent No. 7,958,204 (the “204 patent”), which is entitled “Community-Selected Content.” The 204 patent relates to systems, methods and techniques for providing resources to participants over an electronic network. On August 29, 2013, c4cast.com, Inc. dismissed the action with prejudice, pursuant to a settlement under which we made an immaterial payment in exchange for a license to EchoStar and us of certain patents and patent applications. | |
California Institute of Technology | |
On October 1, 2013, the California Institute of Technology (“Caltech”) filed complaints against us and our wholly-owned subsidiaries, DISH Network L.L.C. and dishNET Satellite Broadband L.L.C., as well as EchoStar subsidiaries Hughes Communications, Inc, and Hughes Network Systems, LLC, in the United States District Court for the Central District of California. The complaint alleges infringement of U.S. Patent Nos. 7,116,710 (the “710 patent”), 7,421,032 (the “032 patent”), 7,916,781 (the “781 patent”) and 8,284,833 (the “833 patent”), each of which is entitled “Serial Concatenation of Interleaved Convolutional Codes forming Turbo-Like Codes.” Caltech alleges that encoding data as specified by the DVB-S2 standard infringes each of the asserted patents. | |
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. | |
Custom Media Technologies LLC | |
On August 15, 2013, Custom Media Technologies LLC (“Custom Media Technologies”) filed complaints against us, AT&T, Inc., Charter Communications, Inc., Comcast Corp., Cox Communications, Inc., DirecTV, Time Warner Cable Inc. and Verizon Communications, Inc. in the United States District Court for the District of Delaware, alleging infringement of United States Patent No. 6,269,275. The patent, which is entitled “Method and System for Customizing and Distributing Presentations for User Sites,” relates to the provision of customized presentations to viewers over a network, such as “a cable television network, an Internet or other computer network, a broadcast television network, and/or a satellite system.” Custom Media Technologies is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. | |
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patent, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. | |
ESPN | |
During 2008, our wholly-owned subsidiary, DISH Network L.L.C., filed a lawsuit against ESPN, Inc., ESPN Classic, Inc., ABC Cable Networks Group, Soapnet L.L.C. and International Family Entertainment (collectively, “ESPN”) for breach of contract in New York State Supreme Court. Our complaint alleges that ESPN failed to provide us with certain HD feeds of the Disney Channel, ESPN News, Toon and ABC Family. In October 2011, the jury returned a verdict in favor of the defendants, which the New York State Supreme Court, Appellate Division, First Department (the “First Department”) affirmed on April 2, 2013. We sought leave to further appeal, which the New York Court of Appeals denied on August 27, 2013 on jurisdictional grounds. On September 19, 2013, we appealed the trial court’s final judgment to the First Department. The parties have submitted a stipulation to adjourn our appeal pending resolution of a motion by ESPN to strike our appeal. | |
ESPN had asserted a counterclaim alleging that we owed approximately $35 million under the applicable affiliation agreements. On April 15, 2009, the New York State Supreme Court granted, in part, ESPN’s motion for summary judgment on the counterclaim, finding that we are liable for some of the amount alleged to be owing but that the actual amount owing is disputed. On December 29, 2010, the First Department affirmed the partial grant of ESPN’s motion for summary judgment on the counterclaim. After the partial grant of ESPN’s motion for summary judgment, ESPN sought an additional $30 million under the applicable affiliation agreements. On March 15, 2010, the New York State Supreme Court ruled that we owe the full amount of approximately $66 million under the applicable affiliation agreements. As of December 31, 2010, we had $42 million recorded as a “Litigation accrual” on our Consolidated Balance Sheets. | |
On June 21, 2011, the First Department affirmed the New York State Supreme Court’s ruling that we owe approximately $66 million under the applicable affiliation agreements and, on October 18, 2011, denied our motion for leave to appeal that decision to New York’s highest court, the New York Court of Appeals. We sought leave to appeal directly to the New York Court of Appeals and, on January 10, 2012, the New York Court of Appeals dismissed our motion for leave on the ground that the ruling upon which we appealed does not fully resolve all claims in the action. As a result of the First Department’s June 2011 ruling, during 2011, we recorded $24 million of “Litigation Expense” on our Consolidated Statements of Operations and Comprehensive Income (Loss). On October 11, 2012, the New York State Supreme Court awarded ESPN $5 million in attorneys’ fees as the prevailing party on both our claim and ESPN’s counterclaim. As a result, we recorded $5 million of “General and administrative expenses” and increased our “Litigation accrual” to a total of $71 million related to this case as of December 31, 2012. During the first quarter 2013, we paid $71 million to ESPN related to the counterclaim and attorneys’ fees and $12 million for accrued interest, which amounts we may be able to recover if our further appeals are successful. We intend to vigorously prosecute and defend this case. | |
Garnet Digital, LLC | |
On September 9, 2013, Garnet Digital, LLC (“Garnet Digital”) filed a complaint against us and our wholly-owned subsidiary, DISH Network L.L.C., in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent No. 5,379,421 (the “421 patent”), which is entitled “Interactive Terminal for the Access of Remote Database Information.” The 421 patent relates to methods for accessing information from a remote computerized database and related devices. On the same day, Garnet Digital filed similar complaints in the same court against 15 other defendants, including AT&T, Inc., Comcast Corp., DirecTV, TiVo, Inc., and Verizon Communications, Inc. Garnet Digital is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. | |
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patent, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. | |
Harbinger Capital Partners LLC (LightSquared Bankruptcy) | |
On August 6, 2013, Harbinger filed an adversary proceeding against us, LBAC, EchoStar, Charles W. Ergen (our Chairman), other affiliates of Mr. Ergen, and certain other parties, in the LightSquared bankruptcy cases pending in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), which cases are jointly administered under the caption In re LightSquared Inc., et. al., Case No. 12 12080 (SCC). Harbinger has alleged, among other things, claims based on fraud, unfair competition, civil conspiracy and tortious interference with prospective economic advantage related to certain purchases of LightSquared secured debt by SP Special Opportunities, LLC (“SPSO”), an entity controlled by Mr. Ergen. Subsequently, LightSquared intervened to join in certain claims alleged against certain defendants other than us, LBAC and EchoStar. Harbinger has alleged damages in excess of $4 billion. | |
On October 29, 2013, the Bankruptcy Court dismissed all of the claims in Harbinger’s adversary proceeding in their entirety. The Bankruptcy Court Judge granted leave for LightSquared to file an amended pleading solely related to certain contract and other related claims under the credit agreement pursuant to which SPSO made certain purchases of LightSquared secured debt and dismissed all other claims alleged by LightSquared in the adversary proceeding. | |
We intend to vigorously defend this proceeding and cannot predict with any degree of certainty the outcome of this proceeding or determine the extent of any potential liability or damages. | |
The Hopper Litigation | |
On May 24, 2012, our wholly-owned subsidiary, DISH Network L.L.C., filed a lawsuit in the United States District Court for the Southern District of New York against American Broadcasting Companies, Inc., CBS Corporation, Fox Entertainment Group, Inc., Fox Television Holdings, Inc., Fox Cable Network Services, L.L.C. and NBCUniversal, LLC. In the lawsuit, we are seeking a declaratory judgment that we are not infringing any defendant’s copyright, or breaching any defendant’s retransmission consent agreement, by virtue of the PrimeTime Anytime™ and AutoHop™ features of our Hopper® set-top box. A consumer can use the PrimeTime Anytime feature, at his or her option, to record certain primetime programs airing on ABC, CBS, Fox, and/or NBC up to every night, and to store those recordings for up to eight days. A consumer can use the AutoHop feature, at his or her option, to watch certain recordings the subscriber made with our PrimeTime Anytime feature, commercial-free, if played back the next day after the show’s original airing. | |
Later on May 24, 2012, (i) Fox Broadcasting Company, Twentieth Century Fox Film Corp. and Fox Television Holdings, Inc. filed a lawsuit against us and DISH Network L.L.C. in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature, the AutoHop feature, as well as Sling placeshifting functionality infringe their copyrights and breach their retransmission consent agreements, (ii) NBC Studios LLC, Universal Network Television, LLC, Open 4 Business Productions LLC and NBCUniversal LLC filed a lawsuit against us and DISH Network L.L.C. in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature and the AutoHop feature infringe their copyrights, and (iii) CBS Broadcasting Inc., CBS Studios Inc. and Survivor Productions LLC filed a lawsuit against us and DISH Network L.L.C. in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature and the AutoHop feature infringe their copyrights. The Central District of California matters have been assigned to a single judge, but remain separate cases. | |
As a result of certain parties’ competing venue-related motions brought in both the New York and California actions, and certain networks’ filing various counterclaims and amended complaints, the claims are presently pending in the following venues: (1) the copyright and contract claims regarding the ABC and CBS parties are pending in New York; and (2) the copyright and contract claims regarding the Fox and NBC parties are pending in California. The NBC plaintiffs and Fox plaintiffs have filed amended complaints in their respective California actions adding copyright claims against EchoStar and EchoStar Technologies L.L.C. (“EchoStar Technologies”), a wholly-owned subsidiary of EchoStar. In addition, the Fox plaintiffs’ amended complaint added claims challenging the Hopper Transfers™ feature of our second-generation Hopper set-top box. Additionally, both the ABC and CBS parties have filed counterclaims in the New York action adding copyright claims against EchoStar Technologies, and the CBS parties have filed a counterclaim alleging that we fraudulently concealed the AutoHop feature when negotiating renewal of our CBS retransmission consent agreement. | |
On November 7, 2012, the California court denied the Fox plaintiffs’ motion for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime Anytime and AutoHop features. The Fox plaintiffs appealed and, on July 24, 2013, the United States Court of Appeals for the Ninth Circuit affirmed the denial of the Fox plaintiffs’ motion for a preliminary injunction as to the PrimeTime Anytime and AutoHop features. On August 7, 2013, the Fox plaintiffs filed a petition for rehearing and rehearing en banc. On March 27, 2013, at the request of the parties, the Central District of California granted a stay of all proceedings in the action brought by the NBC plaintiffs, pending resolution of the appeal by the Fox plaintiffs. | |
On November 23, 2012, the ABC plaintiffs filed a motion in the New York action for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime Anytime and AutoHop features, and, on September 18, 2013, the New York court denied that motion. The ABC plaintiffs have filed a notice of appeal. On February 21, 2013, the Fox plaintiffs filed a second motion for preliminary injunction against: (i) us seeking to enjoin the Hopper Transfers feature in our second-generation Hopper set-top box, alleging breach of their retransmission consent agreement; and (ii) us and EchoStar Technologies seeking to enjoin the Sling placeshifting functionality in our second-generation Hopper set-top box, alleging copyright infringement and breach of their retransmission consent agreement. On September 23, 2013, the California court denied the Fox plaintiffs’ motion and on October 22, 2013, the Fox plaintiffs filed a notice of appeal. | |
We intend to vigorously prosecute and defend our position in these cases. In the event that a court ultimately determines that we infringe the asserted copyrights, or are in breach of any of the retransmission consent agreements, we may be subject to substantial damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. In addition, as a result of this litigation, we may not be able to renew certain of our retransmission consent agreements and other programming agreements on favorable terms or at all. If we are unable to renew these agreements, there can be no assurance that we would be able to obtain substitute programming, or that such substitute programming would be comparable in quality or cost to our existing programming. Loss of access to existing programming could have a material adverse effect on our business, financial condition and results of operations, including, among other things, our gross new subscriber activations and subscriber churn rate. We cannot predict with any degree of certainty the outcome of these suits or determine the extent of any potential liability or damages. | |
LightSquared Transaction Shareholder Derivative Actions | |
On August 9, 2013, an alleged shareholder of the Company, Jacksonville Police and Fire Pension Fund (“Jacksonville PFPF”), filed a putative shareholder derivative action in the District Court for Clark County, Nevada alleging, among other things, breach of fiduciary duty claims against the members of the Company’s Board of Directors as of that date: Charles W. Ergen; Joseph P. Clayton; James DeFranco; Cantey M. Ergen; Steven R. Goodbarn; David K. Moskowitz; Tom A. Ortolf; and Carl E. Vogel (collectively, the “Director Defendants”). In its operative amended complaint, Jacksonville PFPF claims that Mr. Ergen breached his fiduciary duty to the Company as a result of certain purchases of LightSquared debt by SPSO, an entity controlled by Mr. Ergen, and that the other Director Defendants aided and abetted that alleged breach of duty. Jacksonville PFPF claims that the debt purchases created a conflict of interest and allegedly put at risk the Company’s bid to acquire LightSquared’s spectrum assets at the auction that will occur in connection with the LightSquared bankruptcy proceeding. Jacksonville PFPF further claims that most members of the Company’s Board of Directors are not sufficiently independent from Mr. Ergen to guide the Company through the LightSquared auction process. Jacksonville PFPF is seeking an unspecified amount of damages and a preliminary injunction that would enjoin Mr. Ergen and all of the Director Defendants other than Mr. Goodbarn from influencing the Company’s ongoing efforts to acquire assets of LightSquared in the bankruptcy proceeding. The Court has set a hearing on the preliminary injunction motion for November 25, 2013. Jacksonville PFPF dismissed its claims against Mr. Goodbarn on October 8, 2013. | |
Five alleged shareholders have filed duplicative putative derivative complaints in state and federal courts alleging the same claims. On September 18, 2013, DCM Multi-Manager Fund, LLC filed a duplicative putative derivative complaint in the District Court for Clark County, Nevada, which was consolidated with the Jacksonville PFPF action on October 9, 2013. Between September 25, 2013 and October 2, 2013, City of Daytona Beach Police Officers and Firefighters Retirement System, Louisiana Municipal Police Employees’ Retirement System and Iron Worker Mid-South Pension Fund filed duplicative putative derivative complaints in the United States District Court for the District of Colorado. Also on October 2, 2013, Iron Workers District Council (Philadelphia and Vicinity) Retirement and Pension Plan filed its complaint in the United States District Court for the District of Nevada. None of the plaintiffs in these actions is seeking a preliminary injunction. On October 11, 2013, Iron Worker Mid-South Pension Fund dismissed its claims without prejudice. On October 30, 2013, Louisiana Municipal Police Employees’ Retirement System dismissed its claims without prejudice. | |
The Company has established a Special Litigation Committee to review the factual allegations and legal claims in these actions. We cannot predict with any degree of certainty the outcome of these suits or determine the extent of any potential liability or damages. | |
Norman IP Holdings, LLC | |
On September 15, 2011, Norman IP Holdings, LLC (“Norman”) filed a patent infringement complaint (the “2011 Action”) against Lexmark International Corporation (“Lexmark”) and Brother International Corporation (“Brother”) in the United States District Court for the Eastern District of Texas alleging infringement of U.S. Patent No. 5,592,555 (the “555 patent”), U.S. Patent No. 5,530,597 (the “597 patent”) and U.S. Patent No. 5,502,689 (the “689 patent”) by Lexmark, and infringement of the 555 patent and the 689 patent by Brother. On January 27, 2012, Norman filed a second amended complaint in the 2011 Action that added us as a defendant, among others, in which it asserted the 555 patent and the 689 patent against us. On September 21, 2012, Norman served us with preliminary infringement contentions related to the 555 patent and the 689 patent, as well as the 597 patent, which outlined Norman’s claims with respect to certain DISH products. On February 8, 2013, Norman filed a third amended complaint in the 2011 Action, in which it added claims against us alleging infringement of the 597 patent. On April 8, 2013, Norman filed a fourth amended complaint in the 2011 Action, in which it added new claims against us alleging infringement of additional DISH products. On May 1, 2013, Norman filed a fifth amended complaint in the 2011 Action, in which it named Mercedes-Benz USA, LLC, Volkswagen Group of America, Inc., Xerox Corporation, ZTE (USA) Inc., and ZTE Solutions, Inc. as defendants, in addition to us. On July 9, 2013, the Court ordered Norman to file a new sixth amended complaint limiting Norman’s claims against us to those specifically referenced in its September 21, 2012 preliminary infringement contentions. As a result, on July 10, 2013, Norman filed a sixth amended complaint in the 2011 Action, in which it asserted claims against our wholly-owned subsidiary, DISH Network L.L.C., replacing us as defendant, alleging that the use of certain Broadcom chipsets in DISH DVR systems infringes the 689 patent. In addition, Norman withdrew all infringement claims against us regarding the 555 patent and the 597 patent. On July 12, 2013, we filed a motion to dismiss the 2011 Action, because Norman failed to comply with the Court’s July 9, 2013 order. | |
In addition, on May 10, 2013, Norman filed a separate patent infringement complaint (the “2013 Action”) against us in the United States District Court for the Eastern District of Texas, asserting infringement of the 555, 597 and 689 patents, as well as U.S. Patent No. 5,608,873 (the “873 patent”) and U.S. Patent Number 5,771,394 (the “394 patent”). The infringement claims asserted in the 2013 Action relate to different DISH products than Norman identified in the 2011 Action. On June 26, 2013, we filed a motion to dismiss the 2013 Action, because Norman failed to join necessary parties. Our motion to dismiss is pending, and no trial date has been set for the 2013 Action. | |
On October 18, 2013, the parties stipulated that Norman will dismiss all of its claims against DISH Network L.L.C. in the 2011 Action, and re-assert them in the 2013 Action. | |
The 689 patent relates to a clock generator capable of shut-down mode and clock generation method, the 555 patent relates to a wireless communications privacy method and system, the 597 patent relates to an interrupt enable circuit that allows devices to exit processes without using a hardware reset, the 873 patent relates to a device and method for providing inter-processor communication in a multi-processor architecture, and the 394 patent relates to a servo loop control apparatus having a master microprocessor and at least one autonomous streamlined signal processor. Norman is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. | |
We intend to vigorously defend these cases. In the event that a court ultimately determines that we infringe any of the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could cause us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of these suits or determine the extent of any potential liability or damages. | |
Olympic Developments AG, LLC | |
On January 20, 2011, Olympic Developments AG, LLC (“Olympic”) filed suit against our wholly-owned subsidiary, DISH Network L.L.C., Atlantic Broadband, Inc., Bright House Networks, LLC, Cable One, Inc., Cequel Communications Holdings I, LLC, CSC Holdings, LLC, GCI Communication Corp., Insight Communications Company, Inc., Knology, Inc., Mediacom Communications Corporation and RCN Telecom Services, LLC in the United States District Court for the Central District of California alleging infringement of United States Patent Nos. 5,475,585 and 6,246,400. The patents relate to on-demand services. Olympic is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. On June 13, 2011, the case was transferred to the Northern District of California. On November 7, 2011, the case was stayed pending reexamination by the U.S. Patent and Trademark Office. On March 12, 2013, Olympic voluntarily dismissed its claims against us without prejudice. | |
Personalized Media Communications, Inc. | |
During 2008, Personalized Media Communications, Inc. (“PMC”) filed suit against us, EchoStar and Motorola Inc. in the United States District Court for the Eastern District of Texas alleging infringement of United States Patent Nos. 5,109,414, 4,965,825, 5,233,654, 5,335,277, and 5,887,243, which relate to satellite signal processing. PMC is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. Subsequently, Motorola Inc. settled with PMC, leaving EchoStar and us as defendants. On July 18, 2012, pursuant to a Court order, PMC filed a Second Amended Complaint that added Rovi Guides, Inc. (f/k/a/ Gemstar-TV Guide International, Inc.) and TVG-PMC, Inc. (collectively, “Gemstar”) as a party, and added a new claim against all defendants seeking a declaratory judgment as to the scope of Gemstar’s license to the patents in suit, under which we and EchoStar are sublicensees. A new trial date has not yet been set. | |
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe any of the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could cause us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. | |
Pragmatus Telecom, LLC | |
On December 5, 2012, Pragmatus Telecom, LLC (“Pragmatus”) filed a patent infringement lawsuit against us in the United States District Court for the District of Delaware alleging infringement of United States Patent Nos. 6,311,231, 6,668,286, and 7,159,043. Pragmatus alleges that the click-to-chat and click-to-call customer support features of the DISH website and call center management systems infringe these patents. Pragmatus has brought similar complaints against more than 40 other companies, including Comcast, AT&T, Sprint, Frontier Communications, Bright House, UPS, FedEx, GM and Ford. Pragmatus is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. On March 5, 2013, Pragmatus voluntarily dismissed with prejudice all claims in the action relating to allegedly infringing features provided by certain of our vendors. Pragmatus also voluntarily dismissed without prejudice all remaining claims in the action. | |
Premier International Associates, LLC | |
On August 3, 2012, Premier International Associates, LLC (“Premier International Associates”) filed a complaint against us, our wholly-owned subsidiaries, DISH DBS and DISH Network L.L.C., and EchoStar and its wholly-owned subsidiary, EchoStar Technologies L.L.C., in the United States District Court for the Northern District of Illinois alleging infringement of United States Patent No. 6,243,725 (the “725 patent”), which is entitled “List Building System.” The 725 patent relates to a system for building an inventory of audio/visual works. Premier International Associates is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. On March 27, 2013, Premier International Associates dismissed the action against us and the EchoStar defendants with prejudice, pursuant to a settlement under which we and the EchoStar defendants made an immaterial payment in exchange for a license to certain patents and patent applications. | |
Preservation Technologies, LLC | |
In December 2011, Preservation Technologies, LLC (“Preservation Technologies”) filed suit against us in the United States District Court for the Central District of California. In the Operative Seventh Amended Complaint, filed on March 22, 2013, Preservation Technologies also names Netflix, Inc., Hulu, LLC, AT&T Services, Inc., Cox Communications, Inc., Disney Online, American Broadcasting Companies, Inc., Yahoo! Inc., Wal-Mart Stores, Inc., Vudu, Inc. and ESPN Internet Ventures as defendants. Preservation Technologies alleges that our BLOCKBUSTER On Demand, DISH branded pay-TV and DISH Online services and our Hopper and Joey® set-top boxes infringe U.S. Patent Nos. 5,813,014, 5,832,499, 6,092,080, 6,353,831, 6,574,638, 6,199,060, 5,832,495, 6,549,911, 6,212,527 and 6,477,537. The patents relate to digital libraries, the management of multimedia assets, and the cataloging of multimedia data. Preservation Technologies is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. | |
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe any of the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could cause us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. | |
Ronald A. Katz Technology Licensing, L.P. | |
During 2007, Ronald A. Katz Technology Licensing, L.P. (“Katz”) filed a patent infringement action against our wholly-owned subsidiary, DISH Network L.L.C., in the United States District Court for the Northern District of California. The suit originally alleged infringement of 19 patents owned by Katz. The patents relate to interactive voice response, or IVR, technology. The case has been transferred and consolidated for pretrial purposes in the United States District Court for the Central District of California by order of the Judicial Panel on Multidistrict Litigation. Only four patents remain in the case against us, of which all are expired and two are subject to granted reexamination proceedings before the U.S. Patent and Trademark Office. | |
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe any of the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could cause us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. | |
Technology Development and Licensing L.L.C. | |
On January 22, 2009, Technology Development and Licensing L.L.C. (“TDL”) filed suit against us and EchoStar in the United States District Court for the Northern District of Illinois alleging infringement of United States Patent No. Re. 35,952, which relates to certain favorite channel features. TDL is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. In July 2009, the Court granted our motion to stay the case pending two reexamination petitions before the U.S. Patent and Trademark Office. | |
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patent, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could cause us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. | |
TQP Development, LLC | |
On April 4, 2012, TQP Development, LLC (“TQP Development”) filed suit against our wholly-owned subsidiary, DISH Network L.L.C., in the United States District Court for the Eastern District of Texas alleging infringement of United States Patent No. 5,412,730 titled “Encrypted Data Transmission System Employing Means for Randomly Altering the Encryption Keys.” TQP Development is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. On August 9, 2013, all claims in the action were dismissed with prejudice. | |
Tse | |
On May 30, 2012, Ho Keung Tse filed a complaint against our wholly-owned subsidiary, Blockbuster L.L.C., in the United States District Court for the Eastern District of Texas alleging infringement of United States Patent No. 6,665,797, which is entitled “Protection of Software Again [sic] Against Unauthorized Use.” Mr. Tse is the named inventor on the patent. On the same day that he sued Blockbuster, Mr. Tse filed a separate action in the same court alleging infringement of the same patent against Google, Samsung and HTC. He also has earlier-filed litigation on the same patent pending in the United States District Court for the Northern District of California against Sony Connect, Inc., Napster, Inc., Apple Computer, Inc., Realnetworks, Inc., and MusicMatch, Inc. On March 8, 2013, the Court granted Blockbuster L.L.C.’s motion to transfer the matter to the United States District Court for the Northern District of California, the same venue where the matter against Google, Samsung and HTC also was transferred. On July 26, 2013, we filed a summary judgment motion. The Court held a hearing on our motion on September 6, 2013. | |
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patent, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. | |
Waste Disposal Inquiry | |
The California Attorney General and the Alameda County (California) District Attorney are investigating whether certain of our waste disposal policies, procedures and practices are in violation of the California Business and Professions Code and the California Health and Safety Code. We expect that these entities will seek injunctive and monetary relief. The investigation appears to be part of a broader effort to investigate waste handling and disposal processes of a number of industries. While we are unable to predict the outcome of this investigation, we do not believe that the outcome will have a material effect on our results of operations, financial condition or cash flows. | |
Other | |
In addition to the above actions, we are subject to various other legal proceedings and claims which arise in the ordinary course of business, including, among other things, disputes with programmers regarding fees. In our opinion, the amount of ultimate liability with respect to any of these actions is unlikely to materially affect our financial position, results of operations or liquidity, though the outcomes could be material to our operating results for any particular period, depending, in part, upon the operating results for such period. | |
Segment_Reporting
Segment Reporting | 9 Months Ended | |||||||||||||
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13. Segment Reporting | ||||||||||||||
Operating segments are components of an enterprise for which separate financial information is available and regularly evaluated by the chief operating decision maker(s) of an enterprise. Operating income is the primary measure used by our chief operating decision maker to evaluate segment operating performance. We operate three primary business segments. | ||||||||||||||
· DISH. The DISH branded DBS pay-TV service had 14.049 million subscribers in the United States as of September 30, 2013. The DISH branded pay-TV service consists of FCC licenses authorizing us to use DBS and FSS spectrum, our owned and leased satellites, receiver systems, third party broadcast operations, customer service facilities, a leased fiber network, in-home service and call center operations, and certain other assets utilized in our operations. In addition, we market broadband services under the dishNET brand. | ||||||||||||||
· Blockbuster. On April 26, 2011, we completed the Blockbuster Acquisition. Blockbuster primarily offers movies and video games for sale and rental through multiple distribution channels such as retail stores, by-mail, digital devices, the blockbuster.com website and the BLOCKBUSTER On Demand service. On November 6, 2013, we announced that Blockbuster expects to close all of its remaining company-owned domestic retail stores and discontinue the Blockbuster by-mail service by early January 2014. See Note 9 for further information. | ||||||||||||||
· Wireless. In 2008, we paid $712 million to acquire certain 700 MHz wireless spectrum licenses, which were granted to us by the FCC in February 2009 subject to certain interim and final build-out requirements. On March 9, 2012, we completed the DBSD Transaction and the TerreStar Transaction, pursuant to which we acquired, among other things, 40 MHz of AWS-4 wireless spectrum licenses held by DBSD North America and TerreStar. The financial results of DBSD North America and TerreStar are included in our financial results beginning March 9, 2012. The total consideration to acquire the DBSD North America and TerreStar assets was approximately $2.860 billion. On February 15, 2013, the FCC issued an order, which became effective on March 7, 2013, modifying our AWS-4 licenses to expand our terrestrial operating authority. The FCC’s order of modification has imposed certain limitations on the use of a portion of the spectrum and also mandated certain interim and final build-out requirements for the licenses. See Note 12 for further information. | ||||||||||||||
We currently generate an immaterial amount of revenue and incur expenses associated with certain satellite operations and regulatory compliance matters from our wireless spectrum assets. As we review our options for the commercialization of this wireless spectrum, we may incur significant additional expenses and may have to make significant investments related to, among other things, research and development, wireless testing and wireless network infrastructure. | ||||||||||||||
The total assets, revenue and operating income by segment were as follows: | ||||||||||||||
As of | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
Total assets: (1) | ||||||||||||||
DISH | $ | 19,677,640 | $ | 16,144,977 | ||||||||||
Blockbuster (2) | 227,126 | 357,267 | ||||||||||||
Wireless | 4,889,632 | 5,066,616 | ||||||||||||
Eliminations | (4,449,158 | ) | (4,189,252 | ) | ||||||||||
Total assets | $ | 20,345,240 | $ | 17,379,608 | ||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Revenue: | ||||||||||||||
DISH | $ | 3,507,473 | $ | 3,298,869 | $ | 10,375,785 | $ | 9,875,890 | ||||||
Blockbuster (3) | 96,665 | 230,885 | 397,597 | 818,188 | ||||||||||
Wireless (4) | 395 | 305 | 1,607 | 634 | ||||||||||
Eliminations | (2,956 | ) | (6,712 | ) | (12,055 | ) | (17,730 | ) | ||||||
Total revenue | $ | 3,601,577 | $ | 3,523,347 | $ | 10,762,934 | $ | 10,676,982 | ||||||
Operating income (loss): | ||||||||||||||
DISH | $ | 442,368 | $ | (241,674 | ) | $ | 1,462,716 | $ | 824,244 | |||||
Blockbuster (5) | (23,498 | ) | (11,919 | ) | (27,909 | ) | (11,295 | ) | ||||||
Wireless (4)(6) | (21,449 | ) | (19,436 | ) | (564,460 | ) | (45,215 | ) | ||||||
Total operating income (loss) | $ | 397,421 | $ | (273,029 | ) | $ | 870,347 | $ | 767,734 | |||||
(1) Certain prior period assets have been reclassified to conform to the current period presentation consistent with the separate financial information regularly evaluated by our chief operating decision maker(s). | ||||||||||||||
(2) The decrease in assets from December 31, 2012 to September 30, 2013 primarily related to the deconsolidation of Blockbuster UK on January 16, 2013, Blockbuster domestic store closings during the nine months ended September 30, 2013, and the write down of Blockbuster Mexico assets during the third quarter 2013. See Note 9 for further information. | ||||||||||||||
(3) The decrease in revenue for the three and nine months ended September 30, 2013 primarily related to the deconsolidation of Blockbuster UK on January 16, 2013 and Blockbuster domestic store closings during 2013 and 2012. See Note 9 for further information. | ||||||||||||||
(4) The three and nine months ended September 30, 2012 included Wireless results from the acquisitions of DBSD North America and TerreStar on March 9, 2012. | ||||||||||||||
(5) The decrease in operating income for the three and nine months ended September 30, 2013 primarily related to the write down of Blockbuster Mexico assets during the third quarter 2013. See Note 9 for further information. | ||||||||||||||
(6) The nine months ended September 30, 2013 included a $438 million impairment charge for the T2 and D1 satellites, $53 million of additional depreciation expense related to the accelerated depreciable lives of certain assets designed to support the TerreStar MSS business and $18 million of legal and financial advisory fees related to our proposed merger with Sprint. See Note 7 for further information. | ||||||||||||||
Geographic Information. Revenues are attributed to geographic regions based upon the location where the products are delivered and services are provided. The following table summarizes revenue attributed to the United States and foreign locations. | ||||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Revenue: | ||||||||||||||
United States | $ | 3,562,670 | $ | 3,406,088 | $ | 10,615,673 | $ | 10,316,080 | ||||||
United Kingdom (1) | — | 66,744 | 10,883 | 206,978 | ||||||||||
Mexico (2) | 38,129 | 37,507 | 117,715 | 114,196 | ||||||||||
Other | 778 | 13,008 | 18,663 | 39,728 | ||||||||||
Total revenue | $ | 3,601,577 | $ | 3,523,347 | $ | 10,762,934 | $ | 10,676,982 | ||||||
(1) The decrease for the three and nine months ended September 30, 2013 related to the deconsolidation of Blockbuster UK on January 16, 2013. See Note 9 for further information. | ||||||||||||||
(2) This revenue is related solely to our Blockbuster Mexico operations. | ||||||||||||||
Related_Party_Transactions
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14. Related Party Transactions | ||||||||||||||
Related Party Transactions with EchoStar | ||||||||||||||
Following the Spin-off, EchoStar has operated as a separate public company, and we have no continued ownership interest in EchoStar. However, a substantial majority of the voting power of the shares of both companies is owned beneficially by Charles W. Ergen, our Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family. | ||||||||||||||
EchoStar is our primary supplier of set-top boxes and digital broadcast operations and a key supplier of transponder capacity. Generally, the amounts we pay EchoStar for products and services are based on pricing equal to EchoStar’s cost plus a fixed margin (unless noted differently below), which will vary depending on the nature of the products and services provided. | ||||||||||||||
In connection with and following the Spin-off, we and EchoStar have entered into certain agreements pursuant to which we obtain certain products, services and rights from EchoStar, EchoStar obtains certain products, services and rights from us, and we and EchoStar have indemnified each other against certain liabilities arising from our respective businesses. We also may enter into additional agreements with EchoStar in the future. The following is a summary of the terms of our principal agreements with EchoStar that may have an impact on our financial position and results of operations. | ||||||||||||||
“Equipment sales, services and other revenue — EchoStar” | ||||||||||||||
Remanufactured Receiver Agreement. We entered into a remanufactured receiver agreement with EchoStar pursuant to which EchoStar has the right, but not the obligation, to purchase remanufactured receivers and accessories from us at cost plus a fixed margin, which varies depending on the nature of the equipment purchased. In November 2013, we and EchoStar extended this agreement until December 31, 2014. EchoStar may terminate the remanufactured receiver agreement for any reason upon at least 60 days notice to us. We may also terminate this agreement if certain entities acquire us. | ||||||||||||||
Professional Services Agreement. Prior to 2010, in connection with the Spin-off, we entered into various agreements with EchoStar including the Transition Services Agreement, Satellite Procurement Agreement and Services Agreement, which all expired on January 1, 2010 and were replaced by a Professional Services Agreement. During 2009, we and EchoStar agreed that EchoStar shall continue to have the right, but not the obligation, to receive the following services from us, among others, certain of which were previously provided under the Transition Services Agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, we and EchoStar agreed that we shall continue to have the right, but not the obligation, to engage EchoStar to manage the process of procuring new satellite capacity for us (previously provided under the Satellite Procurement Agreement) and receive logistics, procurement and quality assurance services from EchoStar (previously provided under the Services Agreement) and other support services. The Professional Services Agreement automatically renewed on January 1, 2013 for an additional one-year period until January 1, 2014 and renews automatically for successive one-year periods thereafter, unless terminated earlier by either party upon at least 60 days notice. However, either party may terminate the Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days notice. | ||||||||||||||
Management Services Agreement. In connection with the Spin-off, we entered into a Management Services Agreement with EchoStar pursuant to which we have made certain of our officers available to provide services (which were primarily legal and accounting services) to EchoStar. Specifically, Paul W. Orban remains employed by us, but also served as EchoStar’s Senior Vice President and Controller through April 2012. The Management Services Agreement automatically renewed on January 1, 2013 for an additional one-year period until January 1, 2014. Effective June 15, 2013, the Management Services Agreement was terminated by EchoStar. EchoStar made payments to us based upon an allocable portion of the personnel costs and expenses incurred by us with respect to any such officers (taking into account wages and fringe benefits). These allocations were based upon the estimated percentages of time spent by our executive officers performing services for EchoStar under the Management Services Agreement. EchoStar also reimbursed us for direct out-of-pocket costs incurred by us for management services provided to EchoStar. We and EchoStar evaluated all charges for reasonableness at least annually and made any adjustments to these charges as we and EchoStar mutually agreed upon. | ||||||||||||||
Satellite Capacity Leased to EchoStar. Since the Spin-off, we have entered into certain satellite capacity agreements pursuant to which EchoStar leases certain satellite capacity on certain satellites owned by us. The fees for the services provided under these satellite capacity agreements depend, among other things, upon the orbital location of the applicable satellite and the length of the lease. The term of each lease is set forth below: | ||||||||||||||
EchoStar I. During 2009, we entered into a satellite capacity agreement pursuant to which EchoStar leases certain satellite capacity from us on EchoStar I. We and EchoStar mutually agreed to terminate this satellite capacity agreement effective as of July 1, 2012. | ||||||||||||||
D1. Effective November 1, 2012, we entered into a satellite capacity agreement pursuant to which Hughes Network Systems, LLC (“HNS”), a wholly-owned subsidiary of Hughes Communications, Inc. (“Hughes”), leases certain satellite capacity from us on D1 for research and development. This lease generally terminates upon the earlier of: (i) the end-of-life of the satellite; (ii) the date the satellite fails; (iii) the date the spectrum capacity on which service is being provided under the agreement fails; or (iv) December 31, 2013. | ||||||||||||||
EchoStar XV. During May 2013, we began leasing satellite capacity to EchoStar on EchoStar XV and relocated the satellite for testing at EchoStar’s Brazilian authorization at the 45 degree orbital location. Subject to certain conditions, (i) this lease terminates on February 1, 2014, (ii) EchoStar has certain rights to extend the service term of this lease for three years, and (iii) we have the right to terminate this lease prior to the date of expiration and have the satellite relocated from the 45 degree orbital location. | ||||||||||||||
Real Estate Lease Agreements. Since the Spin-off, we have entered into lease agreements pursuant to which we lease certain real estate to EchoStar. The rent on a per square foot basis for each of the leases is comparable to per square foot rental rates of similar commercial property in the same geographic areas, and EchoStar is responsible for its portion of the taxes, insurance, utilities and maintenance of the premises. The term of each lease is set forth below: | ||||||||||||||
Varick Sublease Agreement. During 2008, we subleased certain space at 185 Varick Street, New York, New York to EchoStar for a period of approximately seven years. | ||||||||||||||
El Paso Lease Agreement. During 2012, we leased certain space at 1285 Joe Battle Blvd. El Paso, Texas to EchoStar for a period ending on August 1, 2015, which also provides EchoStar with renewal options for four consecutive three-year terms. | ||||||||||||||
American Fork Occupancy License Agreement. During 2013, we subleased certain space at 796 East Utah Valley Drive, American Fork, Utah to EchoStar for a period ending on July 31, 2017. | ||||||||||||||
“Satellite and transmission expenses — EchoStar” | ||||||||||||||
Broadcast Agreement. Effective January 1, 2012, we and EchoStar entered into a broadcast agreement (the “2012 Broadcast Agreement”) pursuant to which EchoStar provides broadcast services to us, including teleport services such as transmission and downlinking, channel origination services, and channel management services, for the period from January 1, 2012 to December 31, 2016. The fees for services provided under the 2012 Broadcast Agreement are calculated at either: (a) EchoStar’s cost of providing the relevant service plus a fixed dollar fee, which is subject to certain adjustments; or (b) EchoStar’s cost of providing the relevant service plus a fixed margin, which will depend on the nature of the services provided. We have the ability to terminate channel origination services and channel management services for any reason and without any liability upon at least 60 days notice to EchoStar. If we terminate the teleport services provided under the 2012 Broadcast Agreement for a reason other than EchoStar’s breach, we are generally obligated to reimburse EchoStar for any direct costs EchoStar incurs related to any such termination that it cannot reasonably mitigate. | ||||||||||||||
Broadcast Agreement for Certain Sports Related Programming. During May 2010, we and EchoStar entered into a broadcast agreement pursuant to which EchoStar provides certain broadcast services to us in connection with our carriage of certain sports related programming. The term of this agreement is for ten years. If we terminate this agreement for a reason other than EchoStar’s breach, we are generally obligated to reimburse EchoStar for any direct costs EchoStar incurs related to any such termination that it cannot reasonably mitigate. The fees for the broadcast services provided under this agreement depend, among other things, upon the cost to develop and provide such services. | ||||||||||||||
Satellite Capacity Leased from EchoStar. Since the Spin-off, we have entered into certain satellite capacity agreements pursuant to which we lease certain satellite capacity on certain satellites owned or leased by EchoStar. The fees for the services provided under these satellite capacity agreements depend, among other things, upon the orbital location of the applicable satellite and the length of the lease. The term of each lease is set forth below: | ||||||||||||||
EchoStar VI, VIII and XII. The leases for EchoStar VI, VIII and XII generally terminate upon the earlier of: (i) the end of life or replacement of the satellite (unless we determine to renew on a year-to-year basis); (ii) the date the satellite fails; (iii) the date the transponders on which service is being provided fails; or (iv) a certain date, which depends upon, among other things, the estimated useful life of the satellite, whether the replacement satellite fails at launch or in orbit prior to being placed into service and the exercise of certain renewal options. We generally have the option to renew each lease on a year-to-year basis through the end of the respective satellite’s life. There can be no assurance that any options to renew such agreements will be exercised. Beginning in the first quarter 2013, the leases for the EchoStar VI and VIII satellites expired in accordance with their terms and we no longer leased capacity from EchoStar on EchoStar VI and VIII. During May 2013, we began leasing capacity from EchoStar on EchoStar VIII as an in-orbit spare. Subject to certain conditions, this lease terminates on February 1, 2014. | ||||||||||||||
EchoStar IX. We lease certain satellite capacity from EchoStar on EchoStar IX. Subject to availability, we generally have the right to continue to lease satellite capacity from EchoStar on EchoStar IX on a month-to-month basis. | ||||||||||||||
EchoStar XVI. During December 2009, we entered into a transponder service agreement with EchoStar to lease all of the capacity on EchoStar XVI, a DBS satellite, after its service commencement date. EchoStar XVI was launched during November 2012 to replace EchoStar XV at the 61.5 degree orbital location and is currently in service. Under the original transponder service agreement, the initial term generally expired upon the earlier of: (i) the end-of-life or replacement of the satellite; (ii) the date the satellite failed; (iii) the date the transponder(s) on which service was being provided under the agreement failed; or (iv) ten years following the actual service commencement date. Prior to expiration of the initial term, we also had the option to renew on a year-to-year basis through the end-of-life of the satellite. Effective December 21, 2012, we and EchoStar amended the transponder service agreement to, among other things, change the initial term to generally expire upon the earlier of: (i) the end-of-life or replacement of the satellite; (ii) the date the satellite fails; (iii) the date the transponder(s) on which service is being provided under the agreement fails; or (iv) four years following the actual service commencement date. Prior to expiration of the initial term, we have the option to renew for an additional six-year period. Prior to expiration of the initial term, EchoStar also has the right, upon certain conditions, to renew for an additional six-year period. If either we or EchoStar exercise our respective six-year renewal options, then we have the option to renew for an additional five-year period prior to expiration of the then-current term. There can be no assurance that any options to renew this agreement will be exercised. | ||||||||||||||
Nimiq 5 Agreement. During 2009, EchoStar entered into a fifteen-year satellite service agreement with Telesat Canada (“Telesat”) to receive service on all 32 DBS transponders on the Nimiq 5 satellite at the 72.7 degree orbital location (the “Telesat Transponder Agreement”). During 2009, EchoStar also entered into a satellite service agreement (the “DISH Nimiq 5 Agreement”) with us, pursuant to which we currently receive service from EchoStar on all 32 of the DBS transponders covered by the Telesat Transponder Agreement. We have also guaranteed certain obligations of EchoStar under the Telesat Transponder Agreement. See discussion under “Guarantees” in Note 12. | ||||||||||||||
Under the terms of the DISH Nimiq 5 Agreement, we make certain monthly payments to EchoStar that commenced in September 2009 when the Nimiq 5 satellite was placed into service and continue through the service term. Unless earlier terminated under the terms and conditions of the DISH Nimiq 5 Agreement, the service term will expire ten years following the date it was placed into service. Upon expiration of the initial term we have the option to renew the DISH Nimiq 5 Agreement on a year-to-year basis through the end of life of the Nimiq 5 satellite. Upon in-orbit failure or end of life of the Nimiq 5 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that any options to renew the DISH Nimiq 5 Agreement will be exercised or that we will exercise our option to receive service on a replacement satellite. | ||||||||||||||
QuetzSat-1 Lease Agreement. During 2008, EchoStar entered into a ten-year satellite service agreement with SES Latin America S.A. (“SES”), which provides, among other things, for the provision by SES to EchoStar of service on 32 DBS transponders on the QuetzSat-1 satellite. During 2008, EchoStar also entered into a transponder service agreement (“QuetzSat-1 Transponder Agreement”) with us pursuant to which we receive service from EchoStar on 24 of the DBS transponders. QuetzSat-1 was launched on September 29, 2011 and was placed into service during the fourth quarter 2011 at the 67.1 degree orbital location while we and EchoStar explored alternative uses for the QuetzSat-1 satellite. In the interim, EchoStar provided us with alternate capacity at the 77 degree orbital location. During the third quarter 2012, we and EchoStar entered into an agreement pursuant to which we sublease back to EchoStar five of the 24 DBS transponders on the QuetzSat-1 satellite. Rental income generated from this sublease is recorded as revenue within “Equipment sales, services and other revenue — EchoStar” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During January 2013, QuetzSat-1 was moved to the 77 degree orbital location and we commenced commercial operations at that location in February 2013. | ||||||||||||||
Unless earlier terminated under the terms and conditions of the QuetzSat-1 Transponder Agreement, the initial service term will expire in November 2021. Upon expiration of the initial term, we have the option to renew the QuetzSat-1 Transponder Agreement on a year-to-year basis through the end of life of the QuetzSat-1 satellite. Upon an in-orbit failure or end of life of the QuetzSat-1 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that any options to renew the QuetzSat-1 Transponder Agreement will be exercised or that we will exercise our option to receive service on a replacement satellite. | ||||||||||||||
103 Degree Orbital Location/SES-3. During May 2012, EchoStar entered into a spectrum development agreement (the “103 Spectrum Development Agreement”) with Ciel Satellite Holdings Inc. (“Ciel”) to develop certain spectrum rights at the 103 degree orbital location (the “103 Spectrum Rights”). During June 2013, we and EchoStar entered into a spectrum development agreement (the “DISH 103 Spectrum Development Agreement”) pursuant to which we may use and develop the 103 Spectrum Rights. During the third quarter 2013, we made a $23 million payment to EchoStar in exchange for these rights. In accordance with accounting principles that apply to transfers of assets between companies under common control, we recorded EchoStar’s net book value of this asset of $20 million in “Other noncurrent assets, net” on our Condensed Consolidated Balance Sheets and recorded the amount in excess of EchoStar’s net book value of $3 million as a capital distribution. Unless earlier terminated under the terms and conditions of the DISH 103 Spectrum Development Agreement, the term generally will continue for the duration of the 103 Spectrum Rights. | ||||||||||||||
In connection with the 103 Spectrum Development Agreement, during May 2012, EchoStar also entered into a ten-year service agreement with Ciel pursuant to which EchoStar leases certain satellite capacity from Ciel on the SES-3 satellite at the 103 degree orbital location (the “103 Service Agreement”). During June 2013, we and EchoStar entered into an agreement pursuant to which we lease certain satellite capacity from EchoStar on the SES-3 satellite (the “DISH 103 Service Agreement”). Under the terms of the DISH 103 Service Agreement, we make certain monthly payments to EchoStar through the service term. Unless earlier terminated under the terms and conditions of the DISH 103 Service Agreement, the initial service term will expire on the earlier of: (i) the date the SES-3 satellite fails; (ii) the date the transponder(s) on which service was being provided under the agreement fails; or (iii) ten years following the actual service commencement date. Upon in-orbit failure or end of life of the SES-3 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that we will exercise our option to receive service on a replacement satellite. | ||||||||||||||
TT&C Agreement. Effective January 1, 2012, we entered into a telemetry, tracking and control (“TT&C”) agreement pursuant to which we receive TT&C services from EchoStar for a period ending on December 31, 2016 (the “2012 TT&C Agreement”). The fees for services provided under the 2012 TT&C Agreement are calculated at either: (i) a fixed fee; or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. We are able to terminate the 2012 TT&C Agreement for any reason upon 60 days notice. | ||||||||||||||
DBSD North America Agreement. On March 9, 2012, we completed the DBSD Transaction. During the second quarter 2011, EchoStar acquired Hughes. Prior to our acquisition of DBSD North America and EchoStar’s acquisition of Hughes, DBSD North America and HNS entered into an agreement pursuant to which HNS provides, among other things, hosting, operations and maintenance services for DBSD North America’s satellite gateway and associated ground infrastructure. This agreement renewed for a one-year period ending on February 15, 2014, and renews for three successive one-year periods unless terminated by DBSD North America upon at least 30 days notice prior to the expiration of any renewal term. | ||||||||||||||
TerreStar Agreement. On March 9, 2012, we completed the TerreStar Transaction. Prior to our acquisition of substantially all the assets of TerreStar and EchoStar’s acquisition of Hughes, TerreStar and HNS entered into various agreements pursuant to which HNS provides, among other things, hosting, operations and maintenance services for TerreStar’s satellite gateway and associated ground infrastructure. These agreements generally may be terminated by us at any time for convenience. | ||||||||||||||
“General and administrative expenses — EchoStar” | ||||||||||||||
Product Support Agreement. In connection with the Spin-off, we entered into a product support agreement pursuant to which we have the right, but not the obligation, to receive product support from EchoStar (including certain engineering and technical support services) for all set-top boxes and related accessories that EchoStar has previously sold and in the future may sell to us. The fees for the services provided under the product support agreement are calculated at cost plus a fixed margin, which varies depending on the nature of the services provided. The term of the product support agreement is the economic life of such receivers and related accessories, unless terminated earlier. We may terminate the product support agreement for any reason upon at least 60 days notice. In the event of an early termination of this agreement, we are entitled to a refund of any unearned fees paid to EchoStar for the services. | ||||||||||||||
Real Estate Lease Agreements. We have entered into lease agreements pursuant to which we lease certain real estate from EchoStar. The rent on a per square foot basis for each of the leases is comparable to per square foot rental rates of similar commercial property in the same geographic area, and EchoStar is responsible for its portion of the taxes, insurance, utilities and maintenance of the premises. The term of each of the leases is set forth below: | ||||||||||||||
· Inverness Lease Agreement. The lease for certain space at 90 Inverness Circle East in Englewood, Colorado is for a period ending on December 31, 2016. This agreement can be terminated by either party upon six months prior notice. | ||||||||||||||
· Meridian Lease Agreement. The lease for all of 9601 S. Meridian Blvd. in Englewood, Colorado is for a period ending on December 31, 2016. | ||||||||||||||
· Santa Fe Lease Agreement. The lease for all of 5701 S. Santa Fe Dr. in Littleton, Colorado is for a period ending on December 31, 2016 with a renewal option for one additional year. | ||||||||||||||
· EchoStar Data Networks Sublease Agreement. The sublease for certain space at 211 Perimeter Center in Atlanta, Georgia is for a period ending on October 31, 2016. | ||||||||||||||
· Gilbert Lease Agreement. The lease for certain space at 801 N. DISH Dr. in Gilbert, Arizona is a month-to-month lease and can be terminated by either party upon 30 days prior notice. | ||||||||||||||
· Cheyenne Lease Agreement. The lease for certain space at 530 EchoStar Drive in Cheyenne, Wyoming is for a period ending on December 31, 2031. | ||||||||||||||
DISHOnline.com Services Agreement. Effective January 1, 2010, we entered into a two-year agreement with EchoStar pursuant to which we receive certain services associated with an online video portal. The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services. We have the option to renew this agreement for three successive one year terms and the agreement may be terminated for any reason upon at least 120 days notice to EchoStar. In November 2013, we exercised our right to renew this agreement for a one-year period ending on December 31, 2014. | ||||||||||||||
DISH Remote Access Services Agreement. Effective February 23, 2010, we entered into an agreement with EchoStar pursuant to which we receive, among other things, certain remote DVR management services. The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services. This agreement has a term of five years with automatic renewal for successive one year terms. This agreement may be terminated for any reason upon at least 120 days notice to EchoStar. | ||||||||||||||
SlingService Services Agreement. Effective February 23, 2010, we entered into an agreement with EchoStar pursuant to which we receive certain services related to placeshifting. The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services. This agreement has a term of five years with automatic renewal for successive one year terms. This agreement may be terminated for any reason upon at least 120 days notice to EchoStar. | ||||||||||||||
Blockbuster. On April 26, 2011, we completed the Blockbuster Acquisition. During the second quarter 2011, EchoStar acquired Hughes. Blockbuster purchased certain broadband products and services from HNS pursuant to an agreement that was entered into prior to the Blockbuster Acquisition and EchoStar’s acquisition of Hughes. Subsequent to these transactions, Blockbuster entered into a new agreement with HNS which extends for a period through October 31, 2014, pursuant to which Blockbuster may continue to purchase certain broadband products and services from HNS. Blockbuster has the option to renew the agreement for an additional one-year period. | ||||||||||||||
DISH Digital Holding L.L.C. Effective July 1, 2012, we and EchoStar formed DISH Digital Holding L.L.C. (“DISH Digital”), which is owned two-thirds by us and one-third by EchoStar and is consolidated into our financial statements beginning July 1, 2012. DISH Digital was formed to develop and commercialize certain advanced technologies. We, EchoStar and DISH Digital entered into the following agreements with respect to DISH Digital: (i) a contribution agreement pursuant to which we and EchoStar contributed certain assets in exchange for our respective ownership interests in DISH Digital; (ii) a limited liability company operating agreement, which provides for the governance of DISH Digital; and (iii) a commercial agreement pursuant to which, among other things, DISH Digital has: (a) certain rights and corresponding obligations with respect to DISH Digital’s business; and (b) the right, but not the obligation, to receive certain services from us and EchoStar, respectively. Since this is a formation of an entity under common control and a step-up in basis is not allowed, each party’s contributions were recorded at historical book value for accounting purposes. We consolidated DISH Digital with EchoStar’s ownership position recorded as non-controlling interest. | ||||||||||||||
Application Development Agreement. During the fourth quarter 2012, we and EchoStar entered into a set-top box application development agreement (the “Application Development Agreement”) pursuant to which EchoStar provides us with certain services relating to the development of web-based applications for set-top boxes for a period ending on February 1, 2015. The Application Development Agreement renews automatically for successive one-year periods thereafter, unless terminated earlier by us or EchoStar at any time upon at least 90 days notice. The fees for services provided under the Application Development Agreement are calculated at EchoStar’s cost of providing the relevant service plus a fixed margin, which will depend on the nature of the services provided. | ||||||||||||||
XiP Encryption Agreement. During the third quarter 2012, we entered into an encryption agreement with EchoStar for our whole-home HD DVR line of set-top boxes (the “XiP Encryption Agreement”) pursuant to which EchoStar provides certain security measures on our whole-home HD DVR line of set-top boxes to encrypt the content delivered to the set-top box via a smart card and secure the content between set-top boxes. The term of the XiP Encryption Agreement is for a period until December 31, 2014. Under the XiP Encryption Agreement, we have the option, but not the obligation, to extend the XiP Encryption Agreement for one additional year upon 180 days notice prior to the end of the term. We and EchoStar each have the right to terminate the XiP Encryption Agreement for any reason upon at least 30 days notice and 180 days notice, respectively. The fees for the services provided under the XiP Encryption Agreement are calculated on a monthly basis based on the number of receivers utilizing such security measures each month. | ||||||||||||||
Other Agreements — EchoStar | ||||||||||||||
Receiver Agreement. EchoStar is currently our sole supplier of set-top box receivers. Effective January 1, 2012, we and EchoStar entered into a receiver agreement (the “2012 Receiver Agreement”) pursuant to which we have the right, but not the obligation, to purchase digital set-top boxes, related accessories, and other equipment from EchoStar for the period from January 1, 2012 to December 31, 2014. We have an option, but not the obligation, to extend the 2012 Receiver Agreement for one additional year upon 180 days notice prior to the end of the term. The 2012 Receiver Agreement allows us to purchase digital set-top boxes, related accessories and other equipment from EchoStar either: (i) at a cost (decreasing as EchoStar reduces costs and increasing as costs increase) plus a dollar mark-up which will depend upon the cost of the product subject to a collar on EchoStar’s mark-up; or (ii) at cost plus a fixed margin, which will depend on the nature of the equipment purchased. Under the 2012 Receiver Agreement, EchoStar’s margins will be increased if they are able to reduce the costs of their digital set-top boxes and their margins will be reduced if these costs increase. EchoStar provides us with standard manufacturer warranties for the goods sold under the 2012 Receiver Agreement. Additionally, the 2012 Receiver Agreement includes an indemnification provision, whereby the parties indemnify each other for certain intellectual property matters. We are able to terminate the 2012 Receiver Agreement for any reason upon at least 60 days notice to EchoStar. EchoStar is able to terminate the 2012 Receiver Agreement if certain entities acquire us. | ||||||||||||||
For the three months ended September 30, 2013 and 2012, we purchased set-top boxes and other equipment from EchoStar of $341 million and $247 million, respectively. For the nine months ended September 30, 2013 and 2012, we purchased set-top boxes and other equipment from EchoStar of $947 million and $738 million, respectively. Included in these amounts are purchases of certain broadband equipment from EchoStar under the Receiver Agreement. These amounts are initially included in “Inventory” and are subsequently capitalized as “Property and equipment, net” on our Condensed Consolidated Balance Sheets or expensed as “Subscriber acquisition costs” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) when the equipment is deployed. | ||||||||||||||
Tax Sharing Agreement. In connection with the Spin-off, we entered into a tax sharing agreement with EchoStar which governs our respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by us, and we will indemnify EchoStar for such taxes. However, we are not liable for and will not indemnify EchoStar for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”) because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar takes or fails to take; or (iii) any action that EchoStar takes that is inconsistent with the information and representations furnished to the Internal Revenue Service (“IRS”) in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar is solely liable for, and will indemnify us for, any resulting taxes, as well as any losses, claims and expenses. The tax sharing agreement will only terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed. | ||||||||||||||
In light of the tax sharing agreement, among other things, and in connection with our consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, during the third quarter 2013, we and EchoStar agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’ examination of these consolidated tax returns. As a result, we agreed to pay EchoStar $83 million of the tax benefit we received or will receive. This resulted in a reduction of our recorded unrecognized tax benefits and this amount was reclassified to a long-term payable to EchoStar within “Long-term deferred revenue, distribution and carriage payments and other long-term liabilities” on our Condensed Consolidated Balance Sheets during the third quarter 2013. Any payment to EchoStar, including accrued interest, will be made at such time as EchoStar would have otherwise been able to realize such tax benefit. In addition, during the third quarter 2013, we and EchoStar agreed upon a tax sharing arrangement for filing certain combined state income tax returns and a method of allocating the respective tax liabilities between us and EchoStar for such combined returns, through the taxable period ending on December 31, 2017. | ||||||||||||||
RUS Implementation Agreement. In September 2010, DISH Broadband L.L.C. (“DISH Broadband”), our wholly-owned subsidiary, was selected by the Rural Utilities Service (“RUS”) of the United States Department of Agriculture to receive up to approximately $14 million in broadband stimulus grant funds (the “Grant Funds”). Effective November 2011, DISH Broadband and HNS entered into a RUS Implementation Agreement (the “RUS Agreement”) pursuant to which HNS provides certain portions of the equipment and broadband service used to implement our RUS program. The initial term of the RUS Agreement shall continue until the earlier of: (i) September 24, 2013; or (ii) the date that the Grant Funds have been exhausted. In addition, DISH Broadband may terminate the RUS Agreement for convenience upon 45 days prior written notice to HNS. The RUS Agreement expired during June 2013 when the Grant Funds were exhausted. During the three months ended September 30, 2012, we expensed $4 million under this agreement which is included in “Cost of sales — equipment, merchandise, services, rental and other” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During the nine months ended September 30, 2013 and 2012, we expensed $3 million and $6 million, respectively, under this agreement. | ||||||||||||||
TiVo. On April 29, 2011, we and EchoStar entered into a settlement agreement with TiVo Inc. (“TiVo”). The settlement resolved all pending litigation between us and EchoStar, on the one hand, and TiVo, on the other hand, including litigation relating to alleged patent infringement involving certain DISH digital video recorders, or DVRs. | ||||||||||||||
Under the settlement agreement, all pending litigation was dismissed with prejudice and all injunctions that permanently restrain, enjoin or compel any action by us or EchoStar were dissolved. We and EchoStar are jointly responsible for making payments to TiVo in the aggregate amount of $500 million, including an initial payment of $300 million and the remaining $200 million in six equal annual installments between 2012 and 2017. Pursuant to the terms and conditions of the agreements entered into in connection with the Spin-off of EchoStar from us, we made the initial payment to TiVo in May 2011, except for the contribution from EchoStar totaling approximately $10 million, representing an allocation of liability relating to EchoStar’s sales of DVR-enabled receivers to an international customer. Future payments will be allocated between us and EchoStar based on historical sales of certain licensed products, with us being responsible for 95% of each annual payment. | ||||||||||||||
Patent Cross-License Agreements. During December 2011, we and EchoStar entered into separate patent cross-license agreements with the same third party whereby: (i) EchoStar and such third party licensed their respective patents to each other subject to certain conditions; and (ii) we and such third party licensed our respective patents to each other subject to certain conditions (each, a “Cross-License Agreement”). Each Cross License Agreement covers patents acquired by the respective party prior to January 1, 2017 and aggregate payments under both Cross-License Agreements total less than $10 million. Each Cross License Agreement also contains an option to extend each Cross-License Agreement to include patents acquired by the respective party prior to January 1, 2022. If both options are exercised, the aggregate additional payments to such third party would total less than $3 million. However, we and EchoStar may elect to extend our respective Cross-License Agreement independently of each other. Since the aggregate payments under both Cross-License Agreements were based on the combined annual revenues of us and EchoStar, we and EchoStar agreed to allocate our respective payments to such third party based on our respective percentage of combined total revenue. | ||||||||||||||
Hughes Broadband Distribution Agreement. Effective October 1, 2012, dishNET Satellite Broadband L.L.C. (“dishNET Satellite Broadband”), our wholly-owned subsidiary, and HNS entered into a Distribution Agreement (the “Distribution Agreement”) pursuant to which dishNET Satellite Broadband has the right, but not the obligation, to market, sell and distribute the HNS satellite Internet service (the “Service”). dishNET Satellite Broadband pays HNS a monthly per subscriber wholesale service fee for the Service based upon the subscriber’s service level, and, beginning January 1, 2014, certain volume subscription thresholds. The Distribution Agreement also provides that dishNET Satellite Broadband has the right, but not the obligation, to purchase certain broadband equipment from HNS to support the sale of the Service. The Distribution Agreement has a term of five years with automatic renewal for successive one year terms unless either party gives written notice of its intent not to renew to the other party at least 180 days before the expiration of the then-current term. Upon expiration or termination of the Distribution Agreement, the parties will continue to provide the Service to the then-current dishNET subscribers pursuant to the terms and conditions of the Distribution Agreement. During the three and nine months ended September 30, 2013, we paid $9 million and $19 million, respectively, for these services from HNS, included in “Subscriber-related expenses” on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Since this Distribution Agreement was entered into effective October 1, 2012, we did not incur any expense for the three and nine months ended September 30, 2012. | ||||||||||||||
For the three and nine months ended September 30, 2013, we purchased broadband equipment from HNS of $20 million and $57 million, respectively. These amounts are initially included in “Inventory” and are subsequently capitalized as “Property and equipment, net” on our Condensed Consolidated Balance Sheets or expensed as “Subscriber acquisition costs” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) when the equipment is deployed. Since this Distribution Agreement was entered into effective October 1, 2012, we did not incur any expense for the three and nine months ended September 30, 2012. In addition, we purchase certain broadband equipment from EchoStar under the Receiver Agreement, as previously discussed. | ||||||||||||||
Voom Settlement Agreement. On October 21, 2012, we entered into the Voom Settlement Agreement with Voom and Cablevision, and for certain limited purposes, MSG Holdings, L.P., The Madison Square Garden Company and EchoStar. The Voom Settlement Agreement resolved the litigation between the parties relating to the Voom programming services. EchoStar was a party to the Voom Settlement Agreement solely for the purposes of executing a mutual release of claims with Voom, Cablevision, MSG Holdings, L.P. and The Madison Square Garden Company relating to the Voom programming services. | ||||||||||||||
Radio Access Network Agreement. On November 29, 2012, we entered into an agreement with HNS pursuant to which HNS will construct for us a ground-based satellite radio access network (“RAN”) for a fixed fee. The completion of the RAN under this agreement is expected to occur on or before November 29, 2014. This agreement generally may be terminated by us at any time for convenience. As of September 30, 2013 and December 31, 2012, we had capitalized in total $8 million and $3 million, respectively, for these services, included in “Property and equipment, net” on our Condensed Consolidated Balance Sheets. | ||||||||||||||
T2 Development Agreement. On August 29, 2013, we and EchoStar entered into a development agreement (the “T2 Development Agreement”) with respect to the T2 satellite, by which EchoStar will reimburse us for amounts we pay pursuant to an authorization to proceed (the “T2 ATP”) with Space Systems Loral, LLC related to the T2 satellite construction contract. In exchange, we granted EchoStar a right of first refusal and right of first offer to purchase our rights in T2 during the term of the T2 Development Agreement. In addition, under certain circumstances EchoStar has a right to receive a portion of the sale proceeds in the event T2 is sold to a third party during or following the term of the T2 Development Agreement. The term of the T2 Development Agreement expires on the later of: (i) December 31, 2013, or (ii) the date on which the T2 ATP expires. | ||||||||||||||
Other Agreements | ||||||||||||||
In November 2009, Mr. Roger Lynch became employed by both us and EchoStar as Executive Vice President. Mr. Lynch is responsible for the development and implementation of advanced technologies that are of potential utility and importance to both DISH Network and EchoStar. Mr. Lynch’s compensation consists of cash and equity compensation and is borne by both EchoStar and DISH Network. | ||||||||||||||
Related Party Transactions with NagraStar L.L.C. | ||||||||||||||
NagraStar is a joint venture between EchoStar and Nagra USA, Inc. that is our provider of encryption and related security systems intended to assure that only authorized customers have access to our programming. | ||||||||||||||
The table below summarizes our transactions with NagraStar. | ||||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Purchases (including fees): | ||||||||||||||
Purchases from NagraStar | $ | 22,563 | $ | 17,895 | $ | 69,129 | $ | 53,624 | ||||||
As of | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
Amounts Payable and Commitments: | ||||||||||||||
Amounts payable to NagraStar | $ | 18,923 | $ | 21,930 | ||||||||||
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events | ' |
Subsequent Events | ' |
15. Subsequent Events | |
7% Senior Notes due 2013 | |
On October 1, 2013, we redeemed the remaining $451 million principal balance of our 7% Senior Notes due 2013. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Summary of Significant Accounting Policies | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required for complete financial statements prepared under GAAP. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012 (“2012 10-K”). Certain prior period amounts have been reclassified to conform to the current period presentation. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
We consolidate all majority owned subsidiaries, investments in entities in which we have controlling influence and variable interest entities where we have been determined to be the primary beneficiary. Non-majority owned investments are accounted for using the equity method when we have the ability to significantly influence the operating decisions of the investee. When we do not have the ability to significantly influence the operating decisions of an investee, the cost method is used. All significant intercompany accounts and transactions have been eliminated in consolidation. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense for each reporting period. Estimates are used in accounting for, among other things, allowances for doubtful accounts, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, the useful lives and residual value surrounding our rental library inventory, estimated accruals related to revenue-sharing titles that are subject to performance guarantees, fair value of financial instruments, fair value of options granted under our stock-based compensation plans, fair value of assets and liabilities acquired in business combinations, fair value of multi-element arrangements, capital leases, asset impairments, estimates of future cash flows used to evaluate impairments, useful lives of property, equipment and intangible assets, asset retirement obligations, retailer incentives, programming expenses, subscriber lives and royalty obligations. Weak economic conditions have increased the inherent uncertainty in the estimates and assumptions indicated above. Actual results may differ from previously estimated amounts, and such differences may be material to our Condensed Consolidated Financial Statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected prospectively in the period they occur. | |
Fair Value Measurements | ' |
Fair Value Measurements | |
We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We apply the following hierarchy in determining fair value: | |
· Level 1, defined as observable inputs being quoted prices in active markets for identical assets, including U.S. treasury notes; | |
· Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and derivative financial instruments indexed to marketable investment securities; and | |
· Level 3, defined as unobservable inputs for which little or no market data exists, consistent with reasonably available assumptions made by other participants therefore requiring assumptions based on the best information available. | |
As of September 30, 2013 and December 31, 2012, the carrying value for cash and cash equivalents, marketable investment securities, trade accounts receivable (net of allowance for doubtful accounts), derivative financial instruments, and current liabilities (excluding the “Current portion of long-term debt and capital lease obligations”) is equal to or approximates fair value due to their short-term nature or proximity to current market rates. See Note 5 for the fair value of our marketable investment securities. | |
Fair values for our publicly traded debt securities are based on quoted market prices, when available. The fair values of private debt are estimated based on an analysis in which we evaluate market conditions, related securities, various public and private offerings, and other publicly available information. In performing this analysis, we make various assumptions regarding, among other things, credit spreads, and the impact of these factors on the value of the debt securities. See Note 10 for the fair value of our long-term debt. | |
Derivative Financial Instruments | ' |
Derivative Financial Instruments | |
We may purchase and hold derivative financial instruments for, among other reasons, strategic or speculative purposes. We record all derivative financial instruments on our Condensed Consolidated Balance Sheets at fair value as either assets or liabilities. Changes in the fair values of derivative financial instruments are recognized in our results of operations and included in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). We currently have not designated any derivative financial instrument for hedge accounting. | |
During the first and second quarters 2013, we purchased an aggregate notional amount of $592 million of derivative financial instruments that were indexed to the trading price of the common equity securities of Sprint Corporation (“Sprint”). On July 10, 2013, Sprint completed its merger with Softbank Corp. Subsequently, during the third quarter 2013, we settled these derivative financial instruments for cash and common equity securities of Sprint. These common equity securities are classified as available-for-sale and included in “Marketable investment securities” on our Condensed Consolidated Balance Sheets. See Note 5 for further information. | |
Advertising Costs | ' |
Advertising Costs | |
Our advertising costs associated with acquiring new Pay-TV and Broadband subscribers and Blockbuster customers are expensed as incurred. During the three months ended September 30, 2013 and 2012, we recorded advertising costs of $118 million and $134 million, respectively, and during the nine months ended September 30, 2013 and 2012, we recorded advertising costs of $370 million and $364 million, respectively. Advertising costs are included in “Other subscriber acquisition costs” and “General and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). | |
Deferred Cost of Sales | ' |
Deferred Cost of Sales | |
On May 22, 2013, we launched a promotion whereby qualifying new Pay-TV subscribers may choose either an Apple® iPad® 2 or programming credits when they, among other things, commit to a two-year contract. The costs of the iPad 2 are recorded as short-term or long-term deferred cost of sales expense within “Other current assets” and “Other noncurrent assets, net,” respectively, on our Condensed Consolidated Balance Sheets and are amortized on a straight-line basis over the related contract term to “Cost of sales — equipment, merchandise, services, rental and other” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). | |
New Accounting Pronouncements | ' |
New Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2013-11, Income Taxes (Topic 740) - Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward or Tax Credit Carryforward Exists. ASU 2013-11 requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. This standard is effective for reporting periods beginning after December 15, 2013, with early adoption permitted. We do not expect the adoption of ASU 2013-11 to have a material impact on our financial position or results of operations. | |
Basic_and_Diluted_Net_Income_L1
Basic and Diluted Net Income (Loss) Per Share (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Basic and Diluted Net Income (Loss) Per Share | ' | |||||||||||||
Tabular disclosure of the effect of income (loss) on the entity's basic and diluted earnings per share | ' | |||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands, except per share amounts) | ||||||||||||||
Net income (loss) attributable to DISH Network | $ | 314,908 | $ | (158,461 | ) | $ | 519,454 | $ | 427,581 | |||||
Weighted-average common shares outstanding - Class A and B common stock: | ||||||||||||||
Basic | 457,377 | 451,042 | 455,372 | 449,547 | ||||||||||
Dilutive impact of stock awards outstanding | 3,338 | — | 3,024 | 2,772 | ||||||||||
Diluted | 460,715 | 451,042 | 458,396 | 452,319 | ||||||||||
Earnings per share - Class A and B common stock: | ||||||||||||||
Basic net income (loss) per share attributable to DISH Network | $ | 0.69 | $ | (0.35 | ) | $ | 1.14 | $ | 0.95 | |||||
Diluted net income (loss) per share attributable to DISH Network | $ | 0.68 | $ | (0.35 | ) | $ | 1.13 | $ | 0.95 | |||||
Schedule of dilutive securities not included in the diluted EPS calculation | ' | |||||||||||||
As of September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
Performance-based options | 7,806 | 7,943 | ||||||||||||
Restricted Performance Units | 1,969 | 1,190 | ||||||||||||
Total | 9,775 | 9,133 | ||||||||||||
Other_Comprehensive_Income_Los1
Other Comprehensive Income (Loss) (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Other Comprehensive Income (Loss) | ' | |||||||||||||||||||
Schedule of tax effect allocated to component of other comprehensive income (loss) | ' | |||||||||||||||||||
For the Three Months | ||||||||||||||||||||
Ended September 30, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Before | Tax | Net | Before | Tax | Net | |||||||||||||||
Tax | (Expense) | of Tax | Tax | (Expense) | of Tax | |||||||||||||||
Amount | Benefit | Amount | Amount | Benefit | Amount | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Foreign currency translation adjustments | $ | (4,570 | ) | $ | — | $ | (4,570 | ) | $ | 3,990 | $ | — | $ | 3,990 | ||||||
Unrealized holding gains (losses) on available-for-sale securities | 40,692 | 3,647 | 44,339 | 141,781 | — | 141,781 | ||||||||||||||
Recognition of previously unrealized (gains) losses on available-for-sale securities included in net income (loss) | (49,221 | ) | — | (49,221 | ) | (68,899 | ) | — | (68,899 | ) | ||||||||||
Other comprehensive income (loss) | $ | (13,099 | ) | $ | 3,647 | $ | (9,452 | ) | $ | 76,872 | $ | — | $ | 76,872 | ||||||
For the Nine Months | ||||||||||||||||||||
Ended September 30, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Before | Tax | Net | Before | Tax | Net | |||||||||||||||
Tax | (Expense) | of Tax | Tax | (Expense) | of Tax | |||||||||||||||
Amount | Benefit | Amount | Amount | Benefit | Amount | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Foreign currency translation adjustments | $ | 1,029 | $ | — | $ | 1,029 | $ | 5,278 | $ | — | $ | 5,278 | ||||||||
Unrealized holding gains (losses) on available-for-sale securities | 77,760 | (7,946 | ) | 69,814 | 123,409 | — | 123,409 | |||||||||||||
Recognition of previously unrealized (gains) losses on available-for-sale securities included in net income (loss) | (54,565 | ) | — | (54,565 | ) | (152,921 | ) | — | (152,921 | ) | ||||||||||
Other comprehensive income (loss) | $ | 24,224 | $ | (7,946 | ) | $ | 16,278 | $ | (24,234 | ) | $ | — | $ | (24,234 | ) | |||||
Schedule of accumulated other comprehensive income (loss) | ' | |||||||||||||||||||
Foreign | Unrealized/ | |||||||||||||||||||
Currency | Recognized | |||||||||||||||||||
Translation | Gains | |||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Adjustment | (Losses) | Total | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance as of December 31, 2012 | $ | (5,033 | ) | $ | 193,836 | $ | 188,803 | |||||||||||||
Other comprehensive income (loss) before reclassification | 1,029 | 77,760 | 78,789 | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | (54,565 | ) | (54,565 | ) | |||||||||||||||
Tax (expense) benefit | — | (7,946 | ) | (7,946 | ) | |||||||||||||||
Balance as of September 30, 2013 | $ | (4,004 | ) | $ | 209,085 | $ | 205,081 | |||||||||||||
Marketable_Investment_Securiti1
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Tables) | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | ' | |||||||||||||||||||||||||
Schedule of marketable investment securities, restricted cash and other investment securities | ' | |||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable investment securities: | ||||||||||||||||||||||||||
Current marketable investment securities - VRDNs | $ | 149,920 | $ | 130,306 | ||||||||||||||||||||||
Current marketable investment securities - strategic | 1,377,727 | 1,261,015 | ||||||||||||||||||||||||
Current marketable investment securities - other | 3,981,090 | 2,240,316 | ||||||||||||||||||||||||
Total current marketable investment securities | 5,508,737 | 3,631,637 | ||||||||||||||||||||||||
Restricted marketable investment securities (1) | 72,800 | 51,366 | ||||||||||||||||||||||||
Noncurrent marketable investment securities - ARS and other (2) | 126,856 | 106,172 | ||||||||||||||||||||||||
Total marketable investment securities | 5,708,393 | 3,789,175 | ||||||||||||||||||||||||
Restricted cash and cash equivalents (1) | 22,354 | 83,044 | ||||||||||||||||||||||||
Other investment securities: | ||||||||||||||||||||||||||
Other investment securities - cost method (2) | 15,104 | 12,879 | ||||||||||||||||||||||||
Total other investment securities | 15,104 | 12,879 | ||||||||||||||||||||||||
Total marketable investment securities, restricted cash and cash equivalents, and other investment securities | $ | 5,745,851 | $ | 3,885,098 | ||||||||||||||||||||||
(1) Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash and marketable investment securities” on our Condensed Consolidated Balance Sheets. | ||||||||||||||||||||||||||
(2) Noncurrent marketable investment securities — auction rate securities (“ARS”) and other investment securities are included in “Marketable and other investment securities” on our Condensed Consolidated Balance Sheets. | ||||||||||||||||||||||||||
Schedule of unrealized gain (loss) on marketable investment securities | ' | |||||||||||||||||||||||||
As of September 30, 2013 | As of December 31, 2012 | |||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||
Value | Gains | Losses | Net | Value | Gains | Losses | Net | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt securities: | ||||||||||||||||||||||||||
VRDNs | $ | 149,920 | $ | — | $ | — | $ | — | $ | 130,306 | $ | — | $ | — | $ | — | ||||||||||
ARS and other | 45,430 | 1,200 | (5,150 | ) | (3,950 | ) | 43,921 | 1,375 | (8,033 | ) | (6,658 | ) | ||||||||||||||
ARS fair value election | 81,426 | — | — | — | 62,251 | — | — | — | ||||||||||||||||||
Other (including restricted) | 4,989,642 | 175,922 | (1,507 | ) | 174,415 | 3,287,317 | 208,208 | (1,203 | ) | 207,005 | ||||||||||||||||
Equity securities | 441,975 | 75,012 | (15,555 | ) | 59,457 | 265,380 | 17,918 | (11,537 | ) | 6,381 | ||||||||||||||||
Total | $ | 5,708,393 | $ | 252,134 | $ | (22,212 | ) | $ | 229,922 | $ | 3,789,175 | $ | 227,501 | $ | (20,773 | ) | $ | 206,728 | ||||||||
Schedule of available-for-sale securities in continuous unrealized loss position by length of time and their fair value | ' | |||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||
Value | Loss | Value | Loss | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt Securities: | ||||||||||||||||||||||||||
Less than 12 months | $ | 1,679,098 | $ | (936 | ) | $ | 761,551 | $ | (909 | ) | ||||||||||||||||
12 months or more | 121,978 | (5,721 | ) | 72,395 | (8,327 | ) | ||||||||||||||||||||
Equity Securities: | ||||||||||||||||||||||||||
Less than 12 months | 137,995 | (15,555 | ) | 154,566 | (11,537 | ) | ||||||||||||||||||||
12 months or more | — | — | — | — | ||||||||||||||||||||||
Total | $ | 1,939,071 | $ | (22,212 | ) | $ | 988,512 | $ | (20,773 | ) | ||||||||||||||||
Schedule of fair value measurements | ' | |||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Cash equivalents (including restricted) | $ | 4,480,912 | $ | 305,875 | $ | 4,175,037 | $ | — | $ | 3,386,929 | $ | 67,833 | $ | 3,319,096 | $ | — | ||||||||||
Debt securities: | ||||||||||||||||||||||||||
VRDNs | $ | 149,920 | $ | — | $ | 149,920 | $ | — | $ | 130,306 | $ | — | $ | 130,306 | $ | — | ||||||||||
ARS and other | 126,856 | — | 740 | 126,116 | 106,172 | — | 955 | 105,217 | ||||||||||||||||||
Other (including restricted) | 4,989,642 | 11,033 | 4,975,142 | 3,467 | 3,287,317 | 11,182 | 3,276,135 | — | ||||||||||||||||||
Equity securities | 441,975 | 441,975 | — | — | 265,380 | 265,380 | — | — | ||||||||||||||||||
Total | $ | 5,708,393 | $ | 453,008 | $ | 5,125,802 | $ | 129,583 | $ | 3,789,175 | $ | 276,562 | $ | 3,407,396 | $ | 105,217 | ||||||||||
Schedule of changes in Level 3 instruments | ' | |||||||||||||||||||||||||
Level 3 | ||||||||||||||||||||||||||
Investment | ||||||||||||||||||||||||||
Securities | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 105,217 | ||||||||||||||||||||||||
Net realized and unrealized gains (losses) included in earnings | 19,289 | |||||||||||||||||||||||||
Net realized and unrealized gains (losses) included in other comprehensive income (loss) | 2,961 | |||||||||||||||||||||||||
Purchases | 3,480 | |||||||||||||||||||||||||
Settlements | (1,364 | ) | ||||||||||||||||||||||||
Issuances | — | |||||||||||||||||||||||||
Transfers into or out of Level 3 | — | |||||||||||||||||||||||||
Balance as of September 30, 2013 | $ | 129,583 | ||||||||||||||||||||||||
Schedule of gains and losses on sales and changes in carrying values of investments | ' | |||||||||||||||||||||||||
For the Three Months | For the Nine Months | |||||||||||||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||||||||||||
Other Income (Expense): | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable investment securities - gains (losses) on sales/exchanges | $ | 49,223 | $ | 111,709 | $ | 63,405 | $ | 119,445 | ||||||||||||||||||
Marketable investment securities - unrealized gains (losses) on investments accounted for at fair value | 8,689 | 667 | 19,175 | (2,395 | ) | |||||||||||||||||||||
Marketable investment securities - gains (losses) on conversion of DBSD North America Notes (1) | — | — | — | 99,445 | ||||||||||||||||||||||
Derivative financial instruments - net realized and/or unrealized gains (losses) | 42,301 | — | 126,832 | — | ||||||||||||||||||||||
Marketable investment securities - other-than-temporary impairments | — | (42,811 | ) | (1,919 | ) | (45,292 | ) | |||||||||||||||||||
Other | 5,534 | 266 | 5,235 | 1,462 | ||||||||||||||||||||||
Total | $ | 105,747 | $ | 69,831 | $ | 212,728 | $ | 172,665 | ||||||||||||||||||
(1) During the nine months ended September 30, 2012, we recognized a $99 million non-cash gain related to the conversion of our DBSD North America 7.5% Convertible Senior Secured Notes due 2009 in connection with the completion of the DBSD Transaction. |
Inventory_Tables
Inventory (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory | ' | |||||||
Schedule of inventory | ' | |||||||
As of | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
DISH: | ||||||||
Finished goods - DBS | $ | 282,714 | $ | 259,307 | ||||
Raw materials | 116,108 | 122,769 | ||||||
Work-in-process | 125,002 | 82,361 | ||||||
Total DISH inventory (1) | 523,824 | 464,437 | ||||||
Blockbuster: | ||||||||
Rental library | 34,567 | 81,956 | ||||||
Merchandise | 22,323 | 76,180 | ||||||
Total Blockbuster inventory (2) | 56,890 | 158,136 | ||||||
Wireless: | ||||||||
Finished goods | — | 1,147 | ||||||
Total Wireless inventory | — | 1,147 | ||||||
Total inventory | $ | 580,714 | $ | 623,720 | ||||
(1) The increase in “Total DISH inventory” as of September 30, 2013 primarily related to an increase in Hopper® set-top boxes and broadband equipment. | ||||||||
(2) The decrease in “Total Blockbuster inventory” as of September 30, 2013 primarily related to the deconsolidation of Blockbuster UK on January 16, 2013, Blockbuster domestic store closings during the nine months ended September 30, 2013, and the write down of inventory associated with our Blockbuster operations in Mexico (“Blockbuster Mexico”) during the third quarter 2013. See Note 9 for further information. | ||||||||
Property_and_Equipment_and_Int1
Property and Equipment and Intangible Assets (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Property and Equipment and Intangible Assets | ' | |||||||||||||
Schedule of depreciation and amortization expense | ' | |||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Equipment leased to customers | $ | 195,843 | $ | 165,959 | $ | 555,653 | $ | 481,876 | ||||||
Satellites | 33,866 | 38,782 | 101,598 | 111,235 | ||||||||||
Buildings, furniture, fixtures, equipment and other (1) | 30,928 | 30,662 | 138,187 | 82,333 | ||||||||||
148 degree orbital location (2) | — | — | — | 67,776 | ||||||||||
Total depreciation and amortization | $ | 260,637 | $ | 235,403 | $ | 795,438 | $ | 743,220 | ||||||
(1) During the second quarter 2013, we ceased operations of our TerreStar Mobile Satellite Services (“MSS”) business, which had less than 2,000 customers and had less than $1 million in revenue. As a result, we accelerated the depreciable lives of certain assets designed to support this business and the remaining net book value of $53 million was fully depreciated in the second quarter 2013. | ||||||||||||||
(2) During the second quarter 2012, we recorded $68 million of “Depreciation and amortization” expense related to the termination of our license by the FCC for use of the 148 degree orbital location. | ||||||||||||||
Schedule of identifiable intangibles subject to amortization | ' | |||||||||||||
As of | ||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Intangible | Accumulated | Intangible | Accumulated | |||||||||||
Assets | Amortization | Assets | Amortization | |||||||||||
(In thousands) | ||||||||||||||
Technology-based | $ | 34,078 | $ | (10,537 | ) | $ | 39,066 | $ | (8,345 | ) | ||||
Trademarks | 18,236 | (5,813 | ) | 18,236 | (3,907 | ) | ||||||||
Contract-based | 9,082 | (9,082 | ) | 11,275 | (10,127 | ) | ||||||||
Customer relationships | 4,294 | (4,294 | ) | 6,974 | (5,736 | ) | ||||||||
Total | $ | 65,690 | $ | (29,726 | ) | $ | 75,551 | $ | (28,115 | ) | ||||
Schedule of estimated future amortization of identifiable intangible assets | ' | |||||||||||||
For the Years Ended December 31, | ||||||||||||||
2013 (remaining three months) | $ | 2,278 | ||||||||||||
2014 | 9,096 | |||||||||||||
2015 | 8,983 | |||||||||||||
2016 | 8,362 | |||||||||||||
2017 | 3,138 | |||||||||||||
Thereafter | 4,107 | |||||||||||||
Total | $ | 35,964 | ||||||||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Long-Term Debt | ' | |||||||||||||
Schedule of carrying and fair values of the entity's debt facilities | ' | |||||||||||||
As of | ||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Carrying | Carrying | |||||||||||||
Value | Fair Value | Value | Fair Value | |||||||||||
(In thousands) | ||||||||||||||
7 % Senior Notes due 2013 (1) | $ | 451,448 | $ | 451,498 | $ | 500,000 | $ | 521,875 | ||||||
6 5/8% Senior Notes due 2014 | 1,000,000 | 1,055,050 | 1,000,000 | 1,078,500 | ||||||||||
7 3/4% Senior Notes due 2015 | 750,000 | 821,100 | 750,000 | 844,725 | ||||||||||
7 1/8% Senior Notes due 2016 | 1,500,000 | 1,649,595 | 1,500,000 | 1,683,750 | ||||||||||
4 5/8% Senior Notes due 2017 | 900,000 | 920,250 | 900,000 | 940,500 | ||||||||||
4 1/4% Senior Notes due 2018 | 1,200,000 | 1,203,000 | — | — | ||||||||||
7 7/8% Senior Notes due 2019 | 1,400,000 | 1,598,100 | 1,400,000 | 1,669,500 | ||||||||||
5 1/8% Senior Notes due 2020 | 1,100,000 | 1,081,135 | — | — | ||||||||||
6 3/4% Senior Notes due 2021 | 2,000,000 | 2,108,600 | 2,000,000 | 2,280,000 | ||||||||||
5 7/8% Senior Notes due 2022 | 2,000,000 | 2,019,900 | 2,000,000 | 2,150,000 | ||||||||||
5% Senior Notes due 2023 | 1,500,000 | 1,393,125 | 1,500,000 | 1,548,750 | ||||||||||
Mortgages and other notes payable | 82,321 | 82,321 | 88,955 | 88,955 | ||||||||||
Subtotal | 13,883,769 | $ | 14,383,674 | 11,638,955 | $ | 12,806,555 | ||||||||
Capital lease obligations (2) | 227,555 | NA | 249,145 | NA | ||||||||||
Total long-term debt and capital lease obligations (including current portion) | $ | 14,111,324 | $ | 11,888,100 | ||||||||||
(1) During the three months ended September 30, 2013, we repurchased $49 million of our 7% Senior Notes due 2013 in open market transactions. On October 1, 2013, we redeemed the remaining $451 million principal balance of our 7% Senior Notes due 2013. | ||||||||||||||
(2) Disclosure regarding fair value of capital leases is not required. | ||||||||||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Share-based compensation | ' | |||||||||||||
Schedule of stock awards outstanding | ' | |||||||||||||
As of September 30, 2013 | ||||||||||||||
DISH Network Awards | EchoStar Awards | |||||||||||||
Stock Awards Outstanding | Stock | Restricted | Stock | Restricted | ||||||||||
Options | Stock | Options | Stock | |||||||||||
Units | Units | |||||||||||||
Held by DISH Network employees | 13,238,936 | 1,892,331 | 607,361 | 44,954 | ||||||||||
Held by EchoStar employees | 1,315,415 | 76,999 | N/A | N/A | ||||||||||
Total | 14,554,351 | 1,969,330 | 607,361 | 44,954 | ||||||||||
Schedule of stock option activity | ' | |||||||||||||
For the Nine Months | ||||||||||||||
Ended September 30, 2013 | ||||||||||||||
Options | Weighted- | |||||||||||||
Average | ||||||||||||||
Exercise Price | ||||||||||||||
Total options outstanding, beginning of period (1) | 16,399,870 | $ | 19.04 | |||||||||||
Granted | 2,206,500 | $ | 36.68 | |||||||||||
Exercised | (3,941,219 | ) | $ | 16.06 | ||||||||||
Forfeited and cancelled | (110,800 | ) | $ | 28.02 | ||||||||||
Total options outstanding, end of period | 14,554,351 | $ | 21.6 | |||||||||||
Performance-based options outstanding, end of period (2) | 7,805,500 | $ | 24.03 | |||||||||||
Exercisable at end of period | 4,812,350 | $ | 17 | |||||||||||
(1) The beginning of period weighted-average exercise price of $19.04 does not reflect the 2012 Stock Option Adjustment, which occurred subsequent to December 31, 2012. | ||||||||||||||
(2) These stock options are included in the caption “Total options outstanding, end of period.” See discussion of the 2005 LTIP, 2013 LTIP and Other Employee Performance Awards below. | ||||||||||||||
Schedule of realized tax benefits from stock awards exercised | ' | |||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Tax benefit from stock awards exercised | $ | 16,889 | $ | 3,366 | $ | 33,986 | $ | 15,313 | ||||||
Schedule of aggregate intrinsic value of stock options outstanding and exercisable | ' | |||||||||||||
As of September 30, 2013 | ||||||||||||||
Options | Options | |||||||||||||
Outstanding | Exercisable | |||||||||||||
(In thousands) | ||||||||||||||
Aggregate intrinsic value | $ | 340,769 | $ | 134,797 | ||||||||||
Schedule of restricted stock unit activity | ' | |||||||||||||
For the Nine Months | ||||||||||||||
Ended September 30, 2013 | ||||||||||||||
Restricted | Weighted- | |||||||||||||
Stock | Average | |||||||||||||
Units | Grant Date | |||||||||||||
Fair Value | ||||||||||||||
Total restricted stock units outstanding, beginning of period | 1,185,080 | $ | 22.99 | |||||||||||
Granted | 985,000 | $ | 36.48 | |||||||||||
Vested | (135,250 | ) | $ | 29.19 | ||||||||||
Forfeited and cancelled | (65,500 | ) | $ | 30.51 | ||||||||||
Total restricted stock units outstanding, end of period | 1,969,330 | $ | 29.06 | |||||||||||
Restricted Performance Units outstanding, end of period (1) | 1,969,330 | $ | 29.06 | |||||||||||
(1) These Restricted Performance Units are included in the caption “Total restricted stock units outstanding, end of period.” See discussion of the 2005 LTIP, 2013 LTIP and Other Employee Performance Awards below. | ||||||||||||||
Schedule of non-cash, stock-based compensation expense recognized | ' | |||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
Non-Cash, Stock-Based Compensation Expense Recognized | 2013 | 2012 | 2013 | 2012 | ||||||||||
(In thousands) | ||||||||||||||
2008 LTIP | $ | — | $ | 2,515 | $ | 3,071 | $ | 10,694 | ||||||
2013 LTIP | 6,567 | — | 6,567 | — | ||||||||||
Other employee performance awards | 1,186 | 1,279 | 4,049 | 5,851 | ||||||||||
Total non-cash, stock-based compensation expense recognized for performance-based awards | $ | 7,753 | $ | 3,794 | $ | 13,687 | $ | 16,545 | ||||||
Schedule of awards outstanding pursuant to performance-based stock incentive plans | ' | |||||||||||||
As of September 30, 2013 | ||||||||||||||
Number of | Weighted- | |||||||||||||
Awards | Average | |||||||||||||
Exercise Price | ||||||||||||||
Performance-Based Stock Options | ||||||||||||||
2005 LTIP | 3,200,500 | $ | 20.33 | |||||||||||
2013 LTIP | 1,935,000 | $ | 36.48 | |||||||||||
Other employee performance awards | 2,670,000 | $ | 19.46 | |||||||||||
Total | 7,805,500 | $ | 24.03 | |||||||||||
Restricted Performance Units | ||||||||||||||
2005 LTIP | 301,830 | |||||||||||||
2013 LTIP | 967,500 | |||||||||||||
Other employee performance awards | 700,000 | |||||||||||||
Total | 1,969,330 | |||||||||||||
Schedule of allocated non-cash, stock-based compensation expense for all employees | ' | |||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Subscriber-related | $ | 941 | $ | 312 | $ | 1,610 | $ | 1,506 | ||||||
General and administrative | 9,808 | 6,446 | 24,501 | 35,451 | ||||||||||
Total non-cash, stock-based compensation | $ | 10,749 | $ | 6,758 | $ | 26,111 | $ | 36,957 | ||||||
Schedule of assumptions of Black-Scholes option valuation model | ' | |||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
Stock Options | 2013(1) | 2012 (2) | 2013 | 2012 | ||||||||||
Risk-free interest rate | N/A | 0.78% | 0.91% - 1.93% | 0.41% - 1.29% | ||||||||||
Volatility factor | N/A | 38.90% | 32.37% - 39.87% | 33.15% - 39.34% | ||||||||||
Expected term of options in years | N/A | 5.8 | 5.7 - 10.0 | 3.1 - 5.9 | ||||||||||
Weighted-average fair value of options granted | N/A | $11.44 | $14.49 - $16.85 | $6.72 - $12.69 | ||||||||||
(1) During the three months ended September 30, 2013, there were no stock options granted. | ||||||||||||||
(2) During the three months ended September 30, 2012, all stock options granted had the same vesting period. | ||||||||||||||
LTIP 2005 | ' | |||||||||||||
Share-based compensation | ' | |||||||||||||
Schedule of unrecognized non-cash, stock-based compensation expense | ' | |||||||||||||
2005 LTIP | ||||||||||||||
Total | Vested | |||||||||||||
Portion (1) | ||||||||||||||
(In thousands) | ||||||||||||||
DISH Network awards held by DISH Network employees | $ | 36,924 | $ | 35,205 | ||||||||||
EchoStar awards held by DISH Network employees | 6,372 | 6,183 | ||||||||||||
Total | $ | 43,296 | $ | 41,388 | ||||||||||
(1) Represents the amount of this award that has met the foregoing vesting schedule and would therefore vest upon achievement of the performance condition. | ||||||||||||||
LTIP 2008, LTIP 2013 and Other | ' | |||||||||||||
Share-based compensation | ' | |||||||||||||
Schedule of unrecognized non-cash, stock-based compensation expense | ' | |||||||||||||
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | 2013 LTIP | Other | ||||||||||||
Employee | ||||||||||||||
Performance | ||||||||||||||
Awards | ||||||||||||||
(In thousands) | ||||||||||||||
Remaining expense estimated to be recognized during 2013 | $ | 2,234 | $ | 231 | ||||||||||
Estimated contingent expense subsequent to 2013 | 58,223 | 41,929 | ||||||||||||
Total estimated remaining expense over the term of the plan | $ | 60,457 | $ | 42,160 | ||||||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Segment Reporting | ' | |||||||||||||
Schedule of assets, revenue, and operating income (loss) | ' | |||||||||||||
As of | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
Total assets: (1) | ||||||||||||||
DISH | $ | 19,677,640 | $ | 16,144,977 | ||||||||||
Blockbuster (2) | 227,126 | 357,267 | ||||||||||||
Wireless | 4,889,632 | 5,066,616 | ||||||||||||
Eliminations | (4,449,158 | ) | (4,189,252 | ) | ||||||||||
Total assets | $ | 20,345,240 | $ | 17,379,608 | ||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Revenue: | ||||||||||||||
DISH | $ | 3,507,473 | $ | 3,298,869 | $ | 10,375,785 | $ | 9,875,890 | ||||||
Blockbuster (3) | 96,665 | 230,885 | 397,597 | 818,188 | ||||||||||
Wireless (4) | 395 | 305 | 1,607 | 634 | ||||||||||
Eliminations | (2,956 | ) | (6,712 | ) | (12,055 | ) | (17,730 | ) | ||||||
Total revenue | $ | 3,601,577 | $ | 3,523,347 | $ | 10,762,934 | $ | 10,676,982 | ||||||
Operating income (loss): | ||||||||||||||
DISH | $ | 442,368 | $ | (241,674 | ) | $ | 1,462,716 | $ | 824,244 | |||||
Blockbuster (5) | (23,498 | ) | (11,919 | ) | (27,909 | ) | (11,295 | ) | ||||||
Wireless (4)(6) | (21,449 | ) | (19,436 | ) | (564,460 | ) | (45,215 | ) | ||||||
Total operating income (loss) | $ | 397,421 | $ | (273,029 | ) | $ | 870,347 | $ | 767,734 | |||||
(1) Certain prior period assets have been reclassified to conform to the current period presentation consistent with the separate financial information regularly evaluated by our chief operating decision maker(s). | ||||||||||||||
(2) The decrease in assets from December 31, 2012 to September 30, 2013 primarily related to the deconsolidation of Blockbuster UK on January 16, 2013, Blockbuster domestic store closings during the nine months ended September 30, 2013, and the write down of Blockbuster Mexico assets during the third quarter 2013. See Note 9 for further information. | ||||||||||||||
(3) The decrease in revenue for the three and nine months ended September 30, 2013 primarily related to the deconsolidation of Blockbuster UK on January 16, 2013 and Blockbuster domestic store closings during 2013 and 2012. See Note 9 for further information. | ||||||||||||||
(4) The three and nine months ended September 30, 2012 included Wireless results from the acquisitions of DBSD North America and TerreStar on March 9, 2012. | ||||||||||||||
(5) The decrease in operating income for the three and nine months ended September 30, 2013 primarily related to the write down of Blockbuster Mexico assets during the third quarter 2013. See Note 9 for further information. | ||||||||||||||
(6) The nine months ended September 30, 2013 included a $438 million impairment charge for the T2 and D1 satellites, $53 million of additional depreciation expense related to the accelerated depreciable lives of certain assets designed to support the TerreStar MSS business and $18 million of legal and financial advisory fees related to our proposed merger with Sprint. See Note 7 for further information. | ||||||||||||||
Schedule of revenue attributed to the United States and foreign locations | ' | |||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Revenue: | ||||||||||||||
United States | $ | 3,562,670 | $ | 3,406,088 | $ | 10,615,673 | $ | 10,316,080 | ||||||
United Kingdom (1) | — | 66,744 | 10,883 | 206,978 | ||||||||||
Mexico (2) | 38,129 | 37,507 | 117,715 | 114,196 | ||||||||||
Other | 778 | 13,008 | 18,663 | 39,728 | ||||||||||
Total revenue | $ | 3,601,577 | $ | 3,523,347 | $ | 10,762,934 | $ | 10,676,982 | ||||||
(1) The decrease for the three and nine months ended September 30, 2013 related to the deconsolidation of Blockbuster UK on January 16, 2013. See Note 9 for further information. | ||||||||||||||
(2) This revenue is related solely to our Blockbuster Mexico operations. | ||||||||||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Related Party Transactions | ' | |||||||||||||
Schedule of transactions with NagraStar | ' | |||||||||||||
For the Three Months | For the Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Purchases (including fees): | ||||||||||||||
Purchases from NagraStar | $ | 22,563 | $ | 17,895 | $ | 69,129 | $ | 53,624 | ||||||
As of | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
Amounts Payable and Commitments: | ||||||||||||||
Amounts payable to NagraStar | $ | 18,923 | $ | 21,930 | ||||||||||
Organization_and_Business_Acti1
Organization and Business Activities (Details) (USD $) | 9 Months Ended | 12 Months Ended | 0 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2008 | Dec. 31, 2008 | Mar. 09, 2012 | Mar. 09, 2012 |
segment | Wireless | Wireless | Wireless | ||
subscriber | DBSD North America and TerreStar Transactions | DBSD North America (ICO) | |||
Organization and Business Activities | ' | ' | ' | ' | ' |
Number of primary business segments | 3 | ' | ' | ' | ' |
Number of DISH Network subscribers | 14,049,000 | ' | ' | ' | ' |
Spectrum Investments | ' | ' | ' | ' | ' |
Payment to acquire certain 700 MHz wireless licenses | ' | $712 | $712 | ' | ' |
Commitment to acquire percentage ownership interest | ' | ' | ' | ' | 100.00% |
Purchase price | ' | ' | ' | $2,860 | $1,364 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 |
Common equity securities of Sprint Corporation | |||||
Derivative Financial Instruments | ' | ' | ' | ' | ' |
Aggregate notional amount | ' | ' | ' | ' | $592 |
Advertising Costs | ' | ' | ' | ' | ' |
Advertising costs | $118 | $134 | $370 | $364 | ' |
Deferred Cost of Sales | ' | ' | ' | ' | ' |
Customer contract commitment period associated with deferred cost of sales promotional items | ' | ' | '2 years | ' | ' |
Basic_and_Diluted_Net_Income_L2
Basic and Diluted Net Income (Loss) Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Basic and Diluted Net Income (Loss) Per Share | ' | ' | ' | ' |
Net income (loss) attributable to DISH Network | $314,908 | ($158,461) | $519,454 | $427,581 |
Weighted-average common shares outstanding - Class A and B common stock: | ' | ' | ' | ' |
Basic (in shares) | 457,377 | 451,042 | 455,372 | 449,547 |
Dilutive impact of stock awards outstanding (in shares) | 3,338 | ' | 3,024 | 2,772 |
Diluted (in shares) | 460,715 | 451,042 | 458,396 | 452,319 |
Earnings per share - Class A and B common stock: | ' | ' | ' | ' |
Basic net income (loss) per share attributable to DISH Network (in dollars per share) | $0.69 | ($0.35) | $1.14 | $0.95 |
Diluted net income (loss) per share attributable to DISH Network (in dollars per share) | $0.68 | ($0.35) | $1.13 | $0.95 |
Basic_and_Diluted_Net_Income_L3
Basic and Diluted Net Income (Loss) Per Share (Details 2) (Class A common stock) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Stock awards | ' | ' |
Antidilutive securities excluded from computation of earnings per share | ' | ' |
Antidilutive securities excluded from computation of earnings per share | 800,000 | 3,200,000 |
Performance-based options | ' | ' |
Antidilutive securities excluded from computation of earnings per share | ' | ' |
Dilutive securities excluded from computation of earnings per share | 7,806,000 | 7,943,000 |
Restricted Performance Units and other | ' | ' |
Antidilutive securities excluded from computation of earnings per share | ' | ' |
Dilutive securities excluded from computation of earnings per share | 1,969,000 | 1,190,000 |
Long-Term Performance Based Plans | ' | ' |
Antidilutive securities excluded from computation of earnings per share | ' | ' |
Dilutive securities excluded from computation of earnings per share | 9,775,000 | 9,133,000 |
Other_Comprehensive_Income_Los2
Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Other comprehensive income (loss), before-tax amount | ' | ' | ' | ' |
Foreign currency translation adjustments, before-tax amount | ($4,570) | $3,990 | $1,029 | $5,278 |
Unrealized holding gains (losses) on available-for-sale securities, before tax amount | 40,692 | 141,781 | 77,760 | 123,409 |
Recognition of previously unrealized (gains) losses on available-for-sale securities included in net income (loss), before tax amount | -49,221 | -68,899 | -54,565 | -152,921 |
Other comprehensive income (loss), before-tax amount | -13,099 | 76,872 | 24,224 | -24,234 |
Other comprehensive income loss tax (expense) benefit | ' | ' | ' | ' |
Unrealized holding gains (losses) on available-for-sale securities, tax (expense) benefit | 3,647 | ' | -7,946 | ' |
Other Comprehensive Income (Loss), Tax | 3,647 | ' | -7,946 | ' |
Other comprehensive income (loss): | ' | ' | ' | ' |
Foreign currency translation adjustments, net of tax | -4,570 | 3,990 | 1,029 | 5,278 |
Unrealized holding gains (losses) on available-for-sale securities, net of tax | 44,339 | 141,781 | 69,814 | 123,409 |
Recognition of previously unrealized (gains) losses on available-for-sale securities included in net income (loss) | -49,221 | -68,899 | -54,565 | -152,921 |
Total other comprehensive income (loss), net of tax | ($9,452) | $76,872 | $16,278 | ($24,234) |
Other_Comprehensive_Income_Los3
Other Comprehensive Income (Loss) (Details 2) (USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Accumulated Other Comprehensive Income (Loss) | ' | ' |
Accumulated other comprehensive income (loss), balance at beginning of period, net | ' | $188,803 |
Other comprehensive income (loss) before reclassifications | ' | 78,789 |
Amounts reclassified from accumulated other comprehensive income (loss) | ' | -54,565 |
Other Comprehensive Income (Loss), tax (expense) benefit | 3,647 | -7,946 |
Accumulated other comprehensive income (loss), balance at end of period, net | 205,081 | 205,081 |
Foreign Currency Translation Adjustment | ' | ' |
Accumulated Other Comprehensive Income (Loss) | ' | ' |
Accumulated other comprehensive income (loss), balance at beginning of period, net | ' | -5,033 |
Other comprehensive income (loss) before reclassifications | ' | 1,029 |
Accumulated other comprehensive income (loss), balance at end of period, net | -4,004 | -4,004 |
Unrealized/Recognized Gains (Losses) | ' | ' |
Accumulated Other Comprehensive Income (Loss) | ' | ' |
Accumulated other comprehensive income (loss), balance at beginning of period, net | ' | 193,836 |
Other comprehensive income (loss) before reclassifications | ' | 77,760 |
Amounts reclassified from accumulated other comprehensive income (loss) | ' | -54,565 |
Other Comprehensive Income (Loss), tax (expense) benefit | ' | -7,946 |
Accumulated other comprehensive income (loss), balance at end of period, net | $209,085 | $209,085 |
Marketable_Investment_Securiti2
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Marketable investment securities, restricted cash and other investment securities | ' | ' |
Current marketable investment securities | $5,508,737 | $3,631,637 |
Restricted marketable investment securities | 72,800 | 51,366 |
Noncurrent marketable investment securities - ARS and other | 126,856 | 106,172 |
Total marketable investment securities | 5,708,393 | 3,789,175 |
Restricted cash and cash equivalents | 22,354 | 83,044 |
Other investment securities - cost method | 15,104 | 12,879 |
Total other investment securities | 15,104 | 12,879 |
Total marketable investment securities, restricted cash and cash equivalents and other investment securities | 5,745,851 | 3,885,098 |
Current marketable investment securities - VRDNs | ' | ' |
Marketable investment securities, restricted cash and other investment securities | ' | ' |
Current marketable investment securities | 149,920 | 130,306 |
Current marketable investment securities - strategic | ' | ' |
Marketable investment securities, restricted cash and other investment securities | ' | ' |
Current marketable investment securities | 1,377,727 | 1,261,015 |
Current marketable investment securities - other | ' | ' |
Marketable investment securities, restricted cash and other investment securities | ' | ' |
Current marketable investment securities | $3,981,090 | $2,240,316 |
Marketable_Investment_Securiti3
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Clearwire | VRDNs | ARS and other, noncurrent | Debt securities | Debt securities | ||||
Clearwire | Clearwire | |||||||
Other investment securities: | ' | ' | ' | ' | ' | ' | ' | ' |
Settlement period | ' | ' | ' | ' | '5 days | ' | ' | ' |
Call options notice period of debt securities after the specified date | ' | ' | ' | '30 days | ' | ' | ' | ' |
ARS and other investments, total carrying value | ' | $126,856,000 | $106,172,000 | ' | ' | $127,000,000 | ' | ' |
ARS and other investments, portion for which the fair value election was made | ' | ' | ' | ' | ' | 81,000,000 | ' | ' |
Carrying value of debt securities of a single issuer | ' | ' | ' | ' | ' | ' | 763,000,000 | 751,000,000 |
Fair value of debt securities of a single issuer | ' | ' | ' | ' | ' | ' | 932,000,000 | 951,000,000 |
Restricted cash related to litigation released during the period | $42,000,000 | ' | ' | ' | ' | ' | ' | ' |
Marketable_Investment_Securiti4
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 3) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Components of our available-for-sale investments | ' | ' |
Debt securities | $5,508,737,000 | $3,631,637,000 |
Total marketable investment securities | 5,708,393,000 | 3,789,175,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ' | ' |
Unrealized Gains | 252,134,000 | 227,501,000 |
Unrealized Losses | -22,212,000 | -20,773,000 |
Unrealized Gains Losses, Net | 229,922,000 | 206,728,000 |
Contractual maturities of restricted and non-restricted marketable investment securities | ' | ' |
Debt securities with contractual maturities within one year | 3,553,000,000 | ' |
Debt securities with contractual maturities after one year through five years | 1,533,000,000 | ' |
Debt securities with contractual maturities after ten years | 180,000,000 | ' |
Accumulated net unrealized gains (losses) | ' | ' |
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss) | 230,000,000 | 207,000,000 |
Accumulated net unrealized gains, net of tax, in accumulated other comprehensive income (loss) | 209,000,000 | 194,000,000 |
VRDNs | ' | ' |
Components of our available-for-sale investments | ' | ' |
Debt securities | 149,920,000 | 130,306,000 |
ARS and other | ' | ' |
Components of our available-for-sale investments | ' | ' |
Debt securities | 45,430,000 | 43,921,000 |
ARS fair value election | 81,000,000 | ' |
Unrealized Gains (Losses) on Marketable Investment Securities | ' | ' |
Unrealized Gains | 1,200,000 | 1,375,000 |
Unrealized Losses | -5,150,000 | -8,033,000 |
Unrealized Gains Losses, Net | -3,950,000 | -6,658,000 |
ARS fair value election | ' | ' |
Components of our available-for-sale investments | ' | ' |
ARS fair value election | 81,426,000 | 62,251,000 |
Other (including restricted) | ' | ' |
Components of our available-for-sale investments | ' | ' |
Debt securities | 4,989,642,000 | 3,287,317,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ' | ' |
Unrealized Gains | 175,922,000 | 208,208,000 |
Unrealized Losses | -1,507,000 | -1,203,000 |
Unrealized Gains Losses, Net | 174,415,000 | 207,005,000 |
Equity securities | ' | ' |
Components of our available-for-sale investments | ' | ' |
Equity securities | 441,975,000 | 265,380,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ' | ' |
Unrealized Gains | 75,012,000 | 17,918,000 |
Unrealized Losses | -15,555,000 | -11,537,000 |
Unrealized Gains Losses, Net | $59,457,000 | $6,381,000 |
Marketable_Investment_Securiti5
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 4) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair value of marketable investment securities in a loss position | ' | ' |
Total | $1,939,071 | $988,512 |
Unrealized loss on marketable investment securities in a loss position | ' | ' |
Total | -22,212 | -20,773 |
Debt securities | ' | ' |
Fair value of marketable investment securities in a loss position | ' | ' |
Less than 12 Months | 1,679,098 | 761,551 |
12 Months or More | 121,978 | 72,395 |
Unrealized loss on marketable investment securities in a loss position | ' | ' |
Less than 12 Months | -936 | -909 |
12 Months or More | -5,721 | -8,327 |
Equity securities | ' | ' |
Fair value of marketable investment securities in a loss position | ' | ' |
Less than 12 Months | 137,995 | 154,566 |
Unrealized loss on marketable investment securities in a loss position | ' | ' |
Less than 12 Months | ($15,555) | ($11,537) |
Marketable_Investment_Securiti6
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 5) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair value of marketable securities | ' | ' |
Debt and equity securities | $5,708,393 | $3,789,175 |
Debt securities | 5,508,737 | 3,631,637 |
Debt securities | 126,856 | 106,172 |
VRDNs | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 149,920 | 130,306 |
ARS and other | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 127,000 | ' |
Other (including restricted) | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 4,989,642 | 3,287,317 |
Equity securities | ' | ' |
Fair value of marketable securities | ' | ' |
Equity securities | 441,975 | 265,380 |
Fair value measurements on recurring basis | Total | ' | ' |
Fair value of marketable securities | ' | ' |
Cash Equivalents (including restricted) | 4,480,912 | 3,386,929 |
Total | 5,708,393 | 3,789,175 |
Fair value measurements on recurring basis | Total | VRDNs | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 149,920 | 130,306 |
Fair value measurements on recurring basis | Total | ARS and other | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 126,856 | 106,172 |
Fair value measurements on recurring basis | Total | Other (including restricted) | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 4,989,642 | 3,287,317 |
Fair value measurements on recurring basis | Total | Equity securities | ' | ' |
Fair value of marketable securities | ' | ' |
Equity securities | 441,975 | 265,380 |
Fair value measurements on recurring basis | Level 1 | ' | ' |
Fair value of marketable securities | ' | ' |
Cash Equivalents (including restricted) | 305,875 | 67,833 |
Total | 453,008 | 276,562 |
Fair value measurements on recurring basis | Level 1 | Other (including restricted) | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 11,033 | 11,182 |
Fair value measurements on recurring basis | Level 1 | Equity securities | ' | ' |
Fair value of marketable securities | ' | ' |
Equity securities | 441,975 | 265,380 |
Fair value measurements on recurring basis | Level 2 | ' | ' |
Fair value of marketable securities | ' | ' |
Cash Equivalents (including restricted) | 4,175,037 | 3,319,096 |
Total | 5,125,802 | 3,407,396 |
Fair value measurements on recurring basis | Level 2 | VRDNs | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 149,920 | 130,306 |
Fair value measurements on recurring basis | Level 2 | ARS and other | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 740 | 955 |
Fair value measurements on recurring basis | Level 2 | Other (including restricted) | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 4,975,142 | 3,276,135 |
Fair value measurements on recurring basis | Level 3 | ' | ' |
Fair value of marketable securities | ' | ' |
Total | 129,583 | 105,217 |
Fair value measurements on recurring basis | Level 3 | ARS and other | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 126,116 | 105,217 |
Fair value measurements on recurring basis | Level 3 | Other (including restricted) | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | $3,467 | ' |
Marketable_Investment_Securiti7
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 6) (Investment Securities, USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Investment Securities | ' |
Level 3 Investment Securities | ' |
Balance at the beginning of the period | $105,217 |
Net realized and unrealized gains (losses) included in earnings | 19,289 |
Net realized and unrealized gains (losses) included in other comprehensive income (loss) | 2,961 |
Purchases | 3,480 |
Settlements | -1,364 |
Balance at the end of the period | $129,583 |
Marketable_Investment_Securiti8
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 7) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Other Income (Expense) | ' | ' | ' | ' |
Marketable investment securities - gains (losses) on sales/exchanges | $49,223 | $111,709 | $63,405 | $119,445 |
Marketable investment securities - unrealized gains (losses) on investments accounted for at fair value | 8,689 | 667 | 19,175 | -2,395 |
Marketable investment securities - gains (losses) on conversion of DBSD North America | ' | ' | ' | 99,445 |
Derivative financial instruments - net realized and/or unrealized gains (losses) | 42,301 | ' | 126,832 | ' |
Marketable investment securities other-than-temporary impairments | ' | -42,811 | -1,919 | -45,292 |
Other | 5,534 | 266 | 5,235 | 1,462 |
Total | $105,747 | $69,831 | $212,728 | $172,665 |
DBSD North America (ICO) | ' | ' | ' | ' |
Other investment securities: | ' | ' | ' | ' |
Interest rate (as a percent) | 7.50% | ' | 7.50% | ' |
Inventory_Details
Inventory (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventory | ' | ' |
Total inventory | $580,714 | $623,720 |
DISH | ' | ' |
Inventory | ' | ' |
Finished goods - DBS | 282,714 | 259,307 |
Raw materials | 116,108 | 122,769 |
Work-in-process | 125,002 | 82,361 |
Total inventory | 523,824 | 464,437 |
Blockbuster | ' | ' |
Inventory | ' | ' |
Rental library | 34,567 | 81,956 |
Merchandise | 22,323 | 76,180 |
Total inventory | 56,890 | 158,136 |
Wireless | ' | ' |
Inventory | ' | ' |
Finished goods - DBS | ' | 1,147 |
Total inventory | ' | $1,147 |
Property_and_Equipment_and_Int2
Property and Equipment and Intangible Assets (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2012 | Sep. 30, 2012 |
MSS business | Wireless spectrum capitalized interest | Wireless spectrum capitalized interest | Wireless spectrum capitalized interest | Wireless spectrum capitalized interest | Equipment leased to customers | Equipment leased to customers | Equipment leased to customers | Equipment leased to customers | Satellites | Satellites | Satellites | Satellites | DBS Satellites | Buildings, furniture, fixtures, equipment and other | Buildings, furniture, fixtures, equipment and other | Buildings, furniture, fixtures, equipment and other | Buildings, furniture, fixtures, equipment and other | 148 degree orbital location | 148 degree orbital location | ||||||
Maximum | satellite | ||||||||||||||||||||||||
item | |||||||||||||||||||||||||
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of interest capitalized | ' | ' | $101,265 | $72,061 | ' | ' | $32,000 | $33,000 | $101,000 | $72,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | 260,637 | 235,403 | 795,438 | 743,220 | ' | ' | ' | ' | ' | ' | 195,843 | 165,959 | 555,653 | 481,876 | 33,866 | 38,782 | 101,598 | 111,235 | ' | 30,928 | 30,662 | 138,187 | 82,333 | 67,776 | 67,776 |
Number of customers | ' | ' | ' | ' | ' | 2,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | 3,601,577 | 3,523,347 | 10,762,934 | 10,676,982 | ' | 1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining net book value fully depreciated | $4,055,871 | ' | $4,055,871 | ' | $4,402,360 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15 | ' | ' | ' | ' | ' | ' |
Owned Satellites | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' |
Number of satellites utilized under operating lease | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7 | ' | ' | ' | ' | ' | ' |
Number of satellites utilized under capital lease | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Property_and_Equipment_and_Int3
Property and Equipment and Intangible Assets (Details 2) (USD $) | 9 Months Ended | 9 Months Ended | 9 Months Ended | |||||
Sep. 30, 2013 | Oct. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
item | EchoStar and Ariane | Wireless | AWS-4 Satellites | T2 | D1 | T1 | EchoStar XII | |
satellite | EchoStar XVIII Launch Service | satellite | ||||||
Property and equipment | ' | ' | ' | ' | ' | ' | ' | ' |
Number of satellites added | ' | ' | ' | 3 | ' | ' | ' | ' |
Number of satellites in-orbit | ' | ' | ' | 2 | ' | ' | ' | ' |
Number of satellites under construction | ' | ' | ' | 1 | ' | ' | ' | ' |
Net book value of long-lived assets before impairment | ' | ' | ' | ' | $270,000,000 | $358,000,000 | ' | ' |
Net book value of long-lived assets | ' | ' | ' | ' | 40,000,000 | 150,000,000 | 359,000,000 | ' |
Amount payable for launch contract | ' | 120,000,000 | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | $437,575,000 | ' | $438,000,000 | ' | ' | ' | ' | ' |
Number of other satellites to be relocated in the event of failure or loss of any satellite | 1 | ' | ' | ' | ' | ' | ' | ' |
Number of asset groups considered for impairment of DISH branded pay-TV DBS satellite fleet | 1 | ' | ' | ' | ' | ' | ' | ' |
Useful life | ' | ' | ' | ' | ' | ' | ' | '18 months |
Property_and_Equipment_and_Int4
Property and Equipment and Intangible Assets (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Intangible Assets | ' | ' | ' | ' | ' |
Intangible Assets | $65,690,000 | ' | $65,690,000 | ' | $75,551,000 |
Accumulated Amortization | -29,726,000 | ' | -29,726,000 | ' | -28,115,000 |
Amortization expense | 4,000,000 | 6,000,000 | 11,000,000 | 12,000,000 | ' |
Estimated future amortization of identifiable intangible assets | ' | ' | ' | ' | ' |
2013 (remaining three months) | 2,278,000 | ' | 2,278,000 | ' | ' |
2014 | 9,096,000 | ' | 9,096,000 | ' | ' |
2015 | 8,983,000 | ' | 8,983,000 | ' | ' |
2016 | 8,362,000 | ' | 8,362,000 | ' | ' |
2017 | 3,138,000 | ' | 3,138,000 | ' | ' |
Thereafter | 4,107,000 | ' | 4,107,000 | ' | ' |
Total | 35,964,000 | ' | 35,964,000 | ' | ' |
Goodwill | ' | ' | ' | ' | ' |
Goodwill | 126,000,000 | ' | 126,000,000 | ' | 126,000,000 |
Minimum | ' | ' | ' | ' | ' |
Intangible Assets | ' | ' | ' | ' | ' |
Useful life | ' | ' | '1 year | ' | ' |
Maximum | ' | ' | ' | ' | ' |
Intangible Assets | ' | ' | ' | ' | ' |
Useful life | ' | ' | '10 years | ' | ' |
Technology-based | ' | ' | ' | ' | ' |
Intangible Assets | ' | ' | ' | ' | ' |
Intangible Assets | 34,078,000 | ' | 34,078,000 | ' | 39,066,000 |
Accumulated Amortization | -10,537,000 | ' | -10,537,000 | ' | -8,345,000 |
Trademarks | ' | ' | ' | ' | ' |
Intangible Assets | ' | ' | ' | ' | ' |
Intangible Assets | 18,236,000 | ' | 18,236,000 | ' | 18,236,000 |
Accumulated Amortization | -5,813,000 | ' | -5,813,000 | ' | -3,907,000 |
Contract-based | ' | ' | ' | ' | ' |
Intangible Assets | ' | ' | ' | ' | ' |
Intangible Assets | 9,082,000 | ' | 9,082,000 | ' | 11,275,000 |
Accumulated Amortization | -9,082,000 | ' | -9,082,000 | ' | -10,127,000 |
Customer relationships | ' | ' | ' | ' | ' |
Intangible Assets | ' | ' | ' | ' | ' |
Intangible Assets | 4,294,000 | ' | 4,294,000 | ' | 6,974,000 |
Accumulated Amortization | ($4,294,000) | ' | ($4,294,000) | ' | ($5,736,000) |
Acquisitions_Details
Acquisitions (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 0 Months Ended | ||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Mar. 09, 2012 | Mar. 09, 2012 | Mar. 09, 2012 | Mar. 31, 2012 | Mar. 09, 2012 | Oct. 02, 2013 | Oct. 02, 2013 | Jul. 23, 2013 |
TerreStar Networks, Inc. ("TerreStar") | DBSD North America and TerreStar Transactions | DBSD North America and TerreStar Transactions | DBSD North America and TerreStar Transactions | DBSD North America (ICO) | Light Squared LP Entities | Light Squared LP Entities | Light Squared LP Entities | |||
Wireless | Wireless | Sprint Settlement Agreement | Wireless | LBAC | LBAC | Proposed asset purchase agreement | ||||
Wireless | Maximum | |||||||||
Spectrum Investments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total consideration | ' | ' | $1,382 | ' | $2,860 | $114 | $1,364 | ' | ' | $2,220 |
Uncertain tax position | ' | ' | ' | 102 | ' | ' | ' | ' | ' | ' |
Decrease in income tax (provision) benefit, net | 102 | 102 | ' | ' | ' | ' | ' | ' | ' | ' |
Payments for break-up fee on confirmation of order issued by Bankruptcy Court as a qualified bidder | ' | ' | ' | ' | ' | ' | ' | 52 | ' | ' |
Amount to be reimbursed on confirmation of the order issued by Bankruptcy Court as a qualified bidder, if the subsidiary is not successful bidder at auction | ' | ' | ' | ' | ' | ' | ' | ' | $2 | ' |
Blockbuster_Details
Blockbuster (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 |
In Millions, unless otherwise specified | Blockbuster - Domestic | Blockbuster - Domestic | Blockbuster - Domestic | Blockbuster - Mexico | Blockbuster UK | Blockbuster UK | Blockbuster UK | Blockbuster UK | Blockbuster UK |
item | Expected future losses | Expected future losses | Other, net within Other Income (Expense) | Cost of sales - equipment, merchandise, services, rental and other | |||||
Minimum | Maximum | ||||||||
Discontinuation of Blockbuster | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of retail stores | 400 | ' | ' | ' | ' | ' | ' | ' | ' |
Inventory written down | ' | ' | ' | $18 | ' | ' | ' | ' | ' |
Property and equipment written down | ' | ' | ' | 3 | ' | ' | ' | ' | ' |
Cumulative amount of charges recorded on a pre-tax basis on Consolidated Statements of Operations and Comprehensive Income (Loss) | ' | ' | ' | ' | ' | ' | 46 | 25 | 21 |
Revenue | ' | ' | ' | ' | 67 | 207 | ' | ' | ' |
Operating loss | ' | $15 | $30 | ' | $1 | $6 | ' | ' | ' |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jun. 21, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | 28-May-13 | Sep. 30, 2013 | Apr. 05, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 05, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 21, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | 28-May-13 | Sep. 30, 2013 | Dec. 31, 2012 | Oct. 02, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
5% Senior Notes due 2017 | 5% Senior Notes due 2017 | 5% Senior Notes due 2017 | 5% Senior Notes due 2017 | 4 1/4% Senior Notes due 2018 | 4 1/4% Senior Notes due 2018 | 4 1/4% Senior Notes due 2018 | 4 1/4% Senior Notes due 2018 | 5 1/8% Senior Notes due 2020 | 5 1/8% Senior Notes due 2020 | 5 1/8% Senior Notes due 2020 | 5 1/8% Senior Notes due 2020 | 6 1/4% Senior Notes due 2023 | 6 1/4% Senior Notes due 2023 | 6 1/4% Senior Notes due 2023 | 6 1/4% Senior Notes due 2023 | 7 % Senior Notes due 2013 | 7 % Senior Notes due 2013 | 7 % Senior Notes due 2013 | 6 5/8% Senior Notes due 2014 | 6 5/8% Senior Notes due 2014 | 7 3/4% Senior Notes due 2015 | 7 3/4% Senior Notes due 2015 | 7 1/8% Senior Notes due 2016 | 7 1/8% Senior Notes due 2016 | 4 5/8% Senior Notes due 2017 | 4 5/8% Senior Notes due 2017 | 7 7/8% Senior Notes due 2019 | 7 7/8% Senior Notes due 2019 | 6 3/4% Senior Notes due 2021 | 6 3/4% Senior Notes due 2021 | 5 7/8% Senior Notes due 2022 | 5 7/8% Senior Notes due 2022 | 5% Senior Notes due 2023 | 5% Senior Notes due 2023 | Mortgages and other notes payable | Mortgages and other notes payable | ||||||
DISH DBS | DISH DBS | DISH DBS | DISH DBS | DISH DBS | DISH DBS | Subsequent event | ||||||||||||||||||||||||||||||||||||
Redemption Prior to April 1, 2016 | Redemption Prior to May 1, 2016 | |||||||||||||||||||||||||||||||||||||||||
Long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | 4.25% | ' | 4.25% | ' | 5.13% | ' | 5.13% | ' | ' | ' | 6.25% | ' | 7.00% | ' | 7.00% | 6.63% | ' | 7.75% | ' | 7.13% | ' | 4.63% | ' | 7.88% | ' | 6.75% | ' | 5.88% | ' | 5.00% | ' | ' | ' |
Aggregate principal amount | ' | ' | ' | ' | ' | ' | ' | ' | $1,250,000,000 | ' | $1,200,000,000 | ' | ' | ' | $1,100,000,000 | ' | ' | ' | ' | ' | $1,350,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of debt instrument | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | '5 years | ' | ' | ' | '7 years | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument issuance as a percentage of the face amount | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | 100.00% | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption price as a percentage of principal amount | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | 100.00% | ' | ' | ' | 100.00% | ' | ' | 101.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum percentage of the aggregate principal amount of notes with net proceeds of certain equity offerings or capital contributions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of principal amount at which notes may be required to be repurchased in event of change of control | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 101.00% | ' | ' | ' | 101.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Premiums, interest expense and deferred financing costs, as applicable | 189,474,000 | 143,818,000 | 565,730,000 | 391,132,000 | ' | ' | 7,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying Value | 13,883,769,000 | ' | 13,883,769,000 | ' | 11,638,955,000 | ' | ' | ' | ' | 1,200,000,000 | ' | ' | ' | 1,100,000,000 | ' | ' | ' | ' | ' | ' | ' | 451,448,000 | 500,000,000 | ' | 1,000,000,000 | 1,000,000,000 | 750,000,000 | 750,000,000 | 1,500,000,000 | 1,500,000,000 | 900,000,000 | 900,000,000 | 1,400,000,000 | 1,400,000,000 | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | 1,500,000,000 | 1,500,000,000 | 82,321,000 | 88,955,000 |
Fair Value | 14,383,674,000 | ' | 14,383,674,000 | ' | 12,806,555,000 | ' | ' | ' | ' | 1,203,000,000 | ' | ' | ' | 1,081,135,000 | ' | ' | ' | ' | ' | ' | ' | 451,498,000 | 521,875,000 | ' | 1,055,050,000 | 1,078,500,000 | 821,100,000 | 844,725,000 | 1,649,595,000 | 1,683,750,000 | 920,250,000 | 940,500,000 | 1,598,100,000 | 1,669,500,000 | 2,108,600,000 | 2,280,000,000 | 2,019,900,000 | 2,150,000,000 | 1,393,125,000 | 1,548,750,000 | 82,321,000 | 88,955,000 |
Capital lease obligations | 227,555,000 | ' | 227,555,000 | ' | 249,145,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total long-term debt and capital lease obligations (including current portion) | 14,111,324,000 | ' | 14,111,324,000 | ' | 11,888,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt repurchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 49,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal balance of debt redeemed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $451,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 9 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 1 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Dec. 28, 2012 | Dec. 02, 2011 | Sep. 30, 2013 | Dec. 28, 2012 | Dec. 02, 2011 | Sep. 30, 2013 | Jan. 31, 2013 |
Class A common stock | Class A common stock | Class A common stock | Class B common stock | Class B common stock | Stock options | Stock option adjustment | ||
employee | ||||||||
Share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum Expiration term | ' | ' | ' | ' | ' | ' | '10 years | ' |
Percentage of stock awards vesting per year | 20.00% | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock available for future grant under stock incentive plans | ' | ' | ' | 69.7 | ' | ' | ' | ' |
Number of stock options subject to an exercise price change in connection with the Stock Option Adjustment (in shares) | ' | ' | ' | ' | ' | ' | ' | 16.3 |
Dividend in cash per share (in dollars per share) | ' | $1 | $2 | ' | $1 | $2 | ' | ' |
Number of employees affected by stock option adjustment | ' | ' | ' | ' | ' | ' | ' | 550 |
Reduction in exercise price due to dividend declaration (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $0.77 |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 2) | Sep. 30, 2013 | Dec. 31, 2012 |
Stock options | ' | ' |
Share-based compensation | ' | ' |
Stock Awards Outstanding (in shares) | 14,554,351 | 16,399,870 |
Stock options | DISH Network Awards | ' | ' |
Share-based compensation | ' | ' |
Stock Awards Outstanding (in shares) | 14,554,351 | ' |
Stock options | DISH Network Awards | Held by DISH Network employees | ' | ' |
Share-based compensation | ' | ' |
Stock Awards Outstanding (in shares) | 13,238,936 | ' |
Stock options | DISH Network Awards | Held by EchoStar employees | ' | ' |
Share-based compensation | ' | ' |
Stock Awards Outstanding (in shares) | 1,315,415 | ' |
Stock options | EchoStar Awards | ' | ' |
Share-based compensation | ' | ' |
Stock Awards Outstanding (in shares) | 607,361 | ' |
Stock options | EchoStar Awards | Held by DISH Network employees | ' | ' |
Share-based compensation | ' | ' |
Stock Awards Outstanding (in shares) | 607,361 | ' |
Restricted stock units | DISH Network Awards | ' | ' |
Share-based compensation | ' | ' |
Stock Awards Outstanding (in shares) | 1,969,330 | ' |
Restricted stock units | DISH Network Awards | Held by DISH Network employees | ' | ' |
Share-based compensation | ' | ' |
Stock Awards Outstanding (in shares) | 1,892,331 | ' |
Restricted stock units | DISH Network Awards | Held by EchoStar employees | ' | ' |
Share-based compensation | ' | ' |
Stock Awards Outstanding (in shares) | 76,999 | ' |
Restricted stock units | EchoStar Awards | ' | ' |
Share-based compensation | ' | ' |
Stock Awards Outstanding (in shares) | 44,954 | ' |
Restricted stock units | EchoStar Awards | Held by DISH Network employees | ' | ' |
Share-based compensation | ' | ' |
Stock Awards Outstanding (in shares) | 44,954 | ' |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Long-Term Performance Based Plans | ' | ' | ' | ' |
Stock option activity | ' | ' | ' | ' |
Total options outstanding, end of period (in shares) | 7,805,500 | ' | 7,805,500 | ' |
Weighted-Average Exercise Price | ' | ' | ' | ' |
Total options outstanding at the end of the period (in dollars per share) | $24.03 | ' | $24.03 | ' |
Stock options | ' | ' | ' | ' |
Stock option activity | ' | ' | ' | ' |
Total options outstanding, beginning of period (in shares) | ' | ' | 16,399,870 | ' |
Granted (in shares) | ' | ' | 2,206,500 | ' |
Exercised (in shares) | ' | ' | -3,941,219 | ' |
Forfeited and cancelled (in shares) | ' | ' | -110,800 | ' |
Total options outstanding, end of period (in shares) | 14,554,351 | ' | 14,554,351 | ' |
Exercisable at the end of the period (in shares) | 4,812,350 | ' | 4,812,350 | ' |
Weighted-Average Exercise Price | ' | ' | ' | ' |
Total options outstanding, beginning of the period (in dollars per share) | ' | ' | $19.04 | ' |
Granted (in dollars per share) | ' | ' | $36.68 | ' |
Exercised (in dollars per share) | ' | ' | $16.06 | ' |
Forfeited and cancelled (in dollars per share) | ' | ' | $28.02 | ' |
Total options outstanding at the end of the period (in dollars per share) | $21.60 | ' | $21.60 | ' |
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $17 | ' | $17 | ' |
Share-based compensation additional disclosures | ' | ' | ' | ' |
Tax benefit from stock awards exercised | $16,889 | $3,366 | $33,986 | $15,313 |
Additional disclosures | ' | ' | ' | ' |
Aggregate intrinsic value of stock options outstanding | 340,769 | ' | 340,769 | ' |
Aggregate intrinsic value of stock options exercisable | $134,797 | ' | $134,797 | ' |
StockBased_Compensation_Detail3
Stock-Based Compensation (Details 4) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Restricted stock unit activity | ' |
Total restricted stock units outstanding, end of period (in shares) | 1,986,830 |
Long-Term Performance Based Plans | ' |
Restricted stock unit activity | ' |
Total restricted stock units outstanding, end of period (in shares) | 1,969,330 |
Weighted - Average Grant Date Fair Value | ' |
Total restricted stock units outstanding, end of period (in dollars per share) | $29.06 |
Restricted stock units | ' |
Restricted stock unit activity | ' |
Total restricted stock units outstanding, beginning of period (in shares) | 1,185,080 |
Granted (in shares) | 985,000 |
Vested (in shares) | -135,250 |
Forfeited and cancelled (in shares) | -65,500 |
Total restricted stock units outstanding, end of period (in shares) | 1,969,330 |
Weighted - Average Grant Date Fair Value | ' |
Total restricted stock units outstanding, beginning of period (in dollars per share) | $22.99 |
Granted (in dollars per share) | $36.48 |
Vested (in dollars per share) | $29.19 |
Forfeited and cancelled (in dollars per share) | $30.51 |
Total restricted stock units outstanding, end of period (in dollars per share) | $29.06 |
StockBased_Compensation_Detail4
Stock-Based Compensation (Details 5) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
LTIP 2005 | LTIP 2008 | LTIP 2013 | DISH Network Awards | EchoStar Awards | |
Held by DISH Network employees | Held by DISH Network employees | ||||
LTIP 2005 | LTIP 2005 | ||||
2005 LTIP Terms | ' | ' | ' | ' | ' |
Awards vesting period | '7 years | ' | ' | ' | ' |
Percentage awards vesting per annum during first four years | 10.00% | ' | ' | ' | ' |
Percentage awards vesting per annum after first four years | 20.00% | ' | ' | ' | ' |
Share-based expenses | ' | ' | ' | ' | ' |
Unrecognized compensation expense relating to long-term performance based incentive awards | $43,296 | ' | ' | $36,924 | $6,372 |
Unrecognized non-cash stock-based compensation expense on vested portion | $41,388 | ' | ' | $35,205 | $6,183 |
Share-based compensation additional disclosures | ' | ' | ' | ' | ' |
Portion meeting vesting condition (as a percent) | ' | 100.00% | ' | ' | ' |
Percentage of performance goals probable of achievement | ' | ' | 20.00% | ' | ' |
StockBased_Compensation_Detail5
Stock-Based Compensation (Details 6) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Recognized non-cash stock-based compensation expense | ' | ' | ' | ' |
Non-cash stock-based compensation expense recognized | $10,749 | $6,758 | $26,111 | $36,957 |
Outstanding awards pursuant to performance-based stock incentive plans | ' | ' | ' | ' |
Restricted Performance Units (in shares) | 1,986,830 | ' | 1,986,830 | ' |
Long-Term Performance Based Plans | ' | ' | ' | ' |
Recognized non-cash stock-based compensation expense | ' | ' | ' | ' |
Non-cash stock-based compensation expense recognized | 7,753 | 3,794 | 13,687 | 16,545 |
Outstanding awards pursuant to performance-based stock incentive plans | ' | ' | ' | ' |
Performance Based Stock Options (in shares) | 7,805,500 | ' | 7,805,500 | ' |
Weighted-Average Exercise Price (in dollars per share) | $24.03 | ' | $24.03 | ' |
Restricted Performance Units (in shares) | 1,969,330 | ' | 1,969,330 | ' |
LTIP 2005 | ' | ' | ' | ' |
Outstanding awards pursuant to performance-based stock incentive plans | ' | ' | ' | ' |
Performance Based Stock Options (in shares) | 3,200,500 | ' | 3,200,500 | ' |
Weighted-Average Exercise Price (in dollars per share) | $20.33 | ' | $20.33 | ' |
Restricted Performance Units (in shares) | 301,830 | ' | 301,830 | ' |
LTIP 2008 | ' | ' | ' | ' |
Recognized non-cash stock-based compensation expense | ' | ' | ' | ' |
Non-cash stock-based compensation expense recognized | ' | 2,515 | 3,071 | 10,694 |
LTIP 2013 | ' | ' | ' | ' |
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | ' | ' | ' | ' |
Remaining expense estimated to be recognized during 2013 | 2,234 | ' | 2,234 | ' |
Estimated contingent expense subsequent to 2013 | 58,223 | ' | 58,223 | ' |
Total estimated remaining expense over the term of plan | 60,457 | ' | 60,457 | ' |
Recognized non-cash stock-based compensation expense | ' | ' | ' | ' |
Non-cash stock-based compensation expense recognized | 6,567 | ' | 6,567 | ' |
Outstanding awards pursuant to performance-based stock incentive plans | ' | ' | ' | ' |
Performance Based Stock Options (in shares) | 1,935,000 | ' | 1,935,000 | ' |
Weighted-Average Exercise Price (in dollars per share) | $36.48 | ' | $36.48 | ' |
Restricted Performance Units (in shares) | 967,500 | ' | 967,500 | ' |
Other Employee Performance Awards | ' | ' | ' | ' |
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | ' | ' | ' | ' |
Remaining expense estimated to be recognized during 2013 | 231 | ' | 231 | ' |
Estimated contingent expense subsequent to 2013 | 41,929 | ' | 41,929 | ' |
Total estimated remaining expense over the term of plan | 42,160 | ' | 42,160 | ' |
Recognized non-cash stock-based compensation expense | ' | ' | ' | ' |
Non-cash stock-based compensation expense recognized | $1,186 | $1,279 | $4,049 | $5,851 |
Outstanding awards pursuant to performance-based stock incentive plans | ' | ' | ' | ' |
Performance Based Stock Options (in shares) | 2,670,000 | ' | 2,670,000 | ' |
Weighted-Average Exercise Price (in dollars per share) | $19.46 | ' | $19.46 | ' |
Restricted Performance Units (in shares) | 700,000 | ' | 700,000 | ' |
StockBased_Compensation_Detail6
Stock-Based Compensation (Details 7) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Stock-Based Compensation | ' | ' | ' | ' |
Non-cash, stock-based compensation | $10,749,000 | $6,758,000 | $26,111,000 | $36,957,000 |
Subscriber-related | ' | ' | ' | ' |
Stock-Based Compensation | ' | ' | ' | ' |
Non-cash, stock-based compensation | 941,000 | 312,000 | 1,610,000 | 1,506,000 |
General and administrative | ' | ' | ' | ' |
Stock-Based Compensation | ' | ' | ' | ' |
Non-cash, stock-based compensation | 9,808,000 | 6,446,000 | 24,501,000 | 35,451,000 |
Non-Performance Based Stock Awards | ' | ' | ' | ' |
Share-based expenses | ' | ' | ' | ' |
Unrecognized compensation expense | $16,000,000 | ' | $16,000,000 | ' |
Share-based compensation additional disclosures | ' | ' | ' | ' |
Future forfeiture rate (as a percent) | 3.70% | ' | 3.70% | ' |
Weighted average period for recognition of compensation cost | ' | ' | '2 years | ' |
StockBased_Compensation_Detail7
Stock-Based Compensation (Details 8) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||
Dec. 28, 2012 | Dec. 02, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 28, 2012 | Dec. 02, 2011 | Dec. 28, 2012 | Dec. 02, 2011 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2013 | Sep. 30, 2013 | |
Class A common stock | Class A common stock | Class B common stock | Class B common stock | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock option adjustment 2012 | Stock option adjustment 2012 | |||||||
Minimum | Minimum | Maximum | Maximum | ||||||||||||||||
Stock-Based Compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-cash, stock-based compensation | ' | ' | $10,749,000 | $6,758,000 | $26,111,000 | $36,957,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5,000,000 | ' |
Black-Scholes option valuation model, assumptions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk free interest rate, low end of range (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.91% | 0.41% | ' | ' | ' | ' | ' | ' |
Risk free interest rate, high end of range (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.93% | 1.29% | ' | ' | ' | ' | ' | ' |
Risk free interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.78% | ' | ' | ' | ' | ' | ' | ' | ' |
Volatility factor, low end of range (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32.37% | 33.15% | ' | ' | ' | ' | ' | ' |
Volatility factor, high end of range (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 39.87% | 39.34% | ' | ' | ' | ' | ' | ' |
Volatility factor (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 38.90% | ' | ' | ' | ' | ' | ' | ' | ' |
Expected term of options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years 9 months 18 days | ' | ' | '5 years 8 months 12 days | '3 years 1 month 6 days | '10 years | '5 years 10 months 24 days | ' | ' |
Weighted-average fair value of options granted (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $11.44 | ' | ' | $14.49 | $6.72 | $16.85 | $12.69 | ' | ' |
Dividend in cash per share (in dollars per share) | ' | ' | ' | ' | ' | ' | $1 | $2 | $1 | $2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Adjustment to recognized non-cash, stock-based compensation expense to be expensed over the remaining vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,000,000 |
Dividend yield (as a percent) | 0.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 9 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Dec. 31, 2008 | Oct. 29, 2013 | Dec. 31, 2008 | Mar. 09, 2012 | Sep. 30, 2013 | |
Wireless | Wireless | DBSD North America and TerreStar Transactions | DBSD North America and TerreStar Transactions | |||
Wireless | Wireless | |||||
Spectrum Investments | ' | ' | ' | ' | ' | ' |
Purchase price | ' | ' | ' | ' | $2,860,000,000 | ' |
AWS-4 Interim Build-out Requirement (as a percent) | ' | ' | ' | ' | ' | 40.00% |
AWS-4 Final Build-out Requirement (as a percent) | ' | ' | ' | ' | ' | 70.00% |
Payment to acquire certain 700 MHz wireless licenses | ' | 712,000,000 | ' | 712,000,000 | ' | ' |
700 MHz Interim Build-out Requirement (as a percent) | ' | ' | ' | 35.00% | ' | ' |
700 MHz Final Build-out Requirement (as a percent) | ' | ' | ' | 70.00% | ' | ' |
Accelerated period to meet Final Build-Out Requirement on failure to meet Interim Build-Out Requirement | '1 year | ' | ' | ' | ' | ' |
Modified 700 MHz Interim Build-out Requirement (as a percent) | ' | ' | 40.00% | ' | ' | ' |
Modified 700 MHz Final Build-out Requirement (as a percent) | ' | ' | 70.00% | ' | ' | ' |
Minimum period for approval prior to the commencement of planned H Block auction | '30 days | ' | ' | ' | ' | ' |
Aggregate bid price | ' | ' | $1,560,000,000 | ' | ' | ' |
Maximum bid price per MHz/POP (in dollars per unit) | ' | ' | 0.5 | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 09, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 11, 2012 | Dec. 29, 2010 | Mar. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2008 | Jun. 21, 2011 | Dec. 31, 2010 | Mar. 15, 2010 | Jul. 31, 2009 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2007 | Sep. 30, 2013 | 24-May-12 | Aug. 06, 2013 | Sep. 30, 2013 | |
Garnet Digital | Satellite lease guarantees | Satellite transponder guarantees | ESPN-Affiliation agreements | ESPN-Affiliation agreements | ESPN-Affiliation agreements | ESPN-Affiliation agreements | ESPN-Affiliation agreements | ESPN-Affiliation agreements | ESPN-Affiliation agreements | ESPN-Affiliation agreements | ESPN-Affiliation agreements | Technology Development Licensing | Pragmatus | Katz Communications-Patent infringement | Katz Communications-Patent infringement | Norman IP Holdings | The Hopper Litigation | Harbinger | LightSquared transaction shareholder derivative actions | |||||
item | item | Minimum | item | patent | item | Maximum | Minimum | item | ||||||||||||||||
item | patent | |||||||||||||||||||||||
Loss contingencies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Guarantees for payments | ' | ' | ' | ' | ' | $63,000,000 | $391,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Guarantee term | ' | ' | ' | ' | ' | 'P17M | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Claim amount | ' | ' | ' | ' | ' | ' | ' | ' | 30,000,000 | ' | ' | ' | 35,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000,000 | ' |
Court ruling | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 66,000,000 | ' | 66,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Attorneys' fees | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | 71,000,000 | ' | 24,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation accrual | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 71,000,000 | ' | ' | ' | 42,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of accrued interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
General and administrative expenses | $224,069,000 | $309,601,000 | $725,512,000 | $986,571,000 | ' | ' | ' | ' | ' | ' | $5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of days to store HD primetime programs recordings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '8 days | ' | ' |
Number of shareholders who filed lawsuits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 |
Loss contingency terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of reexamination petitions pending before patent and trademark office | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | 2 | ' | ' | ' | ' | ' |
Number of patents the suit alleges infringement of | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19 | ' | ' | ' | ' |
Number of patents remain in the lawsuit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' |
Number of companies against whom similar complaints brought | ' | ' | ' | ' | 15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40 | ' | ' | ' | ' | ' | ' |
Minimum number of autonomous streamlined signal processors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2008 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2008 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jun. 30, 2013 | Sep. 30, 2013 | |
subscriber | segment | Sprint Settlement Agreement | United States | United States | United States | United States | United Kingdom | United Kingdom | United Kingdom | Mexico | Mexico | Mexico | Mexico | Other | Other | Other | Other | DISH | DISH | DISH | DISH | DISH | Blockbuster | Blockbuster | Blockbuster | Blockbuster | Blockbuster | Wireless | Wireless | Wireless | Wireless | Wireless | Wireless | Eliminations | Eliminations | Eliminations | Eliminations | Eliminations | MSS business | MSS business | ||||||
subscriber | TerreStar Networks, Inc. ("TerreStar") | TerreStar Networks, Inc. ("TerreStar") | ||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of primary operating business units | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of DISH Network subscribers | 14,049,000 | ' | 14,049,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment to acquire certain 700 MHz wireless licenses | ' | ' | ' | ' | $712,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $712,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Payments to acquire wireless spectrum assets | ' | ' | ' | ' | ' | 2,860,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total assets | 20,345,240,000 | ' | 20,345,240,000 | ' | ' | ' | 17,379,608,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,677,640,000 | ' | 19,677,640,000 | ' | 16,144,977,000 | 227,126,000 | ' | 227,126,000 | ' | 357,267,000 | 4,889,632,000 | ' | 4,889,632,000 | ' | ' | 5,066,616,000 | -4,449,158,000 | ' | -4,449,158,000 | ' | -4,189,252,000 | ' | ' |
Total revenue | 3,601,577,000 | 3,523,347,000 | 10,762,934,000 | 10,676,982,000 | ' | ' | ' | ' | 3,562,670,000 | 3,406,088,000 | 10,615,673,000 | 10,316,080,000 | 66,744,000 | 10,883,000 | 206,978,000 | 38,129,000 | 37,507,000 | 117,715,000 | 114,196,000 | 778,000 | 13,008,000 | 18,663,000 | 39,728,000 | 3,507,473,000 | 3,298,869,000 | 10,375,785,000 | 9,875,890,000 | ' | 96,665,000 | 230,885,000 | 397,597,000 | 818,188,000 | ' | 395,000 | 305,000 | 1,607,000 | 634,000 | ' | ' | -2,956,000 | -6,712,000 | -12,055,000 | -17,730,000 | ' | ' | ' |
Operating income (loss) | 397,421,000 | -273,029,000 | 870,347,000 | 767,734,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 442,368,000 | -241,674,000 | 1,462,716,000 | 824,244,000 | ' | -23,498,000 | -11,919,000 | -27,909,000 | -11,295,000 | ' | -21,449,000 | -19,436,000 | -564,460,000 | -45,215,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | 437,575,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 438,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional depreciation expense related to accelerated depreciable lives of certain assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 53,000,000 | 53,000,000 |
Legal and financial advisory fees | ' | ' | ' | ' | ' | ' | ' | $18,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 12 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jul. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2009 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 02, 2012 | Apr. 29, 2011 | Sep. 30, 2013 | Jan. 02, 2013 | Jan. 02, 2013 | 31-May-10 | Dec. 21, 2012 | Sep. 30, 2013 | Dec. 31, 2009 | Dec. 31, 2009 | Dec. 31, 2008 | Sep. 30, 2012 | Dec. 31, 2008 | 31-May-13 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jan. 31, 2012 | Mar. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2010 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 31, 2012 | Jan. 31, 2012 | Nov. 30, 2012 | Jan. 31, 2010 | Feb. 23, 2010 | Sep. 30, 2013 | Feb. 23, 2010 | Sep. 30, 2013 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2008 | Sep. 30, 2013 | Dec. 31, 2012 | 31-May-13 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | |
DISH Digital Holding LLC | EchoStar XVI | EchoStar XVI | Gilbert Lease Agreement | Santa Fe Lease Agreement | Inverness Lease Agreement | Hughes Broadband Distribution Agreement | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | Blockbuster, Inc. | NagraStar | NagraStar | NagraStar | NagraStar | NagraStar | HNS | HNS | ||||||
TiVo vs Dish Network and EchoStar Corporation | Remanufactured Receiver Agreement | Professional Services Agreement | Management Services Agreement | Certain Sports Related Programming Broadcast Agreement | EchoStar XVI | EchoStar XVI | Nimiq 5 Agreement | DISH Nimiq 5 Agreement | QuetzSat-1 Lease Agreement | QuetzSat-1 Transponder Agreement | QuetzSat-1 Transponder Agreement | 103 degree orbital location member | 103 degree orbital location member | 103 degree orbital location member | Tax Sharing Agreement | TT&C Agreement | DBSD North America Agreement | Application Development Agreement | XIP Encryption Agreement | RUS Implementation Agreement | RUS Implementation Agreement | RUS Implementation Agreement | RUS Implementation Agreement | Receiver Agreement | Receiver Agreement | Receiver Agreement | Receiver Agreement | Receiver Agreement | Receiver Agreement | Product Support Agreement | DISH Online.com Services Agreement | DISH Online.com Services Agreement | DISH Remote Access Services Agreement | DISH Remote Access Services Agreement | Sling Service Services Agreement | Sling Service Services Agreement | Patent Cross-License Agreements | Hughes Broadband Distribution Agreement | Hughes Broadband Distribution Agreement | El Paso Lease Agreement | Varick Sublease Agreement | Radio Access Network Agreement | Radio Access Network Agreement | EchoStar XV | Hughes Broadband Distribution Agreement | Hughes Broadband Distribution Agreement | |||||||||||||||||||
item | transponder | transponder | transponder | transponder | transponder | item | Minimum | Minimum | item | Maximum | item | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments to the related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $23,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net book value of asset | 35,964,000 | ' | 35,964,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital distribution | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum required notice period for termination of agreement by related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '60 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Automatic renewal period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | '1 year | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum notice period for termination of a specific service | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notice period for termination of agreement | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | '6 months | '180 days | ' | ' | '60 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | '90 days | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchased set-top boxes and other equipment from EchoStar | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 341,000,000 | 247,000,000 | 947,000,000 | 738,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net amount of the allocated tax attributes payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 83,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum grants receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of sales - equipment, merchandise, services, rental and other | 81,521,000 | 120,852,000 | 257,830,000 | 393,175,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | 3,000,000 | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum required notice period for termination by the reporting entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '60 days | ' | ' | '180 days | '45 days | ' | ' | ' | '180 days | ' | ' | ' | ' | '60 days | '60 days | ' | '120 days | ' | '120 days | ' | '120 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Agreement term | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | '5 years | ' | ' | ' | ' | '10 years | ' | ' | '15 years | '10 years | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | '5 years | ' | '5 years | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Agreement term from commencement of service date | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | '4 years | ' | ' | '10 years | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of DBS transponders available to receive services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32 | ' | 32 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of DBS transponders expected to receive services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of DBS transponders currently used | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of transponders subleased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of renewal option | ' | ' | ' | ' | ' | ' | '6 years | ' | ' | '1 year | ' | '1 year | ' | ' | ' | ' | ' | ' | '6 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | '1 year | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' |
Term of renewal option exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional term of renewal option | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' |
Number of successive one year renewal options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of consecutive three year renewal options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments to third party by related party under extension option | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subscriber-related expenses | 1,976,712,000 | 1,808,285,000 | 5,812,325,000 | 5,393,202,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,000,000 | 19,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Broadband equipment purchased from EchoStar | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | 57,000,000 |
Purchases from NagraStar | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,563,000 | 17,895,000 | 69,129,000 | 53,624,000 | ' | ' | ' |
Payments to third party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amounts payable to NagraStar | 336,164,000 | ' | 336,164,000 | ' | 281,875,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,923,000 | ' | 18,923,000 | ' | 21,930,000 | ' | ' |
Settlement amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial settlement amount paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contribution from related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate of six annual installment amounts between 2012 and 2017, net of contribution from related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation settlement number of annual installments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of litigation settlement amount to be made by related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment capitalization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8,000,000 | $3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notice period to exercise option to extend agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '180 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership percentage | ' | ' | ' | ' | ' | 67.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related party ownership interest in subsidiary (as a percentage) | ' | ' | ' | ' | ' | 33.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subsequent_Events_Details
Subsequent Events (Details) (7 % Senior Notes due 2013, USD $) | Sep. 30, 2013 | Oct. 02, 2013 |
In Millions, unless otherwise specified | Subsequent event | |
Subsequent Events | ' | ' |
Principal balance of debt redeemed | ' | $451 |
Interest rate (as a percent) | 7.00% | 7.00% |