Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 5-May-14 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'DISH DBS CORP | ' |
Entity Central Index Key | '0001042642 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 1,015 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash and cash equivalents | $3,956,176 | $4,294,475 |
Marketable investment securities | 4,071,453 | 4,117,326 |
Trade accounts receivable - other, net of allowance for doubtful accounts of $11,769 and $15,981, respectively | 818,302 | 859,986 |
Trade accounts receivable - EchoStar, net of allowance for doubtful accounts of zero | 70,217 | 52,602 |
Inventory | 522,822 | 512,646 |
Deferred tax assets | 65,457 | 65,457 |
Other current assets | 139,787 | 143,564 |
Total current assets | 9,644,214 | 10,046,056 |
Noncurrent Assets: | ' | ' |
Restricted cash and marketable investment securities | 82,026 | 82,780 |
Property and equipment, net | 2,536,442 | 2,979,323 |
FCC authorizations | 635,794 | 635,794 |
Other noncurrent assets, net (Note 4) | 559,270 | 258,754 |
Total noncurrent assets | 3,813,532 | 3,956,651 |
Total assets | 13,457,746 | 14,002,707 |
Current Liabilities: | ' | ' |
Trade accounts payable - other | 139,938 | 257,950 |
Trade accounts payable - EchoStar | 354,752 | 338,788 |
Deferred revenue and other | 852,869 | 824,478 |
Accrued programming | 1,364,447 | 1,238,610 |
Accrued interest | 210,561 | 232,732 |
Other accrued expenses | 487,818 | 457,775 |
Current portion of long-term debt and capital lease obligations | 1,027,695 | 1,032,607 |
Total current liabilities | 4,438,080 | 4,382,940 |
Long-Term Obligations, Net of Current Portion: | ' | ' |
Long-term debt and capital lease obligations, net of current portion | 12,551,169 | 12,596,608 |
Deferred tax liabilities | 1,182,908 | 1,247,375 |
Long-term deferred revenue, distribution and carriage payments and other long-term liabilities | 157,429 | 159,684 |
Total long-term obligations, net of current portion | 13,891,506 | 14,003,667 |
Total liabilities | 18,329,586 | 18,386,607 |
Commitments and Contingencies (Note 8) | ' | ' |
Stockholder's Equity (Deficit): | ' | ' |
Common stock, $.01 par value, 1,000,000 shares authorized, 1,015 shares issued and outstanding | ' | ' |
Additional paid-in capital | 1,260,326 | 1,300,101 |
Accumulated other comprehensive income (loss) | 23,613 | 11,189 |
Accumulated earnings (deficit) | -6,157,620 | -5,697,772 |
Total DISH DBS stockholder's equity (deficit) | -4,873,681 | -4,386,482 |
Noncontrolling interest | 1,841 | 2,582 |
Total stockholder's equity (deficit) | -4,871,840 | -4,383,900 |
Total liabilities and stockholder's equity (deficit) | $13,457,746 | $14,002,707 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Current Assets: | ' | ' |
Allowance for doubtful accounts on trade accounts receivable - other | $11,769 | $15,981 |
Allowance for doubtful accounts on trade accounts receivable - EchoStar | $0 | $0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, shares issued | 1,015 | 1,015 |
Common stock, shares outstanding | 1,015 | 1,015 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenue: | ' | ' |
Subscriber-related revenue | $3,473,208 | $3,310,452 |
Equipment sales and other revenue | 21,450 | 24,521 |
Equipment sales, services and other revenue - EchoStar | 15,552 | 1,285 |
Total revenue | 3,510,210 | 3,336,258 |
Costs and Expenses (exclusive of depreciation shown separately below - Note 6): | ' | ' |
Subscriber-related expenses | 2,015,673 | 1,887,593 |
Satellite and transmission expenses: | ' | ' |
EchoStar | 137,783 | 110,993 |
Other | 10,344 | 9,981 |
Cost of sales - equipment, services and other | 25,226 | 19,996 |
Subscriber acquisition costs: | ' | ' |
Cost of sales - subscriber promotion subsidies | 55,343 | 70,064 |
Other subscriber acquisition costs | 228,148 | 245,831 |
Subscriber acquisition advertising | 124,873 | 113,823 |
Total subscriber acquisition costs | 408,364 | 429,718 |
General and administrative expenses - EchoStar | 20,401 | 12,786 |
General and administrative expenses | 159,183 | 145,582 |
Depreciation and amortization (Note 6) | 224,966 | 205,496 |
Total costs and expenses | 3,001,940 | 2,822,145 |
Operating income (loss) | 508,270 | 514,113 |
Other Income (Expense): | ' | ' |
Interest income | 8,762 | 7,208 |
Interest expense, net of amounts capitalized | -212,079 | -195,766 |
Other, net | 340 | 128 |
Total other income (expense) | -202,977 | -188,430 |
Income (loss) before income taxes | 305,293 | 325,683 |
Income tax (provision) benefit, net | -115,882 | -119,452 |
Net income (loss) | 189,411 | 206,231 |
Less: Net income (loss) attributable to noncontrolling interest | -741 | ' |
Net income (loss) attributable to DISH DBS | 190,152 | 206,231 |
Comprehensive Income (Loss): | ' | ' |
Net income (loss) | 189,411 | 206,231 |
Other comprehensive income (loss): | ' | ' |
Unrealized holding gains (losses) on available-for-sale securities | 19,951 | 2,610 |
Deferred income tax (expense) benefit, net | -7,527 | -1,141 |
Total other comprehensive income (loss), net of tax | 12,424 | 1,469 |
Comprehensive income (loss) | 201,835 | 207,700 |
Less: Comprehensive income (loss) attributable to noncontrolling interest | -741 | ' |
Comprehensive income (loss) attributable to DISH DBS | $202,576 | $207,700 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash Flows From Operating Activities: | ' | ' |
Net income (loss) | $189,411 | $206,231 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ' | ' |
Depreciation and amortization | 224,966 | 205,496 |
Non-cash, stock-based compensation | 9,769 | 10,219 |
Deferred tax expense (benefit) | -40,721 | 8,839 |
Other, net | 13,241 | 45,199 |
Changes in current assets and current liabilities, net | 78,713 | -257,937 |
Net cash flows from operating activities | 475,379 | 218,047 |
Cash Flows From Investing Activities: | ' | ' |
(Purchases) Sales and maturities of marketable investment securities, net | 65,824 | -524,605 |
Purchases of property and equipment | -216,435 | -231,908 |
Change in restricted cash and marketable investment securities | 754 | 42,976 |
Other, net | -9,052 | ' |
Net cash flows from investing activities | -158,909 | -713,537 |
Cash Flows From Financing Activities: | ' | ' |
Dividend to DISH Orbital Corporation | -650,000 | ' |
Repayment of long-term debt and capital lease obligations | -6,692 | -8,315 |
Other, net | 1,923 | 385 |
Net cash flows from financing activities | -654,769 | -7,930 |
Net increase (decrease) in cash and cash equivalents | -338,299 | -503,420 |
Cash and cash equivalents, beginning of period | 4,294,475 | 3,424,387 |
Cash and cash equivalents, end of period | $3,956,176 | $2,920,967 |
Organization_and_Business_Acti
Organization and Business Activities | 3 Months Ended |
Mar. 31, 2014 | |
Organization and Business Activities | ' |
Organization and Business Activities | ' |
1. Organization and Business Activities | |
Principal Business | |
DISH DBS Corporation (which together with its subsidiaries is referred to as “DISH DBS,” the “Company,” “we,” “us” and/or “our” unless otherwise required by the context) is a holding company and an indirect, wholly-owned subsidiary of DISH Network Corporation (“DISH Network”). DISH DBS was formed under Colorado law in January 1996 and its common stock is held by DISH Orbital Corporation (“DOC”), a direct subsidiary of DISH Network. We operate the DISH® branded pay-TV service in the United States. The DISH branded pay-TV service consists of, among other things, Federal Communications Commission (“FCC”) licenses authorizing us to use direct broadcast satellite (“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. | |
Recent Developments | |
Satellite and Tracking Stock Transaction with EchoStar. To improve our position in the growing consumer satellite broadband market, among other reasons, on February 20, 2014, we entered into agreements with EchoStar Corporation (“EchoStar”) to implement a transaction pursuant to which, among other things: (i) on March 1, 2014, we transferred to EchoStar and Hughes Satellite Systems Corporation (“HSSC”), a wholly-owned subsidiary of EchoStar, five satellites (EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV (collectively the “Transferred Satellites”), including related in-orbit incentive obligations and cash interest payments of approximately $59 million), and approximately $11 million in cash in exchange for an aggregate of 6,290,499 shares of a series of preferred tracking stock issued by EchoStar and an aggregate of 81.128 shares of a series of preferred tracking stock issued by HSSC (collectively, the “Tracking Stock”); and (ii) beginning on March 1, 2014, we lease back certain satellite capacity on the Transferred Satellites (collectively, the “Satellite and Tracking Stock Transaction”). The Tracking Stock generally tracks the residential retail satellite broadband business of Hughes Network Systems, LLC (“HNS”), a wholly-owned subsidiary of HSSC, including without limitation the operations, assets and liabilities attributed to the Hughes residential retail satellite broadband business (collectively, the “Hughes Retail Group”). The shares of the Tracking Stock issued to us represent an aggregate 80% economic interest in the Hughes Retail Group. Although our investment in the Tracking Stock represents an aggregate 80% economic interest in the Hughes Retail Group, we have no operational control or significant influence over the Hughes Retail Group business, and currently there is no public market for the Tracking Stock. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2014 | |
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, 2013. 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. Minority interests are recorded as noncontrolling interest. 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, 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, 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; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; 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 March 31, 2014 and December 31, 2013, the carrying value for cash and cash equivalents, trade accounts receivable (net of allowance for doubtful accounts) 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 4 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 7 for the fair value of our long-term debt. |
Supplemental_Data_Statements_o
Supplemental Data - Statements of Cash Flows | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Supplemental Data - Statements of Cash Flows | ' | |||||||
Supplemental Data - Statements of Cash Flows | ' | |||||||
3. Supplemental Data — Statements of Cash Flows | ||||||||
The following table presents our supplemental cash flow and other non-cash data. | ||||||||
For the Three Months | ||||||||
Ended March 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Supplemental Disclosure of Cash Flow Information: | ||||||||
Cash paid for interest | $ | 230,120 | $ | 219,247 | ||||
Cash received for interest | 8,762 | 7,208 | ||||||
Cash paid for income taxes | 2,166 | 300 | ||||||
Cash paid for income taxes to DISH Network | 154,910 | 106,445 | ||||||
Satellite and Tracking Stock Transaction with EchoStar: | ||||||||
Transfer of property and equipment, net | 432,080 | — | ||||||
Investment in EchoStar and HSSC preferred tracking stock - cost method | 316,204 | — | ||||||
Transfer of liabilities and other | 44,540 | — | ||||||
Capital distribution to EchoStar, net of deferred taxes of $31,274 | 51,466 | — | ||||||
Marketable_Investment_Securiti
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||||
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | ' | |||||||||||||||||||||||||
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | ' | |||||||||||||||||||||||||
4. 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 | ||||||||||||||||||||||||||
March 31, | December 31, | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable investment securities: | ||||||||||||||||||||||||||
Current marketable investment securities - VRDNs | $ | 107,767 | $ | 105,854 | ||||||||||||||||||||||
Current marketable investment securities - other | 3,963,686 | 4,011,472 | ||||||||||||||||||||||||
Total current marketable investment securities | 4,071,453 | 4,117,326 | ||||||||||||||||||||||||
Restricted marketable investment securities (1) | 58,621 | 63,902 | ||||||||||||||||||||||||
Total marketable investment securities | 4,130,074 | 4,181,228 | ||||||||||||||||||||||||
Restricted cash and cash equivalents (1) | 23,405 | 18,878 | ||||||||||||||||||||||||
Other investment securities: | ||||||||||||||||||||||||||
Investment in EchoStar preferred tracking stock - cost method (2) | 228,795 | — | ||||||||||||||||||||||||
Investment in HSSC preferred tracking stock - cost method (2) | 87,409 | — | ||||||||||||||||||||||||
Other investment securities - cost method (2) | 5,396 | 5,396 | ||||||||||||||||||||||||
Total marketable investment securities and restricted cash and cash equivalents | $ | 4,475,079 | $ | 4,205,502 | ||||||||||||||||||||||
(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) Other investment securities are included in “Other noncurrent assets, net” 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. | ||||||||||||||||||||||||||
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 — Other | ||||||||||||||||||||||||||
Our current marketable investment securities portfolio includes investments in various debt and equity instruments including corporate and government bonds. | ||||||||||||||||||||||||||
Restricted Cash and Marketable Investment Securities | ||||||||||||||||||||||||||
As of March 31, 2014 and December 31, 2013, 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 8 for further information. | ||||||||||||||||||||||||||
Other Investment Securities | ||||||||||||||||||||||||||
We have strategic investments in certain debt and equity securities that are included in “Other noncurrent assets, net” 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 securities that are not publicly traded depends on the success of the issuers’ 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. | ||||||||||||||||||||||||||
Investment in Tracking Stock | ||||||||||||||||||||||||||
During the first quarter 2014, as part of the Satellite and Tracking Stock Transaction with EchoStar, we received an aggregate of 6,290,499 shares of preferred tracking stock issued by EchoStar and an aggregate of 81.128 shares of preferred tracking stock issued by HSSC (collectively, the “Tracking Stock”). The Tracking Stock generally tracks the Hughes Retail Group. The shares of the Tracking Stock issued to us represent an aggregate 80% economic interest in the Hughes Retail Group. Since the Satellite and Tracking Stock Transaction is among entities under common control, we recorded the Tracking Stock at EchoStar and HSSC’s historical cost basis for these instruments of $229 million and $87 million, respectively. The difference between the historical cost basis of the Tracking Stock received and the net carrying value of the Transferred Satellites of $356 million (including debt obligations, net of deferred taxes), plus the $11 million in cash, resulted in a $51 million capital transaction recorded in “Additional paid-in capital” on our Condensed Consolidated Balance Sheet. Although our investment in the Tracking Stock represents an aggregate 80% economic interest in the Hughes Retail Group, we have no operational control or significant influence over the Hughes Retail Group business, and currently there is no public market for the Tracking Stock. As such, the Tracking Stock is accounted for on a cost basis. | ||||||||||||||||||||||||||
On February 20, 2014, DISH Operating L.L.C. (“DOLLC”) and DISH Network L.L.C. (“DNLLC”), each indirect wholly-owned subsidiaries of us, entered into an Investor Rights Agreement with EchoStar and HSSC with respect to the Tracking Stock (the “Investor Rights Agreement”). The Investor Rights Agreement provides, among other things, certain information and consultation rights for us; certain transfer restrictions on the Tracking Stock and certain rights and obligations to offer and sell under certain circumstances (including a prohibition on transfers of the Tracking Stock for one year, with continuing transfer restrictions (including a right of first offer in favor of EchoStar) thereafter, an obligation to sell the Tracking Stock to EchoStar in connection with a change of control of DISH Network and a right to require EchoStar to repurchase the Tracking Stock in connection with a change of control of EchoStar, in each case subject to certain terms and conditions); certain registration rights; certain obligations to provide conversion and exchange rights of the Tracking Stock under certain circumstances; and certain protective covenants afforded to holders of the Tracking Stock. The Investor Rights Agreement generally will terminate with respect to our interest should we no longer hold any shares of the HSSC-issued Tracking Stock and any registrable securities under the Investor Rights Agreement. | ||||||||||||||||||||||||||
Unrealized Gains (Losses) on Marketable Investment Securities | ||||||||||||||||||||||||||
As of March 31, 2014 and December 31, 2013, we had accumulated net unrealized gains of $35 million and $15 million, respectively. These amounts, net of related tax effect, were $24 million and $11 million, respectively. All of these amounts are included in “Accumulated other comprehensive income (loss)” within “Total stockholder’s equity (deficit).” The components of our available-for-sale investments are summarized in the table below. | ||||||||||||||||||||||||||
As of March 31, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||
Marketable | Marketable | |||||||||||||||||||||||||
Investment | Unrealized | Investment | Unrealized | |||||||||||||||||||||||
Securities | Gains | Losses | Net | Securities | Gains | Losses | Net | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt securities: | ||||||||||||||||||||||||||
VRDNs | $ | 107,767 | $ | — | $ | — | $ | — | $ | 105,854 | $ | — | $ | — | $ | — | ||||||||||
Other (including restricted) | 3,980,111 | 7,220 | (850 | ) | 6,370 | 4,048,851 | 5,447 | (3,355 | ) | 2,092 | ||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||
Other | 42,196 | 28,959 | — | 28,959 | 26,523 | 13,286 | — | 13,286 | ||||||||||||||||||
Total | $ | 4,130,074 | $ | 36,179 | $ | (850 | ) | $ | 35,329 | $ | 4,181,228 | $ | 18,733 | $ | (3,355 | ) | $ | 15,378 | ||||||||
As of March 31, 2014, restricted and non-restricted marketable investment securities include debt securities of $3.488 billion with contractual maturities within one year, $576 million with contractual maturities extending longer than one year through and including five years and $24 million with contractual maturities longer than 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 March 31, 2014, the unrealized losses on our investments in debt securities primarily represent investments in corporate bonds. 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 | ||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||
Value | Loss | Value | Loss | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt Securities: | ||||||||||||||||||||||||||
Less than 12 months | $ | 1,302,801 | $ | (786 | ) | $ | 2,002,239 | $ | (2,820 | ) | ||||||||||||||||
12 months or more | 33,435 | (64 | ) | 38,043 | (535 | ) | ||||||||||||||||||||
Total | $ | 1,336,236 | $ | (850 | ) | $ | 2,040,282 | $ | (3,355 | ) | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||||
Our investments measured at fair value on a recurring basis were as follows: | ||||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Cash Equivalents (including restricted) | $ | 3,654,381 | $ | 46,714 | $ | 3,607,667 | $ | — | $ | 3,743,328 | $ | 275,277 | $ | 3,468,051 | $ | — | ||||||||||
Debt securities: | ||||||||||||||||||||||||||
VRDNs | $ | 107,767 | $ | — | $ | 107,767 | $ | — | $ | 105,854 | $ | — | $ | 105,854 | $ | — | ||||||||||
Other (including restricted) | 3,980,111 | — | 3,980,111 | — | 4,048,851 | — | 4,048,851 | — | ||||||||||||||||||
Equity securities | 42,196 | 42,196 | — | — | 26,523 | 26,523 | — | — | ||||||||||||||||||
Total | $ | 4,130,074 | $ | 42,196 | $ | 4,087,878 | $ | — | $ | 4,181,228 | $ | 26,523 | $ | 4,154,705 | $ | — | ||||||||||
During the three months ended March 31, 2014, we had no transfers in or out of Level 1 and Level 2 fair value measurements. |
Inventory
Inventory | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory | ' | |||||||
Inventory | ' | |||||||
5. Inventory | ||||||||
Inventory consisted of the following: | ||||||||
As of | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Finished goods | $ | 282,678 | $ | 299,975 | ||||
Raw materials | 130,113 | 102,563 | ||||||
Work-in-process | 110,031 | 110,108 | ||||||
Total | $ | 522,822 | $ | 512,646 |
Property_and_Equipment
Property and Equipment | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Property and Equipment | ' | |||||||||
Property and Equipment | ' | |||||||||
6. Property and Equipment | ||||||||||
Property and equipment consisted of the following: | ||||||||||
Depreciable | As of | |||||||||
Life | March 31, | December 31, | ||||||||
(In Years) | 2014 | 2013 | ||||||||
(In thousands) | ||||||||||
Equipment leased to customers | 5-Feb | $ | 3,525,756 | $ | 3,496,994 | |||||
EchoStar I (1) | 12 | — | 201,607 | |||||||
EchoStar VII (1) | 15 | — | 177,000 | |||||||
EchoStar X (1) | 15 | — | 177,192 | |||||||
EchoStar XI (1) | 15 | — | 200,198 | |||||||
EchoStar XIV (1) | 15 | — | 316,541 | |||||||
EchoStar XV | 15 | 277,658 | 277,658 | |||||||
Satellites acquired under capital lease agreements | 15-Oct | 499,819 | 499,819 | |||||||
Furniture, fixtures, equipment and other | 10-Jan | 610,418 | 600,439 | |||||||
Buildings and improvements | Jan-40 | 82,155 | 80,439 | |||||||
Land | — | 5,504 | 5,504 | |||||||
Construction in progress | — | 43,211 | 39,043 | |||||||
Total property and equipment | 5,044,521 | 6,072,434 | ||||||||
Accumulated depreciation (1) | (2,508,079 | ) | (3,093,111 | ) | ||||||
Property and equipment, net | $ | 2,536,442 | $ | 2,979,323 | ||||||
(1) The decrease in property and equipment and accumulated depreciation resulted from the Satellite and Tracking Stock Transaction. See Note 1 and Note 10 for further discussion. | ||||||||||
Depreciation and amortization expense consisted of the following: | ||||||||||
For the Three Months | ||||||||||
Ended March 31, | ||||||||||
2014 | 2013 | |||||||||
(In thousands) | ||||||||||
Equipment leased to customers | $ | 185,723 | $ | 163,118 | ||||||
Satellites | 23,201 | 27,171 | ||||||||
Buildings, furniture, fixtures, equipment and other | 16,042 | 15,207 | ||||||||
Total depreciation and amortization | $ | 224,966 | $ | 205,496 | ||||||
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. | ||||||||||
Pay-TV Satellites. We currently utilize 14 owned and leased satellites in geostationary orbit approximately 22,300 miles above the equator, one of which we own and depreciate over the useful life of the satellite. We currently utilize capacity on 11 satellites that we lease from EchoStar, which are accounted for as operating leases. 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. | ||||||||||
As of March 31, 2014, our pay-TV satellite fleet consisted of the following: | ||||||||||
Degree | Estimated | |||||||||
Launch | Orbital | Useful Life | ||||||||
Satellites | Date | Location | (Years) | |||||||
Owned: | ||||||||||
EchoStar XV (1) | July 2010 | 45 | 15 | |||||||
Leased from EchoStar: | ||||||||||
EchoStar I (1)(2)(3)(4) | December 1995 | 77 | NA | |||||||
EchoStar VII (1)(2)(3)(4) | February 2002 | 119 | NA | |||||||
EchoStar VIII (1)(2) | August 2002 | 77 | NA | |||||||
EchoStar IX (1)(2) | August 2003 | 121 | NA | |||||||
EchoStar X (1)(2)(3)(4) | February 2006 | 110 | NA | |||||||
EchoStar XI (1)(2)(3)(4) | July 2008 | 110 | NA | |||||||
EchoStar XII (1)(2)(3) | July 2003 | 61.5 | NA | |||||||
EchoStar XIV (1)(2)(3)(4) | March 2010 | 119 | NA | |||||||
EchoStar XVI (1) | November 2012 | 61.5 | NA | |||||||
Nimiq 5 (1)(2) | September 2009 | 72.7 | NA | |||||||
QuetzSat-1 (1)(2) | September 2011 | 77 | NA | |||||||
Leased from Other Third Party: | ||||||||||
Anik F3 | April 2007 | 118.7 | NA | |||||||
Ciel II | December 2008 | 129 | NA | |||||||
Under Construction: | ||||||||||
EchoStar XVIII | 2015 | 110 | 15 | |||||||
(1) See Note 10 for further discussion of our Related Party Transactions with EchoStar. | ||||||||||
(2) We lease a portion of the capacity on these satellites. | ||||||||||
(3) We generally have the option to renew each lease on a year-to-year basis through the end of the respective satellite’s useful life. | ||||||||||
(4) On February 20, 2014, we entered into the Satellite and Tracking Stock Transaction with EchoStar pursuant to which, among other things, we transferred these satellites to EchoStar and lease back certain satellite capacity on these satellites. See Note 1 for further discussion. |
LongTerm_Debt
Long-Term Debt | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Long-Term Debt | ' | |||||||||||||
Long-Term Debt | ' | |||||||||||||
7. Long-Term Debt | ||||||||||||||
Fair Value of our Long-Term Debt | ||||||||||||||
The following table summarizes the carrying and fair values of our debt facilities as of March 31, 2014 and December 31, 2013: | ||||||||||||||
As of | ||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||
Carrying | Carrying | |||||||||||||
Value | Fair Value | Value | Fair Value | |||||||||||
(In thousands) | ||||||||||||||
6 5/8% Senior Notes due 2014 (1) | $ | 1,000,000 | $ | 1,026,880 | $ | 1,000,000 | $ | 1,040,200 | ||||||
7 3/4% Senior Notes due 2015 | 750,000 | 804,563 | 750,000 | 813,750 | ||||||||||
7 1/8% Senior Notes due 2016 | 1,500,000 | 1,642,500 | 1,500,000 | 1,657,500 | ||||||||||
4 5/8% Senior Notes due 2017 | 900,000 | 957,600 | 900,000 | 946,962 | ||||||||||
4 1/4% Senior Notes due 2018 | 1,200,000 | 1,253,400 | 1,200,000 | 1,221,792 | ||||||||||
7 7/8% Senior Notes due 2019 | 1,400,000 | 1,659,700 | 1,400,000 | 1,603,000 | ||||||||||
5 1/8% Senior Notes due 2020 | 1,100,000 | 1,144,121 | 1,100,000 | 1,104,950 | ||||||||||
6 3/4% Senior Notes due 2021 | 2,000,000 | 2,249,500 | 2,000,000 | 2,122,500 | ||||||||||
5 7/8% Senior Notes due 2022 | 2,000,000 | 2,143,400 | 2,000,000 | 1,997,500 | ||||||||||
5 % Senior Notes due 2023 | 1,500,000 | 1,507,200 | 1,500,000 | 1,458,090 | ||||||||||
Mortgages and other notes payable (2) | 15,656 | 15,656 | 59,313 | 59,313 | ||||||||||
Subtotal | 13,365,656 | $ | 14,404,520 | 13,409,313 | $ | 14,025,557 | ||||||||
Capital lease obligations (3) | 213,208 | NA | 219,902 | NA | ||||||||||
Total long-term debt and capital lease obligations (including current portion) | $ | 13,578,864 | $ | 13,629,215 | ||||||||||
(1) Our 6 5/8% Senior Notes with an aggregate principal balance of $1.0 billion mature on October 1, 2014. | ||||||||||||||
(2) On February 20, 2014, we entered into the Satellite and Tracking Stock Transaction, which resulted in a decrease in “Mortgages and other notes payable” of $44 million related to the in-orbit incentive obligations associated with the Transferred Satellites. See Note 1 and Note 10 for further discussion. | ||||||||||||||
(3) 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). |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
8. Commitments and Contingencies | |
Commitments | |
Wireless Spectrum | |
700 MHz Licenses. In 2008, DISH Network paid $712 million to acquire certain 700 MHz wireless spectrum licenses, which were granted to DISH Network 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, DISH Network was 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, DISH Network was 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, DISH Network 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”). On October 29, 2013, the FCC issued an order approving the Interoperability Solution (the “Interoperability Solution Order”), which requires DISH Network to reduce power emissions on its 700 MHz licenses. As part of the Interoperability Solution Order, the FCC, among other things, approved DISH Network’s request to modify the 700 MHz Interim Build-Out Requirement so that by March 2017 (rather than the previous deadline of June 2013), DISH Network must provide signal coverage and offer service to at least 40% of its total E Block population (the “Modified 700 MHz Interim Build-Out Requirement”). The FCC also approved DISH Network’s request to modify the 700 MHz Final Build-Out Requirement so that by March 2021 (rather than the previous deadline of June 2019), DISH Network must provide signal coverage and offer service to at least 70% of the population in each of its E Block license areas (the “Modified 700 MHz Final Build-Out Requirement”). These requirements replaced the previous build-out requirements associated with DISH Network’s 700 MHz licenses. While the modifications to DISH Network’s 700 MHz licenses would provide DISH Network additional time to complete the build-out requirements, the reduction in power emissions could have an adverse impact on DISH Network’s ability to fully utilize its 700 MHz licenses. If DISH Network fails 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 DISH Network could face the reduction of license area(s). If DISH Network fails to meet the Modified 700 MHz Final Build-Out Requirement, DISH Network’s authorization may terminate for the geographic portion of each license in which DISH Network is not providing service. | |
AWS-4 Licenses. 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 DISH Network. On March 9, 2012, DISH Network completed the acquisition of 100% of the equity of reorganized DBSD North America (the “DBSD Transaction”) and substantially all of the assets of TerreStar (the “TerreStar Transaction”), pursuant to which DISH Network 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. | |
DISH Network’s 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 Mobile Satellite Service (“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 DISH Network’s AWS-4 authorizations to, among other things, allow DISH Network 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 DISH Network’s AWS-4 licenses to expand its terrestrial operating authority. That order 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 DISH Network presently believes could render 5 MHz of its uplink spectrum (2000-2005 MHz) effectively unusable for terrestrial services and limit its ability to fully utilize the remaining 15 MHz of its uplink spectrum (2005-2020 MHz) for terrestrial services. These limitations could, among other things, impact the ongoing development of technical standards associated with DISH Network’s wireless business, and may have a material adverse effect on DISH Network’s ability to commercialize these licenses. That order also mandated certain interim and final build-out requirements for the licenses. By March 2017, DISH Network 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, DISH Network was required to 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”). | |
On December 20, 2013, the FCC issued a further order that, among other things, extended the AWS-4 Final Build-Out Requirement by one year to March 2021 (the “Modified AWS-4 Final Build-Out Requirement”). If DISH Network fails to meet the AWS-4 Interim Build-Out Requirement, the Modified AWS-4 Final Build-Out Requirement may be accelerated by one year, from March 2021 to March 2020. If DISH Network fails to meet the Modified AWS-4 Final Build-Out Requirement, DISH Network’s terrestrial authorization for each license area in which it fails to meet the requirement may terminate. The FCC’s December 20, 2013 order also conditionally waived certain FCC rules for DISH Network’s AWS-4 spectrum licenses to allow DISH Network to repurpose all 20 MHz of its uplink spectrum (2000-2020 MHz) for downlink (the “AWS-4 Downlink Waiver”). The AWS-4 Downlink Waiver and the Modified AWS-4 Final Build-Out Requirement were conditioned upon DISH Network bidding at least a net clearing price equal to the aggregate reserve price of $1.564 billion in the auction of wireless spectrum known as the “H Block.” DISH Network has satisfied that condition. If DISH Network fails to notify the FCC whether it intends to use its uplink spectrum for downlink by June 20, 2016, the AWS-4 Downlink Waiver will terminate, and the Modified AWS-4 Final Build-Out Requirement will revert back to the AWS-4 Final Build-Out Requirement. | |
H Block Licenses. The H Block auction commenced on January 22, 2014 and concluded on February 27, 2014. DISH Network was the winning bidder for all 176 wireless spectrum licenses in the H Block auction with an aggregate bid of $1.564 billion. On December 17, 2013, DISH Network paid approximately $328 million to the FCC as a deposit for the H Block auction. DISH Network paid the remaining balance of its winning bid of approximately $1.236 billion for the H Block spectrum licenses on March 28, 2014. On April 29, 2014, the FCC issued an order granting DISH Network’s application to acquire these H Block spectrum licenses. As a result, DISH Network is also required to pay approximately $13 million to UTAM, Inc. for clearance costs associated with the lower H Block spectrum and approximately $95 million to Sprint for clearance costs associated with the upper H Block spectrum by May 29, 2014 in connection with the issuance of the H Block licenses. The H Block spectrum licenses are subject to certain interim and final build-out requirements. By April 2018, DISH Network must provide reliable signal coverage and offer service to at least 40% of the population in each area covered by an individual H Block spectrum license (the “H Block Interim Build-Out Requirement”). By April 2024, DISH Network must provide reliable signal coverage and offer service to at least 75% of the population in each area covered by an individual H Block spectrum license (the “H Block Final Build-Out Requirement”). If DISH Network fails to meet the H Block Interim Build-Out Requirement, the H Block license term and the H Block Final Build-Out Requirement may be accelerated by two years (from April 2024 to April 2022) for each H Block license area in which it fails to meet the requirement. If DISH Network fails to meet the H Block Final Build-Out Requirement, its authorization for each H Block spectrum license area in which it fails to meet the requirement may terminate. The FCC has adopted rules for the H Block spectrum band that is adjacent to DISH Network’s AWS-4 spectrum licenses. Depending on the outcome of the standard-setting process for the H Block and DISH Network’s ultimate decision regarding the AWS-4 Downlink Waiver, the rules that the FCC adopted for the H Block could further impact the remaining 15 MHz of DISH Network’s AWS-4 uplink spectrum (2005-2020 MHz), which may have a material adverse effect on DISH Network’s ability to commercialize the AWS-4 licenses. | |
DISH Network may also determine that additional spectrum licenses may be required to commercialize its wireless business and to compete with other wireless service providers. DISH Network will need to make significant additional investments or partner with others to, among other things, finance the commercialization and build-out requirements of its licenses and any additional acquired licenses and DISH Network’s integration efforts, including compliance with regulations applicable to acquired licenses. Depending on the nature and scope of such commercialization, build-out, and integration efforts, any such investment or partnership could vary significantly. We have made cash distributions to DISH Network to finance the acquisition of these licenses and may make additional cash distributions to, among other things, finance the acquisition of additional licenses and the commercialization and build-out requirements of acquired licenses and DISH Network’s integration efforts including compliance with regulations applicable to acquired licenses. On March 28, 2014, we paid a dividend of $650 million to DOC in connection with, among other things, the funding of certain payments by DISH Network related to its winning bid for all 176 wireless spectrum licenses in the H Block auction. There can be no assurance that DISH Network will be able to develop and implement a business model that will realize a return on these spectrum licenses or that DISH Network will be able to profitably deploy the assets represented by these spectrum licenses. | |
Guarantees | |
On January 1, 2008, DISH Network completed the distribution of its 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, we distributed certain satellite lease agreements to EchoStar and remained the guarantor under those capital leases for payments totaling approximately $36 million over approximately the next 11 months. | |
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 DISH Network guarantees a certain portion of EchoStar’s obligation under its satellite transponder service agreement through 2019. As of March 31, 2014, the remaining obligation of DISH Network’s guarantee was $359 million. | |
As of March 31, 2014, we have not recorded a liability on the balance sheet for any of these guarantees. | |
Contingencies | |
Separation Agreement | |
In connection with the Spin-off, DISH Network 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 DISH Network 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. | |
California Institute of Technology | |
On October 1, 2013, the California Institute of Technology (“Caltech”) filed complaints against DISH Network and its wholly-owned subsidiaries DISH Network L.L.C. and dishNET Satellite Broadband L.L.C, as well as Hughes Communications, Inc. and Hughes Network Systems, LLC, which are wholly-owned subsidiaries of EchoStar, in the United States District Court for the Central District of California. The complaint alleges infringement of United States 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. In the operative Amended Complaint, served on March 6, 2014, Caltech claims that our Hopper set-top box, as well as the Hughes defendants’ satellite broadband products and services, infringe the asserted patents by implementing the DVB-S2 standard. | |
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. | |
ClearPlay, Inc. | |
On March 13, 2014, ClearPlay, Inc. (“ClearPlay”) filed a complaint against DISH Network, our wholly-owned subsidiary DISH Network L.L.C., EchoStar, and its wholly-owned subsidiary EchoStar Technologies L.L.C., in the United States District Court for the District of Utah. The complaint alleges infringement of United States Patent Nos. 6,898,799, entitled “Multimedia Content Navigation and Playback” (the “799 patent”); 7,526,784, entitled “Delivery of Navigation Data for Playback of Audio and Video Content” (the “784 patent”); 7,543,318, entitled “Delivery of Navigation Data for Playback of Audio and Video Content” (the “318 patent”); 7,577,970, entitled “Multimedia Content Navigation and Playback” (the “970 patent”); and 8,117,282, entitled “Media Player Configured to Receive Playback Filters From Alternative Storage Mediums” (the “282 patent”). ClearPlay alleges that the AutoHop™ feature in our Hopper set-top box infringes 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. | |
CRFD Research, Inc. (a subsidiary of Marathon Patent Group, Inc.) | |
On January 17, 2014, CRFD Research, Inc. (“CRFD”) filed a complaint against us, our wholly-owned subsidiary DISH Network L.L.C., DISH Network, EchoStar, and its wholly-owned subsidiary EchoStar Technologies L.L.C., in the United States District Court for the District of Delaware, alleging infringement of United States Patent No. 7,191,233 (the “233 patent”). The 233 patent is entitled “System for Automated, Mid-Session, User-Directed, Device-to-Device Session Transfer System,” and relates to transferring an ongoing software session from one device to another. CRFD alleges that our Hopper and Joey set-top boxes infringe the 233 patent. On the same day, CRFD filed similar complaints against AT&T Inc.; Comcast Corp.; DirecTV; Time Warner Cable Inc.; Cox Communications, Inc.; Level 3 Communications, Inc.; Akamai Technologies, Inc.; Cablevision Systems Corp. and Limelight Networks, Inc. CRFD 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. | |
Custom Media Technologies LLC | |
On August 15, 2013, Custom Media Technologies LLC (“Custom Media”) filed complaints against DISH Network; 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 “275 patent”). The 275 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 is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. Pursuant to a stipulation between the parties, on November 6, 2013, the Court entered an order substituting DISH Network L.L.C., our wholly-owned subsidiary, as the defendant in DISH Network’s place. | |
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. | |
Do Not Call Litigation | |
On March 25, 2009, our wholly-owned subsidiary DISH Network L.L.C. was sued in a civil action by the United States Attorney General and several states in the United States District Court for the Central District of Illinois, alleging violations of the Telephone Consumer Protection Act and Telephone Sales Rules, as well as analogous state statutes and state consumer protection laws. The plaintiffs allege that we, directly and through certain independent third-party retailers and their affiliates, committed certain telemarketing violations. On December 23, 2013, the plaintiffs filed a motion for summary judgment, which indicated for the first time that the state plaintiffs are seeking civil penalties and damages of approximately $270 million and that the federal plaintiff is seeking an unspecified amount of civil penalties (which could substantially exceed the civil penalties and damages being sought by the state plaintiffs). The plaintiffs are also seeking injunctive relief that if granted would, among other things, enjoin DISH Network L.L.C., whether acting directly or indirectly through authorized telemarketers or independent third-party retailers, from placing any outbound telemarketing calls to market or promote its goods or services for five years, and enjoin DISH Network L.L.C. from accepting activations or sales from certain existing independent third-party retailers and from certain new independent third-party retailers, except under certain circumstances. We have also filed a motion for summary judgment, seeking dismissal of all claims. | |
We intend to vigorously defend this case. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. | |
Dragon Intellectual Property, LLC | |
On December 20, 2013, Dragon Intellectual Property, LLC (“Dragon IP”) filed complaints against our wholly-owned subsidiary DISH Network L.L.C., as well as Apple Inc.; AT&T, Inc.; Charter Communications, Inc.; Comcast Corp.; Cox Communications, Inc.; DirecTV; Sirius XM Radio Inc.; 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. 5,930,444 (the “444 patent”), which is entitled “Simultaneous Recording and Playback Apparatus.” Dragon IP alleges that various of our DVR receivers infringe the 444 patent. Dragon IP 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 alleged 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. On March 6, 2014, pursuant to a settlement and release agreement between the parties, we dismissed 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 were liable for some of the amount alleged to be owing but that the actual amount owing was 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 owed 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 owed 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 did not fully resolve all claims in the action. As a result of the First Department’s June 2011 ruling, we recorded $24 million of “Litigation Expense” on our Consolidated Statements of Operations and Comprehensive Income (Loss) during 2011. 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. As a result of the parties’ settlement and release, no further appeals are possible, and this matter is now concluded. | |
Garnet Digital, LLC | |
On September 9, 2013, Garnet Digital, LLC (“Garnet Digital”) filed a complaint against DISH Network 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. A trial date has been set for May 9, 2016. | |
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. | |
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 at a certain point 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. | |
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 have proceeded in the following venues: (1) the copyright and contract claims regarding the ABC and CBS parties in New York; and (2) the copyright and contract claims regarding the Fox and NBC parties in California. | |
California Actions. The NBC plaintiffs and Fox plaintiffs 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. | |
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, and the Fox plaintiffs appealed. 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 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, which was denied on January 24, 2014. The United States Supreme Court has granted the Fox plaintiffs an extension until May 23, 2014 to file a petition for writ of certiorari. | |
In addition, 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. The Fox plaintiffs appealed, and the United States Court of Appeals for the Ninth Circuit will hear oral argument on July 7, 2014. The Fox claims are set for trial on January 13, 2015. | |
New York Actions. Both the ABC and CBS parties 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 23, 2012, the ABC plaintiffs filed a motion for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime Anytime and AutoHop features. On September 18, 2013, the New York court denied that motion. The ABC plaintiffs appealed, and oral argument on the appeal was heard on February 20, 2014 before the United States Court of Appeals for the Second Circuit. Pursuant to a settlement between us and the ABC parties, on March 4, 2014, the ABC parties withdrew their appeal to the United States Court of Appeals for the Second Circuit, and, on March 6, 2014, we and the ABC parties dismissed without prejudice all of our respective claims pending in the United States District Court for the Southern District of New York. The CBS claims in the New York action are set to be trial-ready on April 17, 2015. | |
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. | |
Joao Control & Monitoring Systems LLC | |
On April 23, 2014, Joao Control & Monitoring Systems, LLC (“Joao Control”) filed a complaint against DISH Network in the United States District Court for the District of Delaware, alleging infringement of United States Patent No. 6,549,130 (the “130 patent”), which is entitled “Control Apparatus and Method for Vehicles and/or for Premises.” Joao alleges that we infringe the 130 patent by making, using, providing and/or importing remotely-accessed DVRs. On the same day, Joao Control also filed actions against DirecTV; Verizon Communications, Inc.; Time Warner Cable Inc.; Cox Communications, Inc.; and Cablevision Systems Corporation, among others. Joao Control 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. | |
LightSquared/Harbinger Capital Partners LLC (LightSquared Bankruptcy) | |
As previously disclosed in our public filings, L-Band Acquisition, LLC (“LBAC”), DISH Network’s wholly-owned subsidiary, entered into a Plan Support Agreement (the “PSA”) with certain senior secured lenders to LightSquared LP (the “LightSquared LP Lenders”) on July 23, 2013, which contemplated the purchase by LBAC of substantially all of the assets of LightSquared LP and certain of its subsidiaries (the “LBAC Bid”) that are debtors and debtors in possession 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). | |
Pursuant to the PSA, LBAC was entitled to terminate the PSA in certain circumstances, certain of which required three business days’ written notice, including, without limitation, in the event that certain milestones specified in the PSA were not met. On January 7, 2014, LBAC delivered written notice of termination of the PSA to the LightSquared LP Lenders. As a result, the PSA terminated effective on January 10, 2014, and the LBAC Bid was withdrawn. | |
On August 6, 2013, Harbinger Capital Partners LLC and other affiliates of Harbinger (collectively, “Harbinger”), a shareholder of LightSquared Inc., filed an adversary proceeding against DISH Network, LBAC, EchoStar, Charles W. Ergen (our Chairman), SP Special Opportunities, LLC (“SPSO”) (an entity controlled by Mr. Ergen), and certain other parties, in the Bankruptcy Court. Harbinger 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 SPSO. Subsequently, LightSquared intervened to join in certain claims alleged against certain defendants other than DISH Network, LBAC and EchoStar. | |
On October 29, 2013, the Bankruptcy Court dismissed all of the claims in Harbinger’s complaint in their entirety, but granted leave for LightSquared to file its own complaint in intervention. On November 15, 2013, LightSquared filed its complaint, which included various claims against DISH Network, EchoStar, Mr. Ergen and SPSO. On December 2, 2013, Harbinger filed an amended complaint, asserting various claims against SPSO. On December 12, 2013, the Bankruptcy Court dismissed several of the claims asserted by LightSquared and Harbinger. The surviving claims include, among others, LightSquared’s claims against SPSO for declaratory relief, breach of contract and statutory disallowance; LightSquared’s tortious interference claim against DISH Network, EchoStar and Mr. Ergen; and Harbinger’s claim against SPSO for equitable disallowance. These claims proceeded to a non-jury trial on January 9, 2014, which concluded on January 17, 2014. The parties submitted post-trial briefs and a hearing for closing arguments occurred on March 17, 2014. At a hearing on May 8, 2014, the Bankruptcy Court indicated that, in a forthcoming order, it would reject all claims against DISH Network and EchoStar, and it would reject some but not all claims against the other defendants. | |
DISH Network intends 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. | |
LightSquared Transaction Shareholder Derivative Actions | |
On August 9, 2013, a purported shareholder of DISH Network, 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 DISH Network’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 DISH Network in connection with 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. The Jacksonville PFPF claims allege that (1) the debt purchases created an impermissible conflict of interest and (2) put at risk the LBAC Bid, which as noted above has been withdrawn. Jacksonville PFPF further claims that most members of DISH Network’s Board of Directors are beholden to Mr. Ergen to an extent that prevents them from discharging their duties in connection with DISH Network’s participation in the LightSquared bankruptcy auction process. Jacksonville PFPF is seeking an unspecified amount of damages. Jacksonville PFPF dismissed its claims against Mr. Goodbarn on October 8, 2013. | |
Jacksonville PFPF sought a preliminary injunction that would enjoin Mr. Ergen and all of the Director Defendants other than Mr. Goodbarn from influencing DISH Network’s efforts to acquire certain assets of LightSquared in the bankruptcy proceeding. On November 27, 2013, the Court denied that request but granted narrower relief enjoining Mr. Ergen and anyone acting on his behalf from participating in negotiations related to one aspect of the LBAC Bid, which, as noted above, has been withdrawn. | |
Five alleged shareholders have filed substantially similar putative derivative complaints in state and federal courts alleging the same or substantially similar 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 and, on January 2, 2014, filed a new complaint in the District Court for Clark County, Nevada. On December 13, 2013, City of Daytona Beach Police Officers and Firefighters Retirement System voluntarily dismissed its claims without prejudice. On March 28, 2014, Iron Workers District Council (Philadelphia and Vicinity) Retirement and Pension Plan voluntarily dismissed its claims without prejudice. | |
DISH Network’s Board of Directors has established a Special Litigation Committee to review the factual allegations and legal claims in these actions. DISH Network 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 United States Patent Nos. 5,592,555 (the “555 patent”); 5,530,597 (the “597 patent”) and 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 DISH Network 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 DISH Network 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 United States Patent Nos. 5,608,873 (the “873 patent”) and 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 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. | |
Pursuant to a settlement on April 15, 2014, we will pay an immaterial amount to Norman in exchange for a release and dismissal of the 2013 Action and a license for EchoStar and us to certain patents and patent applications. | |
Personalized Media Communications, Inc. | |
During 2008, Personalized Media Communications, Inc. (“PMC”) filed suit against DISH Network; 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 DISH Network and EchoStar 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 DISH Network and EchoStar are sublicensees. No trial date is currently 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. | |
Preservation Technologies, LLC | |
In December 2011, Preservation Technologies, LLC (“Preservation Technologies”) filed suit against DISH Network 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 the BLOCKBUSTER On Demand, DISH branded pay-TV and DISH Online services and our Hopper and Joey® set-top boxes infringe United States 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 United States 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 DISH Network 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 DISH Network’s motion to stay the case pending two reexamination petitions before the United States 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. | |
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 condition, 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. |
Financial_Information_for_Subs
Financial Information for Subsidiary Guarantors | 3 Months Ended |
Mar. 31, 2014 | |
Financial Information for Subsidiary Guarantors | ' |
Financial Information for Subsidiary Guarantors | ' |
9. Financial Information for Subsidiary Guarantors | |
Our senior notes are fully, unconditionally and jointly and severally guaranteed by all of our subsidiaries other than minor subsidiaries and the stand-alone entity DISH DBS has no independent assets or operations. Therefore, supplemental financial information on a condensed consolidating basis of the guarantor subsidiaries is not required. There are no restrictions on our ability to obtain cash dividends or other distributions of funds from the guarantor subsidiaries, except those imposed by applicable law. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Related Party Transactions | ' | |||||||
Related Party Transactions | ' | |||||||
10. Related Party Transactions | ||||||||
Related Party Transactions with DISH Network | ||||||||
On March 28, 2014, we paid a dividend of $650 million to DOC in connection with, among other things, the funding of certain payments by DISH Network related to its winning bid for all 176 wireless spectrum licenses in the recent H Block auction. See Note 8 for further information. | ||||||||
Blockbuster. On April 26, 2011, our parent, DISH Network, completed the acquisition of most of the assets of Blockbuster, Inc. During the three months ended March 31, 2013, we recorded $4 million of “Subscriber-related expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for Blockbuster services provided to our subscribers related to certain of our promotions. As of December 31, 2013, Blockbuster had ceased material operations. As a result, during the three months ended March 31, 2014, we did not record any expense related to these services. | ||||||||
Advertising Sales. We provide advertising services to DISH Network’s broadband business. During the three months ended March 31, 2014, we recorded revenue associated with these services of $5 million in “Subscriber-related revenue” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During the three months ended March 31, 2013, we did not record any revenue associated with these services. | ||||||||
Blockbuster, Broadband, Wireless and Other Operations. We provide certain administrative support such as legal, information systems, marketing, human resources, accounting and finance services to DISH Network’s Blockbuster, Broadband, Wireless and other operations. In addition, we provide call center, installation and other services to DISH Network for its Broadband business. During the three months ended March 31, 2014 and 2013, the costs associated with these services were $3 million and $2 million, respectively. | ||||||||
Related Party Transactions with EchoStar | ||||||||
Following the Spin-off, DISH Network and EchoStar have operated as separate publicly traded companies, and, except for the Satellite and Tracking Stock Transaction described in Note 1 and below, neither entity has any ownership interest in the other. 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 supplier of a majority of our 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 condition 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, DISH Network 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, DISH Network and EchoStar agreed that EchoStar shall continue to have the right, but not the obligation, to receive the following services from DISH Network, 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, DISH Network and EchoStar agreed that DISH Network shall continue to have the right, but not the obligation, to engage EchoStar to manage the process of procuring new satellite capacity for DISH Network (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, 2014 for an additional one-year period until January 1, 2015 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, DISH Network entered into a Management Services Agreement with EchoStar pursuant to which DISH Network has made certain of its officers available to provide services (which were primarily legal and accounting services) to EchoStar. Effective June 15, 2013, the Management Services Agreement was terminated by EchoStar. EchoStar made payments to DISH Network based upon an allocable portion of the personnel costs and expenses incurred by DISH Network 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 DISH Network’s executive officers performing services for EchoStar under the Management Services Agreement. EchoStar also reimbursed DISH Network for direct out-of-pocket costs incurred by DISH Network for management services provided to EchoStar. DISH Network and EchoStar evaluated all charges for reasonableness at least annually and made any adjustments to these charges as DISH Network 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, the number of transponders that are leased on the applicable satellite and the length of the lease. The term of each lease is set forth below: | ||||||||
· 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. Effective March 1, 2014, this lease converted to a month-to-month lease. Both parties have the right to terminate this lease with 30 days notice. Upon termination, EchoStar is responsible, among other things, for relocating this satellite from the 45 degree orbital location back to the 61.5 degree orbital location. | ||||||||
Real Estate Lease Agreements. Since the Spin-off, DISH Network has entered into lease agreements pursuant to which DISH Network leases 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: | ||||||||
· El Paso Lease Agreement. During 2012, DISH Network 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, DISH Network 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, the number of transponders that are leased on the applicable satellite and the length of the lease. The term of each lease is set forth below: | ||||||||
· EchoStar I, VII, X, XI and XIV. On March 1, 2014, we began leasing certain capacity from EchoStar on the EchoStar I, VII, X, XI and XIV satellites. The term of each satellite capacity agreement generally terminates upon the earlier of: (i) the end-of-life of the satellite; (ii) the date the satellite fails; or (iii) a certain date, which depends upon, among other things, the estimated useful life of the satellite. We generally have the option to renew each satellite capacity agreement 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. | ||||||||
· EchoStar VIII. During May 2013, we began leasing capacity from EchoStar on EchoStar VIII as an in-orbit spare. Effective March 1, 2014, this lease converted to a month-to-month lease. Both parties have the right to terminate this lease with 30 days notice. | ||||||||
· 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 XII. The lease for EchoStar XII generally terminates 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 the lease on a year-to-year basis through the end of the satellite’s life. There can be no assurance that any options to renew this agreement will be exercised. | ||||||||
· 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. DISH Network has also guaranteed certain obligations of EchoStar under the Telesat Transponder Agreement. See discussion under “Guarantees” in Note 8. | ||||||||
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 the Nimiq 5 satellite 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 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 five DBS transponders back to EchoStar. 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. 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. | ||||||||
As part of the Satellite and Tracking Stock Transaction, on February 20, 2014, we amended the 2012 TT&C Agreement to cease the provision of TT&C services from EchoStar for the EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV satellites. As of March 1, 2014, EchoStar is providing us TT&C services for the EchoStar XV satellite. | ||||||||
“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 lease 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. We expect this lease to terminate in 2014. | ||||||||
· 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. | ||||||||
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. On May 5, 2014, we provided EchoStar notice to extend the 2012 Receiver Agreement for one year to December 31, 2015. 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 March 31, 2014 and 2013, we purchased set-top boxes and other equipment from EchoStar of $294 million and $297 million, respectively. Included in these amounts are purchases of certain broadband equipment from EchoStar under the 2012 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, DISH Network 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 DISH Network, and DISH Network will indemnify EchoStar for such taxes. However, DISH Network is 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 DISH Network 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 DISH Network’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, during the third quarter 2013, DISH Network 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, DISH Network agreed to pay EchoStar $83 million of the tax benefit DISH Network received or will receive. 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, DISH Network 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 DISH Network 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 RUS Agreement expired during June 2013, when the Grant Funds were exhausted. During the three months ended March 31, 2013, we expensed $1 million under the RUS Agreement, which is included in “Cost of sales — equipment, services and other” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). | ||||||||
TiVo. On April 29, 2011, DISH Network and EchoStar entered into a settlement agreement with TiVo, Inc. (“TiVo”). The settlement resolved all pending litigation between DISH Network 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 DISH Network or EchoStar were dissolved. DISH Network 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. These amounts are recorded in “Litigation expense” or “Subscriber-related expense” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Pursuant to the terms and conditions of the agreements entered into in connection with the Spin-off of EchoStar from DISH Network, DISH Network 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 DISH Network and EchoStar based on historical sales of certain licensed products, with DISH Network being responsible for 95% of each annual payment. | ||||||||
Patent Cross-License Agreements. During December 2011, DISH Network 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) DISH Network and such third-party licensed their 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, DISH Network and EchoStar may elect to extend their 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 DISH Network and EchoStar, DISH Network and EchoStar agreed to allocate their respective payments to such third-party based on their respective percentage of combined total revenue. | ||||||||
Satellite and Tracking Stock Transaction with EchoStar. To improve our position in the growing consumer satellite broadband market, among other reasons, on February 20, 2014, we entered into the Satellite and Tracking Stock Transaction with EchoStar pursuant to which, among other things: (i) on March 1, 2014, we transferred to EchoStar and HSSC the Transferred Satellites, including related in-orbit incentive obligations and cash interest payments of approximately $59 million and approximately $11 million in cash in exchange for the Tracking Stock; and (ii) beginning on March 1, 2014, we lease back certain satellite capacity on the Transferred Satellites. The Satellite and Tracking Stock Transaction is further described below: | ||||||||
· Transaction Agreement. On February 20, 2014, DOLLC, DNLLC and EchoStar XI Holding L.L.C., all indirect wholly-owned subsidiaries of us, entered into the Transaction Agreement with EchoStar, HSSC and Alpha Company LLC, a wholly-owned subsidiary of EchoStar, pursuant to which, on March 1, 2014, we, among other things, transferred to EchoStar and HSSC the Transferred Satellites in exchange for the Tracking Stock. The Tracking Stock generally tracks the Hughes Retail Group. The shares of the Tracking Stock issued to us represent an aggregate 80% economic interest in the Hughes Retail Group. Since the Satellite and Tracking Stock Transaction is among entities under common control, we recorded the Tracking Stock at EchoStar and HSSC’s historical cost basis for these instruments of $229 million and $87 million, respectively. The difference between the historical cost basis of the Tracking Stock received and the net carrying value of the Transferred Satellites of $356 million (including debt obligations, net of deferred taxes), plus the $11 million in cash, resulted in a $51 million capital transaction recorded in “Additional paid-in capital” on our Condensed Consolidated Balance Sheet. The shares of the Tracking Stock issued to us represent an aggregate 80% economic interest in the Hughes Retail Group. Although our investment in the Tracking Stock represents an aggregate 80% economic interest in the Hughes Retail Group, we have no operational control or significant influence over the Hughes Retail Group business, and currently there is no public market for the Tracking Stock. The Transaction Agreement includes, among other things, customary mutual provisions for representations, warranties and indemnification. | ||||||||
· Satellite Capacity Leased from EchoStar. On February 20, 2014, we entered into satellite capacity agreements with certain subsidiaries of EchoStar pursuant to which, beginning March 1, 2014, we, among other things, lease certain satellite capacity on the Transferred Satellites. See further discussion under “Satellite and transmission expenses — EchoStar — Satellite Capacity Leased from EchoStar.” | ||||||||
· Investor Rights Agreement. On February 20, 2014, EchoStar, HSSC, DOLLC and DNLLC (DOLLC and DNLLC, collectively referred to as the “DISH Investors”) also entered into the Investor Rights Agreement with respect to the Tracking Stock. The Investor Rights Agreement provides, among other things, certain information and consultation rights for the DISH Investors; certain transfer restrictions on the Tracking Stock and certain rights and obligations to offer and sell under certain circumstances (including a prohibition on transfers of the Tracking Stock for one year, with continuing transfer restrictions (including a right of first offer in favor of EchoStar) thereafter, an obligation to sell the Tracking Stock to EchoStar in connection with a change of control of DISH Network and a right to require EchoStar to repurchase the Tracking Stock in connection with a change of control of EchoStar, in each case subject to certain terms and conditions); certain registration rights; certain obligations to provide conversion and exchange rights of the Tracking Stock under certain circumstances; and certain protective covenants afforded to holders of the Tracking Stock. The Investor Rights Agreement generally will terminate as to the DISH Investors at such time as the DISH Investors no longer hold any shares of the HSSC-issued Tracking Stock and any registrable securities under the Investor Rights Agreement. | ||||||||
Other Agreements | ||||||||
In November 2009, Mr. Roger Lynch became employed by both DISH Network 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 | ||||||||
Ended March 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Purchases (including fees): | ||||||||
Purchases from NagraStar | $ | 20,203 | $ | 22,019 | ||||
As of | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Amounts Payable and Commitments: | ||||||||
Amounts payable to NagraStar | $ | 16,687 | $ | 23,417 | ||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
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, 2013. 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. Minority interests are recorded as noncontrolling interest. 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, 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, 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; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; 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 March 31, 2014 and December 31, 2013, the carrying value for cash and cash equivalents, trade accounts receivable (net of allowance for doubtful accounts) 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 4 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 7 for the fair value of our long-term debt. |
Supplemental_Data_Statements_o1
Supplemental Data - Statements of Cash Flows (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Supplemental Data - Statements of Cash Flows | ' | |||||||
Schedule of supplemental cash flow and other non-cash data | ' | |||||||
For the Three Months | ||||||||
Ended March 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Supplemental Disclosure of Cash Flow Information: | ||||||||
Cash paid for interest | $ | 230,120 | $ | 219,247 | ||||
Cash received for interest | 8,762 | 7,208 | ||||||
Cash paid for income taxes | 2,166 | 300 | ||||||
Cash paid for income taxes to DISH Network | 154,910 | 106,445 | ||||||
Satellite and Tracking Stock Transaction with EchoStar: | ||||||||
Transfer of property and equipment, net | 432,080 | — | ||||||
Investment in EchoStar and HSSC preferred tracking stock - cost method | 316,204 | — | ||||||
Transfer of liabilities and other | 44,540 | — | ||||||
Capital distribution to EchoStar, net of deferred taxes of $31,274 | 51,466 | — | ||||||
Marketable_Investment_Securiti1
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||||
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | ' | |||||||||||||||||||||||||
Schedule of marketable investment securities, restricted cash and cash equivalents, and other investment securities | ' | |||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
March 31, | December 31, | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable investment securities: | ||||||||||||||||||||||||||
Current marketable investment securities - VRDNs | $ | 107,767 | $ | 105,854 | ||||||||||||||||||||||
Current marketable investment securities - other | 3,963,686 | 4,011,472 | ||||||||||||||||||||||||
Total current marketable investment securities | 4,071,453 | 4,117,326 | ||||||||||||||||||||||||
Restricted marketable investment securities (1) | 58,621 | 63,902 | ||||||||||||||||||||||||
Total marketable investment securities | 4,130,074 | 4,181,228 | ||||||||||||||||||||||||
Restricted cash and cash equivalents (1) | 23,405 | 18,878 | ||||||||||||||||||||||||
Other investment securities: | ||||||||||||||||||||||||||
Investment in EchoStar preferred tracking stock - cost method (2) | 228,795 | — | ||||||||||||||||||||||||
Investment in HSSC preferred tracking stock - cost method (2) | 87,409 | — | ||||||||||||||||||||||||
Other investment securities - cost method (2) | 5,396 | 5,396 | ||||||||||||||||||||||||
Total marketable investment securities and restricted cash and cash equivalents | $ | 4,475,079 | $ | 4,205,502 | ||||||||||||||||||||||
(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) Other investment securities are included in “Other noncurrent assets, net” on our Condensed Consolidated Balance Sheets. | ||||||||||||||||||||||||||
Schedule of unrealized gain (loss) on marketable investment securities | ' | |||||||||||||||||||||||||
As of March 31, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||
Marketable | Marketable | |||||||||||||||||||||||||
Investment | Unrealized | Investment | Unrealized | |||||||||||||||||||||||
Securities | Gains | Losses | Net | Securities | Gains | Losses | Net | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt securities: | ||||||||||||||||||||||||||
VRDNs | $ | 107,767 | $ | — | $ | — | $ | — | $ | 105,854 | $ | — | $ | — | $ | — | ||||||||||
Other (including restricted) | 3,980,111 | 7,220 | (850 | ) | 6,370 | 4,048,851 | 5,447 | (3,355 | ) | 2,092 | ||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||
Other | 42,196 | 28,959 | — | 28,959 | 26,523 | 13,286 | — | 13,286 | ||||||||||||||||||
Total | $ | 4,130,074 | $ | 36,179 | $ | (850 | ) | $ | 35,329 | $ | 4,181,228 | $ | 18,733 | $ | (3,355 | ) | $ | 15,378 | ||||||||
Schedule of available-for-sale securities in continuous unrealized loss position by length of time and their fair value | ' | |||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||
Value | Loss | Value | Loss | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt Securities: | ||||||||||||||||||||||||||
Less than 12 months | $ | 1,302,801 | $ | (786 | ) | $ | 2,002,239 | $ | (2,820 | ) | ||||||||||||||||
12 months or more | 33,435 | (64 | ) | 38,043 | (535 | ) | ||||||||||||||||||||
Total | $ | 1,336,236 | $ | (850 | ) | $ | 2,040,282 | $ | (3,355 | ) | ||||||||||||||||
Schedule of investments measured at fair value on a recurring basis | ' | |||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Cash Equivalents (including restricted) | $ | 3,654,381 | $ | 46,714 | $ | 3,607,667 | $ | — | $ | 3,743,328 | $ | 275,277 | $ | 3,468,051 | $ | — | ||||||||||
Debt securities: | ||||||||||||||||||||||||||
VRDNs | $ | 107,767 | $ | — | $ | 107,767 | $ | — | $ | 105,854 | $ | — | $ | 105,854 | $ | — | ||||||||||
Other (including restricted) | 3,980,111 | — | 3,980,111 | — | 4,048,851 | — | 4,048,851 | — | ||||||||||||||||||
Equity securities | 42,196 | 42,196 | — | — | 26,523 | 26,523 | — | — | ||||||||||||||||||
Total | $ | 4,130,074 | $ | 42,196 | $ | 4,087,878 | $ | — | $ | 4,181,228 | $ | 26,523 | $ | 4,154,705 | $ | — |
Inventory_Tables
Inventory (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory | ' | |||||||
Schedule of inventory | ' | |||||||
As of | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Finished goods | $ | 282,678 | $ | 299,975 | ||||
Raw materials | 130,113 | 102,563 | ||||||
Work-in-process | 110,031 | 110,108 | ||||||
Total | $ | 522,822 | $ | 512,646 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Property and Equipment | ' | |||||||||
Schedule of property and equipment | ' | |||||||||
Depreciable | As of | |||||||||
Life | March 31, | December 31, | ||||||||
(In Years) | 2014 | 2013 | ||||||||
(In thousands) | ||||||||||
Equipment leased to customers | 5-Feb | $ | 3,525,756 | $ | 3,496,994 | |||||
EchoStar I (1) | 12 | — | 201,607 | |||||||
EchoStar VII (1) | 15 | — | 177,000 | |||||||
EchoStar X (1) | 15 | — | 177,192 | |||||||
EchoStar XI (1) | 15 | — | 200,198 | |||||||
EchoStar XIV (1) | 15 | — | 316,541 | |||||||
EchoStar XV | 15 | 277,658 | 277,658 | |||||||
Satellites acquired under capital lease agreements | 15-Oct | 499,819 | 499,819 | |||||||
Furniture, fixtures, equipment and other | 10-Jan | 610,418 | 600,439 | |||||||
Buildings and improvements | Jan-40 | 82,155 | 80,439 | |||||||
Land | — | 5,504 | 5,504 | |||||||
Construction in progress | — | 43,211 | 39,043 | |||||||
Total property and equipment | 5,044,521 | 6,072,434 | ||||||||
Accumulated depreciation (1) | (2,508,079 | ) | (3,093,111 | ) | ||||||
Property and equipment, net | $ | 2,536,442 | $ | 2,979,323 | ||||||
(1) The decrease in property and equipment and accumulated depreciation resulted from the Satellite and Tracking Stock Transaction. See Note 1 and Note 10 for further discussion. | ||||||||||
Schedule of depreciation and amortization expense | ' | |||||||||
For the Three Months | ||||||||||
Ended March 31, | ||||||||||
2014 | 2013 | |||||||||
(In thousands) | ||||||||||
Equipment leased to customers | $ | 185,723 | $ | 163,118 | ||||||
Satellites | 23,201 | 27,171 | ||||||||
Buildings, furniture, fixtures, equipment and other | 16,042 | 15,207 | ||||||||
Total depreciation and amortization | $ | 224,966 | $ | 205,496 | ||||||
Schedule of pay-TV satellite fleet | ' | |||||||||
As of March 31, 2014, our pay-TV satellite fleet consisted of the following: | ||||||||||
Degree | Estimated | |||||||||
Launch | Orbital | Useful Life | ||||||||
Satellites | Date | Location | (Years) | |||||||
Owned: | ||||||||||
EchoStar XV (1) | July 2010 | 45 | 15 | |||||||
Leased from EchoStar: | ||||||||||
EchoStar I (1)(2)(3)(4) | December 1995 | 77 | NA | |||||||
EchoStar VII (1)(2)(3)(4) | February 2002 | 119 | NA | |||||||
EchoStar VIII (1)(2) | August 2002 | 77 | NA | |||||||
EchoStar IX (1)(2) | August 2003 | 121 | NA | |||||||
EchoStar X (1)(2)(3)(4) | February 2006 | 110 | NA | |||||||
EchoStar XI (1)(2)(3)(4) | July 2008 | 110 | NA | |||||||
EchoStar XII (1)(2)(3) | July 2003 | 61.5 | NA | |||||||
EchoStar XIV (1)(2)(3)(4) | March 2010 | 119 | NA | |||||||
EchoStar XVI (1) | November 2012 | 61.5 | NA | |||||||
Nimiq 5 (1)(2) | September 2009 | 72.7 | NA | |||||||
QuetzSat-1 (1)(2) | September 2011 | 77 | NA | |||||||
Leased from Other Third Party: | ||||||||||
Anik F3 | April 2007 | 118.7 | NA | |||||||
Ciel II | December 2008 | 129 | NA | |||||||
Under Construction: | ||||||||||
EchoStar XVIII | 2015 | 110 | 15 | |||||||
(1) See Note 10 for further discussion of our Related Party Transactions with EchoStar. | ||||||||||
(2) We lease a portion of the capacity on these satellites. | ||||||||||
(3) We generally have the option to renew each lease on a year-to-year basis through the end of the respective satellite’s useful life. | ||||||||||
(4) On February 20, 2014, we entered into the Satellite and Tracking Stock Transaction with EchoStar pursuant to which, among other things, we transferred these satellites to EchoStar and lease back certain satellite capacity on these satellites. See Note 1 for further discussion. |
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Long-Term Debt | ' | |||||||||||||
Schedule of carrying and fair values of the entity's debt facilities | ' | |||||||||||||
As of | ||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||
Carrying | Carrying | |||||||||||||
Value | Fair Value | Value | Fair Value | |||||||||||
(In thousands) | ||||||||||||||
6 5/8% Senior Notes due 2014 (1) | $ | 1,000,000 | $ | 1,026,880 | $ | 1,000,000 | $ | 1,040,200 | ||||||
7 3/4% Senior Notes due 2015 | 750,000 | 804,563 | 750,000 | 813,750 | ||||||||||
7 1/8% Senior Notes due 2016 | 1,500,000 | 1,642,500 | 1,500,000 | 1,657,500 | ||||||||||
4 5/8% Senior Notes due 2017 | 900,000 | 957,600 | 900,000 | 946,962 | ||||||||||
4 1/4% Senior Notes due 2018 | 1,200,000 | 1,253,400 | 1,200,000 | 1,221,792 | ||||||||||
7 7/8% Senior Notes due 2019 | 1,400,000 | 1,659,700 | 1,400,000 | 1,603,000 | ||||||||||
5 1/8% Senior Notes due 2020 | 1,100,000 | 1,144,121 | 1,100,000 | 1,104,950 | ||||||||||
6 3/4% Senior Notes due 2021 | 2,000,000 | 2,249,500 | 2,000,000 | 2,122,500 | ||||||||||
5 7/8% Senior Notes due 2022 | 2,000,000 | 2,143,400 | 2,000,000 | 1,997,500 | ||||||||||
5 % Senior Notes due 2023 | 1,500,000 | 1,507,200 | 1,500,000 | 1,458,090 | ||||||||||
Mortgages and other notes payable (2) | 15,656 | 15,656 | 59,313 | 59,313 | ||||||||||
Subtotal | 13,365,656 | $ | 14,404,520 | 13,409,313 | $ | 14,025,557 | ||||||||
Capital lease obligations (3) | 213,208 | NA | 219,902 | NA | ||||||||||
Total long-term debt and capital lease obligations (including current portion) | $ | 13,578,864 | $ | 13,629,215 | ||||||||||
(1) Our 6 5/8% Senior Notes with an aggregate principal balance of $1.0 billion mature on October 1, 2014. | ||||||||||||||
(2) On February 20, 2014, we entered into the Satellite and Tracking Stock Transaction, which resulted in a decrease in “Mortgages and other notes payable” of $44 million related to the in-orbit incentive obligations associated with the Transferred Satellites. See Note 1 and Note 10 for further discussion. | ||||||||||||||
(3) Disclosure regarding fair value of capital leases is not required. |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Related Party Transactions | ' | |||||||
Schedule of transactions with NagraStar | ' | |||||||
For the Three Months | ||||||||
Ended March 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Purchases (including fees): | ||||||||
Purchases from NagraStar | $ | 20,203 | $ | 22,019 | ||||
As of | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Amounts Payable and Commitments: | ||||||||
Amounts payable to NagraStar | $ | 16,687 | $ | 23,417 | ||||
Organization_and_Business_Acti1
Organization and Business Activities (Details) (USD $) | 3 Months Ended | 0 Months Ended | |||
Mar. 31, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | |
Transaction Agreement | EchoStar and HSSC | EchoStar | HSSC | ||
DISH Investors | Transaction Agreement | Transaction Agreement | Transaction Agreement | ||
item | DISH Investors | DISH Investors | |||
Satellite and Tracking Stock Transaction with EchoStar | ' | ' | ' | ' | ' |
Number of owned satellites transferred and leased back | ' | ' | 5 | ' | ' |
Obligations and interest payments transferred | $44,540,000 | ' | $59,000,000 | ' | ' |
Cash in exchange for shares of series of preferred tracking stock issued | ' | ' | $11,000,000 | ' | ' |
Preferred tracking stock issued by related party | ' | ' | ' | 6,290,499 | 81.128 |
Percentage of economic interest in the Hughes Retail Group | ' | 80.00% | ' | ' | ' |
Supplemental_Data_Statements_o2
Supplemental Data - Statements of Cash Flows (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Supplemental Data - Statements of Cash Flows | ' | ' |
Cash paid for interest | $230,120,000 | $219,247,000 |
Cash received for interest | 8,762,000 | 7,208,000 |
Cash paid for income taxes | 2,166,000 | 300,000 |
Cash paid for income taxes to DISH Network | 154,910,000 | 106,445,000 |
Satellite and Tracking Stock Transaction with EchoStar: | ' | ' |
Transfer of property and equipment, net | 432,080,000 | ' |
Investment in EchoStar and HSSC preferred tracking stock - cost method | 316,204,000 | ' |
Transfer of liabilities and other | 44,540,000 | ' |
Capital distribution to EchoStar, net of deferred taxes of $31,274 | 51,466,000 | ' |
Deferred taxes for capital distribution to EchoStar | $31,274,000 | ' |
Marketable_Investment_Securiti2
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details) (USD $) | 3 Months Ended | 3 Months Ended | |||||||
Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | |
EchoStar | HSSC | Current marketable investment securities - VRDNs | Current marketable investment securities - VRDNs | Current marketable investment securities - other | Current marketable investment securities - other | ||||
Marketable Investment Securities, Restricted Cash and Cash Equivalents and Other Investment Securities: | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current marketable investment securities | ' | $4,071,453,000 | $4,117,326,000 | ' | ' | $107,767,000 | $105,854,000 | $3,963,686,000 | $4,011,472,000 |
Restricted marketable investment securities | ' | 58,621,000 | 63,902,000 | ' | ' | ' | ' | ' | ' |
Total marketable investment securities | ' | 4,130,074,000 | 4,181,228,000 | ' | ' | ' | ' | ' | ' |
Restricted cash and cash equivalents | ' | 23,405,000 | 18,878,000 | ' | ' | ' | ' | ' | ' |
Other investment securities - cost method | ' | ' | ' | 228,795,000 | 87,409,000 | ' | ' | 5,396,000 | 5,396,000 |
Total marketable investment securities and restricted cash and cash equivalents | ' | 4,475,079,000 | 4,205,502,000 | ' | ' | ' | ' | ' | ' |
Settlement period | ' | ' | ' | ' | ' | '5 days | ' | ' | ' |
Restricted cash related to litigation released during the period | $42,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Marketable_Investment_Securiti3
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 2) (USD $) | 3 Months Ended | 0 Months Ended | ||||
Mar. 31, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | |
Transaction Agreement | EchoStar and HSSC | EchoStar and HSSC | EchoStar | HSSC | ||
DISH Investors | Transaction Agreement | Investor Rights Agreement | Transaction Agreement | Transaction Agreement | ||
DISH Investors | DISH Investors | DISH Investors | ||||
Other investment securities: | ' | ' | ' | ' | ' | ' |
Preferred tracking stock issued by related party | ' | ' | ' | ' | 6,290,499 | 81.128 |
Percentage of economic interest in the Hughes Retail Group | ' | 80.00% | ' | ' | ' | ' |
Historical cost of tracking stock | $316,204,000 | ' | ' | ' | $229,000,000 | $87,000,000 |
Capital transaction | ' | ' | 356,000,000 | ' | ' | ' |
Cash in exchange for shares of series of preferred tracking stock issued | ' | ' | 11,000,000 | ' | ' | ' |
Capital transaction recorded in additional paid-in capital | $51,466,000 | ' | $51,000,000 | ' | ' | ' |
Tracking stock prohibited transfer period | ' | ' | ' | '1 year | ' | ' |
Marketable_Investment_Securiti4
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 3) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Accumulated net unrealized gains (losses) | ' | ' |
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss) | $35,000,000 | $15,000,000 |
Accumulated net unrealized gains, net of tax, in accumulated other comprehensive income (loss) | 24,000,000 | 11,000,000 |
Components of available-for-sale investments | ' | ' |
Debt securities | 4,071,453,000 | 4,117,326,000 |
Total marketable investment securities | 4,130,074,000 | 4,181,228,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ' | ' |
Unrealized Gains | 36,179,000 | 18,733,000 |
Unrealized Losses | -850,000 | -3,355,000 |
Unrealized Gains Losses, Net | 35,329,000 | 15,378,000 |
Contractual maturities of restricted and non-restricted marketable investment securities | ' | ' |
Debt securities with contractual maturities within one year | 3,488,000,000 | ' |
Debt securities with contractual maturities extending longer than one year through and including five years | 576,000,000 | ' |
Debt securities with contractual maturities longer than ten years | 24,000,000 | ' |
VRDNs | ' | ' |
Components of available-for-sale investments | ' | ' |
Debt securities | 107,767,000 | 105,854,000 |
Other (including restricted) | ' | ' |
Components of available-for-sale investments | ' | ' |
Debt security | 3,980,111,000 | 4,048,851,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ' | ' |
Unrealized Gains | 7,220,000 | 5,447,000 |
Unrealized Losses | -850,000 | -3,355,000 |
Unrealized Gains Losses, Net | 6,370,000 | 2,092,000 |
Equity Securities | ' | ' |
Components of available-for-sale investments | ' | ' |
Equity securities | 42,196,000 | 26,523,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ' | ' |
Unrealized Gains | 28,959,000 | 13,286,000 |
Unrealized Gains Losses, Net | $28,959,000 | $13,286,000 |
Marketable_Investment_Securiti5
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 4) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair value of marketable investment securities in a loss position | ' | ' |
Total | $1,336,236 | $2,040,282 |
Unrealized loss on marketable investment securities in a loss position | ' | ' |
Total | -850 | -3,355 |
Debt Securities | ' | ' |
Fair value of marketable investment securities in a loss position | ' | ' |
Less than 12 Months | 1,302,801 | 2,002,239 |
12 Months or More | 33,435 | 38,043 |
Unrealized loss on marketable investment securities in a loss position | ' | ' |
Less than 12 months | -786 | -2,820 |
12 months or More | ($64) | ($535) |
Marketable_Investment_Securiti6
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 5) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair value of marketable securities | ' | ' |
Debt securities | $4,071,453 | $4,117,326 |
Total marketable investment securities | 4,130,074 | 4,181,228 |
Transfer of investments from Level 1 to Level 2 | 0 | ' |
Transfer of investments from Level 2 to Level 1 | 0 | ' |
VRDNs | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 107,767 | 105,854 |
Other (including restricted) | ' | ' |
Fair value of marketable securities | ' | ' |
Debt security | 3,980,111 | 4,048,851 |
Equity Securities | ' | ' |
Fair value of marketable securities | ' | ' |
Equity securities | 42,196 | 26,523 |
Fair value measurements on recurring basis | Total | ' | ' |
Fair value of marketable securities | ' | ' |
Cash equivalents (including restricted) | 3,654,381 | 3,743,328 |
Total marketable investment securities | 4,130,074 | 4,181,228 |
Fair value measurements on recurring basis | Total | VRDNs | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 107,767 | 105,854 |
Fair value measurements on recurring basis | Total | Other (including restricted) | ' | ' |
Fair value of marketable securities | ' | ' |
Debt security | 3,980,111 | 4,048,851 |
Fair value measurements on recurring basis | Total | Equity Securities | ' | ' |
Fair value of marketable securities | ' | ' |
Equity securities | 42,196 | 26,523 |
Fair value measurements on recurring basis | Level 1 | ' | ' |
Fair value of marketable securities | ' | ' |
Cash equivalents (including restricted) | 46,714 | 275,277 |
Total marketable investment securities | 42,196 | 26,523 |
Fair value measurements on recurring basis | Level 1 | Equity Securities | ' | ' |
Fair value of marketable securities | ' | ' |
Equity securities | 42,196 | 26,523 |
Fair value measurements on recurring basis | Level 2 | ' | ' |
Fair value of marketable securities | ' | ' |
Cash equivalents (including restricted) | 3,607,667 | 3,468,051 |
Total marketable investment securities | 4,087,878 | 4,154,705 |
Fair value measurements on recurring basis | Level 2 | VRDNs | ' | ' |
Fair value of marketable securities | ' | ' |
Debt securities | 107,767 | 105,854 |
Fair value measurements on recurring basis | Level 2 | Other (including restricted) | ' | ' |
Fair value of marketable securities | ' | ' |
Debt security | $3,980,111 | $4,048,851 |
Inventory_Details
Inventory (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory | ' | ' |
Finished goods | $282,678 | $299,975 |
Raw materials | 130,113 | 102,563 |
Work-in-process | 110,031 | 110,108 |
Total inventory | $522,822 | $512,646 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Property and Equipment | ' | ' |
Total property and equipment | $5,044,521 | $6,072,434 |
Accumulated depreciation | -2,508,079 | -3,093,111 |
Property and equipment, net | 2,536,442 | 2,979,323 |
Equipment leased to customers | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | 3,525,756 | 3,496,994 |
Equipment leased to customers | Minimum | ' | ' |
Property and Equipment | ' | ' |
Depreciable life of assets | '2 years | ' |
Equipment leased to customers | Maximum | ' | ' |
Property and Equipment | ' | ' |
Depreciable life of assets | '5 years | ' |
EchoStar I | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | ' | 201,607 |
Depreciable life of assets | '12 years | ' |
EchoStar VII | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | ' | 177,000 |
Depreciable life of assets | '15 years | ' |
EchoStar X | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | ' | 177,192 |
Depreciable life of assets | '15 years | ' |
EchoStar XI | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | ' | 200,198 |
Depreciable life of assets | '15 years | ' |
EchoStar XIV | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | ' | 316,541 |
Depreciable life of assets | '15 years | ' |
EchoStar XV | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | 277,658 | 277,658 |
Depreciable life of assets | '15 years | ' |
Satellites acquired under capital lease agreements | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | 499,819 | 499,819 |
Satellites acquired under capital lease agreements | Minimum | ' | ' |
Property and Equipment | ' | ' |
Depreciable life of assets | '10 years | ' |
Satellites acquired under capital lease agreements | Maximum | ' | ' |
Property and Equipment | ' | ' |
Depreciable life of assets | '15 years | ' |
Furniture, fixtures, equipment and other | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | 610,418 | 600,439 |
Furniture, fixtures, equipment and other | Minimum | ' | ' |
Property and Equipment | ' | ' |
Depreciable life of assets | '1 year | ' |
Furniture, fixtures, equipment and other | Maximum | ' | ' |
Property and Equipment | ' | ' |
Depreciable life of assets | '10 years | ' |
Buildings and improvements | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | 82,155 | 80,439 |
Buildings and improvements | Minimum | ' | ' |
Property and Equipment | ' | ' |
Depreciable life of assets | '1 year | ' |
Buildings and improvements | Maximum | ' | ' |
Property and Equipment | ' | ' |
Depreciable life of assets | '40 years | ' |
Land | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | 5,504 | 5,504 |
Construction in progress | ' | ' |
Property and Equipment | ' | ' |
Total property and equipment | $43,211 | $39,043 |
Property_and_Equipment_Details1
Property and Equipment (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Depreciation and amortization expense | ' | ' |
Depreciation and amortization expense | $224,966 | $205,496 |
Equipment leased to customers | ' | ' |
Depreciation and amortization expense | ' | ' |
Depreciation and amortization expense | 185,723 | 163,118 |
Satellites | ' | ' |
Depreciation and amortization expense | ' | ' |
Depreciation and amortization expense | 23,201 | 27,171 |
Buildings, furniture, fixtures, equipment and other | ' | ' |
Depreciation and amortization expense | ' | ' |
Depreciation and amortization expense | $16,042 | $15,207 |
Pay-TV Satellites | ' | ' |
Depreciation and amortization expense | ' | ' |
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | 14 | ' |
Owned Satellites | 1 | ' |
Number of satellites utilized under operating lease | 11 | ' |
Number of satellites utilized under capital lease | 2 | ' |
Property_and_Equipment_Details2
Property and Equipment (Details 3) | 3 Months Ended |
Mar. 31, 2014 | |
EchoStar XV | ' |
Property and Equipment | ' |
Estimate Useful life of assets | '15 years |
EchoStar XVIII | ' |
Property and Equipment | ' |
Estimate Useful life of assets | '15 years |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Feb. 20, 2014 |
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 | 4 1/4% Senior Notes due 2018 | 4 1/4% Senior Notes due 2018 | 7 7/8% Senior Notes due 2019 | 7 7/8% Senior Notes due 2019 | 5 1/8% Senior Notes due 2020 | 5 1/8% Senior Notes due 2020 | 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 | Mortgages and other notes payable | |||
Transaction Agreement | |||||||||||||||||||||||||
Long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying Value | $13,365,656,000 | $13,409,313,000 | $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 | $1,200,000,000 | $1,200,000,000 | $1,400,000,000 | $1,400,000,000 | $1,100,000,000 | $1,100,000,000 | $2,000,000,000 | $2,000,000,000 | $2,000,000,000 | $2,000,000,000 | $1,500,000,000 | $1,500,000,000 | $15,656,000 | $59,313,000 | ' |
Fair Value | 14,404,520,000 | 14,025,557,000 | 1,026,880,000 | 1,040,200,000 | 804,563,000 | 813,750,000 | 1,642,500,000 | 1,657,500,000 | 957,600,000 | 946,962,000 | 1,253,400,000 | 1,221,792,000 | 1,659,700,000 | 1,603,000,000 | 1,144,121,000 | 1,104,950,000 | 2,249,500,000 | 2,122,500,000 | 2,143,400,000 | 1,997,500,000 | 1,507,200,000 | 1,458,090,000 | 15,656,000 | 59,313,000 | ' |
Capital lease obligations | 213,208,000 | 219,902,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total long-term debt and capital lease obligations (including current portion) | 13,578,864,000 | 13,629,215,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | 6.63% | 6.63% | 7.75% | 7.75% | 7.13% | 7.13% | 4.63% | 4.63% | 4.25% | 4.25% | 7.88% | 7.88% | 5.13% | 5.13% | 6.75% | 6.75% | 5.88% | 5.88% | 5.00% | 5.00% | ' | ' | ' |
Principal balance reclassified to current portion of long-term debt and capital lease obligations | ' | ' | 1,000,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Decrease in mortgages and other notes payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $44,000,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | |||||
Mar. 31, 2014 | Dec. 20, 2013 | Mar. 31, 2014 | Oct. 29, 2013 | Mar. 31, 2014 | Dec. 31, 2008 | Mar. 28, 2014 | Dec. 17, 2013 | Oct. 29, 2013 | Mar. 31, 2014 | Feb. 27, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 09, 2012 | Mar. 31, 2014 | Mar. 09, 2012 | |
item | Wireless Spectrum | DBSD North America and TerreStar Transactions | Dish Network | Dish Network | Dish Network | Dish Network | Dish Network | Dish Network | Dish Network | Dish Network | Dish Network | Dish Network | Dish Network | Dish Network | Dish Network | |
Wireless Spectrum | item | Wireless Spectrum | Wireless Spectrum | Wireless Spectrum | Wireless Spectrum | Wireless Spectrum | Wireless Spectrum | DBSD North America and TerreStar Transactions | DBSD North America and TerreStar Transactions | Networks Inc. Terrestal | ||||||
item | UTAM, Inc. | Sprint | Wireless Spectrum | Wireless Spectrum | ||||||||||||
Spectrum Investments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment to acquire certain 700 MHz wireless licenses | ' | ' | ' | ' | ' | $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% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Modified 700 MHz Interim Build-Out Requirement (as a percent) | ' | ' | ' | 40.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Modified 700 MHz Final Build-Out Requirement (as a percent) | ' | ' | ' | 70.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accelerated period to meet Modified 700 MHz Build-Out Requirement on failure to meet Modified 700 MHz Interim Build-Out Requirement | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of equity acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% |
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% | ' |
Accelerated period to meet Final Build-Out Requirement on failure to meet Interim Build-Out Requirement | '1 year | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Extension term of AWS-4 Final Build-Out Requirement | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' |
Aggregate reserve price of H Block wireless spectrum | ' | 1,564,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of wireless spectrum licenses | 176 | ' | ' | ' | ' | ' | 176 | ' | ' | ' | 176 | ' | ' | ' | ' | ' |
Aggregate bid price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,564,000,000 | ' | ' | ' | ' | ' |
Payment to meet H Block auction requirements | ' | ' | ' | ' | ' | ' | ' | 328,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining balance amount due of H Block spectrum licenses | ' | ' | ' | ' | ' | ' | ' | 1,236,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Payment for clearance costs associated with the lower H Block spectrum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,000,000 | ' | ' | ' | ' |
Payment for clearance costs associated with the upper H Block spectrum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95,000,000 | ' | ' | ' |
H Block Interim Build-Out Requirement (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40.00% | ' | ' | ' | ' | ' | ' |
H Block Final Build-Out Requirement (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75.00% | ' | ' | ' | ' | ' | ' |
Accelerated period to meet Build-Out Requirement on failure | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' |
Dividend paid to DOC | $650,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details 2) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||||||||||
Mar. 31, 2014 | Mar. 31, 2013 | Sep. 09, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2007 | Mar. 31, 2014 | Mar. 31, 2014 | Oct. 11, 2012 | Apr. 30, 2009 | Mar. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2008 | Jun. 21, 2011 | Dec. 31, 2010 | Mar. 15, 2010 | Jul. 31, 2009 | 31-May-12 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 23, 2013 | Mar. 31, 2014 | |
Garnet Digital | LightSquared transaction shareholder derivative actions | Katz Communications-Patent infringement | Katz Communications-Patent infringement | 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 | Hopper litigation | Norman IP Holdings | Do Not Call Litigation | Do Not Call Litigation | Lightsquared Harbinger Capital Partners LLC | |||
item | item | item | Patent | item | Maximum | item | DISH Network L.L.C. | ||||||||||||||||
Patent | |||||||||||||||||||||||
Loss contingencies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Guarantees for payments | ' | ' | ' | ' | ' | ' | $36,000,000 | $359,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Guarantee term | ' | ' | ' | ' | ' | ' | 'P11M | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Claim amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000,000 | ' | ' | ' | 35,000,000 | ' | ' | ' | ' | ' | ' | ' | 270,000,000 | ' |
Period of injunctive relief sought from placing any outbound telemarketing calls to market or promote its goods or services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' |
Court ruling | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 66,000,000 | ' | 66,000,000 | ' | ' | ' | ' | ' | ' |
Litigation accrual | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 71,000,000 | ' | ' | ' | 42,000,000 | ' | ' | ' | ' | ' | ' | ' |
Attorneys' fees | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | 71,000,000 | ' | 24,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
General and administrative expenses | 159,183,000 | 145,582,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of accrued interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of days to store HD primetime programs recordings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '8 days | ' | ' | ' | ' |
Business days allowed to terminate existing agreements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 days |
Number of shareholders who filed lawsuits | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss Contingency Terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of reexamination petitions pending before patent and trademark office | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' |
Minimum number of autonomous streamlined signal processors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' |
Number of plaintiffs seeking a preliminary injunction | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 28, 2014 | Mar. 31, 2014 | Mar. 31, 2013 |
item | Dish Network | Dish Network | Blockbuster, Inc. | ||
Related Party Transactions with DISH Network | ' | ' | ' | ' | ' |
Dividend paid to DOC | $650,000 | ' | $650,000 | ' | ' |
Number of wireless spectrum licenses | 176 | ' | ' | ' | ' |
Subscriber-related revenue | 3,473,208 | 3,310,452 | ' | 5,000 | ' |
Subscriber-related expenses | 2,015,673 | 1,887,593 | ' | ' | 4,000 |
Expenses associated with services | $3,000 | $2,000 | ' | ' | ' |
Related_Party_Transactions_Det1
Related Party Transactions (Details 2) (EchoStar) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended |
Mar. 31, 2014 | Jan. 02, 2014 | Mar. 31, 2014 | Dec. 31, 2012 | 31-May-13 | |
Remanufactured Receiver Agreement | Professional Services Agreement | Professional Services Agreement | El Paso Lease Agreement | EchoStar XV | |
Minimum | Dish Network | Dish Network | Dish Network | ||
item | |||||
Equipment sales, services and other revenue - EchoStar | ' | ' | ' | ' | ' |
Minimum required notice period for termination of agreement by related party | '60 days | ' | ' | ' | ' |
Agreement term | ' | '1 year | ' | ' | ' |
Automatic renewal period | ' | ' | '1 year | ' | ' |
Minimum notice period for termination of agreement | ' | ' | '60 days | ' | ' |
Minimum notice period for termination of a specific service | ' | ' | '30 days | ' | ' |
Notice period for termination of agreement | ' | ' | ' | ' | '30 days |
Number of consecutive three year renewal options | ' | ' | ' | 4 | ' |
Term of renewal option | ' | ' | ' | '3 years | ' |
Related_Party_Transactions_Det2
Related Party Transactions (Details 3) | 3 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | |||
Mar. 31, 2014 | 31-May-10 | 31-May-13 | Dec. 21, 2012 | Mar. 31, 2014 | Dec. 31, 2009 | Dec. 31, 2009 | Sep. 30, 2012 | Dec. 31, 2008 | 31-May-12 | Mar. 31, 2014 | Mar. 31, 2014 | Jan. 02, 2012 | |
EchoStar XVI | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | |
Certain Sports Related Programming Broadcast Agreement | EchoStar VIII | EchoStar XVI | EchoStar XVI | EchoStar XVI | DISH Nimiq 5 Agreement | QuetzSat-1 Lease Agreement | QuetzSat-1 Lease Agreement | 103 degree orbital location member | 103 degree orbital location member | TT&C Agreement | Prior Broadcast Agreement | ||
transponder | transponder | transponder | Minimum | ||||||||||
Satellite and transmission expenses - EchoStar | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Required notice period for termination by the reporting entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '60 days | '60 days |
Agreement term | ' | '10 years | ' | ' | ' | ' | '10 years | ' | ' | '10 years | ' | ' | ' |
Notice period for termination of agreement | ' | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Agreement term from commencement of service date | ' | ' | ' | '4 years | ' | '10 years | ' | ' | ' | ' | '10 years | ' | ' |
Notice period to exercise option to extend agreement | '6 years | ' | ' | ' | '6 years | ' | ' | ' | ' | ' | ' | ' | ' |
Additional term of renewal option | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' |
Agreement term with third party | ' | ' | ' | ' | ' | ' | '15 years | ' | '10 years | ' | ' | ' | ' |
Number of DBS transponders available to receive services | ' | ' | ' | ' | ' | ' | 32 | ' | ' | ' | ' | ' | ' |
Number of DBS transponders currently used | ' | ' | ' | ' | ' | ' | 32 | ' | 32 | ' | ' | ' | ' |
Number of DBS transponders expected to receive services | ' | ' | ' | ' | ' | ' | ' | ' | 24 | ' | ' | ' | ' |
Number of transponders subleased | ' | ' | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' |
Related_Party_Transactions_Det3
Related Party Transactions (Details 4) (EchoStar) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | |||||||
Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Jan. 02, 2010 | Mar. 31, 2014 | Mar. 31, 2014 | Feb. 23, 2010 | Mar. 31, 2014 | Mar. 31, 2014 | Feb. 23, 2010 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Product Support Agreement | Inverness Lease Agreement | Gilbert Lease Agreement | DISH Online.com Services Agreement | DISH Online.com Services Agreement | DISH Online.com Services Agreement | DISH Remote Access Services Agreement | DISH Remote Access Services Agreement | DISH Remote Access Services Agreement | Sling Service Services Agreement | Sling Service Services Agreement | Application Development Agreement | XiP Encryption Agreement | Santa Fe Lease Agreement | |
Minimum | item | Minimum | Minimum | |||||||||||
General and administrative expenses - EchoStar | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Required notice period for termination by the reporting entity | '60 days | ' | ' | ' | ' | '120 days | ' | ' | '120 days | ' | '120 days | ' | ' | ' |
Required notice period for termination of agreement | ' | '6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '180 days | ' |
Notice period to exercise option to extend agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | '1 year |
Minimum notice period for termination of agreement | ' | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | '90 days | '30 days | ' |
Number of successive one year renewal options | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of renewal option exercised | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Agreement term | ' | ' | ' | '2 years | ' | ' | '5 years | ' | ' | '5 years | ' | ' | ' | ' |
Automatic renewal period | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | '1 year | '1 year | ' | ' |
Notice period required to extend the agreement term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '180 days | ' |
Related_Party_Transactions_Det4
Related Party Transactions (Details 5) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | 1 Months Ended | |||||
Mar. 31, 2014 | Mar. 31, 2013 | Apr. 29, 2011 | Jan. 31, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2010 | Dec. 31, 2011 | Mar. 31, 2014 | |
EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | EchoStar | |||
TiVo v. Dish Network and EchoStar Corporation | Receiver Agreement | Receiver Agreement | Receiver Agreement | Tax Sharing Agreement | RUS Implementation Agreement | RUS Implementation Agreement | Patent Cross-License Agreements | Patent Cross-License Agreements | |||
item | Dish Network | Dish Network | Dish Network | ||||||||
Maximum | Maximum | ||||||||||
General and administrative expenses - EchoStar | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notice period to exercise option to extend agreement | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' |
Notice period required to extend the agreement term | ' | ' | ' | '180 days | '60 days | ' | ' | ' | ' | ' | ' |
Purchased set-top boxes and other equipment from EchoStar | ' | ' | ' | ' | $294,000,000 | $297,000,000 | ' | ' | ' | ' | ' |
Net amount of the allocated tax attributes payable | ' | ' | ' | ' | ' | ' | 83,000,000 | ' | ' | ' | ' |
Maximum grants receivable | ' | ' | ' | ' | ' | ' | ' | ' | 14,000,000 | ' | ' |
Cost of sales - equipment, services and other | 25,226,000 | 19,996,000 | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' |
Settlement amount | ' | ' | 500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Initial settlement amount paid | ' | ' | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
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 | ' | ' | ' | ' | ' | ' | ' | ' |
Contribution from related party | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of litigation settlement amount to be made by related party annually | ' | ' | 95.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Payments to third party by related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' |
Payments to third party by related party under extension option | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,000,000 |
Related_Party_Transactions_Det5
Related Party Transactions (Details 6) (USD $) | 3 Months Ended | 0 Months Ended | ||||
Mar. 31, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | |
Transaction Agreement | Transaction Agreement | Transaction Agreement | Transaction Agreement | Investor Rights Agreement | ||
DISH Investors | EchoStar and HSSC | EchoStar | HSSC | EchoStar and HSSC | ||
DISH Investors | DISH Investors | DISH Investors | ||||
Related Party Transactions with NagraStar L.L.C. | ' | ' | ' | ' | ' | ' |
Obligations and cash interest payments transferred | $44,540,000 | ' | $59,000,000 | ' | ' | ' |
Cash in exchange for shares of series of preferred tracking stock issued | ' | ' | 11,000,000 | ' | ' | ' |
Percentage of economic interest in the Hughes Retail Group | ' | 80.00% | ' | ' | ' | ' |
Historical cost of tracking stock | 316,204,000 | ' | ' | 229,000,000 | 87,000,000 | ' |
Capital transaction | ' | ' | 356,000,000 | ' | ' | ' |
Capital transaction recorded in additional paid-in capital | $51,466,000 | ' | $51,000,000 | ' | ' | ' |
Tracking stock prohibited transfer period | ' | ' | ' | ' | ' | '1 year |
Related_Party_Transactions_Det6
Related Party Transactions (Details 7) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Related Party Transactions with NagraStar L.L.C. | ' | ' | ' |
Purchases from NagraStar | $3,000 | $2,000 | ' |
Amounts payable to NagraStar | 354,752 | ' | 338,788 |
NagraStar | ' | ' | ' |
Related Party Transactions with NagraStar L.L.C. | ' | ' | ' |
Purchases from NagraStar | 20,203 | 22,019 | ' |
Amounts payable to NagraStar | $16,687 | ' | $23,417 |