Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 02, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | DISH DBS CORP | ||
Entity Central Index Key | 1042642 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $0 | ||
Entity Common Stock, Shares Outstanding | 1,015 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $6,762,140 | $4,294,475 |
Marketable investment securities | 1,401,145 | 4,117,326 |
Trade accounts receivable - other, net of allowance for doubtful accounts of $23,520 and $15,981, respectively | 870,795 | 859,986 |
Trade accounts receivable - EchoStar, net of allowance for doubtful accounts of zero | 31,391 | 52,602 |
Inventory | 493,546 | 512,646 |
Deferred tax assets | 37,018 | 65,457 |
Other current assets | 130,038 | 143,564 |
Total current assets | 9,726,073 | 10,046,056 |
Noncurrent Assets: | ||
Restricted cash and marketable investment securities | 86,984 | 82,780 |
Property and equipment, net | 2,437,004 | 2,979,323 |
FCC authorizations | 635,794 | 635,794 |
Other noncurrent assets, net | 571,562 | 239,556 |
Total noncurrent assets | 3,731,344 | 3,937,453 |
Total assets | 13,457,417 | 13,983,509 |
Current Liabilities: | ||
Trade accounts payable - other | 152,076 | 257,950 |
Trade accounts payable - EchoStar | 236,122 | 338,788 |
Deferred revenue and other | 865,210 | 824,478 |
Accrued programming | 1,374,710 | 1,238,610 |
Accrued interest | 227,158 | 232,732 |
Other accrued expenses | 441,693 | 457,775 |
Current portion of long-term debt and capital lease obligations | 679,149 | 1,032,607 |
Total current liabilities | 3,976,118 | 4,382,940 |
Long-Term Obligations, Net of Current Portion: | ||
Long-term debt and capital lease obligations, net of current portion | 13,765,003 | 12,577,410 |
Deferred tax liabilities | 1,225,417 | 1,247,375 |
Long-term deferred revenue, distribution and carriage payments and other long-term liabilities | 188,067 | 159,684 |
Total long-term obligations, net of current portion | 15,178,487 | 13,984,469 |
Total liabilities | 19,154,605 | 18,367,409 |
Commitments and Contingencies (Note 11) | ||
Redeemable noncontrolling interest (Note 2) | 19,913 | |
Stockholder's Equity (Deficit): | ||
Common stock, $.01 par value, 1,000,000 shares authorized, 1,015 shares issued and outstanding | ||
Additional paid-in capital | 1,276,201 | 1,300,101 |
Accumulated other comprehensive income (loss) | 28,383 | 11,189 |
Accumulated earnings (deficit) | -7,022,887 | -5,697,772 |
Total DISH DBS stockholder's equity (deficit) | -5,718,303 | -4,386,482 |
Noncontrolling interest | 1,202 | 2,582 |
Total stockholder's equity (deficit) | -5,717,101 | -4,383,900 |
Total liabilities and stockholder's equity (deficit) | $13,457,417 | $13,983,509 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Current Assets: | ||
Allowance for doubtful accounts on trade accounts receivable - other | $23,520 | $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 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue: | |||
Subscriber-related revenue | $14,130,607 | $13,559,511 | $13,038,611 |
Equipment sales and other revenue | 84,729 | 92,618 | 95,923 |
Equipment sales, services and other revenue - EchoStar | 62,077 | 43,483 | 17,066 |
Total revenue | 14,277,413 | 13,695,612 | 13,151,600 |
Costs and Expenses (exclusive of depreciation shown separately below - Note 6): | |||
Subscriber-related expenses | 8,066,642 | 7,677,111 | 7,246,104 |
Satellite and transmission expenses | 685,732 | 527,483 | 460,280 |
Cost of sales - equipment, services and other | 106,037 | 85,627 | 96,240 |
Subscriber acquisition costs: | |||
Cost of sales - subscriber promotion subsidies | 231,064 | 252,178 | 264,208 |
Other subscriber acquisition costs | 912,718 | 992,221 | 967,966 |
Subscriber acquisition advertising | 528,642 | 440,337 | 428,511 |
Total subscriber acquisition costs | 1,672,424 | 1,684,736 | 1,660,685 |
General and administrative expenses | 762,146 | 687,122 | 666,217 |
Litigation expense (Note 11) | 730,457 | ||
Depreciation and amortization (Note 6) | 956,101 | 905,987 | 898,682 |
Total costs and expenses | 12,249,082 | 11,568,066 | 11,758,665 |
Operating income (loss) | 2,028,331 | 2,127,546 | 1,392,935 |
Other Income (Expense): | |||
Interest income | 35,810 | 38,214 | 22,431 |
Interest expense, net of amounts capitalized | -834,856 | -878,550 | -647,298 |
Other, net | -3,394 | -2,833 | 2,124 |
Total other income (expense) | -802,440 | -843,169 | -622,743 |
Income (loss) before income taxes | 1,225,891 | 1,284,377 | 770,192 |
Income tax (provision) benefit, net | -410,831 | -459,655 | -285,926 |
Net income (loss) | 815,060 | 824,722 | 484,266 |
Less: Net income (loss) attributable to noncontrolling interest | -9,825 | -300 | |
Net income (loss) attributable to DISH DBS | 824,885 | 825,022 | 484,266 |
Comprehensive Income (Loss): | |||
Net income (loss) | 815,060 | 824,722 | 484,266 |
Other comprehensive income (loss): | |||
Unrealized holding gains (losses) on available-for-sale securities | 27,819 | 8,781 | 8,047 |
Deferred income tax (expense) benefit, net | -10,625 | -3,672 | -517 |
Total other comprehensive income (loss), net of tax | 17,194 | 5,109 | 7,530 |
Comprehensive income (loss) | 832,254 | 829,831 | 491,796 |
Less: Comprehensive income (loss) attributable to noncontrolling interest | -9,825 | -300 | |
Comprehensive income (loss) attributable to DISH DBS | $842,079 | $830,131 | $491,796 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT) (USD $) | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Earnings (Deficit) | Noncontrolling Interest | Redeemable Noncontrolling Interest | Total |
In Thousands, unless otherwise specified | ||||||
Balance at Dec. 31, 2011 | $1,207,681 | ($1,450) | ($6,091,202) | ($4,884,971) | ||
Increase (Decrease) in Stockholder's Equity | ||||||
Dividends to DISH Orbital Corporation (Note 15) | -915,858 | -915,858 | ||||
Non-cash, stock-based compensation | 38,573 | 38,573 | ||||
Income tax (expense) benefit related to stock awards and other | 8,560 | 8,560 | ||||
Change in unrealized holding gains (losses) on available-for-sale securities, net | 8,047 | 8,047 | ||||
Deferred income tax (expense) benefit attributable to unrealized gains (losses) on available-for-sale securities | -517 | -517 | ||||
Net income (loss) attributable to DISH DBS | 484,266 | 484,266 | ||||
Balance at Dec. 31, 2012 | 1,254,814 | 6,080 | -6,522,794 | -5,261,900 | ||
Increase (Decrease) in Stockholder's Equity | ||||||
Non-cash, stock-based compensation | 29,647 | 29,647 | ||||
Income tax (expense) benefit related to stock awards and other | 18,788 | 18,788 | ||||
Change in unrealized holding gains (losses) on available-for-sale securities, net | 8,781 | 8,781 | ||||
Deferred income tax (expense) benefit attributable to unrealized gains (losses) on available-for-sale securities | -3,672 | -3,672 | ||||
Capital distribution to EchoStar | -3,148 | -3,148 | ||||
Noncontrolling interest recognized with acquisition of a controlling interest in subsidiary | 2,882 | 2,882 | ||||
Net income (loss) attributable to noncontrolling interest | -300 | -300 | ||||
Net income (loss) attributable to DISH DBS | 825,022 | 825,022 | ||||
Balance at Dec. 31, 2013 | 1,300,101 | 11,189 | -5,697,772 | 2,582 | -4,383,900 | |
Increase (Decrease) in Stockholder's Equity | ||||||
Dividends to DISH Orbital Corporation (Note 15) | -2,150,000 | -2,150,000 | ||||
Non-cash, stock-based compensation | 33,969 | 28 | 27 | 33,997 | ||
Income tax (expense) benefit related to stock awards and other | 23,022 | -691 | 22,331 | |||
Change in unrealized holding gains (losses) on available-for-sale securities, net | 27,819 | 27,819 | ||||
Deferred income tax (expense) benefit attributable to unrealized gains (losses) on available-for-sale securities | -10,625 | -10,625 | ||||
Capital distribution to EchoStar, net of deferred taxes of $31,274 | -51,466 | -51,466 | ||||
Capital distribution to EchoStar, net of deferred taxes of $3,542 | -5,845 | -6,118 | -11,963 | |||
Deemed distribution to EchoStar - initial fair value of redeemable noncontrolling interest, net of deferred taxes of $8,489 | -14,011 | 22,500 | -14,011 | |||
Sling TV contribution from parent | -9,569 | 12,612 | 3,043 | |||
Net income (loss) attributable to noncontrolling interest | -2,614 | -9,825 | ||||
Net income (loss) attributable to noncontrolling interest excluding redeemable noncontrolling interest | -7,211 | -7,211 | ||||
Net income (loss) attributable to DISH DBS | 824,885 | 824,885 | ||||
Balance at Dec. 31, 2014 | $1,276,201 | $28,383 | ($7,022,887) | $1,202 | $19,913 | ($5,717,101) |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT) (Parenthetical) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT) | |
Deferred tax in the capital distribution to EchoStar relating to satellite and tracking stock transaction | $31,274 |
Deferred tax in capital distribution to EchoStar | 3,542 |
Deferred tax in deemed distribution of redeemable noncontrolling interest | $8,489 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash Flows From Operating Activities: | |||
Net income (loss) | $815,060 | $824,722 | $484,266 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | |||
Depreciation and amortization | 956,101 | 905,987 | 898,682 |
Realized and unrealized losses (gains) on investments | -813 | -1,751 | |
Non-cash, stock-based compensation | 34,024 | 29,647 | 38,573 |
Deferred tax expense (benefit) | 87,587 | 71,405 | 169,308 |
Other, net | 41,087 | -82,032 | -20,897 |
Changes in current assets and current liabilities: | |||
Trade accounts receivable - other | -19,009 | -36,867 | -55,048 |
Allowance for doubtful accounts | 7,539 | 2,147 | 1,918 |
Trade accounts receivable - EchoStar | 21,211 | -32,678 | -3,628 |
Inventory | -11,718 | -18,437 | 84,151 |
Other current assets | 14,373 | -26,407 | 635 |
Trade accounts payable - other | -105,874 | 32,620 | 93,392 |
Trade accounts payable - EchoStar | -139,803 | 75,945 | 39,926 |
Deferred revenue and other | 39,303 | -8,040 | 23,239 |
Accrued programming and other accrued expenses | 57,939 | 92,309 | 201,638 |
Net cash flows from operating activities | 1,797,007 | 1,830,321 | 1,954,404 |
Cash Flows From Investing Activities: | |||
(Purchases) Sales and maturities of marketable investment securities, net | 2,744,000 | -1,838,875 | -1,580,123 |
Purchases of property and equipment | -822,121 | -925,203 | -778,742 |
Change in restricted cash and marketable investment securities | -4,204 | 38,881 | -2,017 |
Other, net | -737 | -12,235 | -23,895 |
Net cash flows from investing activities | 1,916,938 | -2,737,432 | -2,384,777 |
Cash Flows From Financing Activities: | |||
Proceeds from issuance of long-term debt | 2,000,000 | 2,300,000 | 4,400,000 |
Proceeds from issuance of restricted debt | 2,600,000 | ||
Redemption of restricted debt | -2,600,000 | ||
Release of restricted debt escrow | 2,596,771 | ||
Repurchases and redemption of long-term debt | -1,099,999 | -500,000 | |
Debt issuance costs | -7,677 | -11,146 | -13,246 |
Funding of restricted debt escrow | -2,596,750 | ||
Repayment of long-term debt and capital lease obligations | -29,649 | -35,586 | -34,890 |
Dividends to DISH Orbital Corporation | -2,150,000 | -907,230 | |
Other, net | 41,045 | 23,910 | 11,054 |
Net cash flows from financing activities | -1,246,280 | 1,777,199 | 3,455,688 |
Net increase (decrease) in cash and cash equivalents | 2,467,665 | 870,088 | 3,025,315 |
Cash and cash equivalents, beginning of period | 4,294,475 | 3,424,387 | 399,072 |
Cash and cash equivalents, end of period | $6,762,140 | $4,294,475 | $3,424,387 |
Organization_and_Business_Acti
Organization and Business Activities | 12 Months Ended |
Dec. 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 (“DISH”), which had 13.978 million subscribers in the United States as of December 31, 2014. 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 optic network, in-home service and call center operations, and certain other assets utilized in our operations. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Summary of Significant Accounting Policies | ||||
Summary of Significant Accounting Policies | ||||
2.Summary of Significant Accounting Policies | ||||
Principles of Consolidation and Basis of Presentation | ||||
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 interests or redeemable noncontrolling interests. See below for further discussion. 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. Certain prior period amounts have been reclassified to conform to the current period presentation. | ||||
Redeemable Noncontrolling Interests | ||||
Sling TV. On May 2, 2014, DISH Network contributed its equity interest in Sling TV Holding L.L.C. (“Sling TV,” formerly known as DISH Digital Holding L.L.C.) to us. As a result, all operating activities of Sling TV are included in our financial results beginning May 2, 2014. Effective August 1, 2014, EchoStar Corporation (“EchoStar”) and Sling TV entered into an exchange agreement (the “Exchange Agreement”) pursuant to which, among other things, Sling TV distributed certain assets to EchoStar and EchoStar reduced its interest in Sling TV to a ten percent non-voting interest. EchoStar’s ten percent non-voting interest is redeemable, subject to certain conditions, at fair value within sixty days following the fifth anniversary of the Exchange Agreement. This interest is considered temporary equity and is recorded as “Redeemable noncontrolling interest” in the mezzanine section of our Consolidated Balance Sheets. EchoStar’s redeemable noncontrolling interest in Sling TV was initially accounted for at fair value, which established a minimum threshold value for this interest. Redemption of the interest is contingent on a certain performance goal being achieved by Sling TV, which is not yet probable of being achieved. At such time that we determine the performance goal to be probable, the value of EchoStar’s redeemable noncontrolling interest in Sling TV will be adjusted for any change in redemption value above the minimum threshold through “Redeemable noncontrolling interest,” with the offset recorded in “Additional paid-in capital” on our Consolidated Balance Sheets. In addition, the operating results of Sling TV attributable to EchoStar are recorded as “Redeemable noncontrolling interest” in our Consolidated Balance Sheets effective August 1, 2014, with the offset recorded in “Income (loss) attributable to noncontrolling interests, net of tax” on our Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 15 for further discussion on Sling TV and the Exchange Agreement. | ||||
Use of Estimates | ||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“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 and subscriber lives. Economic conditions may increase 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 the Consolidated Financial Statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected prospectively in the period they occur. | ||||
Cash and Cash Equivalents | ||||
We consider all liquid investments purchased with a remaining maturity of 90 days or less at the date of acquisition to be cash equivalents. Cash equivalents as of December 31, 2014 and 2013 may consist of money market funds, government bonds, corporate notes and commercial paper. The cost of these investments approximates their fair value. | ||||
Marketable Investment Securities | ||||
We currently classify all marketable investment securities as available-for-sale. We adjust the carrying value of our available-for-sale securities to fair value and report the related temporary unrealized gains and losses as a separate component of “Accumulated other comprehensive income (loss)” within “Total stockholder’s equity (deficit),” net of related deferred income tax. Declines in the fair value of a marketable investment security which are determined to be “other-than-temporary” are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss), thus establishing a new cost basis for such investment. | ||||
We evaluate our marketable investment securities portfolio on a quarterly basis to determine whether declines in the fair value of these securities are other-than-temporary. This quarterly evaluation consists of reviewing, among other things: | ||||
· | the fair value of our marketable investment securities compared to the carrying amount, | |||
· | the historical volatility of the price of each security, and | |||
· | any market and company specific factors related to each security. | |||
Declines in the fair value of debt and equity investments below cost basis are generally accounted for as follows: | ||||
Length of Time Investment | Treatment of the Decline in Value | |||
Has Been In a Continuous | (absent specific factors to the contrary) | |||
Loss Position | ||||
Less than six months | Generally, considered temporary. | |||
Six to nine months | Evaluated on a case by case basis to determine whether any company or market-specific factors exist indicating that such decline is other-than-temporary. | |||
Greater than nine months | Generally, considered other-than-temporary. The decline in value is recorded as a charge to earnings. | |||
Additionally, in situations where the fair value of a debt security is below its carrying amount, we consider the decline to be other-than-temporary and record a charge to earnings if any of the following factors apply: | ||||
· | we have the intent to sell the security, | |||
· | it is more likely than not that we will be required to sell the security before maturity or recovery, or | |||
· | we do not expect to recover the security’s entire amortized cost basis, even if there is no intent to sell the security. | |||
In general, we use the first in, first out method to determine the cost basis on sales of marketable investment securities. | ||||
Trade Accounts Receivable | ||||
Management estimates the amount of required allowances for the potential non-collectability of accounts receivable based upon past collection experience and consideration of other relevant factors. However, past experience may not be indicative of future collections and therefore additional charges could be incurred in the future to reflect differences between estimated and actual collections. | ||||
Inventory | ||||
Inventory is stated at the lower of cost or market value. Cost is determined using the first-in, first-out method. The cost of manufactured inventory includes the cost of materials, labor, freight-in, royalties and manufacturing overhead. | ||||
Property and Equipment | ||||
Property and equipment are stated at amortized cost less impairment losses, if any. The costs of satellites under construction, including interest and certain amounts prepaid under our satellite service agreements, are capitalized during the construction phase, assuming the eventual successful launch and in-orbit operation of the satellite. If a satellite were to fail during launch or while in-orbit, the resultant loss would be charged to expense in the period such loss was incurred. The amount of any such loss would be reduced to the extent of insurance proceeds estimated to be received, if any. Depreciation is recorded on a straight-line basis over useful lives ranging from one to 40 years. Repair and maintenance costs are charged to expense when incurred. Renewals and improvements that add value or extend the asset’s useful life are capitalized. | ||||
Impairment of Long-Lived Assets | ||||
We review our long-lived assets and identifiable finite lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For assets which are held and used in operations, the asset would be impaired if the carrying value of the asset (or asset group) exceeded its undiscounted future net cash flows. Once an impairment is determined, the actual impairment recognized is the difference between the carrying value and the fair value as estimated using discounted cash flows. Assets which are to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. We consider relevant cash flow, estimated future operating results, trends and other available information in assessing whether the carrying value of assets are recoverable. | ||||
DBS Satellites. We currently evaluate our DBS satellite fleet for impairment as one asset group whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. We do not believe any triggering event has occurred which would indicate impairment as of December 31, 2014. | ||||
Indefinite Lived Intangible Assets | ||||
We do not amortize indefinite lived intangible assets, but test these assets for impairment annually during the fourth quarter or more often if indicators of impairment arise. Intangible assets that have finite lives are amortized over their estimated useful lives and tested for impairment as described above for long-lived assets. Our intangible assets with indefinite lives primarily consist of FCC licenses. Generally, we have determined that our FCC licenses have indefinite useful lives due to the following: | ||||
· | FCC licenses are a non-depleting asset; | |||
· | existing FCC licenses are integral to our business segments and will contribute to cash flows indefinitely; | |||
· | replacement DBS satellite applications are generally authorized by the FCC subject to certain conditions, without substantial cost under a stable regulatory, legislative and legal environment; | |||
· | maintenance expenditures to obtain future cash flows are not significant; | |||
· | FCC licenses are not technologically dependent; and | |||
· | we intend to use these assets indefinitely. | |||
DBS FCC Licenses. We combine all of our indefinite lived DBS FCC licenses that we currently utilize or plan to utilize in the future into a single unit of accounting. The analysis encompasses future cash flows from satellites transmitting from such licensed orbital locations, including revenue attributable to programming offerings from such satellites, the direct operating and subscriber acquisition costs related to such programming, and future capital costs for replacement satellites. Projected revenue and cost amounts include projected subscribers. In conducting our annual impairment test in 2014, we determined that the estimated fair value of the DBS FCC licenses, calculated using a discounted cash flow analysis, exceeded their carrying amounts. | ||||
Other Investment Securities | ||||
Generally, we account for our unconsolidated equity investments under either the equity method or cost method of accounting. Because these equity securities are generally not publicly traded, it is not practical to regularly estimate the fair value of the investments; however, these investments are subject to an evaluation for other-than-temporary impairment on a quarterly basis. This quarterly evaluation consists of reviewing, among other things, company business plans, current financial statements and key financial metrics, if available, for factors that may indicate an impairment of our investment. Such factors may include, but are not limited to, cash flow concerns, material litigation, violations of debt covenants and changes in business strategy. The fair value of these equity investments is not estimated unless there are identified changes in circumstances that may indicate an impairment exists and these changes are likely to have a significant adverse effect on the fair value of the investment. | ||||
Long-Term Deferred Revenue, Distribution and Carriage Payments | ||||
Certain programmers provide us up-front payments. Such amounts are deferred and recognized as reductions to “Subscriber-related expenses” on a straight-line basis over the relevant remaining contract term (generally up to ten years). The current and long-term portions of these deferred credits are recorded in our Consolidated Balance Sheets in “Deferred revenue and other” and “Long-term deferred revenue, distribution and carriage payments and other long-term liabilities,” respectively. | ||||
Sales Taxes | ||||
We account for sales taxes imposed on our goods and services on a net basis in our Consolidated Statements of Operations and Comprehensive Income (Loss). Since we primarily act as an agent for the governmental authorities, the amount charged to the customer is collected and remitted directly to the appropriate jurisdictional entity. | ||||
Income Taxes | ||||
We establish a provision for income taxes currently payable or receivable and for income tax amounts deferred to future periods. Deferred tax assets and liabilities are recorded for the estimated future tax effects of differences that exist between the book and tax basis of assets and liabilities. Deferred tax assets are offset by valuation allowances when we believe it is more likely than not that such net deferred tax assets will not be realized. | ||||
Accounting for Uncertainty in Income Taxes | ||||
From time to time, we engage in transactions where the tax consequences may be subject to uncertainty. We record a liability when, in management’s judgment, a tax filing position does not meet the more likely than not threshold. For tax positions that meet the more likely than not threshold, we may record a liability depending on management’s assessment of how the tax position will ultimately be settled. We adjust our estimates periodically for ongoing examinations by and settlements with various taxing authorities, as well as changes in tax laws, regulations and precedent. We classify interest and penalties, if any, associated with our uncertain tax positions as a component of “Interest expense, net of amounts capitalized” and “Other, net,” respectively, on our Consolidated Statements of Operations and Comprehensive Income (Loss). | ||||
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; | |||
· | 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; and quoted prices for identical or similar instruments in markets that are not active; 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 December 31, 2014 and 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. | ||||
Deferred Debt Issuance Costs | ||||
Costs of issuing debt are generally deferred and amortized to interest expense using the effective interest rate method over the terms of the respective notes. See Note 7. | ||||
Revenue Recognition | ||||
We recognize revenue when an arrangement exists, prices are determinable, collectability is reasonably assured and the goods or services have been delivered. | ||||
Revenue from our pay-TV service is recognized when programming is broadcast to subscribers. Payments received from our Pay-TV subscribers in advance of the broadcast or service period are recorded as “Deferred revenue and other” in our Consolidated Balance Sheets until earned. | ||||
For certain of our promotions, subscribers are charged an upfront fee. A portion of these fees may be deferred and recognized over the estimated subscriber life for new subscribers or the estimated remaining life for existing subscribers ranging from four to five years. Revenue from advertising sales is recognized when the related services are performed. | ||||
Subscriber fees for pay-TV equipment rental fees and other hardware related fees, including fees for DVRs, equipment upgrade fees and additional outlet fees from subscribers with receivers with multiple tuners, advertising services and fees earned from our in-home service operations are recognized as revenue as earned. Generally, revenue from equipment sales and equipment upgrades is recognized upon shipment to customers. | ||||
Certain of our existing and new subscriber promotions include programming discounts. Programming revenues are recorded as earned at the discounted monthly rate charged to the subscriber. | ||||
We offer our customers the opportunity to download movies for a specific viewing period or permanently purchase a movie from our web-site. We recognize revenue when the movie is successfully downloaded by the customer, which, based on our current technology, occurs at the time the customer plays the movie for the first time. | ||||
Subscriber-Related Expenses | ||||
The cost of television programming distribution rights is generally incurred on a per subscriber basis and various upfront carriage payments are recognized when the related programming is distributed to subscribers. Long-term flat rate programming contracts are charged to expense using the straight-line method over the term of the agreement. The cost of television programming rights to distribute live sporting events for a season or tournament is charged to expense using the straight-line method over the course of the season or tournament. | ||||
“Subscriber-related expenses” in the Consolidated Statements of Operations and Comprehensive Income (Loss) principally include programming expenses, costs for pay-TV services incurred in connection with our in-home service and call center operations, billing costs, refurbishment and repair costs related to receiver systems, subscriber retention and other variable subscriber expenses. These costs are recognized as the services are performed or as incurred. | ||||
Subscriber Acquisition Costs | ||||
Subscriber acquisition costs in our Consolidated Statements of Operations and Comprehensive Income (Loss) consist of costs incurred to acquire new Pay-TV subscribers through third parties and our direct sales distribution channel. Subscriber acquisition costs include the following line items from our Consolidated Statements of Operations and Comprehensive Income (Loss): | ||||
· | “Cost of sales — subscriber promotion subsidies” includes the cost of our receiver systems sold to retailers and other distributors of our equipment and receiver systems sold directly by us to subscribers. | |||
· | “Other subscriber acquisition costs” includes net costs related to promotional incentives and costs related to installation and other promotional subsidies. | |||
· | “Subscriber acquisition advertising” includes advertising and marketing expenses related to the acquisition of new Pay-TV subscribers. Advertising costs are expensed as incurred. | |||
We characterize amounts paid to our independent retailers as consideration for equipment installation services and for equipment buydowns (incentives and rebates) as a reduction of revenue. We expense payments for equipment installation services as “Other subscriber acquisition costs.” Our payments for equipment buydowns represent a partial or complete return of the retailer’s purchase price and are, therefore, netted against the proceeds received from the retailer. We report the net cost from our various sales promotions through our independent retailer network as a component of “Other subscriber acquisition costs.” | ||||
Equipment Lease Programs | ||||
Pay-TV subscribers have the choice of leasing or purchasing the satellite receiver and other equipment necessary to receive our pay-TV service. Most of our new Pay-TV subscribers choose to lease equipment and thus we retain title to such equipment. Equipment | ||||
leased to new and existing Pay-TV subscribers is capitalized and depreciated over their estimated useful lives. | ||||
New Accounting Pronouncements | ||||
Revenue from Contracts with Customers. On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers. This converged standard on revenue recognition was issued jointly with the International Accounting Standards Board (“IASB”) to improve financial reporting by creating common revenue recognition guidance for GAAP and International Financial Reporting Standards (“IFRS”). ASU 2014-09 provides a framework for revenue recognition that replaces most existing GAAP revenue recognition guidance when it becomes effective. ASU 2014-09 will become effective for us on January 1, 2017, and allows for either a full retrospective or modified retrospective adoption. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected an adoption method nor have we determined the effect of the standard on our ongoing financial reporting. | ||||
Supplemental_Data_Statements_o
Supplemental Data - Statements of Cash Flows | 12 Months Ended | ||||||||||
Dec. 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 Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Cash paid for interest | $ | 832,654 | $ | 875,006 | $ | 537,512 | |||||
Cash received for interest | 34,534 | 36,242 | 22,431 | ||||||||
Cash paid for income taxes | 18,186 | 1,351 | 20,624 | ||||||||
Cash paid for income taxes to DISH Network | 279,234 | 433,120 | 272,599 | ||||||||
Satellites and other assets financed under capital lease obligations | 3,462 | 1,070 | 5,857 | ||||||||
Receipt of marketable investment securities with no cash consideration | — | — | 13,237 | ||||||||
Net satellite broadband assets distributed to DISH Network | — | — | 8,628 | ||||||||
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 | — | — | ||||||||
Sling TV Exchange Transaction with EchoStar: | |||||||||||
Transfer of property and equipment, net | 8,978 | — | — | ||||||||
Transfer of investments and intangibles, net | 25,097 | — | — | ||||||||
Capital distribution to EchoStar, net of deferred taxes of $3,542 | 5,845 | — | — | ||||||||
Deemed distribution to EchoStar - initial fair value of redeemable noncontrolling interest, net of deferred taxes of $8,489 | 14,011 | — | — | ||||||||
Our parent, DISH Network, provides a centralized system for the management of our cash and marketable investment securities as it does for all of its subsidiaries, among other reasons, to maximize yield of the portfolio. As a result, the cash and marketable investment securities included on our Consolidated Balance Sheets is a component or portion of the overall cash and marketable investment securities portfolio included on DISH Network’s Consolidated Balance Sheets and managed by DISH Network. We are reflecting the purchases and sales of marketable investment securities on a net basis for each year presented on our Consolidated Statements of Cash Flows as we believe the net presentation is more meaningful to our cash flows from investing activities. | |||||||||||
Marketable_Investment_Securiti
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | 12 Months Ended | |||||||||||||||||||||||||
Dec. 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 December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable investment securities: | ||||||||||||||||||||||||||
Current marketable investment securities | $ | 1,401,145 | $ | 4,117,326 | ||||||||||||||||||||||
Restricted marketable investment securities (1) | 76,970 | 63,902 | ||||||||||||||||||||||||
Total marketable investment securities | 1,478,115 | 4,181,228 | ||||||||||||||||||||||||
Restricted cash and cash equivalents (1) | 10,014 | 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) | 11,046 | 5,396 | ||||||||||||||||||||||||
Total marketable investment securities and restricted cash and cash equivalents | $ | 1,815,379 | $ | 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 Consolidated Balance Sheets. | |||||||||||||||||||||||||
-2 | Other investment securities are included in “Other noncurrent assets, net” on our 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. See Note 2 for further discussion. | ||||||||||||||||||||||||||
Current Marketable Investment Securities | ||||||||||||||||||||||||||
Our current marketable investment securities portfolio includes investments in various debt instruments including, among others, commercial paper, corporate securities and U.S. treasury and agency securities. | ||||||||||||||||||||||||||
Commercial paper consists mainly of unsecured short-term, promissory notes issued primarily by corporations with maturities ranging up to 365 days. Corporate securities consist of debt instruments issued by corporations with various maturities normally less than 18 months. U. S. Treasury and agency securities consist of debt instruments issued by the federal government and other government agencies. | ||||||||||||||||||||||||||
Restricted Cash and Marketable Investment Securities | ||||||||||||||||||||||||||
As of December 31, 2014 and 2013, our restricted marketable investment securities, together with our restricted cash, included amounts required as collateral for our letters of credit. | ||||||||||||||||||||||||||
Other Investment Securities | ||||||||||||||||||||||||||
We have strategic investments in certain debt and equity securities that are included in “Other noncurrent assets, net” on our Consolidated Balance Sheets and accounted for using the cost, equity and/or available-for-sale 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 | ||||||||||||||||||||||||||
On February 20, 2014, we entered into agreements with 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 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. | ||||||||||||||||||||||||||
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 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 under the cost method of accounting. | ||||||||||||||||||||||||||
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 December 31, 2014 and 2013, we had accumulated net unrealized gains of $43 million and $15 million, respectively. These amounts, net of related tax effect, were $28 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 December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Marketable | Marketable | |||||||||||||||||||||||||
Investment | Unrealized | Investment | Unrealized | |||||||||||||||||||||||
Securities | Gains | Losses | Net | Securities | Gains | Losses | Net | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt securities (including restricted): | ||||||||||||||||||||||||||
U. S. Treasury and agency securities | $ | 58,254 | $ | 7 | $ | (11 | ) | $ | (4 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||
Commercial paper | 65,696 | — | — | — | 381,515 | — | — | — | ||||||||||||||||||
Corporate securities | 1,247,403 | 5,608 | (145 | ) | 5,463 | 3,520,092 | 5,436 | (3,149 | ) | 2,287 | ||||||||||||||||
Other | 55,788 | — | — | — | 253,098 | 11 | (206 | ) | (195 | ) | ||||||||||||||||
Equity securities | 50,974 | 37,737 | — | 37,737 | 26,523 | 13,286 | — | 13,286 | ||||||||||||||||||
Total | $ | 1,478,115 | $ | 43,352 | $ | (156 | ) | $ | 43,196 | $ | 4,181,228 | $ | 18,733 | $ | (3,355 | ) | $ | 15,378 | ||||||||
As of December 31, 2014, restricted and non-restricted marketable investment securities included debt securities of $1.132 billion with contractual maturities within one year, $272 million with contractual maturities extending longer than one year through and including five years and $23 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 December 31, 2014, the unrealized losses on our investments in debt securities primarily represented investments in corporate securities. 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 December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||
Value | Loss | Value | Loss | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt Securities: | ||||||||||||||||||||||||||
Less than 12 months | $ | 268,492 | $ | (100 | ) | $ | 2,002,239 | $ | (2,820 | ) | ||||||||||||||||
12 months or more | 129,092 | (56 | ) | 38,043 | (535 | ) | ||||||||||||||||||||
Total | $ | 397,584 | $ | (156 | ) | $ | 2,040,282 | $ | (3,355 | ) | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||||
Our investments measured at fair value on a recurring basis were as follows: | ||||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Cash equivalents (including restricted) | $ | 6,605,274 | $ | 258,281 | $ | 6,346,993 | $ | — | $ | 3,743,328 | $ | 275,277 | $ | 3,468,051 | $ | — | ||||||||||
Debt securities (including restricted): | ||||||||||||||||||||||||||
U. S. Treasury and agency securities | $ | 58,254 | $ | 42,710 | $ | 15,544 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Commercial paper | 65,696 | — | 65,696 | — | 381,515 | — | 381,515 | — | ||||||||||||||||||
Corporate securities | 1,247,403 | — | 1,247,403 | — | 3,520,092 | — | 3,520,092 | — | ||||||||||||||||||
Other | 55,788 | — | 55,788 | — | 253,098 | — | 253,098 | — | ||||||||||||||||||
Equity securities | 50,974 | 50,974 | — | — | 26,523 | 26,523 | — | — | ||||||||||||||||||
Total | $ | 1,478,115 | $ | 93,684 | $ | 1,384,431 | $ | — | $ | 4,181,228 | $ | 26,523 | $ | 4,154,705 | $ | — | ||||||||||
During the years ended December 31, 2014 and 2013, we had no transfers in or out of Level 1 and Level 2 fair value measurements. | ||||||||||||||||||||||||||
Inventory
Inventory | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventory | ||||||||
Inventory | 5.Inventory | |||||||
Inventory consisted of the following: | ||||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Finished goods | $ | 252,101 | $ | 299,975 | ||||
Raw materials | 159,095 | 102,563 | ||||||
Work-in-process | 82,350 | 110,108 | ||||||
Total | $ | 493,546 | $ | 512,646 | ||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Property and Equipment | |||||||||||
Property and Equipment | |||||||||||
6.Property and Equipment and Intangible Assets | |||||||||||
Property and Equipment | |||||||||||
Property and equipment consisted of the following: | |||||||||||
Depreciable | |||||||||||
Life | As of December 31, | ||||||||||
(In Years) | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Equipment leased to customers | 5-Feb | $ | 3,524,211 | $ | 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 | 656,273 | 600,439 | ||||||||
Buildings and improvements | Jan-40 | 84,129 | 80,439 | ||||||||
Land | - | 5,504 | 5,504 | ||||||||
Construction in progress | - | 18,355 | 39,043 | ||||||||
Total property and equipment | 5,065,949 | 6,072,434 | |||||||||
Accumulated depreciation (1) | (2,628,945 | ) | (3,093,111 | ) | |||||||
Property and equipment, net | $ | 2,437,004 | $ | 2,979,323 | |||||||
-1 | Property and equipment and accumulated depreciation decreased $1.073 billion and $633 million, respectively, as a result of the Satellite and Tracking Stock Transaction. See Note 4 and Note 15 for further discussion. | ||||||||||
Construction in progress consisted of the following: | |||||||||||
As of December 31, | |||||||||||
2014 | 2013 | ||||||||||
(In thousands) | |||||||||||
Computer hardware projects | $ | 1,399 | $ | 20,216 | |||||||
Software projects | 16,353 | 15,017 | |||||||||
Other | 603 | 3,810 | |||||||||
Construction in progress | $ | 18,355 | $ | 39,043 | |||||||
Depreciation and amortization expense consisted of the following: | |||||||||||
For the Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Equipment leased to customers | $ | 810,945 | $ | 739,266 | $ | 649,394 | |||||
Satellites (1) | 68,984 | 108,682 | 123,431 | ||||||||
Buildings, furniture, fixtures, equipment and other | 76,172 | 58,039 | 58,081 | ||||||||
148 degree orbital location (2) | — | — | 67,776 | ||||||||
Total depreciation and amortization | $ | 956,101 | $ | 905,987 | $ | 898,682 | |||||
-1 | Depreciation and amortization expense decreased $40 million in 2014 as a result of the Satellite and Tracking Stock Transaction. See Note 4 and Note 15 for further discussion. | ||||||||||
-2 | On May 31, 2012, the International Bureau of the FCC announced the termination of our license for use of the 148 degree orbital location. We had not had a satellite positioned at the 148 degree orbital location since the retirement of EchoStar V in August 2009. Our license for use of the 148 degree orbital location had a $68 million carrying value. This amount was recorded as “Depreciation and amortization” expense on our Consolidated Statements of Operations and Comprehensive Income (Loss) in 2012 due to the termination of this license by the FCC. | ||||||||||
Cost of sales and operating expense categories included in our accompanying Consolidated Statements of Operations and Comprehensive Income (Loss) do not include depreciation expense related to satellites or equipment leased to customers. | |||||||||||
We did not record any capitalized interest during the years ended December 31, 2014, 2013 or 2012. | |||||||||||
Satellites | |||||||||||
DBS Satellites. As of December 31, 2014, we utilized 14 satellites in geostationary orbit approximately 22,300 miles above the equator, one of which we own and depreciate over its useful life. As of December 31, 2014, we utilized certain capacity on 11 satellites that we lease from EchoStar, which were accounted for as operating leases. As of December 31, 2014, we also leased two satellites from third parties, which were accounted for as capital leases and were depreciated over the shorter of the economic life or the term of the satellite agreement. | |||||||||||
Estimated | |||||||||||
Useful Life | |||||||||||
(Years)/ | |||||||||||
Degree | Lease | ||||||||||
Launch | Orbital | Termination | |||||||||
Satellites | Date | Location | Date | ||||||||
Owned: | |||||||||||
EchoStar XV (1) | July 2010 | 45 | 15 | ||||||||
Under Construction: | |||||||||||
EchoStar XVIII (2) | 2015 | 110 | 15 | ||||||||
Leased from EchoStar (1): | |||||||||||
EchoStar I (3)(4) | December 1995 | 77 | November 2015 | ||||||||
EchoStar VII (3)(4) | February 2002 | 119 | June 2016 | ||||||||
EchoStar VIII | August 2002 | 77 | Month to month | ||||||||
EchoStar IX | August 2003 | 121 | Month to month | ||||||||
EchoStar X (3)(4) | February 2006 | 110 | February 2021 | ||||||||
EchoStar XI (3)(4) | July 2008 | 110 | September 2021 | ||||||||
EchoStar XII (3) | July 2003 | 61.5 | September 2017 | ||||||||
EchoStar XIV (3)(4) | March 2010 | 119 | February 2023 | ||||||||
EchoStar XVI (5) | November 2012 | 61.5 | January 2017 | ||||||||
Nimiq 5 | September 2009 | 72.7 | September 2019 | ||||||||
QuetzSat-1 | September 2011 | 77 | November 2021 | ||||||||
Leased from Other Third Party: | |||||||||||
Anik F3 | April 2007 | 118.7 | April 2022 | ||||||||
Ciel II | December 2008 | 129 | January 2019 | ||||||||
-1 | See Note 15 for further discussion of our Related Party Transactions with EchoStar. | ||||||||||
-2 | EchoStar XVIII is expected to launch during the fourth quarter 2015. | ||||||||||
-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 all available capacity on these satellites. See Note 4 and Note 15 for further discussion. | ||||||||||
-5 | We have the option to renew this lease for an additional six-year period. If we exercise our six-year renewal option, we have the option to renew this lease for an additional five years. | ||||||||||
Satellites Under Construction | |||||||||||
EchoStar XVIII. On September 7, 2012, DISH Network entered into a contract with Space Systems/Loral, Inc. (“SS/L”) for the construction of EchoStar XVIII, a DBS satellite with spot beam technology designed for, among other things, HD programming. During October 2013, DISH Network entered into an agreement with ArianeSpace S.A. for launch services for this satellite, which is expected to be launched during the fourth quarter 2015. | |||||||||||
Satellite Anomalies | |||||||||||
Operation of our DISH branded pay-TV service requires that we have adequate satellite transmission capacity for the programming we offer. Moreover, current competitive conditions require that we continue to expand our offering of new programming. While we generally have had in-orbit satellite capacity sufficient to transmit our existing channels and some backup capacity to recover the transmission of certain critical programming, our backup capacity is limited. | |||||||||||
In the event of a failure or loss of any of our owned or leased satellites, we may need to acquire or lease additional satellite capacity or relocate one of our other owned or leased satellites and use it as a replacement for the failed or lost satellite. Such a failure could result in a prolonged loss of critical programming or a significant delay in our plans to expand programming as necessary to remain competitive and thus may have a material adverse effect on our business, financial condition and results of operations. | |||||||||||
In the past, certain of our owned and leased satellites have experienced anomalies, some of which have had a significant adverse impact on their remaining useful life and/or commercial operation. There can be no assurance that future anomalies will not impact the remaining useful life and/or commercial operation of any of the owned and leased satellites in our fleet. See Note 2 “Impairment of Long-Lived Assets” for further discussion of evaluation of impairment. There can be no assurance that we can recover critical transmission capacity in the event one or more of our owned or leased in-orbit satellites were to fail. We generally do not carry commercial insurance for any of the owned or leased in-orbit satellites that we use, other than certain satellites leased from third parties, and therefore, we will bear the risk associated with any uninsured in-orbit satellite failures. | |||||||||||
Intangible Assets | |||||||||||
FCC Authorizations | |||||||||||
As of December 31, 2014 and 2013, our FCC Authorizations consisted of the following: | |||||||||||
As of December 31, | |||||||||||
2014 | 2013 | ||||||||||
(In thousands) | |||||||||||
DBS Licenses | $ | 611,794 | $ | 611,794 | |||||||
MVDDS Licenses (1) | 24,000 | 24,000 | |||||||||
Total | $ | 635,794 | $ | 635,794 | |||||||
-1 | We have multichannel video distribution and data service (“MVDDS”) licenses in 82 out of 214 geographical license areas, including Los Angeles, New York City, Chicago and several other major metropolitan areas. By August 2014, we were required to meet certain FCC build-out requirements related to our MVDDS licenses, and we are subject to certain FCC service rules applicable to these licenses. In January 2015, the FCC granted our application to extend the build-out requirements related to our MVDDS licenses. We now have until 2019 to provide “substantial service” on our MVDDS licenses, and the licenses expire in 2024. Our MVDDS licenses may be terminated, however, if we do not provide substantial service in accordance with the new build-out requirements. | ||||||||||
LongTerm_Debt
Long-Term Debt | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Long-Term Debt | ||||||||||||||
Long-Term Debt | 7.Long-Term Debt and Capital Lease Obligations | |||||||||||||
Fair Value of our Long-Term Debt | ||||||||||||||
The following table summarizes the carrying and fair values of our debt facilities as of December 31, 2014 and 2013: | ||||||||||||||
As of December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||
Value | Value | |||||||||||||
(In thousands) | ||||||||||||||
6 5/8% Senior Notes due 2014 (1) | $ | — | $ | — | $ | 1,000,000 | $ | 1,040,200 | ||||||
7 3/4% Senior Notes due 2015 (2) | 650,001 | 664,321 | 750,000 | 813,750 | ||||||||||
7 1/8% Senior Notes due 2016 | 1,500,000 | 1,580,625 | 1,500,000 | 1,657,500 | ||||||||||
4 5/8% Senior Notes due 2017 | 900,000 | 933,750 | 900,000 | 946,962 | ||||||||||
4 1/4% Senior Notes due 2018 | 1,200,000 | 1,245,600 | 1,200,000 | 1,221,792 | ||||||||||
7 7/8% Senior Notes due 2019 | 1,400,000 | 1,589,700 | 1,400,000 | 1,603,000 | ||||||||||
5 1/8% Senior Notes due 2020 | 1,100,000 | 1,100,000 | 1,100,000 | 1,104,950 | ||||||||||
6 3/4% Senior Notes due 2021 | 2,000,000 | 2,157,500 | 2,000,000 | 2,122,500 | ||||||||||
5 7/8% Senior Notes due 2022 | 2,000,000 | 2,055,000 | 2,000,000 | 1,997,500 | ||||||||||
5 % Senior Notes due 2023 | 1,500,000 | 1,470,000 | 1,500,000 | 1,458,090 | ||||||||||
5 7/8% Senior Notes due 2024 | 2,000,000 | 2,019,800 | — | — | ||||||||||
Other notes payable (3) | 14,701 | 14,701 | 59,313 | 59,313 | ||||||||||
Subtotal | 14,264,702 | $ | 14,830,997 | 13,409,313 | $ | 14,025,557 | ||||||||
Unamortized discounts, net | (15,219 | ) | (19,198 | ) | ||||||||||
Capital lease obligations (4) | 194,669 | NA | 219,902 | NA | ||||||||||
Total long-term debt and capital lease obligations (including current portion) | $ | 14,444,152 | $ | 13,610,017 | ||||||||||
-1 | During the nine months ended September 30, 2014, we repurchased $100 million of our 6 5/8% Senior Notes due 2014 in open market trades. The remaining balance of $900 million was redeemed on October 1, 2014. | |||||||||||||
-2 | During 2014, we repurchased $100 million of our 7 3/4% Senior Notes due 2015 in open market trades. The remaining balance of $650 million matures on May 31, 2015 and is included in “Current portion of long-term debt and capital lease obligations” on our Consolidated Balance Sheets as of December 31, 2014. | |||||||||||||
-3 | On February 20, 2014, we entered into the Satellite and Tracking Stock Transaction, which resulted in a decrease in “Other notes payable” of $44 million related to the in-orbit incentive obligations associated with the Transferred Satellites. See Note 4 and Note 15 for further discussion. | |||||||||||||
-4 | Disclosure regarding fair value of capital leases is not required. | |||||||||||||
Our Senior Notes are: | ||||||||||||||
· | general unsecured senior obligations of DISH DBS; | |||||||||||||
· | ranked equally in right of payment with all of DISH DBS’ and the guarantors’ existing and future unsecured senior debt; and | |||||||||||||
· | ranked effectively junior to our and the guarantors’ current and future secured senior indebtedness up to the value of the collateral securing such indebtedness. | |||||||||||||
The indentures related to our Senior Notes contain restrictive covenants that, among other things, impose limitations on the ability of DISH DBS and its restricted subsidiaries to: | ||||||||||||||
· | incur additional debt; | |||||||||||||
· | pay dividends or make distributions on DISH DBS’ capital stock or repurchase DISH DBS’ capital stock; | |||||||||||||
· | make certain investments; | |||||||||||||
· | create liens or enter into sale and leaseback transactions; | |||||||||||||
· | enter into transactions with affiliates; | |||||||||||||
· | merge or consolidate with another company; and | |||||||||||||
· | transfer or sell assets. | |||||||||||||
In the event of a change of control, as defined in the related indentures, we would be required to make an offer to repurchase all or any part of a holder’s Senior Notes at a purchase price equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon, to the date of repurchase. | ||||||||||||||
7 3/4% Senior Notes due 2015 | ||||||||||||||
On May 27, 2008, we issued $750 million aggregate principal amount of our seven-year 7 3/4% Senior Notes due May 31, 2015. During 2014, we repurchased $100 million of our 7 3/4% Senior Notes due 2015 in open market trades. The remaining balance of $650 million matures on May 31, 2015. Interest accrues at an annual rate of 7 3/4% and is payable semi-annually in cash, in arrears on May 31 and November 30 of each year. | ||||||||||||||
The 7 3/4% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. | ||||||||||||||
7 1/8% Senior Notes due 2016 | ||||||||||||||
On February 2, 2006, we issued $1.5 billion aggregate principal amount of our ten-year 7 1/8% Senior Notes due February 1, 2016. Interest accrues at an annual rate of 7 1/8% and is payable semi-annually in cash, in arrears on February 1 and August 1 of each year. | ||||||||||||||
The 7 1/8% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. | ||||||||||||||
4 5/8% Senior Notes due 2017 | ||||||||||||||
On May 16, 2012, we issued $900 million aggregate principal amount of our five-year 4 5/8% Senior Notes due July 15, 2017. Interest accrues at an annual rate of 4 5/8% and is payable semi-annually in cash, in arrears on January 15 and July 15 of each year. | ||||||||||||||
The 4 5/8% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100.0% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. Prior to July 15, 2015, we may also redeem up to 35.0% of the 4 5/8% Senior Notes at a specified premium with the net cash proceeds from certain equity offerings or capital contributions. | ||||||||||||||
4 1/4% Senior Notes due 2018 | ||||||||||||||
On April 5, 2013, we issued $1.2 billion aggregate principal amount of our five-year 4 1/4% Senior Notes due April 1, 2018. Interest accrues at an annual rate of 4 1/4% and is payable semi-annually in cash in arrears on April 1 and October 1 of each year. | ||||||||||||||
The 4 1/4% Senior Notes due 2018 are redeemable, in whole or in part, at any time at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. Prior to April 1, 2016, we may also redeem up to 35.0% of the 4 1/4% Senior Notes due 2018 at a specified premium with the net cash proceeds from certain equity offerings or capital contributions. | ||||||||||||||
7 7/8% Senior Notes due 2019 | ||||||||||||||
On August 17, 2009 and October 5, 2009, we issued $1.0 billion and $400 million, respectively, aggregate principal amount of our ten-year 7 7/8% Senior Notes due September 1, 2019. Interest accrues at an annual rate of 7 7/8% and is payable semi-annually in cash, in arrears on March 1 and September 1 of each year. | ||||||||||||||
The 7 7/8% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. | ||||||||||||||
5 1/8% Senior Notes due 2020 | ||||||||||||||
On April 5, 2013, we issued $1.1 billion aggregate principal amount of our seven-year 5 1/8% Senior Notes due May 1, 2020. Interest accrues at an annual rate of 5 1/8% and is payable semi-annually in cash in arrears on May 1 and November 1 of each year. | ||||||||||||||
The 5 1/8% Senior Notes due 2020 are redeemable, in whole or in part, at any time at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. Prior to May 1, 2016, we may also redeem up to 35.0% of the 5 1/8% Senior Notes due 2020 at a specified premium with the net cash proceeds from certain equity offerings or capital contributions. | ||||||||||||||
6 3/4% Senior Notes due 2021 | ||||||||||||||
On May 5, 2011, we issued $2.0 billion aggregate principal amount of our ten-year 6 3/4% Senior Notes due June 1, 2021. Interest accrues at an annual rate of 6 3/4% and is payable semi-annually in cash, in arrears on June 1 and December 1 of each year. | ||||||||||||||
The 6 3/4% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. | ||||||||||||||
5 7/8% Senior Notes due 2022 | ||||||||||||||
On May 16, 2012 and July 26, 2012, we issued $1.0 billion and $1.0 billion, respectively, aggregate principal amount of our ten-year 5 7/8% Senior Notes due July 15, 2022. Interest accrues at an annual rate of 5 7/8% and is payable semi-annually in cash, in arrears on January 15 and July 15 of each year. | ||||||||||||||
The 5 7/8% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100.0% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. Prior to July 15, 2015, we may also redeem up to 35.0% of the 5 7/8% Senior Notes at a specified premium with the net cash proceeds from certain equity offerings or capital contributions. | ||||||||||||||
5% Senior Notes due 2023 | ||||||||||||||
On December 27, 2012, we issued $1.5 billion aggregate principal amount of our 5% Senior Notes due March 15, 2023. Interest accrues at an annual rate of 5% and is payable semi-annually in cash, in arrears on March 15 and September 15 of each year. | ||||||||||||||
The 5% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100.0% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. Prior to March 15, 2016, we may also redeem up to 35.0% of the 5% Senior Notes at a specified premium with the net cash proceeds from certain equity offerings or capital contributions. | ||||||||||||||
5 7/8% Senior Notes due 2024 | ||||||||||||||
On November 20, 2014, we issued $2.0 billion aggregate principal amount of our ten-year 5 7/8% Senior Notes due November 15, 2024. Interest accrues at an annual rate of 5 7/8% and is payable semi-annually in cash, in arrears on May 15 and November 15 of each year, commencing on May 15, 2015. | ||||||||||||||
The 5 7/8% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100.0% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest. Prior to November 15, 2017, we may also redeem up to 35.0% of the 5 7/8% Senior Notes at a specified premium with the net cash proceeds from certain equity offerings or capital contributions. | ||||||||||||||
Interest on Long-Term Debt | ||||||||||||||
Annual | ||||||||||||||
Semi-Annual | Debt Service | |||||||||||||
Payment Dates | Requirements | |||||||||||||
(In thousands) | ||||||||||||||
7 1/8% Senior Notes due 2016 | February 1 and August 1 | $ | 106,875 | |||||||||||
4 5/8% Senior Notes due 2017 | January 15 and July 15 | $ | 41,625 | |||||||||||
4 1/4% Senior Notes due 2018 | April 1 and October 1 | $ | 51,000 | |||||||||||
7 7/8% Senior Notes due 2019 | March 1 and September 1 | $ | 110,250 | |||||||||||
5 1/8% Senior Notes due 2020 | May 1 and November 1 | $ | 56,375 | |||||||||||
6 3/4% Senior Notes due 2021 | June 1 and December 1 | $ | 135,000 | |||||||||||
5 7/8% Senior Notes due 2022 | January 15 and July 15 | $ | 117,500 | |||||||||||
5% Senior Notes due 2023 | March 15 and September 15 | $ | 75,000 | |||||||||||
5 7/8% Senior Notes due 2024 | May 15 and November 15 | $ | 117,500 | |||||||||||
During 2014, we repurchased $100 million of our 7 3/4% Senior Notes due 2015 in open market trades. The remaining balance of $650 million matures on May 31, 2015 and is included in “Current portion of long-term debt and capital lease obligations” on our Consolidated Balance Sheets as of December 31, 2014. A debt service payment of approximately $25 million will be paid on May 31, 2015 assuming no additional open market repurchases. | ||||||||||||||
Our ability to meet our debt service requirements will depend on, among other factors, the successful execution of our business strategy, which is subject to uncertainties and contingencies beyond our control. | ||||||||||||||
Other Long-Term Debt and Capital Lease Obligations | ||||||||||||||
Other long-term debt and capital lease obligations consisted of the following: | ||||||||||||||
As of December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||
Satellites and other capital lease obligations | $ | 194,669 | $ | 219,902 | ||||||||||
Notes payable related to satellite vendor financing and other debt payable in installments through 2025 with interest rates ranging from approximately 6.0% to 12.5% | 14,701 | 59,313 | ||||||||||||
Total | 209,370 | 279,215 | ||||||||||||
Less: current portion | (28,133 | ) | (32,607 | ) | ||||||||||
Other long-term debt and capital lease obligations, net of current portion | $ | 181,237 | $ | 246,608 | ||||||||||
Capital Lease Obligations | ||||||||||||||
Anik F3. Anik F3, an FSS satellite, was launched and commenced commercial operation during April 2007. This satellite is accounted for as a capital lease and depreciated over the term of the satellite service agreement. We have leased 100% of the Ku-band capacity on Anik F3 for a period of 15 years. | ||||||||||||||
Ciel II. Ciel II, a Canadian DBS satellite, was launched in December 2008 and commenced commercial operation during February 2009. This satellite is accounted for as a capital lease and depreciated over the term of the satellite service agreement. We have leased 100% of the capacity on Ciel II for an initial 10 year term. | ||||||||||||||
As of December 31, 2014 and 2013, we had $500 million capitalized for the estimated fair value of satellites acquired under capital leases included in “Property and equipment, net,” with related accumulated depreciation of $279 million and $236 million, respectively. In our Consolidated Statements of Operations and Comprehensive Income (Loss), we recognized $43 million, $43 million and $43 million in depreciation expense on satellites acquired under capital lease agreements during the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||
Future minimum lease payments under the capital lease obligations, together with the present value of the net minimum lease payments as of December 31, 2014 are as follows (in thousands): | ||||||||||||||
For the Years Ended December 31, | ||||||||||||||
2015 | $ | 76,842 | ||||||||||||
2016 | 76,809 | |||||||||||||
2017 | 76,007 | |||||||||||||
2018 | 75,982 | |||||||||||||
2019 | 50,331 | |||||||||||||
Thereafter | 112,000 | |||||||||||||
Total minimum lease payments | 467,971 | |||||||||||||
Less: Amount representing lease of the orbital location and estimated executory costs (primarily insurance and maintenance) including profit thereon, included in total minimum lease payments | (220,883 | ) | ||||||||||||
Net minimum lease payments | 247,088 | |||||||||||||
Less: Amount representing interest | (52,419 | ) | ||||||||||||
Present value of net minimum lease payments | 194,669 | |||||||||||||
Less: Current portion | (28,133 | ) | ||||||||||||
Long-term portion of capital lease obligations | $ | 166,536 | ||||||||||||
The summary of future maturities of our outstanding long-term debt as of December 31, 2014 is included in the commitments table in Note 11. | ||||||||||||||
Income_Taxes_and_Accounting_fo
Income Taxes and Accounting for Uncertainty in Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes and Accounting for Uncertainty in Income Taxes | |||||||||||
Income Taxes and Accounting for Uncertainty in Income Taxes | 8.Income Taxes and Accounting for Uncertainty in Income Taxes | ||||||||||
Income Taxes | |||||||||||
Our income tax policy is to record the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported on our Consolidated Balance Sheets, as well as probable operating loss, tax credit and other carryforwards. Deferred tax assets are offset by valuation allowances when we believe it is more likely than not that net deferred tax assets will not be realized. We periodically evaluate our need for a valuation allowance. Determining necessary valuation allowances requires us to make assessments about historical financial information as well as the timing of future events, including the probability of expected future taxable income and available tax planning opportunities. | |||||||||||
As of December 31, 2014, we had no net operating loss carryforwards (“NOLs”) for federal income tax purposes and $5 million of NOL benefit for state income tax purposes. The state NOLs begin to expire in the year 2017. In addition, there are $19 million of tax benefits related to credit carryforwards which are partially offset by a valuation allowance. The state credit carryforwards begin to expire in the year 2015. | |||||||||||
DISH DBS and its domestic subsidiaries join with DISH Network in filing U.S. consolidated federal income tax returns and, in some states, combined or consolidated returns. The federal and state income tax provisions or benefits recorded by DISH DBS are generally those that would have been recorded if DISH DBS and its domestic subsidiaries had filed returns as a consolidated group independent of DISH Network. Cash is due and paid to DISH Network based on amounts that would be payable based on DISH DBS consolidated or combined group filings. Amounts are receivable from DISH Network on a basis similar to when they would be receivable from the IRS or other state taxing authorities. The amounts paid to DISH Network during the years ended December 31, 2014, 2013 and 2012 were $279 million, $433 million and $273 million, respectively. | |||||||||||
The components of the (provision for) benefit from income taxes were as follows: | |||||||||||
For the Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Current (provision) benefit: | |||||||||||
Federal | $ | (342,417 | ) | $ | (361,662 | ) | $ | (127,291 | ) | ||
State | 26,163 | (13,272 | ) | 10,673 | |||||||
Foreign | (6,990 | ) | (13,316 | ) | — | ||||||
(323,244 | ) | (388,250 | ) | (116,618 | ) | ||||||
Deferred (provision) benefit: | |||||||||||
Federal | (78,420 | ) | (65,955 | ) | (126,561 | ) | |||||
State | (14,011 | ) | (5,450 | ) | (42,747 | ) | |||||
Decrease (increase) in valuation allowance | 4,844 | — | — | ||||||||
(87,587 | ) | (71,405 | ) | (169,308 | ) | ||||||
Total benefit (provision) | $ | (410,831 | ) | $ | (459,655 | ) | $ | (285,926 | ) | ||
Our $1.226 billion of “Income (loss) before income taxes” on our Consolidated Statements of Operations and Comprehensive Income (Loss) included a loss of $4 million related to our foreign operations. | |||||||||||
The following table shows the principal reasons for the difference between the effective income tax rate and the statutory federal tax rate: | |||||||||||
For the Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
% of pre-tax (income)/loss | |||||||||||
Statutory rate | (35.0 | ) | (35.0 | ) | (35.0 | ) | |||||
State income taxes, net of Federal benefit | (2.0 | ) | (1.0 | ) | (2.7 | ) | |||||
Reversal of uncertain tax positions | 3.5 | — | — | ||||||||
Other, net | — | 0.2 | 0.6 | ||||||||
Total benefit (provision) for income taxes | (33.5 | ) | (35.8 | ) | (37.1 | ) | |||||
Deferred taxes arise because of the differences in the book and tax bases of certain assets and liabilities. Significant components of deferred tax assets and liabilities were as follows: | |||||||||||
As of December 31, | |||||||||||
2014 | 2013 | ||||||||||
(In thousands) | |||||||||||
Deferred tax assets: | |||||||||||
NOL, credit and other carryforwards | $ | 18,799 | $ | 10,645 | |||||||
Accrued expenses | 40,461 | 48,416 | |||||||||
Stock-based compensation | 21,193 | 23,006 | |||||||||
Deferred revenue | 31,853 | 54,331 | |||||||||
Total deferred tax assets | 112,306 | 136,398 | |||||||||
Valuation allowance | (5,214 | ) | (7,469 | ) | |||||||
Deferred tax asset after valuation allowance | 107,092 | 128,929 | |||||||||
Deferred tax liabilities: | |||||||||||
Depreciation and amortization | (1,155,329 | ) | (1,272,014 | ) | |||||||
Unrealized gains on investments (1) | (109,428 | ) | (2,204 | ) | |||||||
Other liabilities | (30,734 | ) | (36,629 | ) | |||||||
Total deferred tax liabilities | (1,295,491 | ) | (1,310,847 | ) | |||||||
Net deferred tax asset (liability) | $ | (1,188,399 | ) | $ | (1,181,918 | ) | |||||
Current portion of net deferred tax asset (liability) | $ | 37,018 | $ | 65,457 | |||||||
Noncurrent portion of net deferred tax asset (liability) | (1,225,417 | ) | (1,247,375 | ) | |||||||
Total net deferred tax asset (liability) | $ | (1,188,399 | ) | $ | (1,181,918 | ) | |||||
-1 | Includes deferred taxes related to the Satellite and Tracking Stock Transaction. | ||||||||||
Accounting for Uncertainty in Income Taxes | |||||||||||
In addition to filing federal income tax returns, we and one or more of our subsidiaries file income tax returns in all states that impose an income tax and a small number of foreign jurisdictions where we have immaterial operations. We are subject to U.S. federal, state and local income tax examinations by tax authorities for the years beginning in 2002 due to the carryover of previously incurred NOLs. We are currently under a federal income tax examination for fiscal years 2008 through 2012. | |||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits included in “Long-term deferred revenue, distribution and carriage payments and other long-term liabilities” on our Consolidated Balance Sheets was as follows: | |||||||||||
For the Years Ended December 31, | |||||||||||
Unrecognized tax benefit | 2014 | 2013 | 2012 | ||||||||
(In thousands) | |||||||||||
Balance as of beginning of period | $ | 145,884 | $ | 185,669 | $ | 190,935 | |||||
Additions based on tax positions related to the current year | 69,643 | 9,533 | 5,949 | ||||||||
Additions based on tax positions related to prior years | 58,963 | 66,307 | 1,581 | ||||||||
Reductions based on tax positions related to prior years | (16,379 | ) | — | (3,461 | ) | ||||||
Reductions based on tax positions related to settlements with taxing authorities | (42,023 | ) | (103,311 | ) | — | ||||||
Reductions based on tax positions related to the lapse of the statute of limitations | (8,413 | ) | (12,314 | ) | (9,335 | ) | |||||
Balance as of end of period | $ | 207,675 | $ | 145,884 | $ | 185,669 | |||||
We have $173 million in unrecognized tax benefits that, if recognized, could favorably affect our effective tax rate. We do not expect any portion of this amount to be paid or settled within the next twelve months. | |||||||||||
Accrued interest and penalties on uncertain tax positions are recorded as a component of “Other, net” on our Consolidated Statements of Operations and Comprehensive Income (Loss). During the year ended December 31, 2014, we recorded a credit of $3 million in interest and penalty expense to earnings. During the years ended December 31, 2013 and 2012, we recorded $8 million and $6 million in interest and penalty expense to earnings, respectively. Accrued interest and penalties were $10 million and $13 million at December 31, 2014 and 2013, respectively. The above table excludes these amounts. | |||||||||||
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Employee Benefit Plans | |||||||||||
Employee Benefit Plans | 9.Employee Benefit Plans | ||||||||||
Employee Stock Purchase Plan | |||||||||||
Our employees participate in the DISH Network employee stock purchase plan (the “ESPP”), in which DISH Network is authorized to issue up to 2.8 million shares of Class A common stock. At December 31, 2014, DISH Network had 1.0 million shares of Class A common stock which remain available for issuance under the ESPP. Substantially all full-time employees who have been employed by DISH Network for at least one calendar quarter are eligible to participate in the ESPP. Employee stock purchases are made through payroll deductions. Under the terms of the ESPP, employees may not deduct an amount which would permit such employee to purchase DISH Network’s capital stock under all of DISH Network’s stock purchase plans at a rate which would exceed $25,000 in fair value of capital stock in any one year. The purchase price of the stock is 85% of the closing price of DISH Network’s Class A common stock on the last business day of each calendar quarter in which such shares of DISH Network’s Class A common stock are deemed sold to an employee under the ESPP. During the years ended December 31, 2014, 2013 and 2012, employee purchases of DISH Network’s Class A common stock through the ESPP totaled approximately 0.1 million, 0.1 million and 0.1 million shares, respectively. | |||||||||||
401(k) Employee Savings Plan | |||||||||||
DISH Network sponsors a 401(k) Employee Savings Plan (the “401(k) Plan”) for eligible employees. Voluntary employee contributions to the 401(k) Plan may be matched 50% by DISH Network, subject to a maximum annual contribution of $2,500 per employee. Forfeitures of unvested participant balances which are retained by the 401(k) Plan may be used to fund matching and discretionary contributions. DISH Network’s board of directors may also authorize an annual discretionary contribution to the 401(k) Plan with authorization by our Board of Directors, subject to the maximum deductible limit provided by the Internal Revenue Code of 1986, as amended. These contributions may be made in cash or in DISH Network’s stock. | |||||||||||
The following table summarizes the expense associated with our matching contributions and discretionary contributions: | |||||||||||
For the Years Ended December 31, | |||||||||||
Expense Recognized Related to the 401(k) Plan | 2014 | 2013 | 2012 | ||||||||
(In thousands) | |||||||||||
Matching contributions, net of forfeitures | $ | 6,222 | $ | 5,994 | $ | 2,750 | |||||
Discretionary stock contributions, net of forfeitures | $ | 25,972 | $ | 26,096 | $ | 23,772 | |||||
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Stock-Based Compensation | ||||||||||||||||||||
Stock-Based Compensation | 10.Stock-Based Compensation | |||||||||||||||||||
Stock Incentive Plans | ||||||||||||||||||||
DISH Network maintains stock incentive plans to attract and retain officers, directors and key employees. Our employees participate in the DISH Network stock incentive plans. Stock awards under these plans include both performance and non-performance based stock incentives. As of December 31, 2014, there were outstanding under these plans stock options to acquire 10.2 million shares of DISH Network’s Class A common stock and 1.7 million restricted stock units associated with our employees. Stock options granted on or prior to December 31, 2014 were granted with exercise prices equal to or greater than the market value of DISH Network Class A common stock at the date of grant and with a maximum term of approximately ten years. While historically DISH Network has issued stock awards subject to vesting, typically at the rate of 20% per year, some stock awards have been granted with immediate vesting and other stock awards vest only upon the achievement of certain DISH Network-specific subscriber, operational and/or financial goals. As of December 31, 2014, DISH Network had 69.1 million shares of its Class A common stock available for future grant under its stock incentive plans. | ||||||||||||||||||||
During December 2011, DISH Network paid a dividend in cash of $2.00 per share on its outstanding Class A and Class B common stock to shareholders of record on November 17, 2011. In light of such dividend, during January 2012, the exercise price of 17.3 million DISH Network stock options, affecting approximately 400 of our employees, was reduced by $2.00 per share (the “2011 Stock Option Adjustment”). Except as noted below, all information discussed below reflects the 2011 Stock Option Adjustment. | ||||||||||||||||||||
On December 28, 2012, DISH Network paid a dividend in cash of $1.00 per share on its outstanding Class A and Class B common stock to shareholders of record on December 14, 2012. In light of such dividend, during January 2013, the exercise price of 12.9 million DISH Network stock options, affecting approximately 400 of our employees, was reduced by $0.77 per share (the “2012 Stock Option Adjustment”). Except as noted below, all information discussed below reflects the 2012 Stock Option Adjustment. | ||||||||||||||||||||
On January 1, 2008, 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, each DISH Network stock award was converted into an adjusted DISH Network stock award and a new EchoStar stock award consistent with the Spin-off exchange ratio. DISH Network is responsible for fulfilling all stock awards related to DISH Network common stock and EchoStar is responsible for fulfilling all stock awards related to EchoStar common stock, regardless of whether such stock awards are held by our or EchoStar’s employees. Notwithstanding the foregoing, our stock-based compensation expense, resulting from stock awards outstanding at the Spin-off date, is based on the stock awards held by our employees regardless of whether such stock awards were issued by DISH Network or EchoStar. Accordingly, stock-based compensation that we expense with respect to EchoStar stock awards is included in “Additional paid-in capital” on our Consolidated Balance Sheets. As of March 31, 2013, we have recognized all of our stock-based compensation expense resulting from EchoStar stock awards outstanding at the Spin-off date held by our employees. | ||||||||||||||||||||
The following stock awards were outstanding: | ||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
DISH Network Awards | EchoStar Awards | |||||||||||||||||||
Stock Awards Outstanding | Stock | Restricted | Stock | Restricted | ||||||||||||||||
Options | Stock | Options | Stock | |||||||||||||||||
Units | Units | |||||||||||||||||||
Held by DISH DBS employees | 10,214,344 | 1,731,332 | 409,188 | 42,056 | ||||||||||||||||
Exercise prices for DISH Network stock options outstanding and exercisable associated with our employees as of December 31, 2014 were as follows: | ||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Number | Weighted- | Weighted- | Number | Weighted- | Weighted- | |||||||||||||||
Outstanding | Average | Average | Exercisable | Average | Average | |||||||||||||||
as of | Remaining | Exercise | as of | Remaining | Exercise | |||||||||||||||
December 31, | Contractual | Price | December 31, | Contractual | Price | |||||||||||||||
2014 | Life | 2014 | Life | |||||||||||||||||
$ | — | - | $ | 10 | 961,494 | 2.84 | $ | 6.33 | 961,494 | 2.84 | $ | 6.33 | ||||||||
$ | 10.01 | - | $ | 20 | 3,803,409 | 3.07 | $ | 17.36 | 444,009 | 1.62 | $ | 17.53 | ||||||||
$ | 20.01 | - | $ | 30 | 2,711,366 | 5.40 | $ | 25.65 | 1,414,466 | 4.98 | $ | 25.63 | ||||||||
$ | 30.01 | - | $ | 40 | 2,047,125 | 7.68 | $ | 35.88 | 228,825 | 7.23 | $ | 35.20 | ||||||||
$ | 40.01 | - | $ | 50 | 25,200 | 6.43 | $ | 44.43 | 10,000 | 3.50 | $ | 42.52 | ||||||||
$ | 50.01 | - | $ | 60 | 100,000 | 7.75 | $ | 57.92 | 25,000 | 5.60 | $ | 57.92 | ||||||||
$ | 60.01 | - | $ | 70 | 565,750 | 8.86 | $ | 64.17 | 23,750 | 6.80 | $ | 63.79 | ||||||||
$ | — | - | $ | 70 | 10,214,344 | 4.96 | $ | 25.29 | 3,107,544 | 4.01 | $ | 19.81 | ||||||||
Stock Award Activity | ||||||||||||||||||||
DISH Network stock option activity associated with our employees was as follows: | ||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Options | Weighted- | Options | Weighted- | Options | Weighted- | |||||||||||||||
Average | Average | Average | ||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||
Price | Price | Price | ||||||||||||||||||
Total options outstanding, beginning of period (1) | 11,938,090 | $ | 22.49 | 13,018,490 | $ | 18.99 | 17,640,074 | $ | 20.38 | |||||||||||
Granted | 667,750 | $ | 63.23 | 2,225,500 | $ | 36.75 | 589,500 | $ | 32.25 | |||||||||||
Exercised | (2,233,496 | ) | $ | 20.49 | (3,172,900 | ) | $ | 14.7 | (4,406,888 | ) | $ | 18.51 | ||||||||
Forfeited and cancelled | (158,000 | ) | $ | 41.84 | (133,000 | ) | $ | 30.25 | (804,196 | ) | $ | 20.34 | ||||||||
Total options outstanding, end of period | 10,214,344 | $ | 25.29 | 11,938,090 | $ | 22.49 | 13,018,490 | $ | 18.99 | |||||||||||
Performance based options outstanding, end of period (2) | 5,926,500 | $ | 25.15 | 6,468,500 | $ | 24.92 | 6,400,700 | $ | 18.71 | |||||||||||
Exercisable at end of period | 3,107,544 | $ | 19.81 | 4,061,289 | $ | 17.88 | 4,310,489 | $ | 17.92 | |||||||||||
-1 | The beginning of period weighted-average exercise price for the year ended December 31, 2013 of $18.99 does not reflect the 2012 Stock Option Adjustment, which occurred subsequent to December 31, 2012. The beginning of period weighted-average exercise price for the year ended December 31, 2012 of $20.38 does not reflect the 2011 Stock Option Adjustment, which occurred subsequent to December 31, 2011. | |||||||||||||||||||
-2 | These stock options are included in the caption “Total options outstanding, end of period.” See discussion of the 2005 LTIP, 2008 LTIP, 2013 LTIP and Other Employee Performance Awards below. | |||||||||||||||||||
We realized tax benefits from stock awards exercised as follows: | ||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Tax benefit from stock awards exercised | $ | 42,334 | $ | 37,583 | $ | 22,898 | ||||||||||||||
Based on the closing market price of DISH Network Class A common stock on December 31, 2014, the aggregate intrinsic value of stock options associated with our employees was as follows: | ||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Options | Options | |||||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Aggregate intrinsic value | $ | 486,198 | $ | 164,936 | ||||||||||||||||
DISH Network restricted stock unit activity associated with our employees was as follows: | ||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Restricted | Weighted- | Restricted | Weighted- | Restricted | Weighted- | |||||||||||||||
Stock | Average | Stock | Average | Stock | Average | |||||||||||||||
Awards | Grant Date | Awards | Grant Date | Awards | Grant Date | |||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||
Total restricted stock units outstanding, beginning of period | 1,863,165 | $ | 29.27 | 1,076,748 | $ | 22.82 | 1,179,709 | $ | 23.11 | |||||||||||
Granted | 316,500 | $ | 63.57 | 990,000 | $ | 36.53 | — | $ | — | |||||||||||
Vested | (278,000 | ) | $ | 45.04 | (135,250 | ) | $ | 29.19 | (24,795 | ) | $ | 22.94 | ||||||||
Forfeited and cancelled | (170,333 | ) | $ | 33.43 | (68,333 | ) | $ | 32.91 | (78,166 | ) | $ | 27.2 | ||||||||
Total restricted stock units outstanding, end of period | 1,731,332 | $ | 32.6 | 1,863,165 | $ | 29.27 | 1,076,748 | $ | 22.82 | |||||||||||
Restricted Performance Units outstanding, end of period (1) | 1,731,332 | $ | 32.6 | 1,863,165 | $ | 29.27 | 1,076,748 | $ | 22.82 | |||||||||||
-1 | These Restricted Performance Units are included in the caption “Total restricted stock units outstanding, end of period.” See discussion of the 2005 LTIP, 2008 LTIP, 2013 LTIP and Other Employee Performance Awards below. | |||||||||||||||||||
Long-Term Performance Based Plans | ||||||||||||||||||||
2005 LTIP. During 2005, DISH Network adopted a long-term, performance-based stock incentive plan (the “2005 LTIP”). The 2005 LTIP provided stock options and restricted stock units, either alone or in combination, which vested over seven years at the rate of 10% per year during the first four years, and at the rate of 20% per year thereafter. Exercise of the stock awards was subject to the foregoing vesting schedule and a performance condition that a DISH Network-specific subscriber goal be achieved by March 31, 2015. It was determined that the goal can no longer be achieved under the terms of the 2005 LTIP. | ||||||||||||||||||||
2008 LTIP. During 2008, DISH Network adopted a long-term, performance-based stock incentive plan (the “2008 LTIP”). The 2008 LTIP provided stock options and restricted stock units, either alone or in combination, which vested based on DISH Network-specific subscriber and financial goals. As of June 30, 2013, 100% of the eligible 2008 LTIP awards had vested. | ||||||||||||||||||||
2013 LTIP. During 2013, DISH Network adopted a long-term, performance-based stock incentive plan (the “2013 LTIP”). The 2013 LTIP provides stock options and restricted stock units in combination, which vest based on DISH Network -specific subscriber and financial goals. Exercise of the stock awards is contingent on achieving these goals by September 30, 2022. | ||||||||||||||||||||
Although no awards vest until DISH Network attains the performance goals, compensation related to the 2013 LTIP will be recorded based on DISH Network’s assessment of the probability of meeting the remaining goals. If the remaining goals are probable of being achieved, we will begin recognizing the associated non-cash, stock-based compensation expense on our Consolidated Statements of Operations and Comprehensive Income (Loss) over the estimated period to achieve the goal. | ||||||||||||||||||||
During the third quarter 2013, DISH Network has determined that 20% of the 2013 LTIP performance goals were probable of achievement. During the second quarter 2014, DISH Network determined that an additional 10% of the 2013 LTIP performance goals were probable of achievement. As a result, we recorded non cash, stock based compensation expense for the year ended December 31, 2014, as indicated in the table below titled “Non Cash, Stock Based Compensation Expense Recognized.” As of December 31, 2014, approximately 20% of the 2013 LTIP awards had vested. | ||||||||||||||||||||
Other Employee Performance Awards. In addition to the above long-term, performance stock incentive plans, DISH Network has other stock awards that vest based on certain other DISH Network-specific subscriber, operational and/or financial goals. Exercise of these stock awards is contingent on achieving certain performance goals. | ||||||||||||||||||||
Additional compensation related to these awards will be recorded based on DISH Network’s assessment of the probability of meeting the remaining performance goals. If the remaining goals are probable of being achieved, we will begin recognizing the associated non-cash, stock-based compensation expense on our Consolidated Statements of Operations and Comprehensive Income (Loss) over the estimated period to achieve the goal. See the table below titled “Estimated Remaining Non-Cash, Stock-Based Compensation Expense.” | ||||||||||||||||||||
Although no awards vest until the performance goals are attained, DISH Network determined that certain goals were probable of achievement and, as a result, we recorded non-cash, stock-based compensation expense for the years ended December 31, 2014, 2013 and 2012, as indicated in the table below titled “Non-Cash, Stock-Based Compensation Expense Recognized.” | ||||||||||||||||||||
Given the competitive nature of DISH Network’s business, small variations in subscriber churn, gross new subscriber activation rates and certain other factors can significantly impact subscriber growth. Consequently, while it was determined that achievement of certain DISH Network-specific subscriber, operational and/or financial goals was not probable as of December 31, 2014, that assessment could change in the future. | ||||||||||||||||||||
The non-cash, stock-based compensation expense associated with these awards for our employees was as follows: | ||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||
Non-Cash, Stock-Based Compensation Expense Recognized | 2014 | 2013 | 2012 | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
2008 LTIP | $ | — | $ | 2,719 | $ | 9,025 | ||||||||||||||
2013 LTIP | 12,361 | 8,137 | — | |||||||||||||||||
Other employee performance awards | 14,095 | 4,045 | 7,471 | |||||||||||||||||
Total non-cash, stock-based compensation expense recognized for performance based awards | $ | 26,456 | $ | 14,901 | $ | 16,496 | ||||||||||||||
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | 2013 LTIP | Other | ||||||||||||||||||
Employee | ||||||||||||||||||||
Performance | ||||||||||||||||||||
Awards | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Expense estimated to be recognized during 2015 | $ | 1,749 | $ | 1,694 | ||||||||||||||||
Estimated contingent expense subsequent to 2015 | 52,928 | 36,087 | ||||||||||||||||||
Total estimated remaining expense over the term of the plan | $ | 54,677 | $ | 37,781 | ||||||||||||||||
Of the 10.2 million stock options and 1.7 million restricted stock units outstanding under the DISH Network stock incentive plans associated with our employees as of December 31, 2014, the following awards were outstanding pursuant to the performance based stock incentive plans: | ||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Performance Based Stock Options | Number of | Weighted- | ||||||||||||||||||
Awards | Average | |||||||||||||||||||
Exercise | ||||||||||||||||||||
Price | ||||||||||||||||||||
2005 LTIP (1) | 1,844,500 | $ | 20.82 | |||||||||||||||||
2013 LTIP | 1,592,000 | $ | 40.02 | |||||||||||||||||
Other employee performance awards | 2,490,000 | $ | 18.85 | |||||||||||||||||
Total | 5,926,500 | $ | 25.15 | |||||||||||||||||
Restricted Performance Units | ||||||||||||||||||||
2005 LTIP (1) | 210,332 | |||||||||||||||||||
2013 LTIP | 796,000 | |||||||||||||||||||
Other employee performance awards | 725,000 | |||||||||||||||||||
Total | 1,731,332 | |||||||||||||||||||
-1 | It was determined that the goal can no longer be achieved under the terms of the 2005 LTIP. | |||||||||||||||||||
Stock-Based Compensation | ||||||||||||||||||||
During the years ended December 31, 2013 and 2012, we incurred an initial charge related to vested options of $4 million and $13 million, respectively, of additional non-cash, stock-based compensation expense in connection with the 2012 Stock Option Adjustment and the 2011 Stock Option Adjustment discussed previously. These amounts are included in the table below. Total non-cash, stock-based compensation expense for all of our employees is shown in the following table for the years ended December 31, 2014, 2013 and 2012 and was allocated to the same expense categories as the base compensation for such employees: | ||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Subscriber-related | $ | 1,859 | $ | 1,947 | $ | 1,607 | ||||||||||||||
General and administrative | 32,165 | 27,700 | 36,966 | |||||||||||||||||
Total non-cash, stock based compensation | $ | 34,024 | $ | 29,647 | $ | 38,573 | ||||||||||||||
As of December 31, 2014, our total unrecognized compensation cost related to the non-performance based unvested stock awards was $15 million. This cost was based on an estimated future forfeiture rate of approximately 3.2% per year and will be recognized over a weighted-average period of approximately two years. Share-based compensation expense is recognized based on stock awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Changes in the estimated forfeiture rate can have a significant effect on share-based compensation expense since the effect of adjusting the rate is recognized in the period the forfeiture estimate is changed. | ||||||||||||||||||||
Valuation | ||||||||||||||||||||
The fair value of each stock option granted for the years ended December 31, 2014, 2013 and 2012 was estimated at the date of the grant using a Black-Scholes option valuation model with the following assumptions: | ||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||
Stock Options | 2014 | 2013 | 2012 | |||||||||||||||||
Risk-free interest rate | 1.80% - 2.84% | 0.91% - 2.66% | 0.41% - 1.29% | |||||||||||||||||
Volatility factor | 28.53% - 38.62% | 32.37% - 39.87% | 33.15% - 39.50% | |||||||||||||||||
Expected term of options in years | 5.5 - 9.0 | 5.6 - 10.0 | 3.1 - 5.9 | |||||||||||||||||
Weighted-average fair value of options granted | $19.08 - $29.20 | $14.49 - $21.09 | $6.72 - $13.79 | |||||||||||||||||
On December 28, 2012, DISH Network paid a $1.00 cash dividend per share on its outstanding Class A and Class B common stock. While DISH Network currently does not intend to declare additional dividends on its common stock, it may elect to do so from time to time. Accordingly, the dividend yield percentage used in the Black-Scholes option valuation model was set at zero for all periods. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded stock options which have no vesting restrictions and are fully transferable. Consequently, our estimate of fair value may differ from other valuation models. Further, the Black-Scholes option valuation model requires the input of highly subjective assumptions. Changes in these subjective input assumptions can materially affect the fair value estimate. | ||||||||||||||||||||
We will continue to evaluate the assumptions used to derive the estimated fair value of DISH Network’s stock options as new events or changes in circumstances become known. | ||||||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Commitments and Contingencies | |||||||||||||||||||||||
Commitments and Contingencies | 11.Commitments and Contingencies | ||||||||||||||||||||||
Commitments | |||||||||||||||||||||||
As of December 31, 2014, future maturities of our long-term debt, capital lease and contractual obligations are summarized as follows: | |||||||||||||||||||||||
Payments due by period | |||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Long-term debt obligations | $ | 14,264,702 | $ | 651,017 | $ | 1,501,079 | $ | 901,097 | $ | 1,201,163 | $ | 1,401,233 | $ | 8,609,113 | |||||||||
Capital lease obligations | 194,669 | 28,133 | 30,893 | 32,993 | 36,175 | 19,503 | 46,972 | ||||||||||||||||
Interest expense on long-term debt and capital lease obligations | 5,036,836 | 850,579 | 770,957 | 714,722 | 644,542 | 616,490 | 1,439,546 | ||||||||||||||||
Satellite-related obligations | 2,325,026 | 414,047 | 362,527 | 336,576 | 327,247 | 301,106 | 583,523 | ||||||||||||||||
Operating lease obligations | 164,843 | 44,091 | 38,996 | 20,613 | 11,667 | 6,702 | 42,774 | ||||||||||||||||
Purchase obligations | 2,389,180 | 1,647,844 | 323,214 | 158,007 | 126,609 | 111,614 | 21,892 | ||||||||||||||||
Total | $ | 24,375,256 | $ | 3,635,711 | $ | 3,027,666 | $ | 2,164,008 | $ | 2,347,403 | $ | 2,456,648 | $ | 10,743,820 | |||||||||
In certain circumstances the dates on which we are obligated to make these payments could be delayed. These amounts will increase to the extent we procure insurance for our satellites or contract for the construction, launch or lease of additional satellites. | |||||||||||||||||||||||
The table above does not include $208 million of liabilities associated with unrecognized tax benefits that were accrued, as discussed in Note 8, and are included on our Consolidated Balance Sheets as of December 31, 2014. We do not expect any portion of this amount to be paid or settled within the next twelve months. | |||||||||||||||||||||||
Wireless Spectrum | |||||||||||||||||||||||
DISH Network Spectrum | |||||||||||||||||||||||
DISH Network has invested over $5.0 billion since 2008 to acquire certain wireless spectrum licenses and related assets. | |||||||||||||||||||||||
700 MHz Licenses. In 2008, DISH Network paid $712 million to acquire certain 700 MHz E Block (“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, 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, 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 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 wireless spectrum licenses held by DBSD North America, Inc. (“DBSD North America”) and TerreStar Networks, Inc. (“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 these licenses. On December 11, 2012, the FCC approved rules that eliminated these requirements and gave notice of its proposed modification of DISH Network’s 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 licenses to expand its terrestrial operating authority with AWS-4 authority (“AWS-4”). 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 its AWS-4 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 licenses to allow DISH Network to repurpose all 20 MHz of its uplink spectrum (2000-2020 MHz) for downlink (the “AWS-4 Downlink Waiver”). If DISH Network fails to notify the FCC that 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 auction of wireless spectrum known as the H Block commenced on January 22, 2014 and concluded on February 27, 2014. DISH Network was the winning bidder for all 176 H Block wireless spectrum licenses (“H Block”) 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 licenses on March 28, 2014. On April 29, 2014, the FCC issued an order granting DISH Network’s application to acquire these H Block licenses. As a result, during May 2014, DISH Network also paid approximately $13 million to UTAM, Inc. for clearance costs associated with the lower H Block spectrum and approximately $95 million to Sprint Corporation for clearance costs associated with the upper H Block spectrum in connection with the issuance of the H Block licenses. The H Block 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 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 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 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 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 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. | |||||||||||||||||||||||
Commercialization of DISH Network’s Wireless Spectrum Licenses and Related Assets. DISH Network has made substantial investments to acquire certain wireless spectrum licenses and related assets. DISH Network may also determine that additional wireless 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, commercialize, build-out, and integrate these licenses and related assets, and any additional acquired licenses and related assets; and comply with regulations applicable to such licenses. Depending on the nature and scope of such commercialization, build-out, integration efforts, and regulatory compliance, any such investments or partnerships could vary significantly. In connection with the development of DISH Network’s wireless business, including without limitation the efforts described above, we have made cash distributions to partially finance these efforts to date and may make additional cash distributions to finance in whole or in part DISH Network’s future efforts. See Note 15 for further information regarding our dividends to DOC. 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 wireless spectrum licenses or that DISH Network will be able to profitably deploy the assets represented by these wireless spectrum licenses. | |||||||||||||||||||||||
AWS-3 Auction | |||||||||||||||||||||||
The FCC auction of AWS-3 wireless spectrum licenses (the “AWS-3 Licenses”), designated by the FCC as Auction 97 (the “AWS-3 Auction”), commenced on November 13, 2014 and concluded on January 29, 2015. The FCC’s prohibition on certain communications related to the AWS-3 Auction expired on February 13, 2015. Also, on February 13, 2015, Northstar Wireless, LLC (“Northstar Wireless”) and SNR Wireless LicenseCo, LLC (“SNR Wireless”) each filed applications with the FCC to acquire certain AWS-3 Licenses for which it was named as winning bidder and had made the required down payments. Each of Northstar Wireless and SNR Wireless has applied as a designated entity that is entitled to receive a bidding credit of 25% in the AWS-3 Auction, as defined by FCC regulations (a “Designated Entity”). | |||||||||||||||||||||||
Northstar Wireless was the winning bidder for certain AWS-3 Licenses (the “Northstar Licenses”) with gross winning bids totaling approximately $7.845 billion, which after taking into account a 25% bidding credit, equals net winning bids totaling approximately $5.884 billion. Northstar Wireless is a wholly-owned subsidiary of Northstar Spectrum, LLC (“Northstar Spectrum”). DISH Network, through its wholly-owned subsidiary American AWS-3 Wireless II L.L.C. (“American II”), owns an 85% non-controlling interest in Northstar Spectrum. Northstar Manager, LLC (“Northstar Manager” and collectively with Northstar Spectrum and Northstar Wireless, the “Northstar Entities”) owns a 15% controlling interest in, and is the sole manager of, Northstar Spectrum. Northstar Spectrum is governed by a limited liability company agreement by and between American II and Northstar Manager (the “Northstar Spectrum LLC Agreement”). Pursuant to the Northstar Spectrum LLC Agreement, American II and Northstar Manager agreed to make pro-rata equity contributions in Northstar Spectrum equal to approximately 15% of the net purchase price of the Northstar Licenses. American II also entered into a Credit Agreement by and among American II, as Lender, Northstar Wireless, as Borrower, and Northstar Spectrum, as Guarantor (the “Northstar Credit Agreement”). Pursuant to the Northstar Credit Agreement, American II agreed to make loans to Northstar Wireless for approximately 85% of the net purchase price of the Northstar Licenses. American II made equity contributions to Northstar Spectrum of approximately $633 million and a loan to Northstar Wireless of approximately $432 million for Northstar Wireless to make the upfront payment for the AWS-3 Auction and the down payment required for the Northstar Licenses. American II also made an equity contribution to Northstar Spectrum of approximately $117 million and a loan to Northstar Wireless of approximately $4.569 billion for Northstar Wireless to make the final payment required for the Northstar Licenses. Consequently, as of March 2, 2015, the total equity contributions from American II to Northstar Spectrum were approximately $750 million and the total loans from American II to Northstar Wireless were approximately $5.001 billion. | |||||||||||||||||||||||
SNR Wireless was the winning bidder for certain AWS-3 Licenses (the “SNR Licenses”) with gross winning bids totaling approximately $5.482 billion, which after taking into account a 25% bidding credit, equals net winning bids totaling approximately $4.112 billion. In addition to the net winning bids, SNR Wireless is obligated to make a bid withdrawal payment of approximately $8 million to the FCC. SNR Wireless is a wholly-owned subsidiary of SNR Wireless Holdco, LLC (“SNR Holdco”). DISH Network, through its wholly-owned subsidiary American AWS-3 Wireless III L.L.C. (“American III”), owns an 85% non-controlling interest in SNR Holdco. SNR Wireless Management, LLC (“SNR Management” and collectively with SNR Holdco and SNR Wireless, the “SNR Entities”) owns a 15% controlling interest in, and is the sole manager of, SNR Holdco. SNR Holdco is governed by a limited liability company agreement by and between American III and SNR Management (the “SNR Holdco LLC Agreement”). Pursuant to the SNR Holdco LLC Agreement, American III and SNR Management agreed to make pro-rata equity contributions in SNR Holdco equal to approximately 15% of the net purchase price of the SNR Licenses. American III also entered into a Credit Agreement by and among American III, as Lender, SNR Wireless, as Borrower, and SNR Holdco, as Guarantor (the “SNR Credit Agreement”). Pursuant to the SNR Credit Agreement, American III agreed to make loans to SNR Wireless for the amount of the bid withdrawal payment and approximately 85% of the net purchase price of the SNR Licenses. American III made equity contributions to SNR Holdco of approximately $408 million and a loan to SNR Wireless of approximately $350 million for SNR Wireless to make the upfront payment for the AWS-3 Auction and the down payment required for the SNR Licenses. American III also made an equity contribution to SNR Holdco of approximately $116 million and a loan to SNR Wireless of approximately $3.153 billion for SNR Wireless to make the final payment required for the SNR Licenses. Consequently, as of March 2, 2015, the total equity contributions from American III to SNR Holdco were approximately $524 million and the total loans from American III to SNR Wireless were approximately $3.503 billion. | |||||||||||||||||||||||
DISH Network’s total non-controlling equity and debt investments in the Northstar Entities and the SNR Entities were approximately $9.778 billion. Issuance of any AWS-3 Licenses to Northstar Wireless and SNR Wireless depends, among other things, upon the FCC’s review and approval of the applications filed by Northstar Wireless and SNR Wireless. Objections to the applications filed by Northstar Wireless and SNR Wireless must be submitted to the FCC within ten calendar days following the release by the FCC of the public notice listing the applications acceptable for filing. DISH Network cannot predict the timing or the outcome of the FCC’s review of the applications filed by Northstar Wireless and SNR Wireless. | |||||||||||||||||||||||
In the event that the FCC grants the Northstar Licenses and the SNR Licenses, DISH Network may need to make significant additional loans to the Northstar Entities and the SNR Entities, or they may need to partner with others, so that the Northstar Entities and the SNR Entities may commercialize, build-out and integrate the Northstar Licenses and the SNR Licenses, and comply with regulations applicable to the Northstar Licenses and the SNR Licenses. Depending upon the nature and scope of such commercialization, build-out, integration efforts, and regulatory compliance, any such loans or partnerships could vary significantly. There can be no assurance that DISH Network will be able to obtain a profitable return on its non-controlling investments in the Northstar Entities and the SNR Entities. | |||||||||||||||||||||||
In connection with certain funding obligations related to the investments by American II and American III discussed above, in February 2015 we paid a dividend of $8.250 billion to DOC for, among other things, general corporate purposes, which include such funding obligations, and to fund other DISH Network cash needs. We have used a substantial portion of our existing cash and marketable investment securities to pay this dividend. We may make additional cash distributions to finance in whole or in part loans that DISH Network may make to the Northstar Entities and the SNR Entities in the future related to DISH Network’s non-controlling investments in these entities. As a result of, among other things, DISH Network’s non-controlling investments in the Northstar Entities and the SNR Entities, we may need to raise significant additional capital in the future, which may not be available on acceptable terms or at all. In addition, economic weakness or weak results of operations may limit our ability to generate sufficient internal cash to fund additional cash distributions to DISH Network, capital expenditures, acquisitions and other strategic transactions, as well as to fund ongoing operations and service our debt. As a result, these conditions make it difficult for us to accurately forecast and plan future business activities because we may not have access to funding sources necessary for us to pursue organic and strategic business development opportunities. | |||||||||||||||||||||||
Guarantees | |||||||||||||||||||||||
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 December 31, 2014, the remaining obligation of the DISH Network guarantee was $312 million. | |||||||||||||||||||||||
As of December 31, 2014, we have not recorded a liability on the balance sheet for any of these guarantees. | |||||||||||||||||||||||
Purchase Obligations | |||||||||||||||||||||||
Our 2015 purchase obligations primarily consist of binding purchase orders for receiver systems and related equipment, digital broadcast operations, engineering services, and products and services related to the operation of our DISH branded pay-TV service. Our purchase obligations also include certain fixed contractual commitments to purchase programming content. Our purchase obligations can fluctuate significantly from period to period due to, among other things, management’s control of inventory levels, and can materially impact our future operating asset and liability balances, and our future working capital requirements. | |||||||||||||||||||||||
Programming Contracts | |||||||||||||||||||||||
In the normal course of business, we enter into contracts to purchase programming content in which our payment obligations are generally contingent on the number of Pay-TV subscribers to whom we provide the respective content. These programming commitments are not included in the “Commitments” table above. The terms of our contracts typically range from one to ten years with annual rate increases. Our programming expenses will continue to increase to the extent we are successful in growing our Pay-TV subscriber base. In addition, our margins may face further downward pressure from price increases and the renewal of long-term pay-TV programming contracts on less favorable pricing terms. | |||||||||||||||||||||||
Rent Expense | |||||||||||||||||||||||
Total rent expense for operating leases was $468 million, $303 million and $252 million in 2014, 2013 and 2012, respectively. Rent expense in 2014 increased as a result of the Satellite and Tracking Stock Transaction. See Note 4 and Note 15 for further discussion. | |||||||||||||||||||||||
Patents and Intellectual Property | |||||||||||||||||||||||
Many entities, including some of our competitors, have or may in the future obtain patents and other intellectual property rights that cover or affect products or services that we offer or that we may offer in the future. We may not be aware of all intellectual property rights that our products or services may potentially infringe. Damages in patent infringement cases can be substantial, and in certain circumstances can be trebled. Further, we cannot estimate the extent to which we may be required in the future to obtain licenses with respect to patents held by others and the availability and cost of any such licenses. Various parties have asserted patent and other intellectual property rights with respect to components within our direct broadcast satellite system. We cannot be certain that these persons do not own the rights they claim, that our products do not infringe on these rights, and/or that these rights are not valid. Further, we cannot be certain that we would be able to obtain licenses from these persons on commercially reasonable terms or, if we were unable to obtain such licenses, that we would be able to redesign our products to avoid infringement. | |||||||||||||||||||||||
Contingencies | |||||||||||||||||||||||
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; 7,421,032; 7,916,781 and 8,284,833, 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. On February 17, 2015, Caltech filed a new complaint in the United States District Court for the Central District of California, asserting the same patents against the same defendants. Caltech alleges that certain broadband equipment, including without limitation the HT1000 and HT1100 modems, gateway hardware, software and/or firmware that the Hughes defendants provide to, among others, us for our use in connection with the dishNET branded broadband service, infringes these patents. Trial is scheduled to commence on April 20, 2015. | |||||||||||||||||||||||
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”; 7,526,784, entitled “Delivery of Navigation Data for Playback of Audio and Video Content”; 7,543,318, entitled “Delivery of Navigation Data for Playback of Audio and Video Content”; 7,577,970, entitled “Multimedia Content Navigation and Playback”; and 8,117,282, entitled “Media Player Configured to Receive Playback Filters From Alternative Storage Mediums”. ClearPlay alleges that the AutoHop™ feature of our Hopper set-top box infringes the asserted patents. On February 11, 2015, the case was stayed pending various third-party challenges before the United States Patent and Trademark Office regarding the validity of certain of the patents asserted in the action. | |||||||||||||||||||||||
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.; 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. On January 26, 2015, we and EchoStar filed a petition before the United States Patent and Trademark Office challenging the validity of the 233 patent. | |||||||||||||||||||||||
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 alleges that our DVR devices and DVR functionality infringe the 275 patent. 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. Trial is scheduled to commence on September 19, 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. | |||||||||||||||||||||||
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 also filed a motion for summary judgment, seeking dismissal of all claims, and the Court heard oral arguments on the parties’ summary judgment motions on October 17, 2014. On December 12, 2014, the Court issued its opinion with respect to the parties’ summary judgment motions. The Court found that DISH Network L.L.C. is entitled to partial summary judgment with respect to one claim in the action. In addition, the Court found that the plaintiffs are entitled to partial summary judgment with respect to ten claims in the action, which includes, among other things, findings by the Court establishing DISH Network L.L.C.’s liability for a substantial amount of the alleged outbound telemarketing calls by DISH Network L.L.C. and certain of its independent third-party retailers that were the subject of the plaintiffs’ motion. The Court did not issue any injunctive relief and did not make any determination on civil penalties or damages, ruling instead that the scope of any injunctive relief and the amount of any civil penalties or damages are questions for trial. Trial is scheduled to commence on July 21, 2015. | |||||||||||||||||||||||
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. On December 23, 2014, DISH Network L.L.C. filed a petition before the United States Patent and Trademark Office challenging the validity of the 444 patent. | |||||||||||||||||||||||
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. On July 30, 2014, the Court dismissed the claims against us and DISH Network with prejudice. | |||||||||||||||||||||||
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 sought 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 that 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 Slingbox 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., 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 granted the Fox plaintiffs an extension until May 23, 2014 to file a petition for writ of certiorari, but they did not file one. As a result, the stay of the NBC plaintiffs’ action expired. On August 6, 2014, at the request of the parties, the Central District of California granted a further stay of all proceedings in the action brought by the NBC plaintiffs, pending a final judgment on all claims in the Fox plaintiffs’ action. No trial date is currently set on the NBC claims. | |||||||||||||||||||||||
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 L.L.C. seeking to enjoin the Slingbox 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 on July 14, 2014, 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 Hopper Transfers feature and the Slingbox placeshifting functionality in our second-generation Hopper set-top box. | |||||||||||||||||||||||
On January 12, 2015, the Court ruled on the Fox plaintiffs’ and our respective motions for summary judgment, holding that: (a) the Slingbox placeshifting functionality and the PrimeTime Anytime, AutoHop and Hopper Transfers features do not violate the copyright laws; (b) certain quality assurance copies (which were discontinued in November 2012) do violate the copyright laws; and (c) the Slingbox placeshifting functionality, the Hopper Transfers feature and such quality assurance copies breach our Fox retransmission consent agreement. The only issue remaining for trial is the amount of damages (if any) on the claims upon which the Fox plaintiffs prevailed on summary judgment, but the Court ruled that the Fox plaintiffs could not pursue disgorgement as a remedy. At the parties’ joint request, the Court has stayed the case until October 1, 2015, and no trial date has been set. | |||||||||||||||||||||||
New York Actions. Both the ABC and CBS parties filed counterclaims in the New York action adding copyright claims against EchoStar Technologies L.L.C., and the CBS parties filed a counterclaim alleging that we fraudulently concealed the AutoHop feature when negotiating the 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, during March 2014, the ABC parties withdrew their appeal to the United States Court of Appeals for the Second Circuit; 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; and the ABC parties granted a covenant not to sue. Pursuant to a settlement between us and the CBS parties, on December 10, 2014, we and the CBS parties dismissed with prejudice all of our respective claims pending in the New York Court. | |||||||||||||||||||||||
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 similar 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. Joao Control never served us with its complaint and on June 23, 2014, Joao Control dismissed its complaint against DISH Network without prejudice. | |||||||||||||||||||||||
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 statutory disallowance. These claims proceeded to a non-jury trial on January 9, 2014. In its Post-Trial Findings of Fact and Conclusions of Law entered on June 10, 2014, the Bankruptcy Court rejected all claims against DISH Network and EchoStar, and it rejected some but not all claims against the other defendants. | |||||||||||||||||||||||
DISH Network intends to vigorously defend any claims against it in 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/Harbinger Capital Partners LLC (LightSquared Colorado Action) | |||||||||||||||||||||||
On July 8, 2014, Harbinger filed suit against DISH Network, LBAC, Mr. Ergen, SPSO, and certain other parties, in the United States District Court for the District of Colorado. The complaint asserts claims for tortious interference with contract and abuse of process, as well as claims alleging violations of the federal Racketeering Influenced and Corrupt Organization Act and the Colorado Organized Crime Control Act. Harbinger seeks to rely on many of the same facts and circumstances that were at issue in the LightSquared adversary proceeding pending in the Bankruptcy Court. Harbinger argues that the defendants’ alleged conduct, among other things, is responsible for Harbinger’s losing control of LightSquared and causing breaches of Harbinger’s stockholder agreement. The complaint seeks damages in excess of $500 million, which under federal and state law may be trebled. | |||||||||||||||||||||||
DISH Network intends to vigorously defend any claims against it in this case 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 first amended complaint, Jacksonville PFPF asserted 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 alleged 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 claimed 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. | |||||||||||||||||||||||
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, which, on May 2, 2014, was consolidated with the Jacksonville PFPF action. 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. | |||||||||||||||||||||||
On July 25, 2014, Jacksonville PFPF filed a second amended complaint, which added claims against George R. Brokaw and Charles M. Lillis, as Director Defendants, and Thomas A. Cullen, R. Stanton Dodge and K. Jason Kiser, as officers of DISH Network. Jacksonville PFPF asserted five claims in its second amended complaint, each of which alleged breaches of the duty of loyalty. Three of the claims were asserted solely against Mr. Ergen; one claim was made against all of the Director Defendants, other than Mr. Ergen and Mr. Clayton; and the final claim was made against Messrs. Cullen, Dodge and Kiser. | |||||||||||||||||||||||
DISH Network’s Board of Directors has established a Special Litigation Committee to review the factual allegations and legal claims in these actions. On October 24, 2014, the Special Litigation Committee filed a report in the District Court for Clark County, Nevada regarding its investigation of the claims and allegations asserted in Jacksonville PFPF’s second amended complaint. The Special Litigation Committee filed a motion to dismiss the action based, among other things, on its determination that it is in the best interests of DISH Network not to pursue the claims asserted by Jacksonville PFPF. The Director Defendants and Messrs. Cullen, Dodge and Kiser have also filed various motions to dismiss the action. The Court will hold a hearing on the Special Litigation Committee’s and the defendants’ motions on May 14, 2015. We cannot predict with any degree of certainty the outcome of these suits or determine the extent of any potential liability or damages. | |||||||||||||||||||||||
Norman IP Holdings, LLC | |||||||||||||||||||||||
On September 15, 2011, Norman IP Holdings, LLC (“Norman”) filed a patent infringement complaint (the “2011 Action”) against Lexmark International Corporation (“Lexmark”) and Brother International Corporation (“Brother”), in the United States District Court for the Eastern District of Texas, alleging infringement of 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. | |||||||||||||||||||||||
On May 30, 2014, Norman dismissed the 2013 Action against us with prejudice, pursuant to a settlement agreement. | |||||||||||||||||||||||
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. On August 12, 2014, in response to the parties’ respective summary judgment motions related to the Gemstar license issues, the Court ruled in favor of PMC and dismissed all claims by or against Gemstar and entered partial final judgment in PMC’s favor as to those claims. On September 16, 2014, DISH Network and EchoStar filed a notice of appeal of that partial final judgment, which is pending. Trial is scheduled to commence on May 18, 2015. PMC has informed DISH Network that it will not pursue at trial its claim for infringement of United States Patent No. 5,109,414. PMC’s damages expert had contended that DISH Network and EchoStar are liable for damages ranging from approximately $500 million to $650 million as of March 31, 2012, and has subsequently modified such damages as ranging from approximately $150 million to $450 million, as of September 30, 2014, which does not include pre-judgment interest and may be trebled under Federal law. | |||||||||||||||||||||||
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. | |||||||||||||||||||||||
Phoenix Licensing, L.L.C./LPL Licensing, L.L.C. | |||||||||||||||||||||||
On October 17, 2014, Phoenix Licensing, L.L.C. and LPL Licensing, L.L.C. (together referred to as “Phoenix”) 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 Nos. 5,987,434 entitled “Apparatus and Method for Transacting Marketing and Sales of Financial Products”; 7,890,366 entitled “Personalized Communication Documents, System and Method for Preparing Same”; 8,352,317 entitled “System for Facilitating Production of Variable Offer Communications”; 8,234,184 entitled “Automated Reply Generation Direct Marketing System”; and 6,999,938 entitled “Automated Reply Generation Direct Marketing System”. Phoenix alleges that we infringe the asserted patents by making and using products and services that generate customized marketing materials. Phoenix is an entity that seeks to license a patent portfolio without itself practicing any of the claims recited therein. Trial is set scheduled to commence on March 14, 2016. | |||||||||||||||||||||||
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. | |||||||||||||||||||||||
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. | |||||||||||||||||||||||
Effective June 18, 2014, Preservation Technologies dismissed all of its claims against DISH Network with prejudice, pursuant to a settlement agreement. | |||||||||||||||||||||||
Qurio Holdings, Inc. | |||||||||||||||||||||||
On September 26, 2014, Qurio Holdings, Inc. (“Qurio”) filed a complaint against DISH Network and our wholly-owned subsidiary DISH Network L.L.C., in the United States District Court for the Northern District of Illinois, alleging infringement of United States Patent No. 8,102,863 entitled “Highspeed WAN To Wireless LAN Gateway” and United States Patent No. 7,787,904 entitled “Personal Area Network Having Media Player And Mobile Device Controlling The Same”. On the same day, Qurio filed similar complaints against Comcast and DirecTV. On November 13, 2014, Qurio filed a first amended complaint, which added a claim alleging infringement of United States Patent No. 8,879,567 entitled “High-Speed WAN To Wireless LAN Gateway”. Qurio is an entity that seeks to license a patent portfolio without itself practicing any of the claims recited therein. On February 9, 2015, the Court granted DISH Network L.L.C.’s motion to transfer the case to the United States District Court for the Northern District of California. | |||||||||||||||||||||||
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 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 was 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. Ultimately, only four patents remained in the case against us, of which all were expired and two were subject to granted reexamination proceedings before the United States Patent and Trademark Office. On November 19, 2014, the action was dismissed with prejudice, pursuant to a settlement agreement between the parties. | |||||||||||||||||||||||
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. The case has been stayed since July 2009 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. | |||||||||||||||||||||||
TQ Beta LLC | |||||||||||||||||||||||
On June 30, 2014, TQ Beta LLC (“TQ Beta”) filed a complaint against us; our wholly-owned subsidiary DISH Network L.L.C; DISH Network; EchoStar; and EchoStar’s subsidiaries EchoStar Technologies L.L.C., Hughes Satellite Systems Corporation, and Sling Media Inc., in the United States District Court for the District of Delaware. The Complaint alleges infringement of United States Patent No. 7,203,456 (the “456 patent”), which is entitled “Method and Apparatus for Time and Space Domain Shifting of Broadcast Signals.” TQ Beta alleges that our Hopper set-top boxes, ViP 722 and ViP 722k DVR devices, as well as our DISH Anywhere service and DISH Anywhere mobile application, infringe the 456 patent. TQ Beta is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. Trial is scheduled to commence on January 12, 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. | |||||||||||||||||||||||
Voom HD Holdings | |||||||||||||||||||||||
In January 2008, Voom HD Holdings LLC (“Voom”) filed a lawsuit against our wholly-owned subsidiary DISH Network L.L.C., in New York Supreme Court, alleging breach of contract and other claims arising from our termination of the affiliation agreement governing carriage of certain Voom HD channels on the DISH branded pay-TV service and seeking over $2.5 billion in damages. | |||||||||||||||||||||||
On October 21, 2012, we entered into a confidential settlement agreement and release (the “Voom Settlement Agreement”) with Voom and CSC Holdings, LLC (“Cablevision”), and for certain limited purposes, MSG Holdings, L.P., The Madison Square Garden Company and EchoStar. The Voom Settlement Agreement resolved the litigation between the parties relating to the Voom programming services. Pursuant to the terms of the Voom Settlement Agreement, among other things: (i) the litigation between the parties relating to the Voom programming services was dismissed with prejudice and the parties released each other for all claims against each other related thereto; (ii) we agreed to pay $700 million in cash to Voom; (iii) DISH Media Holdings Corporation, a wholly-owned subsidiary of DISH Network, agreed to enter into an agreement to transfer its ownership interest in Voom to Rainbow Programming Holdings, LLC, an affiliate of Voom; and (iv) an affiliate of Cablevision agreed to enter into an agreement to transfer certain of its wireless multichannel video distribution and data service licenses (the “MVDDS Licenses”) to us. On October 23, 2012, we paid Voom $700 million. | |||||||||||||||||||||||
Separately, we entered into a multi-year affiliation agreement with AMC Network Entertainment LLC, WE: Women’s Entertainment LLC, The Independent Film Channel, The Sundance Channel L.L.C, each of which are subsidiaries of AMC Networks Inc., and Fuse Channel LLC, a subsidiary of The Madison Square Garden Company, for the carriage of AMC, WE, IFC, Sundance Channel and the Fuse channel. | |||||||||||||||||||||||
Since the Voom Settlement Agreement and the multi-year affiliation agreement were entered into contemporaneously, we accounted for all components of both agreements at fair value in the context of the Voom Settlement Agreement. We determined the fair value of the multi-year affiliation agreement and the MVDDS Licenses using a market-based approach and a probability-weighted discounted cash flow analysis, respectively. Based on market data and similar agreements we have with other content providers, we allocated $54 million of the payments under the multi-year affiliation agreement to the fair value of the Voom Settlement Agreement. The resulting liability was recorded on our Consolidated Balance Sheets as “Accrued Programming” and is being amortized as contra “Subscriber-related expenses” on a straight-line basis over the term of the agreement. Evaluating all potential uses for the MVDDS Licenses, we assessed their fair value at $24 million and recorded these on our Consolidated Balance Sheets as “FCC Authorizations.” The fair value of the Voom Settlement Agreement was assessed at $730 million and was recorded as “Litigation expense” on our Consolidated Statement of Operations and Comprehensive Income (Loss) for the year ended December 31, 2012. | |||||||||||||||||||||||
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 that 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 | 12 Months Ended |
Dec. 31, 2014 | |
Financial Information for Subsidiary Guarantors | |
Financial Information for Subsidiary Guarantors | |
12.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. | |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Valuation and Qualifying Accounts | ||||||||||||||
Valuation and Qualifying Accounts | ||||||||||||||
13.Valuation and Qualifying Accounts | ||||||||||||||
Our valuation and qualifying accounts as of December 31, 2014, 2013 and 2012 were as follows: | ||||||||||||||
Allowance for doubtful accounts | Balance at | Charged to | Deductions | Balance at | ||||||||||
Beginning | Costs and | End of Year | ||||||||||||
of Year | Expenses | |||||||||||||
(In thousands) | ||||||||||||||
For the years ended: | ||||||||||||||
December 31, 2014 | $ | 15,981 | $ | 151,016 | $ | (143,477 | ) | $ | 23,520 | |||||
December 31, 2013 | $ | 13,834 | $ | 125,664 | $ | (123,517 | ) | $ | 15,981 | |||||
December 31, 2012 | $ | 11,916 | $ | 116,742 | $ | (114,824 | ) | $ | 13,834 | |||||
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Quarterly Financial Data (Unaudited) | ||||||||||||||
Quarterly Financial Data (Unaudited) | ||||||||||||||
14.Quarterly Financial Data (Unaudited) | ||||||||||||||
Our quarterly results of operations are summarized as follows: | ||||||||||||||
For the Three Months Ended | ||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||
(In thousands) | ||||||||||||||
Year ended December 31, 2014: | ||||||||||||||
Total revenue | $ | 3,510,210 | $ | 3,598,565 | $ | 3,585,372 | $ | 3,583,266 | ||||||
Operating income (loss) | 508,270 | 497,196 | 420,459 | 602,406 | ||||||||||
Net income (loss) attributable to DISH DBS | 190,152 | 190,486 | 155,041 | 289,206 | ||||||||||
Year ended December 31, 2013: | ||||||||||||||
Total revenue | $ | 3,336,258 | $ | 3,444,922 | $ | 3,448,860 | $ | 3,465,572 | ||||||
Operating income (loss) | 514,113 | 601,161 | 494,094 | 518,178 | ||||||||||
Net income (loss) attributable to DISH DBS | 206,231 | 233,882 | 186,527 | 198,382 | ||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Related Party Transactions | |||||||||||
Related Party Transactions | |||||||||||
15.Related Party Transactions | |||||||||||
Related Party Transactions with DISH Network | |||||||||||
On February 12, 2015, we paid a dividend of $8.250 billion to DOC for, among other things, general corporate purposes, which include certain funding obligations related to DISH Network’s non-controlling equity and debt investments in the Northstar Entities and the SNR Entities, and to fund other DISH Network cash needs. | |||||||||||
On October 14, 2014, we paid a dividend of $1.5 billion to DOC in connection with, among other things, DISH Network’s general corporate purposes. | |||||||||||
On May 2, 2014, DISH Network contributed its equity interest in Sling TV to us. We recorded all of the assets and liabilities at historical cost and the difference was recorded as a deemed distribution in “Stockholder’s equity (deficit)” on our Consolidated Balance Sheets. As a result, all operating activities of Sling TV are included in our financial results beginning May 2, 2014. | |||||||||||
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. See Note 11 for further information. | |||||||||||
On December 2, 2012, the board of directors of DISH Network declared a dividend of $1.00 per share on its outstanding Class A and Class B common stock, or $453 million in the aggregate. On December 27, 2012, we paid a dividend of $850 million to DOC to fund the payment of DISH Network’s dividend and other potential DISH Network cash needs. | |||||||||||
On October 1, 2012, we made a distribution to DOC of the assets and liabilities associated with the satellite broadband business with a fair value of $66 million. This distribution resulted in a reduction in our historical net assets of $9 million and a deemed dividend of $57 million. | |||||||||||
Blockbuster. On April 26, 2011, our parent, DISH Network, completed the acquisition of most of the assets of Blockbuster, Inc. During the years ended December 31, 2013 and 2012, we recorded $11 million and $21 million, respectively, of “Subscriber-related expenses” on our 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 year ended December 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 years ended December 31, 2014 and 2013, we received revenue associated with these services of $18 million and $15 million, respectively, in “Subscriber-related revenue” on our Consolidated Statements of Operations and Comprehensive Income (Loss). During the year ended December 31, 2012, we did not receive revenue associated with these services. | |||||||||||
Broadband, Wireless, Blockbuster and Other Operations. We provide certain administrative support such as legal, information systems, marketing, human resources, accounting and finance services to DISH Network’s Broadband, Wireless, Blockbuster and other operations. In addition, we provide call center, installation and other services to DISH Network for its Broadband business. During the years ended December 31, 2014, 2013 and 2012, the costs associated with these services were $12 million, $10 million and $11 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 and Sling TV described 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 the vast 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 2014, we and EchoStar extended this agreement until December 31, 2015. 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, 2015 for an additional one-year period until January 1, 2016 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. In connection with the Exchange Agreement, this sublease terminated during the fourth quarter 2014. | |||||||||||
“Satellite and transmission expenses” | |||||||||||
During the years ended December 31, 2014, 2013 and 2012, we incurred $646 million, $487 million and $420 million, respectively, for satellite and transmission expenses from EchoStar. These amounts are recorded in “Satellite and transmission expenses” on our Consolidated Statements of Operations and Comprehensive Income (Loss). The agreements pertaining to these expenses are discussed below. | |||||||||||
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 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. See “DBS Satellites” in Note 8 for further information. The term of each lease is set forth below: | |||||||||||
· | EchoStar I, VII, X, XI and XIV. On March 1, 2014, we began leasing all available 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 11. | |||||||||||
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. During the third quarter 2013, we made a $23 million payment to EchoStar in exchange for its rights under the 103 Spectrum Development Agreement. In accordance with accounting principles that apply to transfers of assets between companies under common control, we recorded EchoStar’s net book value of this asset of $20 million in “Other noncurrent assets, net” on our Consolidated Balance Sheets and recorded the amount in excess of EchoStar’s net book value of $3 million as a capital distribution. Unless earlier terminated under the terms and conditions of the DISH 103 Spectrum Development Agreement, the term generally will continue for the duration of the 103 Spectrum Rights. | |||||||||||
In connection with the 103 Spectrum Development Agreement, during May 2012, EchoStar also entered into a ten-year service agreement with Ciel pursuant to which EchoStar leases certain satellite capacity from Ciel on the SES-3 satellite at the 103 degree orbital location (the “103 Service Agreement”). During June 2013, we and EchoStar entered into an agreement pursuant to which we lease certain satellite capacity from EchoStar on the SES-3 satellite (the “DISH 103 Service Agreement”). Under the terms of the DISH 103 Service Agreement, we make certain monthly payments to EchoStar through the service term. Unless earlier terminated under the terms and conditions of the DISH 103 Service Agreement, the initial service term will expire on the earlier of: (i) the date the SES-3 satellite fails; (ii) the date the transponder(s) on which service was being provided under the agreement fails; or (iii) ten years following the actual service commencement date. Upon in-orbit failure or end of life of the SES-3 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that we will exercise our option to receive service on a replacement satellite. | |||||||||||
TT&C Agreement. Effective January 1, 2012, we entered into a telemetry, tracking and control (“TT&C”) agreement pursuant to which we receive TT&C services from EchoStar for a period ending on December 31, 2016 (the “2012 TT&C Agreement”). The fees for services provided under the 2012 TT&C Agreement are calculated at either: (i) a fixed fee; or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. We are able to terminate the 2012 TT&C Agreement for any reason upon 60 days notice. | |||||||||||
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” | |||||||||||
During the years ended December 31, 2014, 2013 and 2012, we incurred $101 million, $69 million and $50 million, respectively, for general and administrative expenses from EchoStar. These amounts are recorded in “General and administrative expenses” on our Consolidated Statements of Operations and Comprehensive Income (Loss). The agreements pertaining to these expenses are discussed below. In addition, the expenses incurred pursuant to the Commercial Agreement discussed in “Sling TV,” under “Other Agreements — EchoStar” below, are also included in these amounts. | |||||||||||
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. Effective August 1, 2014, we began leasing certain space from EchoStar at 801 N. DISH Dr. in Gilbert, Arizona for a period ending on July 31, 2016. We also have renewal options for three additional one-year terms. | ||||||||||
· | 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 successive one year terms and the agreement may be terminated for any reason upon at least 120 days notice to EchoStar. In October 2014, we exercised our right to renew this agreement for a one-year period ending on December 31, 2015. | |||||||||||
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, 2016. 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. On May 5, 2014, we provided EchoStar notice to extend the XiP Encryption Agreement for one additional year until December 31, 2015. 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. | |||||||||||
Sling Trademark License Agreement. On December 31, 2014, Sling TV L.L.C. entered into an agreement with Sling Media, Inc., a subsidiary of EchoStar, pursuant to which we have the right for a fixed fee to use certain trademarks, domain names and other intellectual property related to the “Sling” trademark for a period ending on December 31, 2016. | |||||||||||
Other Agreements — EchoStar | |||||||||||
Receiver Agreement. EchoStar is currently our primary 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 additional year until 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 years ended December 31, 2014, 2013 and 2012, we purchased set-top boxes and other equipment from EchoStar of $1.114 billion, $1.242 billion and $1.005 billion, 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 Consolidated Balance Sheets or expensed as “Subscriber acquisition costs” on our 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 provided 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 years ended December 31, 2013 and 2012, we expensed $3 million and $7 million, respectively, under the RUS Agreement, which is included in “Cost of sales — equipment, services and other” on our 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. 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. | |||||||||||
Voom Settlement Agreement. On October 21, 2012, we entered into the Voom Settlement Agreement with Voom and Cablevision, and for certain limited purposes, MSG Holdings, L.P., The Madison Square Garden Company and EchoStar. The Voom Settlement Agreement resolved the litigation between the parties relating to the Voom programming services. EchoStar was a party to the Voom Settlement Agreement solely for the purposes of executing a mutual release of claims with Voom, Cablevision, MSG Holdings, L.P. and The Madison Square Garden Company relating to the Voom programming services. | |||||||||||
Sling TV. On May 2, 2014, DISH Network contributed its equity interest in Sling TV to us. See “Related Party Transactions with DISH Network” within the related party section previously discussed. Effective July 1, 2012, DISH Network and EchoStar formed Sling TV, which was owned two-thirds by DISH Network and one-third by EchoStar and was consolidated into DISH Network’s financial statements beginning July 1, 2012. Sling TV was formed to develop and commercialize certain advanced technologies. At that time, DISH Network, EchoStar and Sling TV entered into the following agreements with respect to Sling TV: (i) a contribution agreement pursuant to which DISH Network and EchoStar contributed certain assets in exchange for its respective ownership interests in Sling TV; (ii) a limited liability company operating agreement (the “Operating Agreement”), which provides for the governance of Sling TV; and (iii) a commercial agreement (the “Commercial Agreement”) pursuant to which, among other things, Sling TV has: (a) certain rights and corresponding obligations with respect to its business; and (b) the right, but not the obligation, to receive certain services from DISH Network and EchoStar, respectively. Since this was a formation of an entity under common control and a step-up in basis was not allowed, each party’s contributions were recorded at historical book value for accounting purposes. DISH Network consolidated Sling TV with EchoStar’s ownership position recorded as non-controlling interest. | |||||||||||
Effective August 1, 2014, EchoStar and Sling TV entered into the Exchange Agreement pursuant to which, among other things, Sling TV distributed certain assets to EchoStar and EchoStar reduced its interest in Sling TV to a ten percent non-voting interest. We now have a ninety percent equity interest and a 100% voting interest in Sling TV. In addition, we, EchoStar and Sling TV amended and restated the Operating Agreement, primarily to reflect the changes implemented by the Exchange Agreement. Finally, we, EchoStar and Sling TV amended and restated the Commercial Agreement, pursuant to which, among other things, Sling TV: (1) continues to have certain rights and corresponding obligations with respect to its business; (2) continues to have the right, but not the obligation, to receive certain services from us and EchoStar; and (3) has a license from EchoStar to use certain of the assets distributed to EchoStar as part of the Exchange Agreement. On February 9, 2015, we launched a live, linear streaming OTT service under the Sling TV brand. | |||||||||||
Since the Exchange Agreement is among entities under common control, we recorded the difference between the historical cost basis of the assets transferred to EchoStar and our historical cost basis in EchoStar’s one-third noncontrolling interest in Sling TV as a $6 million, net of deferred taxes, capital distribution in “Additional paid-in capital” on our Consolidated Balance Sheet. In addition, we recorded the initial fair value of EchoStar’s ten percent non-voting interest as a $14 million, net of deferred taxes, deemed distribution in “Additional paid-in capital” on our Consolidated Balance Sheet. All services provided to Sling TV by EchoStar under the Commercial Agreement are recorded in “General and administrative expenses” on our Consolidated Statements of Operations and Comprehensive Income (Loss). See “General and administrative expenses” within the related party section previously discussed. | |||||||||||
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. During the years ended December 31, 2014, 2013 and 2012, we paid $3 million, $2 million and $2 million, respectively, for these services from EchoStar, included in “Subscriber-related expenses” on the Consolidated Statements of Operations and Comprehensive Income (Loss). | |||||||||||
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. During the years ended December 31, 2014, 2013 and 2012, we paid $4 million, $3 million and $2 million, respectively, for these services from EchoStar, included in “Subscriber-related expenses” on the Consolidated Statements of Operations and Comprehensive Income (Loss). | |||||||||||
Satellite and Tracking Stock Transaction with EchoStar. 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 all available 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 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 under the cost method of accounting. 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 all available satellite capacity on the Transferred Satellites. See further discussion under “Satellite and transmission expenses — 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 an 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 consisted of cash and equity compensation and was borne by both EchoStar and DISH Network. As of January 1, 2015, Mr. Lynch is solely a DISH Network employee. | |||||||||||
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. These expenses are recorded in “Subscriber-related expenses” on our Consolidated Statements of Operations and Comprehensive Income (Loss). We record all payables in “Trade accounts payable — other” or “Other accrued expenses” on our Consolidated Balance Sheets. | |||||||||||
The table below summarizes our transactions with NagraStar. | |||||||||||
For the Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Purchases (including fees): | |||||||||||
Purchases from NagraStar | $ | 84,636 | $ | 91,712 | $ | 72,549 | |||||
As of December 31, | |||||||||||
2014 | 2013 | ||||||||||
(In thousands) | |||||||||||
Amounts Payable and Commitments: | |||||||||||
Amounts payable to NagraStar | $ | 14,819 | $ | 20,954 | |||||||
Commitments to NagraStar | $ | 12,368 | $ | 2,463 | |||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Summary of Significant Accounting Policies | ||||
Principles of Consolidation and Basis of Presentation | ||||
Principles of Consolidation and Basis of Presentation | ||||
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 interests or redeemable noncontrolling interests. See below for further discussion. 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. Certain prior period amounts have been reclassified to conform to the current period presentation. | ||||
Redeemable Noncontrolling Interests | ||||
Redeemable Noncontrolling Interests | ||||
Sling TV. On May 2, 2014, DISH Network contributed its equity interest in Sling TV Holding L.L.C. (“Sling TV,” formerly known as DISH Digital Holding L.L.C.) to us. As a result, all operating activities of Sling TV are included in our financial results beginning May 2, 2014. Effective August 1, 2014, EchoStar Corporation (“EchoStar”) and Sling TV entered into an exchange agreement (the “Exchange Agreement”) pursuant to which, among other things, Sling TV distributed certain assets to EchoStar and EchoStar reduced its interest in Sling TV to a ten percent non-voting interest. EchoStar’s ten percent non-voting interest is redeemable, subject to certain conditions, at fair value within sixty days following the fifth anniversary of the Exchange Agreement. This interest is considered temporary equity and is recorded as “Redeemable noncontrolling interest” in the mezzanine section of our Consolidated Balance Sheets. EchoStar’s redeemable noncontrolling interest in Sling TV was initially accounted for at fair value, which established a minimum threshold value for this interest. Redemption of the interest is contingent on a certain performance goal being achieved by Sling TV, which is not yet probable of being achieved. At such time that we determine the performance goal to be probable, the value of EchoStar’s redeemable noncontrolling interest in Sling TV will be adjusted for any change in redemption value above the minimum threshold through “Redeemable noncontrolling interest,” with the offset recorded in “Additional paid-in capital” on our Consolidated Balance Sheets. In addition, the operating results of Sling TV attributable to EchoStar are recorded as “Redeemable noncontrolling interest” in our Consolidated Balance Sheets effective August 1, 2014, with the offset recorded in “Income (loss) attributable to noncontrolling interests, net of tax” on our Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 15 for further discussion on Sling TV and the Exchange Agreement. | ||||
Use of Estimates | ||||
Use of Estimates | ||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“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 and subscriber lives. Economic conditions may increase 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 the Consolidated Financial Statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected prospectively in the period they occur. | ||||
Cash and Cash Equivalents | ||||
Cash and Cash Equivalents | ||||
We consider all liquid investments purchased with a remaining maturity of 90 days or less at the date of acquisition to be cash equivalents. Cash equivalents as of December 31, 2014 and 2013 may consist of money market funds, government bonds, corporate notes and commercial paper. The cost of these investments approximates their fair value. | ||||
Marketable Investment Securities | ||||
Marketable Investment Securities | ||||
We currently classify all marketable investment securities as available-for-sale. We adjust the carrying value of our available-for-sale securities to fair value and report the related temporary unrealized gains and losses as a separate component of “Accumulated other comprehensive income (loss)” within “Total stockholder’s equity (deficit),” net of related deferred income tax. Declines in the fair value of a marketable investment security which are determined to be “other-than-temporary” are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss), thus establishing a new cost basis for such investment. | ||||
We evaluate our marketable investment securities portfolio on a quarterly basis to determine whether declines in the fair value of these securities are other-than-temporary. This quarterly evaluation consists of reviewing, among other things: | ||||
· | the fair value of our marketable investment securities compared to the carrying amount, | |||
· | the historical volatility of the price of each security, and | |||
· | any market and company specific factors related to each security. | |||
Declines in the fair value of debt and equity investments below cost basis are generally accounted for as follows: | ||||
Length of Time Investment | Treatment of the Decline in Value | |||
Has Been In a Continuous | (absent specific factors to the contrary) | |||
Loss Position | ||||
Less than six months | Generally, considered temporary. | |||
Six to nine months | Evaluated on a case by case basis to determine whether any company or market-specific factors exist indicating that such decline is other-than-temporary. | |||
Greater than nine months | Generally, considered other-than-temporary. The decline in value is recorded as a charge to earnings. | |||
Additionally, in situations where the fair value of a debt security is below its carrying amount, we consider the decline to be other-than-temporary and record a charge to earnings if any of the following factors apply: | ||||
· | we have the intent to sell the security, | |||
· | it is more likely than not that we will be required to sell the security before maturity or recovery, or | |||
· | we do not expect to recover the security’s entire amortized cost basis, even if there is no intent to sell the security. | |||
In general, we use the first in, first out method to determine the cost basis on sales of marketable investment securities. | ||||
Trade Accounts Receivable | ||||
Trade Accounts Receivable | ||||
Management estimates the amount of required allowances for the potential non-collectability of accounts receivable based upon past collection experience and consideration of other relevant factors. However, past experience may not be indicative of future collections and therefore additional charges could be incurred in the future to reflect differences between estimated and actual collections. | ||||
Inventory | ||||
Inventory | ||||
Inventory is stated at the lower of cost or market value. Cost is determined using the first-in, first-out method. The cost of manufactured inventory includes the cost of materials, labor, freight-in, royalties and manufacturing overhead. | ||||
Property and Equipment | ||||
Property and Equipment | ||||
Property and equipment are stated at amortized cost less impairment losses, if any. The costs of satellites under construction, including interest and certain amounts prepaid under our satellite service agreements, are capitalized during the construction phase, assuming the eventual successful launch and in-orbit operation of the satellite. If a satellite were to fail during launch or while in-orbit, the resultant loss would be charged to expense in the period such loss was incurred. The amount of any such loss would be reduced to the extent of insurance proceeds estimated to be received, if any. Depreciation is recorded on a straight-line basis over useful lives ranging from one to 40 years. Repair and maintenance costs are charged to expense when incurred. Renewals and improvements that add value or extend the asset’s useful life are capitalized. | ||||
Impairment of Long-Lived Assets | ||||
Impairment of Long-Lived Assets | ||||
We review our long-lived assets and identifiable finite lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For assets which are held and used in operations, the asset would be impaired if the carrying value of the asset (or asset group) exceeded its undiscounted future net cash flows. Once an impairment is determined, the actual impairment recognized is the difference between the carrying value and the fair value as estimated using discounted cash flows. Assets which are to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. We consider relevant cash flow, estimated future operating results, trends and other available information in assessing whether the carrying value of assets are recoverable. | ||||
DBS Satellites. We currently evaluate our DBS satellite fleet for impairment as one asset group whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. We do not believe any triggering event has occurred which would indicate impairment as of December 31, 2014. | ||||
Indefinite Lived Intangible Assets | ||||
Indefinite Lived Intangible Assets | ||||
We do not amortize indefinite lived intangible assets, but test these assets for impairment annually during the fourth quarter or more often if indicators of impairment arise. Intangible assets that have finite lives are amortized over their estimated useful lives and tested for impairment as described above for long-lived assets. Our intangible assets with indefinite lives primarily consist of FCC licenses. Generally, we have determined that our FCC licenses have indefinite useful lives due to the following: | ||||
· | FCC licenses are a non-depleting asset; | |||
· | existing FCC licenses are integral to our business segments and will contribute to cash flows indefinitely; | |||
· | replacement DBS satellite applications are generally authorized by the FCC subject to certain conditions, without substantial cost under a stable regulatory, legislative and legal environment; | |||
· | maintenance expenditures to obtain future cash flows are not significant; | |||
· | FCC licenses are not technologically dependent; and | |||
· | we intend to use these assets indefinitely. | |||
DBS FCC Licenses. We combine all of our indefinite lived DBS FCC licenses that we currently utilize or plan to utilize in the future into a single unit of accounting. The analysis encompasses future cash flows from satellites transmitting from such licensed orbital locations, including revenue attributable to programming offerings from such satellites, the direct operating and subscriber acquisition costs related to such programming, and future capital costs for replacement satellites. Projected revenue and cost amounts include projected subscribers. In conducting our annual impairment test in 2014, we determined that the estimated fair value of the DBS FCC licenses, calculated using a discounted cash flow analysis, exceeded their carrying amounts. | ||||
Other Investment Securities | ||||
Other Investment Securities | ||||
Generally, we account for our unconsolidated equity investments under either the equity method or cost method of accounting. Because these equity securities are generally not publicly traded, it is not practical to regularly estimate the fair value of the investments; however, these investments are subject to an evaluation for other-than-temporary impairment on a quarterly basis. This quarterly evaluation consists of reviewing, among other things, company business plans, current financial statements and key financial metrics, if available, for factors that may indicate an impairment of our investment. Such factors may include, but are not limited to, cash flow concerns, material litigation, violations of debt covenants and changes in business strategy. The fair value of these equity investments is not estimated unless there are identified changes in circumstances that may indicate an impairment exists and these changes are likely to have a significant adverse effect on the fair value of the investment. | ||||
Long-Term Deferred Revenue, Distribution and Carriage Payments | ||||
Long-Term Deferred Revenue, Distribution and Carriage Payments | ||||
Certain programmers provide us up-front payments. Such amounts are deferred and recognized as reductions to “Subscriber-related expenses” on a straight-line basis over the relevant remaining contract term (generally up to ten years). The current and long-term portions of these deferred credits are recorded in our Consolidated Balance Sheets in “Deferred revenue and other” and “Long-term deferred revenue, distribution and carriage payments and other long-term liabilities,” respectively. | ||||
Sales Taxes | ||||
Sales Taxes | ||||
We account for sales taxes imposed on our goods and services on a net basis in our Consolidated Statements of Operations and Comprehensive Income (Loss). Since we primarily act as an agent for the governmental authorities, the amount charged to the customer is collected and remitted directly to the appropriate jurisdictional entity. | ||||
Income Taxes and Accounting for Uncertainty in Income Taxes | ||||
Income Taxes | ||||
We establish a provision for income taxes currently payable or receivable and for income tax amounts deferred to future periods. Deferred tax assets and liabilities are recorded for the estimated future tax effects of differences that exist between the book and tax basis of assets and liabilities. Deferred tax assets are offset by valuation allowances when we believe it is more likely than not that such net deferred tax assets will not be realized. | ||||
Accounting for Uncertainty in Income Taxes | ||||
From time to time, we engage in transactions where the tax consequences may be subject to uncertainty. We record a liability when, in management’s judgment, a tax filing position does not meet the more likely than not threshold. For tax positions that meet the more likely than not threshold, we may record a liability depending on management’s assessment of how the tax position will ultimately be settled. We adjust our estimates periodically for ongoing examinations by and settlements with various taxing authorities, as well as changes in tax laws, regulations and precedent. We classify interest and penalties, if any, associated with our uncertain tax positions as a component of “Interest expense, net of amounts capitalized” and “Other, net,” respectively, on our Consolidated Statements of Operations and Comprehensive Income (Loss). | ||||
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; | |||
· | 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; and quoted prices for identical or similar instruments in markets that are not active; 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 December 31, 2014 and 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. | ||||
Deferred Debt Issuance Costs | ||||
Deferred Debt Issuance Costs | ||||
Costs of issuing debt are generally deferred and amortized to interest expense using the effective interest rate method over the terms of the respective notes. See Note 7. | ||||
Revenue Recognition | ||||
Revenue Recognition | ||||
We recognize revenue when an arrangement exists, prices are determinable, collectability is reasonably assured and the goods or services have been delivered. | ||||
Revenue from our pay-TV service is recognized when programming is broadcast to subscribers. Payments received from our Pay-TV subscribers in advance of the broadcast or service period are recorded as “Deferred revenue and other” in our Consolidated Balance Sheets until earned. | ||||
For certain of our promotions, subscribers are charged an upfront fee. A portion of these fees may be deferred and recognized over the estimated subscriber life for new subscribers or the estimated remaining life for existing subscribers ranging from four to five years. Revenue from advertising sales is recognized when the related services are performed. | ||||
Subscriber fees for pay-TV equipment rental fees and other hardware related fees, including fees for DVRs, equipment upgrade fees and additional outlet fees from subscribers with receivers with multiple tuners, advertising services and fees earned from our in-home service operations are recognized as revenue as earned. Generally, revenue from equipment sales and equipment upgrades is recognized upon shipment to customers. | ||||
Certain of our existing and new subscriber promotions include programming discounts. Programming revenues are recorded as earned at the discounted monthly rate charged to the subscriber. | ||||
We offer our customers the opportunity to download movies for a specific viewing period or permanently purchase a movie from our web-site. We recognize revenue when the movie is successfully downloaded by the customer, which, based on our current technology, occurs at the time the customer plays the movie for the first time. | ||||
Subscriber-Related Expenses | ||||
Subscriber-Related Expenses | ||||
The cost of television programming distribution rights is generally incurred on a per subscriber basis and various upfront carriage payments are recognized when the related programming is distributed to subscribers. Long-term flat rate programming contracts are charged to expense using the straight-line method over the term of the agreement. The cost of television programming rights to distribute live sporting events for a season or tournament is charged to expense using the straight-line method over the course of the season or tournament. | ||||
“Subscriber-related expenses” in the Consolidated Statements of Operations and Comprehensive Income (Loss) principally include programming expenses, costs for pay-TV services incurred in connection with our in-home service and call center operations, billing costs, refurbishment and repair costs related to receiver systems, subscriber retention and other variable subscriber expenses. These costs are recognized as the services are performed or as incurred. | ||||
Subscriber Acquisition Costs | Subscriber Acquisition Costs | |||
Subscriber acquisition costs in our Consolidated Statements of Operations and Comprehensive Income (Loss) consist of costs incurred to acquire new Pay-TV subscribers through third parties and our direct sales distribution channel. Subscriber acquisition costs include the following line items from our Consolidated Statements of Operations and Comprehensive Income (Loss): | ||||
· | “Cost of sales — subscriber promotion subsidies” includes the cost of our receiver systems sold to retailers and other distributors of our equipment and receiver systems sold directly by us to subscribers. | |||
· | “Other subscriber acquisition costs” includes net costs related to promotional incentives and costs related to installation and other promotional subsidies. | |||
· | “Subscriber acquisition advertising” includes advertising and marketing expenses related to the acquisition of new Pay-TV subscribers. Advertising costs are expensed as incurred. | |||
We characterize amounts paid to our independent retailers as consideration for equipment installation services and for equipment buydowns (incentives and rebates) as a reduction of revenue. We expense payments for equipment installation services as “Other subscriber acquisition costs.” Our payments for equipment buydowns represent a partial or complete return of the retailer’s purchase price and are, therefore, netted against the proceeds received from the retailer. We report the net cost from our various sales promotions through our independent retailer network as a component of “Other subscriber acquisition costs.” | ||||
Equipment Lease Programs | ||||
Equipment Lease Programs | ||||
Pay-TV subscribers have the choice of leasing or purchasing the satellite receiver and other equipment necessary to receive our pay-TV service. Most of our new Pay-TV subscribers choose to lease equipment and thus we retain title to such equipment. Equipment leased to new and existing Pay-TV subscribers is capitalized and depreciated over their estimated useful lives. | ||||
New Accounting Pronouncements | ||||
New Accounting Pronouncements | ||||
Revenue from Contracts with Customers. On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers. This converged standard on revenue recognition was issued jointly with the International Accounting Standards Board (“IASB”) to improve financial reporting by creating common revenue recognition guidance for GAAP and International Financial Reporting Standards (“IFRS”). ASU 2014-09 provides a framework for revenue recognition that replaces most existing GAAP revenue recognition guidance when it becomes effective. ASU 2014-09 will become effective for us on January 1, 2017, and allows for either a full retrospective or modified retrospective adoption. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected an adoption method nor have we determined the effect of the standard on our ongoing financial reporting. | ||||
Supplemental_Data_Statements_o1
Supplemental Data - Statements of Cash Flows (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Supplemental Data - Statements of Cash Flows | |||||||||||
Schedule of supplemental cash flow and other non-cash data | For the Years Ended December 31, | ||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Cash paid for interest | $ | 832,654 | $ | 875,006 | $ | 537,512 | |||||
Cash received for interest | 34,534 | 36,242 | 22,431 | ||||||||
Cash paid for income taxes | 18,186 | 1,351 | 20,624 | ||||||||
Cash paid for income taxes to DISH Network | 279,234 | 433,120 | 272,599 | ||||||||
Satellites and other assets financed under capital lease obligations | 3,462 | 1,070 | 5,857 | ||||||||
Receipt of marketable investment securities with no cash consideration | — | — | 13,237 | ||||||||
Net satellite broadband assets distributed to DISH Network | — | — | 8,628 | ||||||||
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 | — | — | ||||||||
Sling TV Exchange Transaction with EchoStar: | |||||||||||
Transfer of property and equipment, net | 8,978 | — | — | ||||||||
Transfer of investments and intangibles, net | 25,097 | — | — | ||||||||
Capital distribution to EchoStar, net of deferred taxes of $3,542 | 5,845 | — | — | ||||||||
Deemed distribution to EchoStar - initial fair value of redeemable noncontrolling interest, net of deferred taxes of $8,489 | 14,011 | — | — | ||||||||
Marketable_Investment_Securiti1
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 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 December 31, | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable investment securities: | ||||||||||||||||||||||||||
Current marketable investment securities | $ | 1,401,145 | $ | 4,117,326 | ||||||||||||||||||||||
Restricted marketable investment securities (1) | 76,970 | 63,902 | ||||||||||||||||||||||||
Total marketable investment securities | 1,478,115 | 4,181,228 | ||||||||||||||||||||||||
Restricted cash and cash equivalents (1) | 10,014 | 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) | 11,046 | 5,396 | ||||||||||||||||||||||||
Total marketable investment securities and restricted cash and cash equivalents | $ | 1,815,379 | $ | 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 Consolidated Balance Sheets. | |||||||||||||||||||||||||
-2 | Other investment securities are included in “Other noncurrent assets, net” on our Consolidated Balance Sheets. | |||||||||||||||||||||||||
Schedule of unrealized gain (loss) on marketable investment securities | As of December 31, | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Marketable | Marketable | |||||||||||||||||||||||||
Investment | Unrealized | Investment | Unrealized | |||||||||||||||||||||||
Securities | Gains | Losses | Net | Securities | Gains | Losses | Net | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt securities (including restricted): | ||||||||||||||||||||||||||
U. S. Treasury and agency securities | $ | 58,254 | $ | 7 | $ | (11 | ) | $ | (4 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||
Commercial paper | 65,696 | — | — | — | 381,515 | — | — | — | ||||||||||||||||||
Corporate securities | 1,247,403 | 5,608 | (145 | ) | 5,463 | 3,520,092 | 5,436 | (3,149 | ) | 2,287 | ||||||||||||||||
Other | 55,788 | — | — | — | 253,098 | 11 | (206 | ) | (195 | ) | ||||||||||||||||
Equity securities | 50,974 | 37,737 | — | 37,737 | 26,523 | 13,286 | — | 13,286 | ||||||||||||||||||
Total | $ | 1,478,115 | $ | 43,352 | $ | (156 | ) | $ | 43,196 | $ | 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 December 31, | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||
Value | Loss | Value | Loss | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt Securities: | ||||||||||||||||||||||||||
Less than 12 months | $ | 268,492 | $ | (100 | ) | $ | 2,002,239 | $ | (2,820 | ) | ||||||||||||||||
12 months or more | 129,092 | (56 | ) | 38,043 | (535 | ) | ||||||||||||||||||||
Total | $ | 397,584 | $ | (156 | ) | $ | 2,040,282 | $ | (3,355 | ) | ||||||||||||||||
Schedule of investments measured at fair value on a recurring basis | As of December 31, | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Cash equivalents (including restricted) | $ | 6,605,274 | $ | 258,281 | $ | 6,346,993 | $ | — | $ | 3,743,328 | $ | 275,277 | $ | 3,468,051 | $ | — | ||||||||||
Debt securities (including restricted): | ||||||||||||||||||||||||||
U. S. Treasury and agency securities | $ | 58,254 | $ | 42,710 | $ | 15,544 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Commercial paper | 65,696 | — | 65,696 | — | 381,515 | — | 381,515 | — | ||||||||||||||||||
Corporate securities | 1,247,403 | — | 1,247,403 | — | 3,520,092 | — | 3,520,092 | — | ||||||||||||||||||
Other | 55,788 | — | 55,788 | — | 253,098 | — | 253,098 | — | ||||||||||||||||||
Equity securities | 50,974 | 50,974 | — | — | 26,523 | 26,523 | — | — | ||||||||||||||||||
Total | $ | 1,478,115 | $ | 93,684 | $ | 1,384,431 | $ | — | $ | 4,181,228 | $ | 26,523 | $ | 4,154,705 | $ | — | ||||||||||
Inventory_Tables
Inventory (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventory | ||||||||
Schedule of inventory | As of December 31, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Finished goods | $ | 252,101 | $ | 299,975 | ||||
Raw materials | 159,095 | 102,563 | ||||||
Work-in-process | 82,350 | 110,108 | ||||||
Total | $ | 493,546 | $ | 512,646 | ||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Property and Equipment | |||||||||||
Schedule of property and equipment | Depreciable | ||||||||||
Life | As of December 31, | ||||||||||
(In Years) | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Equipment leased to customers | 5-Feb | $ | 3,524,211 | $ | 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 | 656,273 | 600,439 | ||||||||
Buildings and improvements | Jan-40 | 84,129 | 80,439 | ||||||||
Land | - | 5,504 | 5,504 | ||||||||
Construction in progress | - | 18,355 | 39,043 | ||||||||
Total property and equipment | 5,065,949 | 6,072,434 | |||||||||
Accumulated depreciation (1) | (2,628,945 | ) | (3,093,111 | ) | |||||||
Property and equipment, net | $ | 2,437,004 | $ | 2,979,323 | |||||||
-1 | Property and equipment and accumulated depreciation decreased $1.073 billion and $633 million, respectively, as a result of the Satellite and Tracking Stock Transaction. See Note 4 and Note 15 for further discussion. | ||||||||||
Schedule of construction in progress | As of December 31, | ||||||||||
2014 | 2013 | ||||||||||
(In thousands) | |||||||||||
Computer hardware projects | $ | 1,399 | $ | 20,216 | |||||||
Software projects | 16,353 | 15,017 | |||||||||
Other | 603 | 3,810 | |||||||||
Construction in progress | $ | 18,355 | $ | 39,043 | |||||||
Schedule of depreciation and amortization expense | For the Years Ended December 31, | ||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Equipment leased to customers | $ | 810,945 | $ | 739,266 | $ | 649,394 | |||||
Satellites (1) | 68,984 | 108,682 | 123,431 | ||||||||
Buildings, furniture, fixtures, equipment and other | 76,172 | 58,039 | 58,081 | ||||||||
148 degree orbital location (2) | — | — | 67,776 | ||||||||
Total depreciation and amortization | $ | 956,101 | $ | 905,987 | $ | 898,682 | |||||
-1 | Depreciation and amortization expense decreased $40 million in 2014 as a result of the Satellite and Tracking Stock Transaction. See Note 4 and Note 15 for further discussion. | ||||||||||
-2 | On May 31, 2012, the International Bureau of the FCC announced the termination of our license for use of the 148 degree orbital location. We had not had a satellite positioned at the 148 degree orbital location since the retirement of EchoStar V in August 2009. Our license for use of the 148 degree orbital location had a $68 million carrying value. This amount was recorded as “Depreciation and amortization” expense on our Consolidated Statements of Operations and Comprehensive Income (Loss) in 2012 due to the termination of this license by the FCC. | ||||||||||
Schedule of DBS Satellites | Estimated | ||||||||||
Useful Life | |||||||||||
(Years)/ | |||||||||||
Degree | Lease | ||||||||||
Launch | Orbital | Termination | |||||||||
Satellites | Date | Location | Date | ||||||||
Owned: | |||||||||||
EchoStar XV (1) | July 2010 | 45 | 15 | ||||||||
Under Construction: | |||||||||||
EchoStar XVIII (2) | 2015 | 110 | 15 | ||||||||
Leased from EchoStar (1): | |||||||||||
EchoStar I (3)(4) | December 1995 | 77 | November 2015 | ||||||||
EchoStar VII (3)(4) | February 2002 | 119 | June 2016 | ||||||||
EchoStar VIII | August 2002 | 77 | Month to month | ||||||||
EchoStar IX | August 2003 | 121 | Month to month | ||||||||
EchoStar X (3)(4) | February 2006 | 110 | February 2021 | ||||||||
EchoStar XI (3)(4) | July 2008 | 110 | September 2021 | ||||||||
EchoStar XII (3) | July 2003 | 61.5 | September 2017 | ||||||||
EchoStar XIV (3)(4) | March 2010 | 119 | February 2023 | ||||||||
EchoStar XVI (5) | November 2012 | 61.5 | January 2017 | ||||||||
Nimiq 5 | September 2009 | 72.7 | September 2019 | ||||||||
QuetzSat-1 | September 2011 | 77 | November 2021 | ||||||||
Leased from Other Third Party: | |||||||||||
Anik F3 | April 2007 | 118.7 | April 2022 | ||||||||
Ciel II | December 2008 | 129 | January 2019 | ||||||||
-1 | See Note 15 for further discussion of our Related Party Transactions with EchoStar. | ||||||||||
-2 | EchoStar XVIII is expected to launch during the fourth quarter 2015. | ||||||||||
-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 all available capacity on these satellites. See Note 4 and Note 15 for further discussion. | ||||||||||
-5 | We have the option to renew this lease for an additional six-year period. If we exercise our six-year renewal option, we have the option to renew this lease for an additional five years. | ||||||||||
Schedule of FCC Authorizations | As of December 31, | ||||||||||
2014 | 2013 | ||||||||||
(In thousands) | |||||||||||
DBS Licenses | $ | 611,794 | $ | 611,794 | |||||||
MVDDS Licenses (1) | 24,000 | 24,000 | |||||||||
Total | $ | 635,794 | $ | 635,794 | |||||||
-1 | We have multichannel video distribution and data service (“MVDDS”) licenses in 82 out of 214 geographical license areas, including Los Angeles, New York City, Chicago and several other major metropolitan areas. By August 2014, we were required to meet certain FCC build-out requirements related to our MVDDS licenses, and we are subject to certain FCC service rules applicable to these licenses. In January 2015, the FCC granted our application to extend the build-out requirements related to our MVDDS licenses. We now have until 2019 to provide “substantial service” on our MVDDS licenses, and the licenses expire in 2024. Our MVDDS licenses may be terminated, however, if we do not provide substantial service in accordance with the new build-out requirements. | ||||||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Long-Term Debt | ||||||||||||||
Schedule of carrying and fair values of the entity's debt facilities | As of December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||
Value | Value | |||||||||||||
(In thousands) | ||||||||||||||
6 5/8% Senior Notes due 2014 (1) | $ | — | $ | — | $ | 1,000,000 | $ | 1,040,200 | ||||||
7 3/4% Senior Notes due 2015 (2) | 650,001 | 664,321 | 750,000 | 813,750 | ||||||||||
7 1/8% Senior Notes due 2016 | 1,500,000 | 1,580,625 | 1,500,000 | 1,657,500 | ||||||||||
4 5/8% Senior Notes due 2017 | 900,000 | 933,750 | 900,000 | 946,962 | ||||||||||
4 1/4% Senior Notes due 2018 | 1,200,000 | 1,245,600 | 1,200,000 | 1,221,792 | ||||||||||
7 7/8% Senior Notes due 2019 | 1,400,000 | 1,589,700 | 1,400,000 | 1,603,000 | ||||||||||
5 1/8% Senior Notes due 2020 | 1,100,000 | 1,100,000 | 1,100,000 | 1,104,950 | ||||||||||
6 3/4% Senior Notes due 2021 | 2,000,000 | 2,157,500 | 2,000,000 | 2,122,500 | ||||||||||
5 7/8% Senior Notes due 2022 | 2,000,000 | 2,055,000 | 2,000,000 | 1,997,500 | ||||||||||
5 % Senior Notes due 2023 | 1,500,000 | 1,470,000 | 1,500,000 | 1,458,090 | ||||||||||
5 7/8% Senior Notes due 2024 | 2,000,000 | 2,019,800 | — | — | ||||||||||
Other notes payable (3) | 14,701 | 14,701 | 59,313 | 59,313 | ||||||||||
Subtotal | 14,264,702 | $ | 14,830,997 | 13,409,313 | $ | 14,025,557 | ||||||||
Unamortized discounts, net | (15,219 | ) | (19,198 | ) | ||||||||||
Capital lease obligations (4) | 194,669 | NA | 219,902 | NA | ||||||||||
Total long-term debt and capital lease obligations (including current portion) | $ | 14,444,152 | $ | 13,610,017 | ||||||||||
-1 | During the nine months ended September 30, 2014, we repurchased $100 million of our 6 5/8% Senior Notes due 2014 in open market trades. The remaining balance of $900 million was redeemed on October 1, 2014. | |||||||||||||
-2 | During 2014, we repurchased $100 million of our 7 3/4% Senior Notes due 2015 in open market trades. The remaining balance of $650 million matures on May 31, 2015 and is included in “Current portion of long-term debt and capital lease obligations” on our Consolidated Balance Sheets as of December 31, 2014. | |||||||||||||
-3 | On February 20, 2014, we entered into the Satellite and Tracking Stock Transaction, which resulted in a decrease in “Other notes payable” of $44 million related to the in-orbit incentive obligations associated with the Transferred Satellites. See Note 4 and Note 15 for further discussion. | |||||||||||||
-4 | Disclosure regarding fair value of capital leases is not required. | |||||||||||||
Schedule of interest on long-term debt | Annual | |||||||||||||
Semi-Annual | Debt Service | |||||||||||||
Payment Dates | Requirements | |||||||||||||
(In thousands) | ||||||||||||||
7 1/8% Senior Notes due 2016 | February 1 and August 1 | $ | 106,875 | |||||||||||
4 5/8% Senior Notes due 2017 | January 15 and July 15 | $ | 41,625 | |||||||||||
4 1/4% Senior Notes due 2018 | April 1 and October 1 | $ | 51,000 | |||||||||||
7 7/8% Senior Notes due 2019 | March 1 and September 1 | $ | 110,250 | |||||||||||
5 1/8% Senior Notes due 2020 | May 1 and November 1 | $ | 56,375 | |||||||||||
6 3/4% Senior Notes due 2021 | June 1 and December 1 | $ | 135,000 | |||||||||||
5 7/8% Senior Notes due 2022 | January 15 and July 15 | $ | 117,500 | |||||||||||
5% Senior Notes due 2023 | March 15 and September 15 | $ | 75,000 | |||||||||||
5 7/8% Senior Notes due 2024 | May 15 and November 15 | $ | 117,500 | |||||||||||
Schedule of other long term debt and capital lease obligations | ||||||||||||||
As of December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||
Satellites and other capital lease obligations | $ | 194,669 | $ | 219,902 | ||||||||||
Notes payable related to satellite vendor financing and other debt payable in installments through 2025 with interest rates ranging from approximately 6.0% to 12.5% | 14,701 | 59,313 | ||||||||||||
Total | 209,370 | 279,215 | ||||||||||||
Less: current portion | (28,133 | ) | (32,607 | ) | ||||||||||
Other long-term debt and capital lease obligations, net of current portion | $ | 181,237 | $ | 246,608 | ||||||||||
Future minimum lease payments under capital lease obligations | Future minimum lease payments under the capital lease obligations, together with the present value of the net minimum lease payments as of December 31, 2014 are as follows (in thousands): | |||||||||||||
For the Years Ended December 31, | ||||||||||||||
2015 | $ | 76,842 | ||||||||||||
2016 | 76,809 | |||||||||||||
2017 | 76,007 | |||||||||||||
2018 | 75,982 | |||||||||||||
2019 | 50,331 | |||||||||||||
Thereafter | 112,000 | |||||||||||||
Total minimum lease payments | 467,971 | |||||||||||||
Less: Amount representing lease of the orbital location and estimated executory costs (primarily insurance and maintenance) including profit thereon, included in total minimum lease payments | (220,883 | ) | ||||||||||||
Net minimum lease payments | 247,088 | |||||||||||||
Less: Amount representing interest | (52,419 | ) | ||||||||||||
Present value of net minimum lease payments | 194,669 | |||||||||||||
Less: Current portion | (28,133 | ) | ||||||||||||
Long-term portion of capital lease obligations | $ | 166,536 | ||||||||||||
Income_Taxes_and_Accounting_fo1
Income Taxes and Accounting for Uncertainty in Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes and Accounting for Uncertainty in Income Taxes | |||||||||||
Schedule of components of the (provision for) benefit from income taxes | For the Years Ended December 31, | ||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Current (provision) benefit: | |||||||||||
Federal | $ | (342,417 | ) | $ | (361,662 | ) | $ | (127,291 | ) | ||
State | 26,163 | (13,272 | ) | 10,673 | |||||||
Foreign | (6,990 | ) | (13,316 | ) | — | ||||||
(323,244 | ) | (388,250 | ) | (116,618 | ) | ||||||
Deferred (provision) benefit: | |||||||||||
Federal | (78,420 | ) | (65,955 | ) | (126,561 | ) | |||||
State | (14,011 | ) | (5,450 | ) | (42,747 | ) | |||||
Decrease (increase) in valuation allowance | 4,844 | — | — | ||||||||
(87,587 | ) | (71,405 | ) | (169,308 | ) | ||||||
Total benefit (provision) | $ | (410,831 | ) | $ | (459,655 | ) | $ | (285,926 | ) | ||
Schedule of reconciliation of amounts computed by applying the statutory Federal tax rate to income before taxes | For the Years Ended December 31, | ||||||||||
2014 | 2013 | 2012 | |||||||||
% of pre-tax (income)/loss | |||||||||||
Statutory rate | (35.0 | ) | (35.0 | ) | (35.0 | ) | |||||
State income taxes, net of Federal benefit | (2.0 | ) | (1.0 | ) | (2.7 | ) | |||||
Reversal of uncertain tax positions | 3.5 | — | — | ||||||||
Other, net | — | 0.2 | 0.6 | ||||||||
Total benefit (provision) for income taxes | (33.5 | ) | (35.8 | ) | (37.1 | ) | |||||
Schedule of deferred tax assets and liabilities | As of December 31, | ||||||||||
2014 | 2013 | ||||||||||
(In thousands) | |||||||||||
Deferred tax assets: | |||||||||||
NOL, credit and other carryforwards | $ | 18,799 | $ | 10,645 | |||||||
Accrued expenses | 40,461 | 48,416 | |||||||||
Stock-based compensation | 21,193 | 23,006 | |||||||||
Deferred revenue | 31,853 | 54,331 | |||||||||
Total deferred tax assets | 112,306 | 136,398 | |||||||||
Valuation allowance | (5,214 | ) | (7,469 | ) | |||||||
Deferred tax asset after valuation allowance | 107,092 | 128,929 | |||||||||
Deferred tax liabilities: | |||||||||||
Depreciation and amortization | (1,155,329 | ) | (1,272,014 | ) | |||||||
Unrealized gains on investments (1) | (109,428 | ) | (2,204 | ) | |||||||
Other liabilities | (30,734 | ) | (36,629 | ) | |||||||
Total deferred tax liabilities | (1,295,491 | ) | (1,310,847 | ) | |||||||
Net deferred tax asset (liability) | $ | (1,188,399 | ) | $ | (1,181,918 | ) | |||||
Current portion of net deferred tax asset (liability) | $ | 37,018 | $ | 65,457 | |||||||
Noncurrent portion of net deferred tax asset (liability) | (1,225,417 | ) | (1,247,375 | ) | |||||||
Total net deferred tax asset (liability) | $ | (1,188,399 | ) | $ | (1,181,918 | ) | |||||
-1 | Includes deferred taxes related to the Satellite and Tracking Stock Transaction. | ||||||||||
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits included in long-term deferred revenue, distribution and carriage payments and other long-term liabilities | For the Years Ended December 31, | ||||||||||
Unrecognized tax benefit | 2014 | 2013 | 2012 | ||||||||
(In thousands) | |||||||||||
Balance as of beginning of period | $ | 145,884 | $ | 185,669 | $ | 190,935 | |||||
Additions based on tax positions related to the current year | 69,643 | 9,533 | 5,949 | ||||||||
Additions based on tax positions related to prior years | 58,963 | 66,307 | 1,581 | ||||||||
Reductions based on tax positions related to prior years | (16,379 | ) | — | (3,461 | ) | ||||||
Reductions based on tax positions related to settlements with taxing authorities | (42,023 | ) | (103,311 | ) | — | ||||||
Reductions based on tax positions related to the lapse of the statute of limitations | (8,413 | ) | (12,314 | ) | (9,335 | ) | |||||
Balance as of end of period | $ | 207,675 | $ | 145,884 | $ | 185,669 | |||||
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Employee Benefit Plans | |||||||||||
Schedule of expense recognized related to the 401(k) Plan | For the Years Ended December 31, | ||||||||||
Expense Recognized Related to the 401(k) Plan | 2014 | 2013 | 2012 | ||||||||
(In thousands) | |||||||||||
Matching contributions, net of forfeitures | $ | 6,222 | $ | 5,994 | $ | 2,750 | |||||
Discretionary stock contributions, net of forfeitures | $ | 25,972 | $ | 26,096 | $ | 23,772 | |||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Stock-Based Compensation | ||||||||||||||||||||
Schedule of stock awards outstanding | As of December 31, 2014 | |||||||||||||||||||
DISH Network Awards | EchoStar Awards | |||||||||||||||||||
Stock Awards Outstanding | Stock | Restricted | Stock | Restricted | ||||||||||||||||
Options | Stock | Options | Stock | |||||||||||||||||
Units | Units | |||||||||||||||||||
Held by DISH DBS employees | 10,214,344 | 1,731,332 | 409,188 | 42,056 | ||||||||||||||||
Schedule of exercise prices for stock options outstanding and exercisable associated with employees | ||||||||||||||||||||
Exercise prices for DISH Network stock options outstanding and exercisable associated with our employees as of December 31, 2014 were as follows: | ||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Number | Weighted- | Weighted- | Number | Weighted- | Weighted- | |||||||||||||||
Outstanding | Average | Average | Exercisable | Average | Average | |||||||||||||||
as of | Remaining | Exercise | as of | Remaining | Exercise | |||||||||||||||
December 31, | Contractual | Price | December 31, | Contractual | Price | |||||||||||||||
2014 | Life | 2014 | Life | |||||||||||||||||
$ | — | - | $ | 10 | 961,494 | 2.84 | $ | 6.33 | 961,494 | 2.84 | $ | 6.33 | ||||||||
$ | 10.01 | - | $ | 20 | 3,803,409 | 3.07 | $ | 17.36 | 444,009 | 1.62 | $ | 17.53 | ||||||||
$ | 20.01 | - | $ | 30 | 2,711,366 | 5.40 | $ | 25.65 | 1,414,466 | 4.98 | $ | 25.63 | ||||||||
$ | 30.01 | - | $ | 40 | 2,047,125 | 7.68 | $ | 35.88 | 228,825 | 7.23 | $ | 35.20 | ||||||||
$ | 40.01 | - | $ | 50 | 25,200 | 6.43 | $ | 44.43 | 10,000 | 3.50 | $ | 42.52 | ||||||||
$ | 50.01 | - | $ | 60 | 100,000 | 7.75 | $ | 57.92 | 25,000 | 5.60 | $ | 57.92 | ||||||||
$ | 60.01 | - | $ | 70 | 565,750 | 8.86 | $ | 64.17 | 23,750 | 6.80 | $ | 63.79 | ||||||||
$ | — | - | $ | 70 | 10,214,344 | 4.96 | $ | 25.29 | 3,107,544 | 4.01 | $ | 19.81 | ||||||||
Schedule of stock option activity associated with employees | For the Years Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Options | Weighted- | Options | Weighted- | Options | Weighted- | |||||||||||||||
Average | Average | Average | ||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||
Price | Price | Price | ||||||||||||||||||
Total options outstanding, beginning of period (1) | 11,938,090 | $ | 22.49 | 13,018,490 | $ | 18.99 | 17,640,074 | $ | 20.38 | |||||||||||
Granted | 667,750 | $ | 63.23 | 2,225,500 | $ | 36.75 | 589,500 | $ | 32.25 | |||||||||||
Exercised | (2,233,496 | ) | $ | 20.49 | (3,172,900 | ) | $ | 14.7 | (4,406,888 | ) | $ | 18.51 | ||||||||
Forfeited and cancelled | (158,000 | ) | $ | 41.84 | (133,000 | ) | $ | 30.25 | (804,196 | ) | $ | 20.34 | ||||||||
Total options outstanding, end of period | 10,214,344 | $ | 25.29 | 11,938,090 | $ | 22.49 | 13,018,490 | $ | 18.99 | |||||||||||
Performance based options outstanding, end of period (2) | 5,926,500 | $ | 25.15 | 6,468,500 | $ | 24.92 | 6,400,700 | $ | 18.71 | |||||||||||
Exercisable at end of period | 3,107,544 | $ | 19.81 | 4,061,289 | $ | 17.88 | 4,310,489 | $ | 17.92 | |||||||||||
-1 | The beginning of period weighted-average exercise price for the year ended December 31, 2013 of $18.99 does not reflect the 2012 Stock Option Adjustment, which occurred subsequent to December 31, 2012. The beginning of period weighted-average exercise price for the year ended December 31, 2012 of $20.38 does not reflect the 2011 Stock Option Adjustment, which occurred subsequent to December 31, 2011. | |||||||||||||||||||
-2 | These stock options are included in the caption “Total options outstanding, end of period.” See discussion of the 2005 LTIP, 2008 LTIP, 2013 LTIP and Other Employee Performance Awards below. | |||||||||||||||||||
Schedule of realized tax benefits from stock awards exercised | For the Years Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Tax benefit from stock awards exercised | $ | 42,334 | $ | 37,583 | $ | 22,898 | ||||||||||||||
Schedule of aggregate intrinsic value of stock options associated with employees | As of December 31, 2014 | |||||||||||||||||||
Options | Options | |||||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Aggregate intrinsic value | $ | 486,198 | $ | 164,936 | ||||||||||||||||
Schedule of restricted stock unit activity associated with employees | For the Years Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Restricted | Weighted- | Restricted | Weighted- | Restricted | Weighted- | |||||||||||||||
Stock | Average | Stock | Average | Stock | Average | |||||||||||||||
Awards | Grant Date | Awards | Grant Date | Awards | Grant Date | |||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||
Total restricted stock units outstanding, beginning of period | 1,863,165 | $ | 29.27 | 1,076,748 | $ | 22.82 | 1,179,709 | $ | 23.11 | |||||||||||
Granted | 316,500 | $ | 63.57 | 990,000 | $ | 36.53 | — | $ | — | |||||||||||
Vested | (278,000 | ) | $ | 45.04 | (135,250 | ) | $ | 29.19 | (24,795 | ) | $ | 22.94 | ||||||||
Forfeited and cancelled | (170,333 | ) | $ | 33.43 | (68,333 | ) | $ | 32.91 | (78,166 | ) | $ | 27.2 | ||||||||
Total restricted stock units outstanding, end of period | 1,731,332 | $ | 32.6 | 1,863,165 | $ | 29.27 | 1,076,748 | $ | 22.82 | |||||||||||
Restricted Performance Units outstanding, end of period (1) | 1,731,332 | $ | 32.6 | 1,863,165 | $ | 29.27 | 1,076,748 | $ | 22.82 | |||||||||||
-1 | These Restricted Performance Units are included in the caption “Total restricted stock units outstanding, end of period.” See discussion of the 2005 LTIP, 2008 LTIP, 2013 LTIP and Other Employee Performance Awards below. | |||||||||||||||||||
Schedule of awards outstanding pursuant to performance-based stock incentive plans | As of December 31, 2014 | |||||||||||||||||||
Performance Based Stock Options | Number of | Weighted- | ||||||||||||||||||
Awards | Average | |||||||||||||||||||
Exercise | ||||||||||||||||||||
Price | ||||||||||||||||||||
2005 LTIP (1) | 1,844,500 | $ | 20.82 | |||||||||||||||||
2013 LTIP | 1,592,000 | $ | 40.02 | |||||||||||||||||
Other employee performance awards | 2,490,000 | $ | 18.85 | |||||||||||||||||
Total | 5,926,500 | $ | 25.15 | |||||||||||||||||
Restricted Performance Units | ||||||||||||||||||||
2005 LTIP (1) | 210,332 | |||||||||||||||||||
2013 LTIP | 796,000 | |||||||||||||||||||
Other employee performance awards | 725,000 | |||||||||||||||||||
Total | 1,731,332 | |||||||||||||||||||
-1 | It was determined that the goal can no longer be achieved under the terms of the 2005 LTIP. | |||||||||||||||||||
Schedule of allocated non-cash, stock-based compensation expense for all employees | For the Years Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Subscriber-related | $ | 1,859 | $ | 1,947 | $ | 1,607 | ||||||||||||||
General and administrative | 32,165 | 27,700 | 36,966 | |||||||||||||||||
Total non-cash, stock based compensation | $ | 34,024 | $ | 29,647 | $ | 38,573 | ||||||||||||||
Schedule of assumptions of Black-Scholes option valuation model | For the Years Ended December 31, | |||||||||||||||||||
Stock Options | 2014 | 2013 | 2012 | |||||||||||||||||
Risk-free interest rate | 1.80% - 2.84% | 0.91% - 2.66% | 0.41% - 1.29% | |||||||||||||||||
Volatility factor | 28.53% - 38.62% | 32.37% - 39.87% | 33.15% - 39.50% | |||||||||||||||||
Expected term of options in years | 5.5 - 9.0 | 5.6 - 10.0 | 3.1 - 5.9 | |||||||||||||||||
Weighted-average fair value of options granted | $19.08 - $29.20 | $14.49 - $21.09 | $6.72 - $13.79 | |||||||||||||||||
LTIP 2008, LTIP 2013 and Other | ||||||||||||||||||||
Stock-Based Compensation | ||||||||||||||||||||
Schedule of unrecognized non-cash, stock-based compensation expense | For the Years Ended December 31, | |||||||||||||||||||
Non-Cash, Stock-Based Compensation Expense Recognized | 2014 | 2013 | 2012 | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
2008 LTIP | $ | — | $ | 2,719 | $ | 9,025 | ||||||||||||||
2013 LTIP | 12,361 | 8,137 | — | |||||||||||||||||
Other employee performance awards | 14,095 | 4,045 | 7,471 | |||||||||||||||||
Total non-cash, stock-based compensation expense recognized for performance based awards | $ | 26,456 | $ | 14,901 | $ | 16,496 | ||||||||||||||
Schedule of non-cash, stock-based compensation expense recognized | Estimated Remaining Non-Cash, Stock-Based Compensation Expense | 2013 LTIP | Other | |||||||||||||||||
Employee | ||||||||||||||||||||
Performance | ||||||||||||||||||||
Awards | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Expense estimated to be recognized during 2015 | $ | 1,749 | $ | 1,694 | ||||||||||||||||
Estimated contingent expense subsequent to 2015 | 52,928 | 36,087 | ||||||||||||||||||
Total estimated remaining expense over the term of the plan | $ | 54,677 | $ | 37,781 | ||||||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Commitments and Contingencies | |||||||||||||||||||||||
Schedule of future maturities of long-term debt, capital lease and contractual obligations | Payments due by period | ||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Long-term debt obligations | $ | 14,264,702 | $ | 651,017 | $ | 1,501,079 | $ | 901,097 | $ | 1,201,163 | $ | 1,401,233 | $ | 8,609,113 | |||||||||
Capital lease obligations | 194,669 | 28,133 | 30,893 | 32,993 | 36,175 | 19,503 | 46,972 | ||||||||||||||||
Interest expense on long-term debt and capital lease obligations | 5,036,836 | 850,579 | 770,957 | 714,722 | 644,542 | 616,490 | 1,439,546 | ||||||||||||||||
Satellite-related obligations | 2,325,026 | 414,047 | 362,527 | 336,576 | 327,247 | 301,106 | 583,523 | ||||||||||||||||
Operating lease obligations | 164,843 | 44,091 | 38,996 | 20,613 | 11,667 | 6,702 | 42,774 | ||||||||||||||||
Purchase obligations | 2,389,180 | 1,647,844 | 323,214 | 158,007 | 126,609 | 111,614 | 21,892 | ||||||||||||||||
Total | $ | 24,375,256 | $ | 3,635,711 | $ | 3,027,666 | $ | 2,164,008 | $ | 2,347,403 | $ | 2,456,648 | $ | 10,743,820 | |||||||||
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Valuation and Qualifying Accounts | ||||||||||||||
Summary of activity in the allowance for doubtful accounts | Allowance for doubtful accounts | Balance at | Charged to | Deductions | Balance at | |||||||||
Beginning | Costs and | End of Year | ||||||||||||
of Year | Expenses | |||||||||||||
(In thousands) | ||||||||||||||
For the years ended: | ||||||||||||||
December 31, 2014 | $ | 15,981 | $ | 151,016 | $ | (143,477 | ) | $ | 23,520 | |||||
December 31, 2013 | $ | 13,834 | $ | 125,664 | $ | (123,517 | ) | $ | 15,981 | |||||
December 31, 2012 | $ | 11,916 | $ | 116,742 | $ | (114,824 | ) | $ | 13,834 | |||||
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Quarterly Financial Data (Unaudited) | ||||||||||||||
Schedule of quarterly results of operations | For the Three Months Ended | |||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||
(In thousands) | ||||||||||||||
Year ended December 31, 2014: | ||||||||||||||
Total revenue | $ | 3,510,210 | $ | 3,598,565 | $ | 3,585,372 | $ | 3,583,266 | ||||||
Operating income (loss) | 508,270 | 497,196 | 420,459 | 602,406 | ||||||||||
Net income (loss) attributable to DISH DBS | 190,152 | 190,486 | 155,041 | 289,206 | ||||||||||
Year ended December 31, 2013: | ||||||||||||||
Total revenue | $ | 3,336,258 | $ | 3,444,922 | $ | 3,448,860 | $ | 3,465,572 | ||||||
Operating income (loss) | 514,113 | 601,161 | 494,094 | 518,178 | ||||||||||
Net income (loss) attributable to DISH DBS | 206,231 | 233,882 | 186,527 | 198,382 | ||||||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Related Party Transactions | |||||||||||
Schedule of transactions with NagraStar | For the Years Ended December 31, | ||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Purchases (including fees): | |||||||||||
Purchases from NagraStar | $ | 84,636 | $ | 91,712 | $ | 72,549 | |||||
As of December 31, | |||||||||||
2014 | 2013 | ||||||||||
(In thousands) | |||||||||||
Amounts Payable and Commitments: | |||||||||||
Amounts payable to NagraStar | $ | 14,819 | $ | 20,954 | |||||||
Commitments to NagraStar | $ | 12,368 | $ | 2,463 | |||||||
Organization_and_Business_Acti1
Organization and Business Activities (Details) | Dec. 31, 2014 |
item | |
Organization and Business Activities | |
Number of subscribers | 13,978,000 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Minimum | |
Marketable Investment Securities | |
The length of time an investment has been in a continuous loss position in which the decline in value would be evaluated on a case by case basis to determine if the decline in value is other-than-temporary | 6 months |
Length of time an investment has been in a continuous loss position in which the decline in value is considered other-than-temporary | 9 months |
Property and Equipment | |
Useful life of property and equipment | 1 year |
Revenue Recognition | |
Period of deferral for the portion of subscriber fees that are deferred | 4 years |
Maximum | |
Marketable Investment Securities | |
Length of time an investment has been in a continuous loss position in which the decline in value is considered as temporary | 6 months |
The length of time an investment has been in a continuous loss position in which the decline in value would be evaluated on a case by case basis to determine if the decline in value is other-than-temporary | 9 months |
Property and Equipment | |
Useful life of property and equipment | 40 years |
Long-Term Deferred Revenue, Distribution and Carriage Payments | |
Deferred upfront payment, amortization period | 10 years |
Revenue Recognition | |
Period of deferral for the portion of subscriber fees that are deferred | 5 years |
Sling TV Holding LLC | EchoStar | |
Redeemable Noncontrolling Interest | |
Ownership percentage owned by noncontrolling owners | 10.00% |
Number of days following the fifth anniversary of the Exchange Agreement to redeem | 60 days |
Supplemental_Data_Statements_o2
Supplemental Data - Statements of Cash Flows (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash paid for interest | $832,654 | $875,006 | $537,512 |
Cash received for interest | 34,534 | 36,242 | 22,431 |
Cash paid for income taxes | 18,186 | 1,351 | 20,624 |
Cash paid for income taxes to DISH Network | 279,234 | 433,120 | 272,599 |
Satellites and other assets financed under capital lease obligations | 3,462 | 1,070 | 5,857 |
Receipt of marketable investment securities with no cash consideration | 13,237 | ||
Net satellite broadband assets distributed to DISH Network | 8,628 | ||
Satellite and Tracking Stock Transaction with EchoStar: | |||
Transfer of property and equipment, net | 1,073,000 | ||
Capital distribution to EchoStar, net of deferred taxes of $31,274 | 51,466 | ||
Deferred tax in the capital distribution to EchoStar relating to satellite and tracking stock transaction | 31,274 | ||
Capital distribution to EchoStar, net of deferred taxes of $3,542 | 11,963 | ||
Deferred tax in capital distribution to EchoStar | 3,542 | ||
Deemed distribution to EchoStar - initial fair value of redeemable noncontrolling interest, net of deferred taxes of $8,489 | 14,011 | ||
Deferred tax in deemed distribution of redeemable noncontrolling interest | 8,489 | ||
EchoStar | |||
Satellite and Tracking Stock Transaction with EchoStar: | |||
Investment in EchoStar and HSSC preferred tracking stock - cost method | 228,795 | ||
Satellite and Tracking Stock Transaction | EchoStar | |||
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 | ||
Sling TV Exchange Transaction | EchoStar | |||
Satellite and Tracking Stock Transaction with EchoStar: | |||
Transfer of property and equipment, net | 8,978 | ||
Transfer of investments and intangibles, net | 25,097 | ||
Capital distribution to EchoStar, net of deferred taxes of $3,542 | 5,845 | ||
Deemed distribution to EchoStar - initial fair value of redeemable noncontrolling interest, net of deferred taxes of $8,489 | $14,011 |
Marketable_Investment_Securiti2
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Marketable Investment Securities, Restricted Cash and Cash Equivalents and Other Investment Securities: | ||
Current marketable investment securities | $1,401,145 | $4,117,326 |
Restricted marketable investment securities | 76,970 | 63,902 |
Total marketable investment securities | 1,478,115 | 4,181,228 |
Restricted cash and cash equivalents | 10,014 | 18,878 |
Total marketable investment securities and restricted cash and cash equivalents | 1,815,379 | 4,205,502 |
Maximum maturities of commercial paper | 365 days | |
Maximum maturities of corporate securities | 18 months | |
EchoStar | ||
Marketable Investment Securities, Restricted Cash and Cash Equivalents and Other Investment Securities: | ||
Other investment securities - cost method | 228,795 | |
HSSC | ||
Marketable Investment Securities, Restricted Cash and Cash Equivalents and Other Investment Securities: | ||
Other investment securities - cost method | 87,409 | |
Current marketable investment securities - other | ||
Marketable Investment Securities, Restricted Cash and Cash Equivalents and Other Investment Securities: | ||
Other investment securities - cost method | $11,046 | $5,396 |
Marketable_Investment_Securiti3
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 2) Q (Satellite and Tracking Stock Transaction, USD $) | 0 Months Ended | 12 Months Ended |
Feb. 20, 2014 | Dec. 31, 2014 | |
Other investment securities: | ||
Percentage of economic interest in the Hughes Retail Group | 80.00% | |
EchoStar and HSSC | ||
Other investment securities: | ||
Number of owned satellites transferred and leased back | 5 | |
Liabilities Transferred | $59,000,000 | |
Cash in exchange for shares of series of preferred tracking stock issued | 11,000,000 | |
Capital transaction | 356,000,000 | |
Capital transaction recorded in additional paid-in capital | 51,000,000 | |
Tracking stock prohibited transfer period | 1 year | |
EchoStar | ||
Other investment securities: | ||
Liabilities Transferred | 44,540,000 | |
Preferred tracking stock issued by related party | 6,290,499 | |
Historical cost of tracking stock | 229,000,000 | |
HSSC | ||
Other investment securities: | ||
Preferred tracking stock issued by related party | 81.128 | |
Historical cost of tracking stock | $87,000,000 |
Marketable_Investment_Securiti4
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accumulated net unrealized gains (losses) | ||
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss) | $43,196,000 | $15,378,000 |
Accumulated net unrealized gains, net of tax, in accumulated other comprehensive income (loss) | 28,000,000 | 11,000,000 |
Components of available-for-sale investments | ||
Debt securities | 1,401,145,000 | 4,117,326,000 |
Total marketable investment securities | 1,478,115,000 | 4,181,228,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 43,352,000 | 18,733,000 |
Unrealized Losses | -156,000 | -3,355,000 |
Unrealized Gains Losses, Net | 43,196,000 | 15,378,000 |
Contractual maturities of restricted and non-restricted marketable investment securities | ||
Debt securities with contractual maturities within one year | 1,132,000,000 | |
Debt securities with contractual maturities extending longer than one year through and including five years | 272,000,000 | |
Debt securities with contractual maturities longer than ten years | 23,000,000 | |
U.S. Treasury and agency securities | ||
Accumulated net unrealized gains (losses) | ||
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss) | -4,000 | |
Components of available-for-sale investments | ||
Debt securities | 58,254,000 | |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 7,000 | |
Unrealized Losses | -11,000 | |
Unrealized Gains Losses, Net | -4,000 | |
Commercial paper | ||
Components of available-for-sale investments | ||
Debt securities | 65,696,000 | 381,515,000 |
Corporate securities | ||
Accumulated net unrealized gains (losses) | ||
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss) | 5,463,000 | 2,287,000 |
Components of available-for-sale investments | ||
Debt securities | 1,247,403,000 | 3,520,092,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 5,608,000 | 5,436,000 |
Unrealized Losses | -145,000 | -3,149,000 |
Unrealized Gains Losses, Net | 5,463,000 | 2,287,000 |
Other (including restricted) | ||
Accumulated net unrealized gains (losses) | ||
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss) | -195,000 | |
Components of available-for-sale investments | ||
Debt security | 55,788,000 | 253,098,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 11,000 | |
Unrealized Losses | -206,000 | |
Unrealized Gains Losses, Net | -195,000 | |
Equity Securities | ||
Accumulated net unrealized gains (losses) | ||
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss) | 37,737,000 | 13,286,000 |
Components of available-for-sale investments | ||
Equity securities | 50,974,000 | 26,523,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 37,737,000 | 13,286,000 |
Unrealized Gains Losses, Net | $37,737,000 | $13,286,000 |
Marketable_Investment_Securiti5
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 3) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair value of marketable investment securities in a loss position | ||
Total | $397,584 | $2,040,282 |
Unrealized loss on marketable investment securities in a loss position | ||
Total | -156 | -3,355 |
Debt Securities | ||
Fair value of marketable investment securities in a loss position | ||
Less than 12 Months | 268,492 | 2,002,239 |
12 Months or More | 129,092 | 38,043 |
Unrealized loss on marketable investment securities in a loss position | ||
Less than 12 months | -100 | -2,820 |
12 months or more | ($56) | ($535) |
Marketable_Investment_Securiti6
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 4) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair value of marketable securities | ||
Debt securities | $1,401,145 | $4,117,326 |
Total marketable investment securities | 1,478,115 | 4,181,228 |
Transfer of investments from Level 1 to Level 2 | 0 | |
Transfer of investments from Level 2 to Level 1 | 0 | |
U.S. Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 58,254 | |
Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 65,696 | 381,515 |
Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 1,247,403 | 3,520,092 |
Other (including restricted) | ||
Fair value of marketable securities | ||
Debt security | 55,788 | 253,098 |
Equity Securities | ||
Fair value of marketable securities | ||
Equity securities | 50,974 | 26,523 |
Fair value measurements on recurring basis | Total | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 6,605,274 | 3,743,328 |
Total marketable investment securities | 1,478,115 | 4,181,228 |
Fair value measurements on recurring basis | Total | U.S. Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 58,254 | |
Fair value measurements on recurring basis | Total | Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 65,696 | 381,515 |
Fair value measurements on recurring basis | Total | Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 1,247,403 | 3,520,092 |
Fair value measurements on recurring basis | Total | Other (including restricted) | ||
Fair value of marketable securities | ||
Debt security | 55,788 | 253,098 |
Fair value measurements on recurring basis | Total | Equity Securities | ||
Fair value of marketable securities | ||
Equity securities | 50,974 | 26,523 |
Fair value measurements on recurring basis | Level 1 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 258,281 | 275,277 |
Total marketable investment securities | 93,684 | 26,523 |
Fair value measurements on recurring basis | Level 1 | U.S. Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 42,710 | |
Fair value measurements on recurring basis | Level 1 | Equity Securities | ||
Fair value of marketable securities | ||
Equity securities | 50,974 | 26,523 |
Fair value measurements on recurring basis | Level 2 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 6,346,993 | 3,468,051 |
Total marketable investment securities | 1,384,431 | 4,154,705 |
Fair value measurements on recurring basis | Level 2 | U.S. Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 15,544 | |
Fair value measurements on recurring basis | Level 2 | Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 65,696 | 381,515 |
Fair value measurements on recurring basis | Level 2 | Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 1,247,403 | 3,520,092 |
Fair value measurements on recurring basis | Level 2 | Other (including restricted) | ||
Fair value of marketable securities | ||
Debt security | $55,788 | $253,098 |
Inventory_Details
Inventory (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory | ||
Finished goods | $252,101 | $299,975 |
Raw materials | 159,095 | 102,563 |
Work-in-process | 82,350 | 110,108 |
Total inventory | $493,546 | $512,646 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property and Equipment | ||
Total property and equipment | $5,065,949,000 | $6,072,434,000 |
Accumulated depreciation | -2,628,945,000 | -3,093,111,000 |
Property and equipment, net | 2,437,004,000 | 2,979,323,000 |
Decrease in property and equipment as a result of the Satellite and Tracking Stock Transaction | 1,073,000,000 | |
Decrease in accumulated depreciation as a result of the Satellite and Tracking Stock Transaction | 633,000,000 | |
Minimum | ||
Property and Equipment | ||
Depreciable life of assets | 1 year | |
Maximum | ||
Property and Equipment | ||
Depreciable life of assets | 40 years | |
Equipment leased to customers | ||
Property and Equipment | ||
Total property and equipment | 3,524,211,000 | 3,496,994,000 |
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 | 201,607,000 | |
Depreciable life of assets | 12 years | |
EchoStar VII | ||
Property and Equipment | ||
Total property and equipment | 177,000,000 | |
Depreciable life of assets | 15 years | |
EchoStar X | ||
Property and Equipment | ||
Total property and equipment | 177,192,000 | |
Depreciable life of assets | 15 years | |
EchoStar XI | ||
Property and Equipment | ||
Total property and equipment | 200,198,000 | |
Depreciable life of assets | 15 years | |
EchoStar XIV | ||
Property and Equipment | ||
Total property and equipment | 316,541,000 | |
Depreciable life of assets | 15 years | |
EchoStar XV | ||
Property and Equipment | ||
Total property and equipment | 277,658,000 | 277,658,000 |
Depreciable life of assets | 15 years | |
Satellites acquired under capital lease agreements | ||
Property and Equipment | ||
Total property and equipment | 499,819,000 | 499,819,000 |
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 | 656,273,000 | 600,439,000 |
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 | 84,129,000 | 80,439,000 |
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 | 5,504,000 | 5,504,000 |
Construction in progress | ||
Property and Equipment | ||
Total property and equipment | 18,355,000 | 39,043,000 |
Construction in progress | Computer hardware projects | ||
Property and Equipment | ||
Total property and equipment | 1,399,000 | 20,216,000 |
Construction in progress | Software projects | ||
Property and Equipment | ||
Total property and equipment | 16,353,000 | 15,017,000 |
Construction in progress | Other | ||
Property and Equipment | ||
Total property and equipment | $603,000 | $3,810,000 |
Property_and_Equipment_Details1
Property and Equipment (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Depreciation and amortization expense | |||
Depreciation and amortization expense | $956,101,000 | $905,987,000 | $898,682,000 |
Decrease in depreciation and amortization expenses | 40,000,000 | ||
Equipment leased to customers | |||
Depreciation and amortization expense | |||
Depreciation and amortization expense | 810,945,000 | 739,266,000 | 649,394,000 |
Satellites | |||
Depreciation and amortization expense | |||
Depreciation and amortization expense | 68,984,000 | 108,682,000 | 123,431,000 |
Buildings, furniture, fixtures, equipment and other | |||
Depreciation and amortization expense | |||
Depreciation and amortization expense | 76,172,000 | 58,039,000 | 58,081,000 |
148 degree orbital location | |||
Depreciation and amortization expense | |||
Depreciation and amortization expense | $67,776,000 | ||
DBS 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) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
item | |||
Property and Equipment | |||
Number of other satellites to be relocated in the event of failure or loss of any satellite | 1 | ||
Depreciation and amortization | $956,101 | $905,987 | $898,682 |
FCC authorizations | 635,794 | 635,794 | |
DBS Licenses | |||
Property and Equipment | |||
FCC authorizations | 611,794 | 611,794 | |
MVDDS Licenses | |||
Property and Equipment | |||
FCC authorizations | 24,000 | 24,000 | |
Number of licenses in geographical license areas | 82 | ||
Number of geographical license areas | 214 | ||
Minimum | |||
Property and Equipment | |||
Depreciable life of assets | 1 year | ||
Maximum | |||
Property and Equipment | |||
Depreciable life of assets | 40 years | ||
EchoStar I | |||
Property and Equipment | |||
Depreciable life of assets | 12 years | ||
EchoStar VII | |||
Property and Equipment | |||
Depreciable life of assets | 15 years | ||
EchoStar X | |||
Property and Equipment | |||
Depreciable life of assets | 15 years | ||
EchoStar XI | |||
Property and Equipment | |||
Depreciable life of assets | 15 years | ||
EchoStar XIV | |||
Property and Equipment | |||
Depreciable life of assets | 15 years | ||
EchoStar XV | |||
Property and Equipment | |||
Depreciable life of assets | 15 years | ||
EchoStar XVIII | |||
Property and Equipment | |||
Depreciable life of assets | 15 years | ||
148 degree orbital location | |||
Property and Equipment | |||
Depreciation and amortization | $67,776 | ||
EchoStar XVI | |||
Property and Equipment | |||
Option to renew the lease for an additional period | 6 years | ||
Another option to renew the lease if renewal option exercised | 5 years |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||||||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 01, 2014 | 27-May-08 | Feb. 02, 2006 | 16-May-12 | Apr. 05, 2013 | Oct. 05, 2009 | Aug. 17, 2009 | 5-May-11 | Jul. 26, 2012 | Jun. 24, 2013 | Nov. 20, 2014 | Feb. 20, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | 28-May-13 | Dec. 27, 2012 | |
Long-term debt | |||||||||||||||||||
Percentage of principal amount at which notes may be required to be repurchased in event of change of control | 101.00% | ||||||||||||||||||
Premiums, interest expense and deferred financing costs, as applicable | $834,856,000 | $878,550,000 | $647,298,000 | ||||||||||||||||
6 5/8% Senior Notes due 2014 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Debt repurchased | 100,000,000 | ||||||||||||||||||
Interest rate (as a percent) | 6.63% | ||||||||||||||||||
Principal balance of debt redeemed | 900,000,000 | ||||||||||||||||||
7 3/4% Senior Notes due 2015 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Debt repurchased | 100,000,000 | ||||||||||||||||||
Interest rate (as a percent) | 7.75% | ||||||||||||||||||
Redemption price as a percentage of principal amount | 100.00% | ||||||||||||||||||
Aggregate principal amount | 750,000,000 | ||||||||||||||||||
Term of debt instrument | 7 years | ||||||||||||||||||
Annual Debt Service Requirements | 25,000,000 | ||||||||||||||||||
7 1/8% Senior Notes due 2016 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Interest rate (as a percent) | 7.13% | ||||||||||||||||||
Percentage of principal amount at which notes may be required to be repurchased in event of change of control | 100.00% | ||||||||||||||||||
Aggregate principal amount | 1,500,000,000 | ||||||||||||||||||
Term of debt instrument | 10 years | ||||||||||||||||||
Annual Debt Service Requirements | 106,875,000 | ||||||||||||||||||
4 5/8% Senior Notes due 2017 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Interest rate (as a percent) | 4.63% | ||||||||||||||||||
Redemption price as a percentage of principal amount | 100.00% | ||||||||||||||||||
Aggregate principal amount | 900,000,000 | ||||||||||||||||||
Term of debt instrument | 5 years | 5 years | |||||||||||||||||
Annual Debt Service Requirements | 41,625,000 | ||||||||||||||||||
4 5/8% Senior Notes due 2017 | Redemption Prior to July 15, 2015 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Percentage of principal amount at which the entity may redeem some or all of the notes at any time | 35.00% | ||||||||||||||||||
4 1/4% Senior Notes due 2018 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Interest rate (as a percent) | 4.25% | ||||||||||||||||||
Redemption price as a percentage of principal amount | 100.00% | ||||||||||||||||||
Aggregate principal amount | 1,200,000,000 | ||||||||||||||||||
Term of debt instrument | 5 years | ||||||||||||||||||
Annual Debt Service Requirements | 51,000,000 | ||||||||||||||||||
4 1/4% Senior Notes due 2018 | Redemption Prior to April 1, 2016 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Maximum percentage of the aggregate principal amount of notes with net proceeds of certain equity offerings or capital contributions | 35.00% | ||||||||||||||||||
7 7/8% Senior Notes due 2019 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Interest rate (as a percent) | 7.88% | ||||||||||||||||||
Redemption price as a percentage of principal amount | 100.00% | ||||||||||||||||||
Aggregate principal amount | 400,000,000 | 1,000,000,000 | |||||||||||||||||
Term of debt instrument | 10 years | 10 years | |||||||||||||||||
Annual Debt Service Requirements | 110,250,000 | ||||||||||||||||||
5 1/8% Senior Notes due 2020 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Interest rate (as a percent) | 5.13% | ||||||||||||||||||
Redemption price as a percentage of principal amount | 100.00% | ||||||||||||||||||
Aggregate principal amount | 1,100,000,000 | ||||||||||||||||||
Term of debt instrument | 7 years | ||||||||||||||||||
Annual Debt Service Requirements | 56,375,000 | ||||||||||||||||||
5 1/8% Senior Notes due 2020 | Redemption Prior to May 1, 2016 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Maximum percentage of the aggregate principal amount of notes with net proceeds of certain equity offerings or capital contributions | 35.00% | ||||||||||||||||||
6 3/4% Senior Notes due 2021 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Interest rate (as a percent) | 6.75% | 6.75% | 6.75% | ||||||||||||||||
Redemption price as a percentage of principal amount | 100.00% | ||||||||||||||||||
Aggregate principal amount | 2,000,000,000 | ||||||||||||||||||
Term of debt instrument | 10 years | ||||||||||||||||||
Annual Debt Service Requirements | 135,000,000 | ||||||||||||||||||
5 7/8% Senior Notes due 2022 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Interest rate (as a percent) | 5.88% | 5.88% | 5.88% | ||||||||||||||||
Redemption price as a percentage of principal amount | 100.00% | ||||||||||||||||||
Aggregate principal amount | 1,000,000,000 | 1,000,000,000 | |||||||||||||||||
Term of debt instrument | 10 years | 10 years | |||||||||||||||||
Annual Debt Service Requirements | 117,500,000 | ||||||||||||||||||
5 7/8% Senior Notes due 2022 | Redemption Prior to July 15, 2015 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Maximum percentage of the aggregate principal amount of notes with net proceeds of certain equity offerings or capital contributions | 35.00% | ||||||||||||||||||
5% Senior Notes due 2023 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Interest rate (as a percent) | 5.00% | 5.00% | |||||||||||||||||
Redemption price as a percentage of principal amount | 100.00% | ||||||||||||||||||
Aggregate principal amount | 1,500,000,000 | ||||||||||||||||||
Annual Debt Service Requirements | 75,000,000 | ||||||||||||||||||
5% Senior Notes due 2023 | Redemption Prior to March 15, 2016 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Maximum percentage of the aggregate principal amount of notes with net proceeds of certain equity offerings or capital contributions | 35.00% | ||||||||||||||||||
5 7/8% Senior Notes due 2024 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Redemption price as a percentage of principal amount | 100.00% | ||||||||||||||||||
Aggregate principal amount | 2,000,000,000 | ||||||||||||||||||
Term of debt instrument | 10 years | ||||||||||||||||||
Annual Debt Service Requirements | 117,500,000 | ||||||||||||||||||
5 7/8% Senior Notes due 2024 | Redemption Prior to November 15, 2017 | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Maximum percentage of the aggregate principal amount of notes with net proceeds of certain equity offerings or capital contributions | 35.00% | ||||||||||||||||||
Mortgages and other notes payable | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Transfer of liabilities and other | $44,000,000 |
LongTerm_Debt_Details_2
Long-Term Debt (Details 2) (USD $) | 0 Months Ended | |||||||||
Oct. 01, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | 5-May-11 | 16-May-12 | Jun. 24, 2013 | 28-May-13 | |
Long-term debt | ||||||||||
Carrying Value | $14,264,702,000 | $13,409,313,000 | ||||||||
Fair Value | 14,830,997,000 | 14,025,557,000 | ||||||||
Unamortized discounts, net | -15,219,000 | -19,198,000 | ||||||||
Capital lease obligations | 194,669,000 | 219,902,000 | ||||||||
Total long-term debt and capital lease obligations (including current portion) | 14,444,152,000 | 13,610,017,000 | ||||||||
6 5/8% Senior Notes due 2014 | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 1,000,000,000 | |||||||||
Fair Value | 1,040,200,000 | |||||||||
Interest rate (as a percent) | 6.63% | |||||||||
Debt repurchased | 100,000,000 | |||||||||
Principal balance of debt redeemed | 900,000,000 | |||||||||
7 3/4% Senior Notes due 2015 | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 650,001,000 | 750,000,000 | ||||||||
Fair Value | 664,321,000 | 813,750,000 | ||||||||
Interest rate (as a percent) | 7.75% | |||||||||
Principal balance reclassified to current portion of long-term debt and capital lease obligations | 650,000,000 | |||||||||
Debt repurchased | 100,000,000 | |||||||||
7 1/8% Senior Notes due 2016 | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 1,500,000,000 | 1,500,000,000 | ||||||||
Fair Value | 1,580,625,000 | 1,657,500,000 | ||||||||
Interest rate (as a percent) | 7.13% | |||||||||
4 5/8% Senior Notes due 2017 | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 900,000,000 | 900,000,000 | ||||||||
Fair Value | 933,750,000 | 946,962,000 | ||||||||
Interest rate (as a percent) | 4.63% | |||||||||
4 1/4% Senior Notes due 2018 | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 1,200,000,000 | 1,200,000,000 | ||||||||
Fair Value | 1,245,600,000 | 1,221,792,000 | ||||||||
Interest rate (as a percent) | 4.25% | |||||||||
7 7/8% Senior Notes due 2019 | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 1,400,000,000 | 1,400,000,000 | ||||||||
Fair Value | 1,589,700,000 | 1,603,000,000 | ||||||||
Interest rate (as a percent) | 7.88% | |||||||||
5 1/8% Senior Notes due 2020 | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 1,100,000,000 | 1,100,000,000 | ||||||||
Fair Value | 1,100,000,000 | 1,104,950,000 | ||||||||
Interest rate (as a percent) | 5.13% | |||||||||
6 3/4% Senior Notes due 2021 | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 2,000,000,000 | 2,000,000,000 | ||||||||
Fair Value | 2,157,500,000 | 2,122,500,000 | ||||||||
Interest rate (as a percent) | 6.75% | 6.75% | 6.75% | |||||||
5 7/8% Senior Notes due 2022 | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 2,000,000,000 | 2,000,000,000 | ||||||||
Fair Value | 2,055,000,000 | 1,997,500,000 | ||||||||
Interest rate (as a percent) | 5.88% | 5.88% | 5.88% | |||||||
5% Senior Notes due 2023 | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 1,500,000,000 | 1,500,000,000 | ||||||||
Fair Value | 1,470,000,000 | 1,458,090,000 | ||||||||
Interest rate (as a percent) | 5.00% | 5.00% | ||||||||
5 7/8% Senior Notes due 2024 | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 2,000,000,000 | |||||||||
Fair Value | 2,019,800,000 | |||||||||
Mortgages and other notes payable | ||||||||||
Long-term debt | ||||||||||
Carrying Value | 14,701,000 | 59,313,000 | ||||||||
Fair Value | $14,701,000 | $59,313,000 |
LongTerm_Debt_Details_3
Long-Term Debt (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Other long-term debt and capital lease obligations | ||
Total | $209,370 | $279,215 |
Less current portion | -28,133 | -32,607 |
Other long-term debt and capital lease obligations, net of current portion | 181,237 | 246,608 |
Capital lease obligations | ||
Other long-term debt and capital lease obligations | ||
Total | 194,669 | 219,902 |
Notes payable related to satellite vendor financing and other debt payable in installments through 2025 with interest rates ranging from approximately 6% to 13% | ||
Other long-term debt and capital lease obligations | ||
Total | $14,701 | $59,313 |
Interest rate, low end of range (as a percent) | 6.00% | |
Interest rate, high end of range (as a percent) | 12.50% |
LongTerm_Debt_Details_4
Long-Term Debt (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Capital lease obligations | |||
Estimated fair value of satellites acquired under capital leases | $500,000,000 | $500,000,000 | |
Accumulated depreciation on satellites acquired under capital leases | 279,000,000 | 236,000,000 | |
Depreciation expense - capital leases | 43,000,000 | 43,000,000 | 43,000,000 |
Future minimum lease payments under the capital lease obligation, together with the present value of the net minimum lease payments | |||
2015 | 76,842,000 | ||
2016 | 76,809,000 | ||
2017 | 76,007,000 | ||
2018 | 75,982,000 | ||
2019 | 50,331,000 | ||
Thereafter | 112,000,000 | ||
Total minimum lease payments | 467,971,000 | ||
Less: Amount representing lease of the orbital location and estimated executory costs (primarily insurance and maintenance) including profit thereon, included in total minimum lease payments | -220,883,000 | ||
Net minimum lease payments | 247,088,000 | ||
Less: Amount representing interest | -52,419,000 | ||
Present value of net minimum lease payments | 194,669,000 | ||
Less: Current portion | -28,133,000 | ||
Long-term portion of capital lease obligations | $166,536,000 | ||
FSS Satellite Anik F3 | |||
Capital lease obligations | |||
Ku-band capacity leased (as a percent) | 100.00% | ||
Term of capital lease | 15 years | ||
Canadian DBS Satellite Ciel II | |||
Capital lease obligations | |||
Satellite capacity leased (as a percent) | 100.00% | ||
Initial term of capital lease | 10 years |
Income_Taxes_and_Accounting_fo2
Income Taxes and Accounting for Uncertainty in Income Taxes (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes and Accounting for Uncertainty in Income Taxes | |||
Net operating loss carryforwards | $0 | ||
Net operating loss carryforwards | |||
Cash paid for income taxes to DISH Network | 279,234,000 | 433,120,000 | 272,599,000 |
Current (provision) benefit: | |||
Federal | -342,417,000 | -361,662,000 | -127,291,000 |
State | 26,163,000 | -13,272,000 | 10,673,000 |
Foreign | -6,990,000 | -13,316,000 | |
Total current (provision) benefit | -323,244,000 | -388,250,000 | -116,618,000 |
Deferred (provision) benefit: | |||
Federal | -78,420,000 | -65,955,000 | -126,561,000 |
State | -14,011,000 | -5,450,000 | -42,747,000 |
Decrease (increase) in valuation allowance | 4,844,000 | ||
Total deferred (provision) benefit | -87,587,000 | -71,405,000 | -169,308,000 |
Total benefit (provision) | -410,831,000 | -459,655,000 | -285,926,000 |
Income (loss) before income taxes | 1,225,891,000 | 1,284,377,000 | 770,192,000 |
Income (loss) from foreign operations | -4,000,000 | ||
Reconciliation of amounts computed by applying the statutory Federal tax rate to income before taxes | |||
Statutory rate (as a percent) | -35.00% | -35.00% | -35.00% |
State income taxes, net of Federal benefit (as a percent) | -2.00% | -1.00% | -2.70% |
Reversal of uncertain tax positions (as a percent) | 3.50% | ||
Other (as a percent) | 0.20% | 0.60% | |
Total benefit (provision) for income taxes (as a percent) | -33.50% | -35.80% | -37.10% |
Deferred tax assets: | |||
NOL, credit and other carryforwards | 18,799,000 | 10,645,000 | |
Accrued expenses | 40,461,000 | 48,416,000 | |
Stock-based compensation | 21,193,000 | 23,006,000 | |
Deferred revenue | 31,853,000 | 54,331,000 | |
Total deferred tax assets | 112,306,000 | 136,398,000 | |
Valuation allowance | -5,214,000 | -7,469,000 | |
Deferred tax asset after valuation allowance | 107,092,000 | 128,929,000 | |
Deferred tax liabilities: | |||
Depreciation and amortization | -1,155,329,000 | -1,272,014,000 | |
Unrealized gains on investments | -109,428,000 | -2,204,000 | |
Other liabilities | -30,734,000 | -36,629,000 | |
Total deferred tax liabilities | -1,295,491,000 | -1,310,847,000 | |
Net deferred tax asset (liability) | -1,188,399,000 | -1,181,918,000 | |
Current portion of net deferred tax asset | 37,018,000 | 65,457,000 | |
Noncurrent portion of net deferred tax asset (liability) | -1,225,417,000 | -1,247,375,000 | |
Net deferred tax asset (liability) | -1,188,399,000 | -1,181,918,000 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits included in long-term deferred revenue, distribution and carriage payments and other long-term liabilities | |||
Balance as of beginning of period | 145,884,000 | 185,669,000 | 190,935,000 |
Additions based on tax positions related to the current year | 69,643,000 | 9,533,000 | 5,949,000 |
Additions based on tax positions related to prior years | 58,963,000 | 66,307,000 | 1,581,000 |
Reductions based on tax positions related to prior years | -16,379,000 | -3,461,000 | |
Reductions based on tax positions related to settlements with taxing authorities | -42,023,000 | -103,311,000 | |
Reductions based on tax positions related to the lapse of the statute of limitations | -8,413,000 | -12,314,000 | -9,335,000 |
Balance as of end of period | 207,675,000 | 145,884,000 | 185,669,000 |
Unrecognized tax benefits if recognized, could favorably affect our effective tax rate | 173,000,000 | ||
Interest and penalty (benefit) expense | -3,000,000 | 8,000,000 | 6,000,000 |
Accrued interest and penalties | 10,000,000 | 13,000,000 | |
State | |||
Net operating loss carryforwards | |||
NOL benefit for state income tax purposes | 5,000,000 | ||
Tax benefits related to credit carryforwards | $19,000,000 |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 12 Months Ended | ||
Share data in Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
401(k) Employee Savings Plan | |||
Employer matching contribution as a percentage of voluntary employee contributions under 401(k) plan | 50.00% | ||
Employer maximum annual contribution per employee under 401(k) plan | $2,500 | ||
Expense recognized related to 401(k) plan | |||
Matching contributions, net of forfeitures, under 401(k) plan | 6,222,000 | 5,994,000 | 2,750,000 |
Discretionary stock contributions, net of forfeitures, under 401(k) plan | 25,972,000 | 26,096,000 | 23,772,000 |
Employee Stock Purchase Plan | |||
Employee Stock Purchase Plan | |||
Minimum number of calendar quarters to be employed for full-time employees to be eligible to participate in the ESPP | 3 months | ||
Maximum fair value of capital stock permitted to be purchased by employees in any one year under ESPP | $25,000 | ||
Employee Stock Purchase Plan | Class A common stock | |||
Employee Stock Purchase Plan | |||
Number of shares authorized to be issued under Employee Stock Purchase Plan (ESPP) | 2.8 | ||
Shares of common stock available for future grant under stock incentive plans | 1 | ||
Purchase price as percentage of closing market price on the last business day of each calendar quarter under ESPP | 85.00% | ||
Number of shares of common stock purchased under ESPP | 0.1 | 0.1 | 0.1 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||||
Dec. 31, 2014 | Dec. 28, 2012 | Dec. 02, 2011 | Jan. 31, 2013 | Jan. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Stock-Based Compensation | ||||||||
Stock Awards Outstanding (in shares) | 10,214,344 | |||||||
DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Percentage of stock awards vesting per year (as a percent) | 20.00% | |||||||
Class A common stock | DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Shares of common stock available for future grant under stock incentive plans | 69,100,000 | |||||||
Dividend in cash per share (in dollars per share) | $1 | $2 | ||||||
Class B common stock | DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Dividend in cash per share (in dollars per share) | $1 | $2 | ||||||
Stock Options | Maximum | ||||||||
Stock-Based Compensation | ||||||||
Expiration term | 10 years | |||||||
Stock Options | DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Stock Awards Outstanding (in shares) | 10,214,344 | 11,938,090 | 13,018,490 | 17,640,074 | ||||
Stock Options | Held by DISH DBS employees | DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Stock Awards Outstanding (in shares) | 10,214,344 | |||||||
Stock Options | Held by DISH DBS employees | EchoStar awards | ||||||||
Stock-Based Compensation | ||||||||
Stock Awards Outstanding (in shares) | 409,188 | |||||||
Stock Options | Class A common stock | DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Stock Awards Outstanding (in shares) | 10,200,000 | |||||||
Stock Options | Long-Term Performance Based Plans | DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Stock Awards Outstanding (in shares) | 5,926,500 | 6,468,500 | 6,400,700 | |||||
Stock Options | Stock option adjustment 2012 | DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Number of stock options subject to an exercise price change in connection with the Stock Option Adjustment (in shares) | 12,900,000 | |||||||
Number of employees affected by stock option adjustment | $400 | |||||||
Reduction in exercise price due to dividend declaration (in dollars per share) | $0.77 | |||||||
Stock Options | Stock option adjustment 2011 | DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Number of stock options subject to an exercise price change in connection with the Stock Option Adjustment (in shares) | 17,300,000 | |||||||
Number of employees affected by stock option adjustment | $400 | |||||||
Reduction in exercise price due to dividend declaration (in dollars per share) | $2 | |||||||
Restricted Stock Units | DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Restricted stock units outstanding (in shares) | 1,731,332 | 1,863,165 | 1,076,748 | 1,179,709 | ||||
Restricted Stock Units | Held by DISH DBS employees | DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Restricted stock units outstanding (in shares) | 1,731,332 | |||||||
Restricted Stock Units | Held by DISH DBS employees | EchoStar awards | ||||||||
Stock-Based Compensation | ||||||||
Restricted stock units outstanding (in shares) | 42,056 | |||||||
Restricted Stock Units | Long-Term Performance Based Plans | DISH Network Awards | ||||||||
Stock-Based Compensation | ||||||||
Restricted stock units outstanding (in shares) | 1,731,332 | 1,863,165 | 1,076,748 |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 2) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Exercise prices for stock options outstanding and exercisable: | ||||
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $70 | |||
Number of stock options outstanding (in shares) | 10,214,344 | |||
Outstanding, Weighted-Average Remaining Contractual Life | 4 years 11 months 16 days | |||
Outstanding, Weighted-Average Exercise Price (in dollars per share) | $25.29 | |||
Number of stock options exercisable | 3,107,544 | |||
Exercisable, Weighted-Average Remaining Contractual Life | 4 years 4 days | |||
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $19.81 | |||
Stock Options | DISH Network Awards | ||||
Exercise prices for stock options outstanding and exercisable: | ||||
Number of stock options outstanding (in shares) | 10,214,344 | 11,938,090 | 13,018,490 | 17,640,074 |
Outstanding, Weighted-Average Exercise Price (in dollars per share) | $25.29 | $22.49 | $18.99 | $20.38 |
Number of stock options exercisable | 3,107,544 | 4,061,289 | 4,310,489 | |
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $19.81 | $17.88 | $17.92 | |
Range of Exercise Prices $00.00 - $10.00 | ||||
Exercise prices for stock options outstanding and exercisable: | ||||
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $10 | |||
Number of stock options outstanding (in shares) | 961,494 | |||
Outstanding, Weighted-Average Remaining Contractual Life | 2 years 10 months 2 days | |||
Outstanding, Weighted-Average Exercise Price (in dollars per share) | $6.33 | |||
Number of stock options exercisable | 961,494 | |||
Exercisable, Weighted-Average Remaining Contractual Life | 2 years 10 months 2 days | |||
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $6.33 | |||
Range Of Exercise Prices $10.01 - $20.00 | ||||
Exercise prices for stock options outstanding and exercisable: | ||||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $10.01 | |||
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $20 | |||
Number of stock options outstanding (in shares) | 3,803,409 | |||
Outstanding, Weighted-Average Remaining Contractual Life | 3 years 26 days | |||
Outstanding, Weighted-Average Exercise Price (in dollars per share) | $17.36 | |||
Number of stock options exercisable | 444,009 | |||
Exercisable, Weighted-Average Remaining Contractual Life | 1 year 7 months 13 days | |||
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $17.53 | |||
Range of Exercise Prices $20.01 - $30.00 | ||||
Exercise prices for stock options outstanding and exercisable: | ||||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $20.01 | |||
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $30 | |||
Number of stock options outstanding (in shares) | 2,711,366 | |||
Outstanding, Weighted-Average Remaining Contractual Life | 5 years 4 months 24 days | |||
Outstanding, Weighted-Average Exercise Price (in dollars per share) | $25.65 | |||
Number of stock options exercisable | 1,414,466 | |||
Exercisable, Weighted-Average Remaining Contractual Life | 4 years 11 months 23 days | |||
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $25.63 | |||
Range of Exercise Prices $30.01 - $40.00 | ||||
Exercise prices for stock options outstanding and exercisable: | ||||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $30.01 | |||
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $40 | |||
Number of stock options outstanding (in shares) | 2,047,125 | |||
Outstanding, Weighted-Average Remaining Contractual Life | 7 years 8 months 5 days | |||
Outstanding, Weighted-Average Exercise Price (in dollars per share) | $35.88 | |||
Number of stock options exercisable | 228,825 | |||
Exercisable, Weighted-Average Remaining Contractual Life | 7 years 2 months 23 days | |||
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $35.20 | |||
Range of Exercise Prices $40.01 - $50.00 | ||||
Exercise prices for stock options outstanding and exercisable: | ||||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $40.01 | |||
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $50 | |||
Number of stock options outstanding (in shares) | 25,200 | |||
Outstanding, Weighted-Average Remaining Contractual Life | 6 years 5 months 5 days | |||
Outstanding, Weighted-Average Exercise Price (in dollars per share) | $44.43 | |||
Number of stock options exercisable | 10,000 | |||
Exercisable, Weighted-Average Remaining Contractual Life | 3 years 6 months | |||
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $42.52 | |||
Range of Exercise Prices $50.01 - $60.00 | ||||
Exercise prices for stock options outstanding and exercisable: | ||||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $50.01 | |||
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $60 | |||
Number of stock options outstanding (in shares) | 100,000 | |||
Outstanding, Weighted-Average Remaining Contractual Life | 7 years 9 months | |||
Outstanding, Weighted-Average Exercise Price (in dollars per share) | $57.92 | |||
Number of stock options exercisable | 25,000 | |||
Exercisable, Weighted-Average Remaining Contractual Life | 5 years 7 months 6 days | |||
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $57.92 | |||
Range of Exercise Prices $60.01 - $70.00 | ||||
Exercise prices for stock options outstanding and exercisable: | ||||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $60.01 | |||
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $70 | |||
Number of stock options outstanding (in shares) | 565,750 | |||
Outstanding, Weighted-Average Remaining Contractual Life | 8 years 10 months 10 days | |||
Outstanding, Weighted-Average Exercise Price (in dollars per share) | $64.17 | |||
Number of stock options exercisable | 23,750 | |||
Exercisable, Weighted-Average Remaining Contractual Life | 6 years 9 months 18 days | |||
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $63.79 |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock option activity | |||
Total options outstanding, end of period (in shares) | 10,214,344 | ||
Exercisable at the end of the period (in shares) | 3,107,544 | ||
Weighted-Average Exercise Price | |||
Total options outstanding at the end of the period (in dollars per share) | $25.29 | ||
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $19.81 | ||
Stock Options | DISH Network Awards | |||
Stock option activity | |||
Total options outstanding, beginning of period (in shares) | 11,938,090 | 13,018,490 | 17,640,074 |
Granted (in shares) | 667,750 | 2,225,500 | 589,500 |
Exercised (in shares) | -2,233,496 | -3,172,900 | -4,406,888 |
Forfeited and cancelled (in shares) | -158,000 | -133,000 | -804,196 |
Total options outstanding, end of period (in shares) | 10,214,344 | 11,938,090 | 13,018,490 |
Exercisable at the end of the period (in shares) | 3,107,544 | 4,061,289 | 4,310,489 |
Weighted-Average Exercise Price | |||
Total options outstanding, beginning of the period (in dollars per share) | $22.49 | $18.99 | $20.38 |
Granted (in dollars per share) | $63.23 | $36.75 | $32.25 |
Exercised (in dollars per share) | $20.49 | $14.70 | $18.51 |
Forfeited and cancelled (in dollars per share) | $41.84 | $30.25 | $20.34 |
Total options outstanding at the end of the period (in dollars per share) | $25.29 | $22.49 | $18.99 |
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $19.81 | $17.88 | $17.92 |
Stock Options | DISH Network Awards | Long-Term Performance Based Plans | |||
Stock option activity | |||
Total options outstanding, end of period (in shares) | 5,926,500 | 6,468,500 | 6,400,700 |
Weighted-Average Exercise Price | |||
Total options outstanding at the end of the period (in dollars per share) | $25.15 | $24.92 | $18.71 |
StockBased_Compensation_Detail3
Stock-Based Compensation (Details 4) (Stock Options, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock Options | |||
Stock-Based Compensation | |||
Tax benefit from stock awards exercised | $42,334 | $37,583 | $22,898 |
StockBased_Compensation_Detail4
Stock-Based Compensation (Details 5) (Stock Options, DISH Network Awards, USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Stock Options | DISH Network Awards | |
Aggregate intrinsic value | |
Aggregate intrinsic value of stock options outstanding | $486,198 |
Aggregate intrinsic value of stock options exercisable | $164,936 |
StockBased_Compensation_Detail5
Stock-Based Compensation (Details 6) (Restricted Stock Units, DISH Network Awards, USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted stock unit activity | |||
Total restricted stock units outstanding, beginning of period (in shares) | 1,863,165 | 1,076,748 | 1,179,709 |
Granted (in shares) | 316,500 | 990,000 | |
Vested (in shares) | -278,000 | -135,250 | -24,795 |
Forfeited and cancelled (in shares) | -170,333 | -68,333 | -78,166 |
Total restricted stock units outstanding, end of period (in shares) | 1,731,332 | 1,863,165 | 1,076,748 |
Weighted- Average Grant Date Fair Value | |||
Total restricted stock units outstanding, beginning of period (in dollars per share) | $29.27 | $22.82 | $23.11 |
Granted (in dollars per share) | $63.57 | $36.53 | |
Vested (in dollars per share) | $45.04 | $29.19 | $22.94 |
Forfeited and cancelled (in dollars per share) | $33.43 | $32.91 | $27.20 |
Total restricted stock units outstanding, end of period (in dollars per share) | $32.60 | $29.27 | $22.82 |
Long-Term Performance Based Plans | |||
Restricted stock unit activity | |||
Total restricted stock units outstanding, end of period (in shares) | 1,731,332 | 1,863,165 | 1,076,748 |
Weighted- Average Grant Date Fair Value | |||
Total restricted stock units outstanding, end of period (in dollars per share) | $32.60 | $29.27 | $22.82 |
StockBased_Compensation_Detail6
Stock-Based Compensation (Details 7) (USD $) | 12 Months Ended | 3 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2005 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2011 |
Recognized non-cash stock-based compensation expense | ||||||||
Non-cash stock-based compensation expense recognized | $34,024 | $29,647 | $38,573 | |||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Performance Based Stock Options (in shares) | 10,214,344 | |||||||
Weighted-Average Exercise Price (in dollars per share) | $25.29 | |||||||
Long-Term Performance Based Plans | ||||||||
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | ||||||||
Non-cash, stock-based compensation expense recognized | 26,456 | 14,901 | 16,496 | |||||
LTIP 2005 | ||||||||
2005 LTIP Terms | ||||||||
Awards vesting period | 7 years | |||||||
Percentage awards vesting per annum during first four years | 10.00% | |||||||
Percentage awards vesting per annum after first four years | 20.00% | |||||||
LTIP 2008 | ||||||||
Share-based compensation additional disclosures | ||||||||
Portion vested (as a percent) | 100.00% | |||||||
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | ||||||||
Non-cash, stock-based compensation expense recognized | 2,719 | 9,025 | ||||||
2013 LTIP | ||||||||
Share-based compensation additional disclosures | ||||||||
Portion vested (as a percent) | 20.00% | |||||||
Percentage of performance goals probable of achievement | 10.00% | 20.00% | ||||||
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | ||||||||
Non-cash, stock-based compensation expense recognized | 12,361 | 8,137 | ||||||
Other Employee Performance Awards | ||||||||
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | ||||||||
Non-cash, stock-based compensation expense recognized | 14,095 | 4,045 | 7,471 | |||||
DISH Network Awards | 2013 LTIP | ||||||||
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | ||||||||
Expense estimated to be recognized during 2015 | 1,749 | |||||||
Estimated contingent expense subsequent to 2015 | 52,928 | |||||||
Total estimated remaining expense over the term of plan | 54,677 | |||||||
DISH Network Awards | Other Employee Performance Awards | ||||||||
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | ||||||||
Expense estimated to be recognized during 2015 | 1,694 | |||||||
Estimated contingent expense subsequent to 2015 | 36,087 | |||||||
Total estimated remaining expense over the term of plan | $37,781 | |||||||
Stock Options | DISH Network Awards | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Performance Based Stock Options (in shares) | 10,214,344 | 11,938,090 | 13,018,490 | 17,640,074 | ||||
Weighted-Average Exercise Price (in dollars per share) | $25.29 | $22.49 | $18.99 | $20.38 | ||||
Stock Options | DISH Network Awards | Long-Term Performance Based Plans | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Performance Based Stock Options (in shares) | 5,926,500 | 6,468,500 | 6,400,700 | |||||
Weighted-Average Exercise Price (in dollars per share) | $25.15 | $24.92 | $18.71 | |||||
Stock Options | DISH Network Awards | LTIP 2005 | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Performance Based Stock Options (in shares) | 1,844,500 | |||||||
Weighted-Average Exercise Price (in dollars per share) | $20.82 | |||||||
Stock Options | DISH Network Awards | 2013 LTIP | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Performance Based Stock Options (in shares) | 1,592,000 | |||||||
Weighted-Average Exercise Price (in dollars per share) | $40.02 | |||||||
Stock Options | DISH Network Awards | Other Employee Performance Awards | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Performance Based Stock Options (in shares) | 2,490,000 | |||||||
Weighted-Average Exercise Price (in dollars per share) | $18.85 | |||||||
Stock Options | DISH Network Awards | Held by DISH DBS employees | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Performance Based Stock Options (in shares) | 10,214,344 | |||||||
Stock Options | EchoStar awards | Held by DISH DBS employees | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Performance Based Stock Options (in shares) | 409,188 | |||||||
Restricted Stock Units | DISH Network Awards | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Restricted Performance Units (in shares) | 1,731,332 | 1,863,165 | 1,076,748 | 1,179,709 | ||||
Restricted Stock Units | DISH Network Awards | Long-Term Performance Based Plans | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Restricted Performance Units (in shares) | 1,731,332 | 1,863,165 | 1,076,748 | |||||
Restricted Stock Units | DISH Network Awards | LTIP 2005 | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Restricted Performance Units (in shares) | 210,332 | |||||||
Restricted Stock Units | DISH Network Awards | 2013 LTIP | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Restricted Performance Units (in shares) | 796,000 | |||||||
Restricted Stock Units | DISH Network Awards | Other Employee Performance Awards | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Restricted Performance Units (in shares) | 725,000 | |||||||
Restricted Stock Units | DISH Network Awards | Held by DISH DBS employees | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Restricted Performance Units (in shares) | 1,731,332 | |||||||
Restricted Stock Units | EchoStar awards | Held by DISH DBS employees | ||||||||
Outstanding awards pursuant to performance-based stock incentive plans | ||||||||
Restricted Performance Units (in shares) | 42,056 |
StockBased_Compensation_Detail7
Stock-Based Compensation (Details 8) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock-Based Compensation | |||
Non-cash, stock-based compensation | $34,024,000 | $29,647,000 | $38,573,000 |
Non-Performance Based Stock Awards | |||
Stock-Based Compensation | |||
Unrecognized compensation expense | 15,000,000 | ||
Future forfeiture rate (as a percent) | 3.20% | ||
Weighted average period for recognition of compensation cost | 2 years | ||
Stock option adjustment 2011 | |||
Stock-Based Compensation | |||
Non-cash, stock-based compensation | 13,000,000 | ||
Stock option adjustment 2012 | |||
Stock-Based Compensation | |||
Non-cash, stock-based compensation | 4,000,000 | ||
Subscriber-related | |||
Stock-Based Compensation | |||
Non-cash, stock-based compensation | 1,859,000 | 1,947,000 | 1,607,000 |
General and administrative | |||
Stock-Based Compensation | |||
Non-cash, stock-based compensation | $32,165,000 | $27,700,000 | $36,966,000 |
StockBased_Compensation_Detail8
Stock-Based Compensation (Details 9) (USD $) | 0 Months Ended | 12 Months Ended | |||
Dec. 28, 2012 | Dec. 02, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Class A common stock | DISH Network Awards | |||||
Black-Scholes option valuation model, assumptions | |||||
Dividend in cash per share (in dollars per share) | $1 | $2 | |||
Class B common stock | DISH Network Awards | |||||
Black-Scholes option valuation model, assumptions | |||||
Dividend in cash per share (in dollars per share) | $1 | $2 | |||
Stock Options | |||||
Black-Scholes option valuation model, assumptions | |||||
Risk-free interest rate, low end of range (as a percent) | 1.80% | 0.91% | 0.41% | ||
Risk-free interest rate, high end of range (as a percent) | 2.84% | 2.66% | 1.29% | ||
Volatility factor, low end of range (as a percent) | 28.53% | 32.37% | 33.15% | ||
Volatility factor, high end of range (as a percent) | 38.62% | 39.87% | 39.50% | ||
Stock Options | Maximum | |||||
Black-Scholes option valuation model, assumptions | |||||
Expected term of options | 9 years | 10 years | 5 years 10 months 24 days | ||
Weighted-average fair value of options granted (in dollars per share) | 29.2 | 21.09 | 13.79 | ||
Stock Options | Minimum | |||||
Black-Scholes option valuation model, assumptions | |||||
Expected term of options | 5 years 6 months | 5 years 7 months 6 days | 3 years 1 month 6 days | ||
Weighted-average fair value of options granted (in dollars per share) | 19.08 | 14.49 | 6.72 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitment and Contingencies | |
Total | $24,375,256 |
2015 | 3,635,711 |
2016 | 3,027,666 |
2017 | 2,164,008 |
2018 | 2,347,403 |
2019 | 2,456,648 |
Thereafter | 10,743,820 |
Long-term debt obligations | |
Commitment and Contingencies | |
Total | 14,264,702 |
2015 | 651,017 |
2016 | 1,501,079 |
2017 | 901,097 |
2018 | 1,201,163 |
2019 | 1,401,233 |
Thereafter | 8,609,113 |
Capital lease obligations | |
Commitment and Contingencies | |
Total | 194,669 |
2015 | 28,133 |
2016 | 30,893 |
2017 | 32,993 |
2018 | 36,175 |
2019 | 19,503 |
Thereafter | 46,972 |
Interest expense on long-term debt and capital lease obligations | |
Commitment and Contingencies | |
Total | 5,036,836 |
2015 | 850,579 |
2016 | 770,957 |
2017 | 714,722 |
2018 | 644,542 |
2019 | 616,490 |
Thereafter | 1,439,546 |
Satellite-related obligations | |
Commitment and Contingencies | |
Total | 2,325,026 |
2015 | 414,047 |
2016 | 362,527 |
2017 | 336,576 |
2018 | 327,247 |
2019 | 301,106 |
Thereafter | 583,523 |
Operating lease obligations | |
Commitment and Contingencies | |
Total | 164,843 |
2015 | 44,091 |
2016 | 38,996 |
2017 | 20,613 |
2018 | 11,667 |
2019 | 6,702 |
Thereafter | 42,774 |
Purchase obligations | |
Commitment and Contingencies | |
Total | 2,389,180 |
2015 | 1,647,844 |
2016 | 323,214 |
2017 | 158,007 |
2018 | 126,609 |
2019 | 111,614 |
Thereafter | $21,892 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (USD $) | 0 Months Ended | |
Feb. 20, 2014 | Dec. 31, 2014 | |
item | ||
Operating lease obligations | ||
2015 | $3,635,711,000 | |
2016 | 3,027,666,000 | |
2017 | 2,164,008,000 | |
2018 | 2,347,403,000 | |
2019 | 2,456,648,000 | |
Thereafter | 10,743,820,000 | |
Long-term debt obligations | ||
Operating lease obligations | ||
2015 | 651,017,000 | |
2016 | 1,501,079,000 | |
2017 | 901,097,000 | |
2018 | 1,201,163,000 | |
2019 | 1,401,233,000 | |
Thereafter | 8,609,113,000 | |
Interest expense on long-term debt and capital lease obligations | ||
Operating lease obligations | ||
2015 | 850,579,000 | |
2016 | 770,957,000 | |
2017 | 714,722,000 | |
2018 | 644,542,000 | |
2019 | 616,490,000 | |
Thereafter | 1,439,546,000 | |
Satellite and Tracking Stock Transaction | EchoStar and HSSC | ||
Commitments | ||
Number of owned satellites transferred and leased back | 5 | |
Cash in exchange for shares of series of preferred tracking stock issued | $11,000,000 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 3) (USD $) | 0 Months Ended | 12 Months Ended | 84 Months Ended | 0 Months Ended | |||||||
Mar. 28, 2014 | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2008 | Dec. 31, 2014 | Dec. 17, 2013 | Mar. 09, 2012 | Mar. 02, 2015 | Dec. 31, 2013 | Dec. 31, 2011 | Feb. 27, 2014 | |
item | |||||||||||
Spectrum Investments | |||||||||||
Number of wireless spectrum licenses | 176 | 176 | |||||||||
Dividend paid to DOC | $8,250,000,000 | $2,150,000,000 | $907,230,000 | ||||||||
Unrecognized tax benefits | 207,675,000 | 185,669,000 | 207,675,000 | 145,884,000 | 190,935,000 | ||||||
Northstar Wireless or Northstar Spectrum | |||||||||||
Spectrum Investments | |||||||||||
Bidding credit | 25.00% | ||||||||||
SNR Wireless or SNR Wireless Holdco | |||||||||||
Spectrum Investments | |||||||||||
Bidding credit | 25.00% | ||||||||||
Northstar Manager LLC | Northstar Wireless or Northstar Spectrum | |||||||||||
Spectrum Investments | |||||||||||
Controlling interest owned by other companies | 15.00% | ||||||||||
SNR Wireless Management LLC | SNR Wireless or SNR Wireless Holdco | |||||||||||
Spectrum Investments | |||||||||||
Controlling interest owned by other companies | 15.00% | ||||||||||
Wireless | |||||||||||
Spectrum Investments | |||||||||||
Aggregate bid price | 1,564,000,000 | ||||||||||
AWS 3 Auction | Northstar Spectrum And SNR Holdco | |||||||||||
Spectrum Investments | |||||||||||
Number of days for objections to applications filed | 10 days | ||||||||||
AWS 3 Auction | Northstar Wireless or Northstar Spectrum | |||||||||||
Spectrum Investments | |||||||||||
Bidding credit | 25.00% | ||||||||||
Gross winning bids | 7,845,000,000 | ||||||||||
Net winning bid | 5,884,000,000 | ||||||||||
AWS 3 Auction | SNR Wireless or SNR Wireless Holdco | |||||||||||
Spectrum Investments | |||||||||||
Bidding credit | 25.00% | ||||||||||
Gross winning bids | 5,482,000,000 | ||||||||||
Net winning bid | 4,112,000,000 | ||||||||||
Bid withdrawal payment | 8,000,000 | ||||||||||
AWS 3 Auction | Northstar Manager LLC | Northstar Wireless or Northstar Spectrum | |||||||||||
Spectrum Investments | |||||||||||
Equity contributions as percentage of purchase price | 15.00% | ||||||||||
AWS 3 Auction | SNR Wireless Management LLC | SNR Wireless or SNR Wireless Holdco | |||||||||||
Spectrum Investments | |||||||||||
Equity contributions as percentage of purchase price | 15.00% | ||||||||||
DBSD North America and TerreStar Transactions | Wireless | |||||||||||
Spectrum Investments | |||||||||||
AWS-4 Interim Build-Out Requirement (as a percent) | 40.00% | ||||||||||
AWS-4 Final Build-Out Requirement (as a percent) | 70.00% | ||||||||||
Dish Network | |||||||||||
Spectrum Investments | |||||||||||
Payment to acquire certain wireless licenses | 712,000,000 | 5,000,000,000 | |||||||||
700 MHz Interim Build-Out Requirement (as a percent) | 35.00% | ||||||||||
700 MHz Final Build-Out Requirement (as a percent) | 70.00% | ||||||||||
Dish Network | Wireless | |||||||||||
Spectrum Investments | |||||||||||
Payment to meet H Block auction requirements | 328,000,000 | ||||||||||
Remaining balance amount due of H Block spectrum licenses | 1,236,000,000 | ||||||||||
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 | ||||||||||
Dish Network | Wireless | UTAM, Inc. | |||||||||||
Spectrum Investments | |||||||||||
Payment for clearance costs associated with the lower H Block spectrum | 13,000,000 | ||||||||||
Dish Network | Wireless | Sprint | |||||||||||
Spectrum Investments | |||||||||||
Payment for clearance costs associated with the upper H Block spectrum | 95,000,000 | ||||||||||
Dish Network | AWS 3 Auction | Northstar Spectrum And SNR Holdco | |||||||||||
Spectrum Investments | |||||||||||
Total investments | 9,778,000,000 | 9,778,000,000 | |||||||||
Dish Network | DBSD North America and TerreStar Transactions | Wireless | |||||||||||
Spectrum Investments | |||||||||||
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 | ||||||||||
American II | Northstar Wireless or Northstar Spectrum | |||||||||||
Spectrum Investments | |||||||||||
Ownership percentage | 85.00% | ||||||||||
American II | AWS 3 Auction | Northstar Wireless or Northstar Spectrum | |||||||||||
Spectrum Investments | |||||||||||
Equity contributions as percentage of purchase price | 15.00% | ||||||||||
Commitment to make loan as percentage of purchase price | 85.00% | ||||||||||
Equity contribution | 633,000,000 | ||||||||||
Loan made | 432,000,000 | ||||||||||
Equity contribution commitment | 117,000,000 | ||||||||||
Commitment to make loan | 4,569,000,000 | ||||||||||
American II | AWS 3 Auction | Subsequent event | Northstar Wireless or Northstar Spectrum | |||||||||||
Spectrum Investments | |||||||||||
Equity contribution | 750,000,000 | ||||||||||
Loan receivable | 5,001,000,000 | ||||||||||
American III | SNR Wireless or SNR Wireless Holdco | |||||||||||
Spectrum Investments | |||||||||||
Ownership percentage | 85.00% | ||||||||||
American III | AWS 3 Auction | SNR Wireless or SNR Wireless Holdco | |||||||||||
Spectrum Investments | |||||||||||
Equity contributions as percentage of purchase price | 15.00% | ||||||||||
Commitment to make loan as percentage of purchase price | 85.00% | ||||||||||
Equity contribution | 408,000,000 | ||||||||||
Loan made | 350,000,000 | ||||||||||
Equity contribution commitment | 116,000,000 | ||||||||||
Commitment to make loan | 3,153,000,000 | ||||||||||
American III | AWS 3 Auction | Subsequent event | SNR Wireless or SNR Wireless Holdco | |||||||||||
Spectrum Investments | |||||||||||
Equity contribution | 524,000,000 | ||||||||||
Loan receivable | $3,503,000,000 |
Commitments_and_Contingencies_4
Commitments and Contingencies (Details 4) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments | |||
Total rent expense for operating leases | $468 | $303 | $252 |
Minimum | |||
Commitments | |||
Term of programming contracts | 1 year | ||
Maximum | |||
Commitments | |||
Term of programming contracts | 10 years |
Commitments_and_Contingencies_5
Commitments and Contingencies (Details 5) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | |||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 09, 2013 | Oct. 23, 2012 | Dec. 31, 2007 | Oct. 11, 2012 | Apr. 30, 2009 | Mar. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2008 | Jul. 31, 2009 | 31-May-12 | Jul. 08, 2014 | Sep. 30, 2014 | Mar. 31, 2012 | Jan. 31, 2008 | Jun. 21, 2011 | Dec. 31, 2010 | Mar. 15, 2010 | |
item | item | item | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
General and administrative expenses | $762,146,000 | $687,122,000 | $666,217,000 | |||||||||||||||||
Loss Contingency Terms | ||||||||||||||||||||
Litigation expense | 730,457,000 | |||||||||||||||||||
Garnet Digital | ||||||||||||||||||||
Loss Contingency Terms | ||||||||||||||||||||
Number of companies against whom similar complaints brought | 15 | |||||||||||||||||||
LightSquared transaction shareholder derivative actions | ||||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
Number of shareholders who filed lawsuits | 5 | |||||||||||||||||||
Lightsquared Harbinger Capital Partners LLC | ||||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
Business days allowed to terminate existing agreements | 3 days | |||||||||||||||||||
Voom Settlement Agreement | ||||||||||||||||||||
Loss Contingency Terms | ||||||||||||||||||||
Payments under the multi-year affiliation agreement allocated to the fair value of the Voom Settlement Agreement | 54,000,000 | |||||||||||||||||||
Cash paid under settlement agreement | 700,000,000 | |||||||||||||||||||
Fair value of MVDDS Licenses | 24,000,000 | |||||||||||||||||||
Litigation expense | 730,000,000 | |||||||||||||||||||
Katz Communications-Patent infringement | ||||||||||||||||||||
Loss Contingency Terms | ||||||||||||||||||||
Number of patents the suit alleges infringement of | 19 | |||||||||||||||||||
Number of patents remain in the lawsuit | 4 | |||||||||||||||||||
Number of reexamination petitions pending before patent and trademark office | 2 | |||||||||||||||||||
Satellite transponder guarantees | ||||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
Guarantees for payments | 312,000,000 | |||||||||||||||||||
ESPN-Affiliation agreements | ||||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
Claim amount | 30,000,000 | 35,000,000 | ||||||||||||||||||
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 | 5,000,000 | |||||||||||||||||||
Payment of accrued interest | 12,000,000 | |||||||||||||||||||
Technology Development Licensing | ||||||||||||||||||||
Loss Contingency Terms | ||||||||||||||||||||
Number of reexamination petitions pending before patent and trademark office | 2 | |||||||||||||||||||
Hopper litigation | Maximum | ||||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
Number of days to store HD primetime programs recordings | 8 days | |||||||||||||||||||
Norman IP Holdings | ||||||||||||||||||||
Loss Contingency Terms | ||||||||||||||||||||
Minimum number of autonomous streamlined signal processors | 1 | |||||||||||||||||||
Do Not Call Litigation | ||||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
Period of injunctive relief sought from placing any outbound telemarketing calls to market or promote its goods or services | 5 years | |||||||||||||||||||
Do Not Call Litigation | DISH Network L.L.C. | ||||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
Claim amount | 270,000,000 | |||||||||||||||||||
Lightsquared Harbinger Capital Partners LLC | Minimum | ||||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
Claim amount | 500,000,000 | |||||||||||||||||||
Personalized Media Communications Inc | Maximum | ||||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
Claim amount | 450,000,000 | 650,000,000 | ||||||||||||||||||
Personalized Media Communications Inc | Minimum | ||||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
Claim amount | 150,000,000 | 500,000,000 | ||||||||||||||||||
Voom Settlement Agreement | ||||||||||||||||||||
Loss contingencies | ||||||||||||||||||||
Claim amount | $2,500,000,000 |
Valuation_and_Qualifying_Accou2
Valuation and Qualifying Accounts (Details) (Allowance for doubtful accounts, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for doubtful accounts | |||
Activity in Valuation and Qualifying Accounts | |||
Balance at Beginning of Year | $15,981 | $13,834 | $11,916 |
Charged to Cost and Expenses | 151,016 | 125,664 | 116,742 |
Deductions | -143,477 | -123,517 | -114,824 |
Balance at End of Year | $23,520 | $15,981 | $13,834 |
Quarterly_Financial_Data_Unaud2
Quarterly Financial Data (Unaudited) (Details) (Imported) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Data (Unaudited) | |||||||||||
Total revenue | $3,583,266 | $3,585,372 | $3,598,565 | $3,510,210 | $3,465,572 | $3,448,860 | $3,444,922 | $3,336,258 | $14,277,413 | $13,695,612 | $13,151,600 |
Operating income (loss) | 602,406 | 420,459 | 497,196 | 508,270 | 518,178 | 494,094 | 601,161 | 514,113 | 2,028,331 | 2,127,546 | 1,392,935 |
Net income (loss) attributable to DISH DBS | $289,206 | $155,041 | $190,486 | $190,152 | $198,382 | $186,527 | $233,882 | $206,231 | $824,885 | $825,022 | $484,266 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||||
Mar. 28, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 14, 2014 | Dec. 27, 2012 | Dec. 02, 2012 | Oct. 01, 2012 | Feb. 12, 2015 | |
item | |||||||||
Related Party Transactions | |||||||||
Dividend paid to DOC | $8,250,000,000 | $2,150,000,000 | $907,230,000 | ||||||
Number of wireless spectrum licenses | 176 | ||||||||
Aggregate dividend declared | 2,150,000,000 | 915,858,000 | |||||||
Net satellite broadband assets distributed to DISH Network | 8,628,000 | ||||||||
Subscriber-related expenses | 8,066,642,000 | 7,677,111,000 | 7,246,104,000 | ||||||
Subscriber-related revenue | 14,130,607,000 | 13,559,511,000 | 13,038,611,000 | ||||||
Blockbuster, Wireless and Other Segments | |||||||||
Related Party Transactions | |||||||||
Expenses associated with services | 12,000,000 | 10,000,000 | 11,000,000 | ||||||
Dish Network | |||||||||
Related Party Transactions | |||||||||
Dividend paid to DOC | 650,000,000 | 1,500,000,000 | 850,000,000 | ||||||
Aggregate dividend declared | 453,000,000 | ||||||||
Distribution to DOC of the assets and liabilities associated with satellite broadband business | 66,000,000 | ||||||||
Net satellite broadband assets distributed to DISH Network | 9,000,000 | ||||||||
Deemed dividend | 57,000,000 | ||||||||
Subscriber-related revenue | 18,000,000 | 15,000,000 | |||||||
Dish Network | Subsequent event | |||||||||
Related Party Transactions | |||||||||
Dividend paid to DOC | 8,250,000,000 | ||||||||
Dish Network | Class A common stock | |||||||||
Related Party Transactions | |||||||||
Dividend declared (in dollars per share) | $1 | ||||||||
Blockbuster, Inc. | |||||||||
Related Party Transactions | |||||||||
Subscriber-related expenses | $11,000,000 | $21,000,000 |
Related_Party_Transactions_Det1
Related Party Transactions (Details 2) (USD $) | 12 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 02, 2014 |
Related Party Transactions | ||||
Satellite and transmission expenses | $685,732 | $527,483 | $460,280 | |
EchoStar | ||||
Related Party Transactions | ||||
Satellite and transmission expenses | $646,000 | $487,000 | $420,000 | |
EchoStar | Remanufactured Receiver Agreement | Minimum | ||||
Related Party Transactions | ||||
Minimum required notice period for termination of agreement by related party | 60 days | |||
EchoStar | Professional Services Agreement | Dish Network | ||||
Related Party Transactions | ||||
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 | |||
EchoStar | El Paso Lease Agreement | Dish Network | ||||
Related Party Transactions | ||||
Number of consecutive three year renewal options | 4 | |||
Term of renewal option | 3 years |
Related_Party_Transactions_Det2
Related Party Transactions (Details 3) (EchoStar, USD $) | 1 Months Ended | 0 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | ||
In Millions, unless otherwise specified | 31-May-10 | Mar. 02, 2014 | Dec. 21, 2012 | Dec. 31, 2014 | Dec. 31, 2009 | Sep. 30, 2012 | Dec. 31, 2008 | 31-May-12 | Sep. 30, 2013 | Jan. 02, 2012 |
item | item | |||||||||
Certain Sports Related Programming Broadcast Agreement | ||||||||||
Related Party Transactions | ||||||||||
Agreement term | 10 years | |||||||||
EchoStar VIII | ||||||||||
Related Party Transactions | ||||||||||
Notice period for termination of agreement | 30 days | |||||||||
EchoStar XVI | ||||||||||
Related Party Transactions | ||||||||||
Agreement term from commencement of service date | 4 years | 10 years | ||||||||
Notice period to exercise option to extend agreement | 6 years | |||||||||
Additional term of renewal option | 5 years | |||||||||
Telesat Transponder Agreement | ||||||||||
Related Party Transactions | ||||||||||
Agreement term | 15 years | |||||||||
Number of DBS transponders available to receive services | 32 | |||||||||
DISH Nimiq 5 Agreement | ||||||||||
Related Party Transactions | ||||||||||
Agreement term | 10 years | |||||||||
Number of DBS transponders currently used | 32 | |||||||||
QuetzSat-1 Lease Agreement | ||||||||||
Related Party Transactions | ||||||||||
Agreement term with third party | 10 years | |||||||||
Number of DBS transponders currently used | 32 | |||||||||
Number of DBS transponders expected to receive services | 24 | |||||||||
Number of transponders subleased | 5 | |||||||||
103 degree orbital location member | ||||||||||
Related Party Transactions | ||||||||||
Agreement term | 10 years | |||||||||
Agreement term from commencement of service date | 10 years | |||||||||
Payments to the related party | $23 | |||||||||
Net book value of asset | 20 | |||||||||
Capital distribution | $3 | |||||||||
TT&C Agreement | ||||||||||
Related Party Transactions | ||||||||||
Required notice period for termination by the reporting entity | 60 days | |||||||||
Prior Broadcast Agreement | Minimum | ||||||||||
Related Party Transactions | ||||||||||
Required notice period for termination by the reporting entity | 60 days |
Related_Party_Transactions_Det3
Related Party Transactions (Details 4) (USD $) | 0 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 23, 2010 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Transactions | ||||
General and administrative expenses | $762,146 | $687,122 | $666,217 | |
Subscriber-related expenses | 8,066,642 | 7,677,111 | 7,246,104 | |
EchoStar | ||||
Related Party Transactions | ||||
General and administrative expenses | 101,000 | 69,000 | 50,000 | |
EchoStar | Product Support Agreement | ||||
Related Party Transactions | ||||
Required notice period for termination by the reporting entity | 60 days | |||
EchoStar | Inverness Lease Agreement | ||||
Related Party Transactions | ||||
Required notice period for termination of agreement | 6 months | |||
EchoStar | DISH Online.com Services Agreement | ||||
Related Party Transactions | ||||
Term of renewal option exercised | 1 year | |||
Agreement term | 2 years | |||
EchoStar | DISH Remote Access Services Agreement | ||||
Related Party Transactions | ||||
Required notice period for termination by the reporting entity | 120 days | |||
Agreement term | 5 years | |||
Automatic renewal period | 1 year | |||
Subscriber-related expenses | 3,000 | 2,000 | 2,000 | |
EchoStar | Sling Service Services Agreement | ||||
Related Party Transactions | ||||
Required notice period for termination by the reporting entity | 120 days | |||
Agreement term | 5 years | |||
Automatic renewal period | 1 year | |||
Subscriber-related expenses | $4,000 | $3,000 | $2,000 | |
EchoStar | Application Development Agreement | ||||
Related Party Transactions | ||||
Required notice period for termination of agreement | 90 days | |||
Automatic renewal period | 1 year | |||
EchoStar | XiP Encryption Agreement | ||||
Related Party Transactions | ||||
Required notice period for termination by the reporting entity | 30 days | |||
Required notice period for termination of agreement | 180 days | |||
Agreement term extend option | 1 year | |||
Notice period required to extend the agreement term | 180 days |
Related_Party_Transactions_Det4
Related Party Transactions (Details 5) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 29, 2011 | Dec. 31, 2011 | Jan. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2010 | |
item | ||||||||
Related Party Transactions | ||||||||
Cost of sales - equipment, services and other | $106,037,000 | $85,627,000 | $96,240,000 | |||||
Receiver Agreement | ||||||||
Related Party Transactions | ||||||||
Notice period to exercise option to extend agreement | 1 year | |||||||
Notice period required to extend the agreement term | 180 days | |||||||
EchoStar | TiVo v. Dish Network and EchoStar Corporation | ||||||||
Related Party Transactions | ||||||||
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% | |||||||
EchoStar | Receiver Agreement | ||||||||
Related Party Transactions | ||||||||
Purchased set-top boxes and other equipment from EchoStar | 1,114,000,000 | 1,242,000,000 | 1,005,000,000 | |||||
EchoStar | Tax Sharing Agreement | Dish Network | ||||||||
Related Party Transactions | ||||||||
Net amount of the allocated tax attributes payable | 83,000,000 | |||||||
EchoStar | RUS Implementation Agreement | ||||||||
Related Party Transactions | ||||||||
Maximum grants receivable | 14,000,000 | |||||||
Cost of sales - equipment, services and other | 3,000,000 | 7,000,000 | ||||||
EchoStar | Patent Cross-License Agreements | Maximum | ||||||||
Related Party Transactions | ||||||||
Payments to third party by related party | 10,000,000 | |||||||
Payments to third party by related party under extension option | $3,000,000 | |||||||
EchoStar | Prior Receiver Agreement | ||||||||
Related Party Transactions | ||||||||
Required notice period for termination by the reporting entity | 60 days |
Related_Party_Transactions_Det5
Related Party Transactions (Details 6) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Feb. 20, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Related Party Transactions | ||||
Deemed Distribution Redeemable Noncontrolling Interest Fair Value Net Of Deferred Tax | $14,011,000 | |||
Amounts payable to NagraStar | 236,122,000 | 338,788,000 | ||
Satellite and Tracking Stock Transaction | ||||
Related Party Transactions | ||||
Percentage of economic interest in the Hughes Retail Group | 80.00% | |||
EchoStar | Satellite and Tracking Stock Transaction | ||||
Related Party Transactions | ||||
Liabilities Transferred | 44,540,000 | |||
Related Party Transactions Historical Cost of Tracking Stock | 229,000,000 | |||
NagraStar | ||||
Related Party Transactions | ||||
Purchases from NagraStar | 84,636,000 | 91,712,000 | 72,549,000 | |
Amounts payable to NagraStar | 14,819,000 | 20,954,000 | ||
Commitments to NagraStar | 12,368,000 | 2,463,000 | ||
EchoStar and HSSC | Satellite and Tracking Stock Transaction | ||||
Related Party Transactions | ||||
Liabilities Transferred | 59,000,000 | |||
Cash in exchange for shares of series of preferred tracking stock issued | 11,000,000 | |||
Capital transaction | 356,000,000 | |||
Cash in Exchange of Shares Issued | 11,000,000 | |||
Capital Distribution to Related Party in Connection Purchase of Strategic Investments | 51,000,000 | |||
HSSC | Satellite and Tracking Stock Transaction | ||||
Related Party Transactions | ||||
Related Party Transactions Historical Cost of Tracking Stock | 87,000,000 | |||
Sling TV Holding LLC | ||||
Related Party Transactions | ||||
Ownership percentage | 90.00% | |||
Voting interest (as a percent) | 100.00% | |||
Additional paid in capital recorded due to difference between the historical cost basis of the assets transferred | 6,000,000 | |||
Deemed Distribution Redeemable Noncontrolling Interest Fair Value Net Of Deferred Tax | $14,000,000 | |||
Sling TV Holding LLC | EchoStar | ||||
Related Party Transactions | ||||
Ownership percentage | 10.00% |