Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 6-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | DISH DBS CORP | |
Entity Central Index Key | 1042642 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,015 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $320,798 | $6,762,140 |
Marketable investment securities | 45,540 | 1,401,145 |
Trade accounts receivable - other, net of allowance for doubtful accounts of $15,437 and $23,520, respectively | 839,622 | 870,795 |
Trade accounts receivable - EchoStar, net of allowance for doubtful accounts of zero | 40,796 | 31,391 |
Inventory | 484,601 | 493,546 |
Deferred tax assets | 37,018 | 37,018 |
Other current assets | 128,129 | 130,038 |
Total current assets | 1,896,504 | 9,726,073 |
Noncurrent Assets: | ||
Restricted cash and marketable investment securities | 86,984 | 86,984 |
Property and equipment, net of accumulated depreciation of $2,661,279 and $2,628,945, respectively | 2,365,000 | 2,437,004 |
FCC authorizations | 635,794 | 635,794 |
Other noncurrent assets, net | 541,141 | 535,308 |
Total noncurrent assets | 3,628,919 | 3,695,090 |
Total assets | 5,525,423 | 13,421,163 |
Current Liabilities: | ||
Trade accounts payable - other | 167,983 | 152,076 |
Trade accounts payable - EchoStar | 254,568 | 236,122 |
Deferred revenue and other | 890,377 | 865,210 |
Accrued programming | 1,498,659 | 1,374,710 |
Accrued interest | 217,165 | 227,158 |
Other accrued expenses | 469,240 | 441,693 |
Current portion of long-term debt and capital lease obligations | 2,179,857 | 679,149 |
Total current liabilities | 5,677,849 | 3,976,118 |
Long-Term Obligations, Net of Current Portion: | ||
Long-term debt and capital lease obligations, net of current portion | 12,223,954 | 13,728,749 |
Deferred tax liabilities | 1,188,254 | 1,225,417 |
Long-term deferred revenue, distribution and carriage payments and other long-term liabilities | 195,889 | 188,067 |
Total long-term obligations, net of current portion | 13,608,097 | 15,142,233 |
Total liabilities | 19,285,946 | 19,118,351 |
Commitments and Contingencies (Note 8) | ||
Redeemable noncontrolling interest | 17,134 | 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 | 1,291,445 | 1,276,201 |
Accumulated other comprehensive income (loss) | 15,797 | 28,383 |
Accumulated earnings (deficit) | -15,084,955 | -7,022,887 |
Total DISH DBS stockholder's equity (deficit) | -13,777,713 | -5,718,303 |
Noncontrolling interest | 56 | 1,202 |
Total stockholder's equity (deficit) | -13,777,657 | -5,717,101 |
Total liabilities and stockholder's equity (deficit) | $5,525,423 | $13,421,163 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Allowance for doubtful accounts on trade accounts receivable - other | $15,437,000 | $23,520,000 |
Allowance for doubtful accounts on trade accounts receivable - EchoStar | 0 | 0 |
Noncurrent Assets: | ||
Accumulated depreciation on property and equipment, net | $2,661,279 | $2,628,945 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, shares issued | 1,015 | 1,015 |
Common stock, shares outstanding | 1,015 | 1,015 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue: | ||
Subscriber-related revenue | $3,586,094 | $3,473,208 |
Equipment sales and other revenue | 22,127 | 21,450 |
Equipment sales, services and other revenue - EchoStar | 12,841 | 15,552 |
Total revenue | 3,621,062 | 3,510,210 |
Costs and Expenses (exclusive of depreciation shown separately below - Note 6): | ||
Subscriber-related expenses | 2,096,143 | 2,015,673 |
Satellite and transmission expenses | 184,680 | 148,127 |
Cost of sales - equipment, services and other | 39,448 | 25,226 |
Subscriber acquisition costs: | ||
Cost of sales - subscriber promotion subsidies | 47,518 | 55,343 |
Other subscriber acquisition costs | 194,379 | 228,148 |
Subscriber acquisition advertising | 128,264 | 124,873 |
Total subscriber acquisition costs | 370,161 | 408,364 |
General and administrative expenses | 200,446 | 179,584 |
Depreciation and amortization (Note 6) | 223,895 | 224,966 |
Total costs and expenses | 3,114,773 | 3,001,940 |
Operating income (loss) | 506,289 | 508,270 |
Other Income (Expense): | ||
Interest income | 4,217 | 8,762 |
Interest expense, net of amounts capitalized | -222,010 | -212,079 |
Other, net | 91 | 340 |
Total other income (expense) | -217,702 | -202,977 |
Income (loss) before income taxes | 288,587 | 305,293 |
Income tax (provision) benefit, net | -104,600 | -115,882 |
Net income (loss) | 183,987 | 189,411 |
Less: Net income (loss) attributable to noncontrolling interest, net of tax | -3,945 | -741 |
Net income (loss) attributable to DISH DBS | 187,932 | 190,152 |
Comprehensive Income (Loss): | ||
Net income (loss) | 183,987 | 189,411 |
Other comprehensive income (loss): | ||
Unrealized holding gains (losses) on available-for-sale securities | -17,532 | 19,951 |
Deferred income tax (expense) benefit, net | 4,946 | -7,527 |
Total other comprehensive income (loss), net of tax | -12,586 | 12,424 |
Comprehensive income (loss) | 171,401 | 201,835 |
Less: Comprehensive income (loss) attributable to noncontrolling interest, net of tax | -3,945 | -741 |
Comprehensive income (loss) attributable to DISH DBS | $175,346 | $202,576 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash Flows From Operating Activities: | ||
Net income (loss) | $183,987 | $189,411 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||
Depreciation and amortization | 223,895 | 224,966 |
Non-cash, stock-based compensation | 7,709 | 9,769 |
Deferred tax expense (benefit) | -32,217 | -40,721 |
Other, net | 13,252 | 13,241 |
Changes in current assets and current liabilities, net | 233,005 | 78,713 |
Net cash flows from operating activities | 629,631 | 475,379 |
Cash Flows From Investing Activities: | ||
(Purchases) Sales and maturities of marketable investment securities, net | 1,338,073 | 65,824 |
Purchases of property and equipment | -163,376 | -216,435 |
Other, net | 2,949 | -8,298 |
Net cash flows from investing activities | 1,177,646 | -158,909 |
Cash Flows From Financing Activities: | ||
Dividends to DISH Orbital Corporation | -8,250,000 | -650,000 |
Repayment of long-term debt and capital lease obligations | -6,586 | -6,692 |
Other, net | 7,967 | 1,923 |
Net cash flows from financing activities | -8,248,619 | -654,769 |
Net increase (decrease) in cash and cash equivalents | -6,441,342 | -338,299 |
Cash and cash equivalents, beginning of period | 6,762,140 | 4,294,475 |
Cash and cash equivalents, end of period | $320,798 | $3,956,176 |
Organization_and_Business_Acti
Organization and Business Activities | 3 Months Ended |
Mar. 31, 2015 | |
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 13.844 million subscribers in the United States as of March 31, 2015. 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 | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Summary of Significant Accounting Policies | ||||
Summary of Significant Accounting Policies | 2.Summary of Significant Accounting Policies | |||
Basis of Presentation | ||||
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required for complete financial statements prepared under GAAP. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014. Certain prior period amounts have been reclassified to conform to the current period presentation. | ||||
Principles of Consolidation | ||||
We consolidate all majority owned subsidiaries, investments in entities in which we have controlling influence and variable interest entities where we have been determined to be the primary beneficiary. Minority interests are recorded as noncontrolling 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. | ||||
Use of Estimates | ||||
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense for each reporting period. Estimates are used in accounting for, among other things, allowances for doubtful accounts, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of options granted under our stock-based compensation plans, fair value of assets and liabilities acquired in business combinations, fair value of multi-element arrangements, capital leases, asset impairments, estimates of future cash flows used to evaluate impairments, useful lives of property, equipment and intangible assets, retailer incentives, programming expenses 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 our Condensed Consolidated Financial Statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected prospectively in the period they occur. | ||||
Fair Value Measurements | ||||
We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We apply the following hierarchy in determining fair value: | ||||
· | Level 1, defined as observable inputs being quoted prices in active markets for identical assets; | |||
· | 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 March 31, 2015 and December 31, 2014, 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. | ||||
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. However, the FASB has proposed a potential one year deferral on the effective date for implementation of this standard. 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 | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Supplemental Data - Statements of Cash Flows | ||||||||
Supplemental Data - Statements of Cash Flows | 3.Supplemental Data — Statements of Cash Flows | |||||||
The following table presents our supplemental cash flow and other non-cash data. | ||||||||
For the Three Months | ||||||||
Ended March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Cash paid for interest | $ | 230,081 | $ | 230,120 | ||||
Cash received for interest | 4,217 | 8,762 | ||||||
Cash paid for income taxes | 577 | 2,166 | ||||||
Cash paid for income taxes to DISH Network | 140,595 | 154,910 | ||||||
Satellite and Tracking Stock Transaction with EchoStar: | ||||||||
Transfer of property and equipment, net | — | 432,080 | ||||||
Investment in EchoStar and HSSC preferred tracking stock - cost method | — | 316,204 | ||||||
Transfer of liabilities and other | — | 44,540 | ||||||
Capital distribution to EchoStar, net of deferred taxes of $31,274 | — | 51,466 | ||||||
Marketable_Investment_Securiti
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | ||||||||||||||||||||||||||
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | 4.Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | |||||||||||||||||||||||||
Our marketable investment securities, restricted cash and cash equivalents, and other investment securities consisted of the following: | ||||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
March 31, | December 31, | |||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable investment securities: | ||||||||||||||||||||||||||
Current marketable investment securities | $ | 45,540 | $ | 1,401,145 | ||||||||||||||||||||||
Restricted marketable investment securities (1) | 85,617 | 76,970 | ||||||||||||||||||||||||
Total marketable investment securities | 131,157 | 1,478,115 | ||||||||||||||||||||||||
Restricted cash and cash equivalents (1) | 1,367 | 10,014 | ||||||||||||||||||||||||
Other investment securities: | ||||||||||||||||||||||||||
Investment in EchoStar preferred tracking stock - cost method | 228,795 | 228,795 | ||||||||||||||||||||||||
Investment in HSSC preferred tracking stock - cost method | 87,409 | 87,409 | ||||||||||||||||||||||||
Other investment securities - cost method | 11,046 | 11,046 | ||||||||||||||||||||||||
Total other investment securities (2) | 327,250 | 327,250 | ||||||||||||||||||||||||
Total marketable investment securities, restricted cash and cash equivalents, and other investment securities | $ | 459,774 | $ | 1,815,379 | ||||||||||||||||||||||
-1 | Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash and marketable investment securities” on our Condensed Consolidated Balance Sheets. | |||||||||||||||||||||||||
-2 | Other investment securities are included in “Other noncurrent assets, net” on our Condensed Consolidated Balance Sheets. | |||||||||||||||||||||||||
Marketable Investment Securities | ||||||||||||||||||||||||||
Our marketable investment securities portfolio consists of various debt and equity instruments, all of which are classified as available-for-sale. | ||||||||||||||||||||||||||
Current Marketable Investment Securities | ||||||||||||||||||||||||||
Our current marketable investment securities portfolio includes investments in equity securities and 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 March 31, 2015 and December 31, 2014, 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 Condensed 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 Corporation (“EchoStar”) to implement a transaction pursuant to which, among other things: (i) on March 1, 2014, we transferred to EchoStar and Hughes Satellite Systems Corporation (“HSSC”), a 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’s and HSSC’s historical cost basis for these instruments of $229 million and $87 million, respectively. The difference between the historical cost basis of the Tracking Stock received and the net carrying value of the Transferred Satellites of $356 million (including debt obligations, net of deferred taxes), plus the $11 million in cash, resulted in a $51 million capital transaction recorded in “Additional paid-in capital” on our Condensed Consolidated Balance Sheets. 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 March 31, 2015 and December 31, 2014, we had accumulated net unrealized gains of $26 million and $43 million, respectively. These amounts, net of related tax effect, were $16 million and $28 million, respectively. All of these amounts are included in “Accumulated other comprehensive income (loss)” within “Total stockholder’s equity (deficit).” The components of our available-for-sale investments are summarized in the table below. | ||||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||
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 | $ | 62,777 | $ | 92 | $ | — | $ | 92 | $ | 58,254 | $ | 7 | $ | (11 | ) | $ | (4 | ) | ||||||||
Commercial paper | 11,277 | — | — | — | 65,696 | — | — | — | ||||||||||||||||||
Corporate securities | 1,017 | — | (4 | ) | (4 | ) | 1,247,403 | 5,608 | (145 | ) | 5,463 | |||||||||||||||
Other | 17,194 | — | — | — | 55,788 | — | — | — | ||||||||||||||||||
Equity securities | 38,892 | 25,576 | — | 25,576 | 50,974 | 37,737 | — | 37,737 | ||||||||||||||||||
Total | $ | 131,157 | $ | 25,668 | $ | (4 | ) | $ | 25,664 | $ | 1,478,115 | $ | 43,352 | $ | (156 | ) | $ | 43,196 | ||||||||
As of March 31, 2015, restricted and non-restricted marketable investment securities included debt securities of $42 million with contractual maturities within one year and $50 million with contractual maturities extending longer than one year through and including five years. Actual maturities may differ from contractual maturities as a result of our ability to sell these securities prior to maturity. | ||||||||||||||||||||||||||
Marketable Investment Securities in a Loss Position | ||||||||||||||||||||||||||
The following table reflects the length of time that the individual securities, accounted for as available-for-sale, have been in an unrealized loss position, aggregated by investment category. As of March 31, 2015, the unrealized losses related to our investments in debt securities 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 | ||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||
Value | Loss | Value | Loss | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt Securities: | ||||||||||||||||||||||||||
Less than 12 months | $ | 637 | $ | (4 | ) | $ | 268,492 | $ | (100 | ) | ||||||||||||||||
12 months or more | — | — | 129,092 | (56 | ) | |||||||||||||||||||||
Total | $ | 637 | $ | (4 | ) | $ | 397,584 | $ | (156 | ) | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||||
Our investments measured at fair value on a recurring basis were as follows: | ||||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Cash Equivalents (including restricted) | $ | 232,663 | $ | 37,675 | $ | 194,988 | $ | — | $ | 6,605,274 | $ | 258,281 | $ | 6,346,993 | $ | — | ||||||||||
Debt securities (including restricted): | ||||||||||||||||||||||||||
U.S. Treasury and agency securities | $ | 62,777 | $ | 47,250 | $ | 15,527 | $ | — | $ | 58,254 | $ | 42,710 | $ | 15,544 | $ | — | ||||||||||
Commercial paper | 11,277 | — | 11,277 | — | 65,696 | — | 65,696 | — | ||||||||||||||||||
Corporate securities | 1,017 | — | 1,017 | — | 1,247,403 | — | 1,247,403 | — | ||||||||||||||||||
Other | 17,194 | — | 17,194 | — | 55,788 | — | 55,788 | — | ||||||||||||||||||
Equity securities | 38,892 | 38,892 | — | — | 50,974 | 50,974 | — | — | ||||||||||||||||||
Total | $ | 131,157 | $ | 86,142 | $ | 45,015 | $ | — | $ | 1,478,115 | $ | 93,684 | $ | 1,384,431 | $ | — | ||||||||||
During the three months ended March 31, 2015, we had no transfers in or out of Level 1 and Level 2 fair value measurements. | ||||||||||||||||||||||||||
Inventory
Inventory | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory | ||||||||
Inventory | 5.Inventory | |||||||
Inventory consisted of the following: | ||||||||
As of | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Finished goods | $ | 221,499 | $ | 252,101 | ||||
Raw materials | 166,532 | 159,095 | ||||||
Work-in-process | 96,570 | 82,350 | ||||||
Total inventory | $ | 484,601 | $ | 493,546 | ||||
Property_and_Equipment
Property and Equipment | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Property and Equipment | ||||||||
Property and Equipment | 6.Property and Equipment | |||||||
Depreciation and amortization expense consisted of the following: | ||||||||
For the Three Months | ||||||||
Ended March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Equipment leased to customers | $ | 191,753 | $ | 185,723 | ||||
Satellites | 15,261 | 23,201 | ||||||
Buildings, furniture, fixtures, equipment and other | 16,881 | 16,042 | ||||||
Total depreciation and amortization | $ | 223,895 | $ | 224,966 | ||||
Cost of sales and operating expense categories included in our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) do not include depreciation expense related to satellites or equipment leased to customers. | ||||||||
Pay-TV Satellites. We currently utilize 14 satellites in geostationary orbit approximately 22,300 miles above the equator, one of which we own and depreciate over its useful life. We currently utilize certain capacity on 11 satellites that we lease from EchoStar, which are accounted for as operating leases. We also lease two satellites from third parties, which are accounted for as capital leases and are depreciated over the shorter of the economic life or the term of the satellite agreement. | ||||||||
As of March 31, 2015, our pay-TV satellite fleet consisted of the following: | ||||||||
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 10 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 10 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. | |||||||
LongTerm_Debt
Long-Term Debt | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Long-Term Debt | ||||||||||||||
Long-Term Debt | 7.Long-Term Debt | |||||||||||||
Fair Value of our Long-Term Debt | ||||||||||||||
The following table summarizes the carrying and fair values of our debt facilities as of March 31, 2015 and December 31, 2014: | ||||||||||||||
As of | ||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||
Carrying | Carrying | |||||||||||||
Value | Fair Value | Value | Fair Value | |||||||||||
(In thousands) | ||||||||||||||
7 3/4% Senior Notes due 2015 (1) | $ | 650,001 | $ | 656,501 | $ | 650,001 | $ | 664,321 | ||||||
7 1/8% Senior Notes due 2016 (2) | 1,500,000 | 1,558,500 | 1,500,000 | 1,580,625 | ||||||||||
4 5/8% Senior Notes due 2017 | 900,000 | 927,531 | 900,000 | 933,750 | ||||||||||
4 1/4% Senior Notes due 2018 | 1,200,000 | 1,221,000 | 1,200,000 | 1,245,600 | ||||||||||
7 7/8% Senior Notes due 2019 | 1,400,000 | 1,575,952 | 1,400,000 | 1,589,700 | ||||||||||
5 1/8% Senior Notes due 2020 | 1,100,000 | 1,113,750 | 1,100,000 | 1,100,000 | ||||||||||
6 3/4% Senior Notes due 2021 | 2,000,000 | 2,130,000 | 2,000,000 | 2,157,500 | ||||||||||
5 7/8% Senior Notes due 2022 | 2,000,000 | 2,025,000 | 2,000,000 | 2,055,000 | ||||||||||
5% Senior Notes due 2023 | 1,500,000 | 1,500,000 | 1,500,000 | 1,470,000 | ||||||||||
5 7/8% Senior Notes due 2024 | 2,000,000 | 2,012,500 | 2,000,000 | 2,019,800 | ||||||||||
Other notes payable | 14,701 | 14,701 | 14,701 | 14,701 | ||||||||||
Subtotal | 14,264,702 | $ | 14,735,435 | 14,264,702 | $ | 14,830,997 | ||||||||
Unamortized deferred financing costs and debt discounts, net | (48,974 | ) | (51,473 | ) | ||||||||||
Capital lease obligations (3) | 188,083 | NA | 194,669 | NA | ||||||||||
Total long-term debt and capital lease obligations (including current portion) | $ | 14,403,811 | $ | 14,407,898 | ||||||||||
-1 | Our 7 3/4% Senior Notes due 2015 mature on May 31, 2015 and are included in “Current portion of long-term debt and capital lease obligations” on our Condensed Consolidated Balance Sheets as of March 31, 2015. | |||||||||||||
-2 | Our 7 1/8% Senior Notes due 2016 mature on February 1, 2016 and have been reclassified to “Current portion of long-term debt and capital lease obligations” on our Condensed Consolidated Balance Sheets as of March 31, 2015. | |||||||||||||
-3 | Disclosure regarding fair value of capital leases is not required. | |||||||||||||
We estimated the fair value of our publicly traded long-term debt using market prices in less active markets (Level 2). | ||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8.Commitments and Contingencies |
Commitments | |
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. On October 29, 2013, the FCC issued an order approving a voluntary industry solution to resolve certain interoperability issues affecting the lower 700 MHz spectrum band (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 original interim and final build-out requirements associated with its 700 MHz licenses 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”). 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. | |
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. On April 29, 2014, the FCC issued an order granting DISH Network’s application to acquire all 176 wireless spectrum licenses in the H Block auction. DISH Network paid approximately $1.672 billion to acquire these H Block licenses, including clearance costs associated with the lower H Block spectrum. 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 10 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” and collectively with Northstar Wireless, the “Northstar Entities”). 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”) 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 made pro-rata equity contributions in Northstar Spectrum equal to approximately 15% of the net purchase price of the Northstar Licenses. As of March 2, 2015, the total equity contributions from Northstar Manager to Northstar Spectrum were $133 million. 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 made loans to Northstar Wireless for approximately 85% of the net purchase price of the Northstar Licenses. After Northstar Wireless made the final payments to the FCC on March 2, 2015 for the Northstar Licenses, 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 made 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” and collectively with SNR Wireless, the “SNR Entities”). 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”) 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 made pro-rata equity contributions in SNR Holdco equal to approximately 15% of the net purchase price of the SNR Licenses. As of March 2, 2015, the total equity contributions from SNR Management to SNR Holdco were $93 million. 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 made loans to SNR Wireless for the amount of the bid withdrawal payment and approximately 85% of the net purchase price of the SNR Licenses. After SNR Wireless made the final payments to the FCC on March 2, 2015 for the SNR Licenses, 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. | |
After Northstar Wireless and SNR Wireless made the final payments to the FCC on March 2, 2015 for the Northstar Licenses and the SNR Licenses, respectively, 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 or SNR Wireless depends, among other things, upon the FCC’s review and approval of the applications filed by Northstar Wireless and SNR Wireless. On April 29, 2015, the FCC issued a public notice that, among other things, found the applications filed by Northstar Wireless and SNR Wireless, upon initial review, to be acceptable for filing. The FCC’s public notice also set the following filing deadlines related to the applications: (i) petitions to deny the applications must have been filed no later than May 11, 2015; (ii) oppositions to a petition to deny the applications must be filed no later than May 18, 2015; and (iii) replies to oppositions must be filed no later than May 26, 2015. 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 addition, on April 29, 2015, DISH Network received a letter from the United States Senate Committee on Commerce, Science and Transportation (the “Senate Committee”), requesting certain information related to its relationship with Northstar Wireless and SNR Wireless and its participation in the AWS-3 Auction. DISH Network cannot predict the timing or the outcome of the Senate Committee’s inquiry. | |
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 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, to among other things, continue investing in our business and to pursue acquisitions and other strategic transactions. 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 satellite transponder service agreement for Nimiq 5 through 2024. We sublease this capacity from EchoStar and also guarantee a certain portion of EchoStar’s obligation under its satellite transponder service agreement through 2019. As of March 31, 2015, the remaining obligation of our guarantee was $296 million. As of March 31, 2015, we have not recorded a liability on the balance sheet for this guarantee. | |
Contingencies | |
Separation Agreement | |
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, 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 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 May 5, 2015, the Court granted summary judgment in our favor as to the DISH products and services alleged in the complaint. 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. | |
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 were seeking civil penalties and damages of approximately $270 million and that the federal plaintiff was 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. 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 October 6, 2015. In recent pre-trial disclosures, the federal plaintiff has informed us that it intends to seek up to $900 million in alleged civil penalties at trial, and the state plaintiffs have informed us that they now intend to seek $23.5 billion in alleged civil penalties and damages. | |
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. On April 10, 2015, the Court granted DISH Network L.L.C.’s motion to stay the action in light of DISH Network L.L.C.’s petition and certain other defendants’ petitions pending 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. | |
Grecia | |
On March 27, 2015, William Grecia (“Grecia”) filed a complaint against 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. 8,533,860 (the “860 patent”), which is entitled “Personalized Digital Media Access System—PDMAS Part II.” Grecia alleges that we violate the 860 patent in connection with our digital rights management. Grecia is the named inventor on the 860 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. | |
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. | |
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, President and Chief Executive Officer), 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 included, 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. On April 28, 2015, the District Court granted DISH Network’s motion to dismiss the complaint. | |
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 remaining 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 July 16, 2015. DISH Network cannot predict with any degree of certainty the outcome of these suits or determine the extent of any potential liability or damages. | |
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. 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 subsequently modified such damages as ranging from approximately $150 million to $450 million, as of September 30, 2014, which did not include pre-judgment interest and could be trebled under Federal law. On May 7, 2015, DISH Network, EchoStar and PMC entered into a settlement and release agreement that provides, among other things, for a license by PMC to DISH Network and EchoStar for certain patents and patent applications and the dismissal of all of PMC’s claims in the action against DISH Network and EchoStar with prejudice. | |
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. | |
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. | |
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. | |
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 | 3 Months Ended |
Mar. 31, 2015 | |
Financial Information for Subsidiary Guarantors | |
Financial Information for Subsidiary Guarantors | 9.Financial Information for Subsidiary Guarantors |
Our senior notes are fully, unconditionally and jointly and severally guaranteed by all of our subsidiaries other than minor subsidiaries and the stand-alone entity DISH DBS has no independent assets or operations. Therefore, supplemental financial information on a condensed consolidating basis of the guarantor subsidiaries is not required. There are no restrictions on our ability to obtain cash dividends or other distributions of funds from the guarantor subsidiaries, except those imposed by applicable law. | |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Related Party Transactions | ||||||||
Related Party Transactions | 10.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 Holding L.L.C. (“Sling TV,” formerly known as DISH Digital Holding L.L.C.) 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 Condensed 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 8 for further information. | ||||||||
Advertising Sales. We provide advertising services to DISH Network’s broadband business. During the three months ended March 31, 2015 and 2014, we received revenue associated with these services of $4 million and $5 million, respectively, in “Subscriber-related revenue” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). | ||||||||
Broadband, Wireless and Other Operations. We provide certain administrative support such as legal, information systems, marketing, human resources, accounting and finance services to DISH Network’s Broadband, Wireless and other operations. In addition, we provide call center, installation and other services to DISH Network for its Broadband business. During the three months ended March 31, 2015 and 2014, the costs associated with these services were $4 million and $3 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, President and Chief Executive Officer, 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. | ||||||||
Satellite Capacity Leased to EchoStar. Since the Spin-off, we have entered into certain satellite capacity agreements pursuant to which EchoStar leases certain 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 relating to Sling TV discussed below, this sublease terminated during the fourth quarter 2014. | |||||||
“Satellite and transmission expenses” | ||||||||
During the three months ended March 31, 2015 and 2014, we incurred $175 million and $138 million, respectively, for satellite and transmission expenses from EchoStar. These amounts are recorded in “Satellite and transmission expenses” on our Condensed 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 “Pay-TV Satellites” in Note 6 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 8. | ||||||||
Under the terms of the DISH Nimiq 5 Agreement, we make certain monthly payments to EchoStar that commenced in September 2009 when the Nimiq 5 satellite was placed into service and continue through the service term. Unless earlier terminated under the terms and conditions of the DISH Nimiq 5 Agreement, the service term will expire ten years following the date the Nimiq 5 satellite was placed into service. Upon expiration of the initial term, we have the option to renew the DISH Nimiq 5 Agreement on a year-to-year basis through the end-of-life of the Nimiq 5 satellite. Upon in-orbit failure or end-of-life of the Nimiq 5 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that any options to renew the DISH Nimiq 5 Agreement will be exercised or that we will exercise our option to receive service on a replacement satellite. | ||||||||
QuetzSat-1 Lease Agreement. During 2008, EchoStar entered into a ten-year satellite service agreement with SES Latin America S.A. (“SES”), which provides, among other things, for the provision by SES to EchoStar of service on 32 DBS transponders on the QuetzSat-1 satellite. During 2008, EchoStar also entered into a transponder service agreement (“QuetzSat-1 Transponder Agreement”) with us pursuant to which we receive service from EchoStar on 24 DBS transponders. QuetzSat-1 was launched on September 29, 2011 and was placed into service during the fourth quarter 2011 at the 67.1 degree orbital location while we and EchoStar explored alternative uses for the QuetzSat-1 satellite. In the interim, EchoStar provided us with alternate capacity at the 77 degree orbital location. During the third quarter 2012, we and EchoStar entered into an agreement pursuant to which we sublease five DBS transponders back to EchoStar. During January 2013, QuetzSat-1 was moved to the 77 degree orbital location and we commenced commercial operations at that location in February 2013. | ||||||||
Unless earlier terminated under the terms and conditions of the QuetzSat-1 Transponder Agreement, the initial service term will expire in November 2021. Upon expiration of the initial term, we have the option to renew the QuetzSat-1 Transponder Agreement on a year-to-year basis through the end-of-life of the QuetzSat-1 satellite. Upon an in-orbit failure or end-of-life of the QuetzSat-1 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that any options to renew the QuetzSat-1 Transponder Agreement will be exercised or that we will exercise our option to receive service on a replacement satellite. | ||||||||
103 Degree Orbital Location/SES-3. During May 2012, EchoStar entered into a spectrum development agreement (the “103 Spectrum Development Agreement”) with Ciel Satellite Holdings Inc. (“Ciel”) to develop certain spectrum rights at the 103 degree orbital location (the “103 Spectrum Rights”). During June 2013, we and EchoStar entered into a spectrum development agreement (the “DISH 103 Spectrum Development Agreement”) pursuant to which we may use and develop the 103 Spectrum Rights. 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 Condensed Consolidated Balance Sheets and recorded the amount in excess of EchoStar’s net book value of $3 million as a capital distribution. Unless earlier terminated under the terms and conditions of the DISH 103 Spectrum Development Agreement, the term generally will continue for the duration of the 103 Spectrum Rights. | ||||||||
In connection with the 103 Spectrum Development Agreement, during May 2012, EchoStar also entered into a ten-year service agreement with Ciel pursuant to which EchoStar leases certain satellite capacity from Ciel on the SES-3 satellite at the 103 degree orbital location (the “103 Service Agreement”). During June 2013, we and EchoStar entered into an agreement pursuant to which we lease certain satellite capacity from EchoStar on the SES-3 satellite (the “DISH 103 Service Agreement”). Under the terms of the DISH 103 Service Agreement, we make certain monthly payments to EchoStar through the service term. Unless earlier terminated under the terms and conditions of the DISH 103 Service Agreement, the initial service term will expire on the earlier of: (i) the date the SES-3 satellite fails; (ii) the date the transponder(s) on which service was being provided under the agreement fails; or (iii) ten years following the actual service commencement date. Upon in-orbit failure or end-of-life of the SES-3 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that we will exercise our option to receive service on a replacement satellite. | ||||||||
TT&C Agreement. Effective January 1, 2012, we entered into a telemetry, tracking and control (“TT&C”) agreement pursuant to which we receive TT&C services from EchoStar for a period ending on December 31, 2016 (the “2012 TT&C Agreement”). The fees for services provided under the 2012 TT&C Agreement are calculated at either: (i) a fixed fee; or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. We are able to terminate the 2012 TT&C Agreement for any reason upon 60 days notice. | ||||||||
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. | ||||||||
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. | ||||||||
“General and administrative expenses” | ||||||||
During each of the three months ended March 31, 2015 and 2014, we incurred $20 million for general and administrative expenses from EchoStar. These amounts are recorded in “General and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The agreements pertaining to these expenses are discussed below. | ||||||||
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. | |||||||
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 initial term of the XiP Encryption Agreement was for a period until December 31, 2014. Under the XiP Encryption Agreement, we had 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 had 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 had 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 three months ended March 31, 2015 and 2014, we purchased set-top boxes and other equipment from EchoStar of $223 million and $294 million, respectively. Included in these amounts are purchases of certain broadband equipment from EchoStar under the 2012 Receiver Agreement. These amounts are initially included in “Inventory” and are subsequently capitalized as “Property and equipment, net” on our Condensed Consolidated Balance Sheets or expensed as “Subscriber acquisition costs” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) when the equipment is deployed. | ||||||||
Tax Sharing Agreement. In connection with the Spin-off, DISH Network entered into a tax sharing agreement with EchoStar which governs our respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network, and DISH Network will indemnify EchoStar for such taxes. However, DISH Network is not liable for and will not indemnify EchoStar for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”) because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar takes or fails to take; or (iii) any action that EchoStar takes that is inconsistent with the information and representations furnished to the Internal Revenue Service (“IRS”) in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar is solely liable for, and will indemnify DISH Network for, any resulting taxes, as well as any losses, claims and expenses. The tax sharing agreement will only terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed. | ||||||||
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 us, 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. | ||||||||
Sling TV Holding L.L.C. 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. | ||||||||
Effective August 1, 2014, 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. 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 over-the-top (“OTT”) Internet-based domestic video programming 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 Condensed Consolidated Balance Sheets. 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 Condensed Consolidated Balance Sheets. All services provided to Sling TV by EchoStar under the Commercial Agreement are recorded in “Satellite and transmission expenses” and “General and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See “Satellite and transmission expenses” and “General and administrative expenses” within the related party section previously discussed. | ||||||||
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 under the applicable accounting guidance and is thus recorded as part of “Redeemable noncontrolling interest” in the mezzanine section of our Condensed 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. | ||||||||
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 had an initial term of five years with automatic renewal for successive one year terms. This agreement automatically renewed on February 23, 2015 for an additional one-year period until February 23, 2016. This agreement may be terminated for any reason upon at least 120 days notice to EchoStar. During each of the three months ended March 31, 2015 and 2014, we incurred expenses of $1 million for these services from EchoStar, which are included in “Subscriber-related expenses” on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). | ||||||||
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 had an initial term of five years with automatic renewal for successive one year terms. This agreement automatically renewed on February 23, 2015 for an additional one-year period until February 23, 2016. This agreement may be terminated for any reason upon at least 120 days notice to EchoStar. During each of the three months ended March 31, 2015 and 2014, we incurred expenses of $1 million for these services from EchoStar, which are included in “Subscriber-related expenses” on the Condensed 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’s and HSSC’s historical cost basis for these instruments of $229 million and $87 million, respectively. The difference between the historical cost basis of the Tracking Stock received and the net carrying value of the Transferred Satellites of $356 million (including debt obligations, net of deferred taxes), plus the $11 million in cash, resulted in a $51 million capital transaction recorded in “Additional paid-in capital” on our Condensed Consolidated Balance Sheets. 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 | ||||||||
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 Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). We record all payables in “Trade accounts payable — other” or “Other accrued expenses” on our Condensed Consolidated Balance Sheets. | ||||||||
The table below summarizes our transactions with NagraStar. | ||||||||
For the Three Months | ||||||||
Ended March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Purchases (including fees): | ||||||||
Purchases from NagraStar | $ | 22,498 | $ | 20,203 | ||||
As of | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Amounts Payable and Commitments: | ||||||||
Amounts payable to NagraStar | $ | 13,783 | $ | 14,819 | ||||
Commitments to NagraStar | $ | 9,545 | $ | 12,368 | ||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Summary of Significant Accounting Policies | ||||
Basis of Presentation | Basis of Presentation | |||
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required for complete financial statements prepared under GAAP. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014. Certain prior period amounts have been reclassified to conform to the current period presentation. | ||||
Principles of Consolidation | Principles of Consolidation | |||
We consolidate all majority owned subsidiaries, investments in entities in which we have controlling influence and variable interest entities where we have been determined to be the primary beneficiary. Minority interests are recorded as noncontrolling 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. | ||||
Use of Estimates | Use of Estimates | |||
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense for each reporting period. Estimates are used in accounting for, among other things, allowances for doubtful accounts, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of options granted under our stock-based compensation plans, fair value of assets and liabilities acquired in business combinations, fair value of multi-element arrangements, capital leases, asset impairments, estimates of future cash flows used to evaluate impairments, useful lives of property, equipment and intangible assets, retailer incentives, programming expenses 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 our Condensed Consolidated Financial Statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected prospectively in the period they occur. | ||||
Fair Value Measurements | Fair Value Measurements | |||
We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We apply the following hierarchy in determining fair value: | ||||
· | Level 1, defined as observable inputs being quoted prices in active markets for identical assets; | |||
· | 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 March 31, 2015 and December 31, 2014, 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. | ||||
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. However, the FASB has proposed a potential one year deferral on the effective date for implementation of this standard. 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) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Supplemental Data - Statements of Cash Flows | ||||||||
Schedule of supplemental cash flow and other non-cash data | For the Three Months | |||||||
Ended March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Cash paid for interest | $ | 230,081 | $ | 230,120 | ||||
Cash received for interest | 4,217 | 8,762 | ||||||
Cash paid for income taxes | 577 | 2,166 | ||||||
Cash paid for income taxes to DISH Network | 140,595 | 154,910 | ||||||
Satellite and Tracking Stock Transaction with EchoStar: | ||||||||
Transfer of property and equipment, net | — | 432,080 | ||||||
Investment in EchoStar and HSSC preferred tracking stock - cost method | — | 316,204 | ||||||
Transfer of liabilities and other | — | 44,540 | ||||||
Capital distribution to EchoStar, net of deferred taxes of $31,274 | — | 51,466 | ||||||
Marketable_Investment_Securiti1
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | ||||||||||||||||||||||||||
Schedule of marketable investment securities, restricted cash and cash equivalents, and other investment securities | ||||||||||||||||||||||||||
As of | ||||||||||||||||||||||||||
March 31, | December 31, | |||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable investment securities: | ||||||||||||||||||||||||||
Current marketable investment securities | $ | 45,540 | $ | 1,401,145 | ||||||||||||||||||||||
Restricted marketable investment securities (1) | 85,617 | 76,970 | ||||||||||||||||||||||||
Total marketable investment securities | 131,157 | 1,478,115 | ||||||||||||||||||||||||
Restricted cash and cash equivalents (1) | 1,367 | 10,014 | ||||||||||||||||||||||||
Other investment securities: | ||||||||||||||||||||||||||
Investment in EchoStar preferred tracking stock - cost method | 228,795 | 228,795 | ||||||||||||||||||||||||
Investment in HSSC preferred tracking stock - cost method | 87,409 | 87,409 | ||||||||||||||||||||||||
Other investment securities - cost method | 11,046 | 11,046 | ||||||||||||||||||||||||
Total other investment securities (2) | 327,250 | 327,250 | ||||||||||||||||||||||||
Total marketable investment securities, restricted cash and cash equivalents, and other investment securities | $ | 459,774 | $ | 1,815,379 | ||||||||||||||||||||||
-1 | Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash and marketable investment securities” on our Condensed Consolidated Balance Sheets. | |||||||||||||||||||||||||
-2 | Other investment securities are included in “Other noncurrent assets, net” on our Condensed Consolidated Balance Sheets. | |||||||||||||||||||||||||
Schedule of unrealized gain (loss) on marketable investment securities | As of March 31, 2015 | As of December 31, 2014 | ||||||||||||||||||||||||
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 | $ | 62,777 | $ | 92 | $ | — | $ | 92 | $ | 58,254 | $ | 7 | $ | (11 | ) | $ | (4 | ) | ||||||||
Commercial paper | 11,277 | — | — | — | 65,696 | — | — | — | ||||||||||||||||||
Corporate securities | 1,017 | — | (4 | ) | (4 | ) | 1,247,403 | 5,608 | (145 | ) | 5,463 | |||||||||||||||
Other | 17,194 | — | — | — | 55,788 | — | — | — | ||||||||||||||||||
Equity securities | 38,892 | 25,576 | — | 25,576 | 50,974 | 37,737 | — | 37,737 | ||||||||||||||||||
Total | $ | 131,157 | $ | 25,668 | $ | (4 | ) | $ | 25,664 | $ | 1,478,115 | $ | 43,352 | $ | (156 | ) | $ | 43,196 | ||||||||
Schedule of available-for-sale securities in continuous unrealized loss position by length of time and their fair value | As of | |||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||
Value | Loss | Value | Loss | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Debt Securities: | ||||||||||||||||||||||||||
Less than 12 months | $ | 637 | $ | (4 | ) | $ | 268,492 | $ | (100 | ) | ||||||||||||||||
12 months or more | — | — | 129,092 | (56 | ) | |||||||||||||||||||||
Total | $ | 637 | $ | (4 | ) | $ | 397,584 | $ | (156 | ) | ||||||||||||||||
Schedule of investments measured at fair value on a recurring basis | As of | |||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Cash Equivalents (including restricted) | $ | 232,663 | $ | 37,675 | $ | 194,988 | $ | — | $ | 6,605,274 | $ | 258,281 | $ | 6,346,993 | $ | — | ||||||||||
Debt securities (including restricted): | ||||||||||||||||||||||||||
U.S. Treasury and agency securities | $ | 62,777 | $ | 47,250 | $ | 15,527 | $ | — | $ | 58,254 | $ | 42,710 | $ | 15,544 | $ | — | ||||||||||
Commercial paper | 11,277 | — | 11,277 | — | 65,696 | — | 65,696 | — | ||||||||||||||||||
Corporate securities | 1,017 | — | 1,017 | — | 1,247,403 | — | 1,247,403 | — | ||||||||||||||||||
Other | 17,194 | — | 17,194 | — | 55,788 | — | 55,788 | — | ||||||||||||||||||
Equity securities | 38,892 | 38,892 | — | — | 50,974 | 50,974 | — | — | ||||||||||||||||||
Total | $ | 131,157 | $ | 86,142 | $ | 45,015 | $ | — | $ | 1,478,115 | $ | 93,684 | $ | 1,384,431 | $ | — | ||||||||||
Inventory_Tables
Inventory (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory | ||||||||
Schedule of inventory | As of | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Finished goods | $ | 221,499 | $ | 252,101 | ||||
Raw materials | 166,532 | 159,095 | ||||||
Work-in-process | 96,570 | 82,350 | ||||||
Total inventory | $ | 484,601 | $ | 493,546 | ||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Property and Equipment | ||||||||
Schedule of depreciation and amortization expense | For the Three Months | |||||||
Ended March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Equipment leased to customers | $ | 191,753 | $ | 185,723 | ||||
Satellites | 15,261 | 23,201 | ||||||
Buildings, furniture, fixtures, equipment and other | 16,881 | 16,042 | ||||||
Total depreciation and amortization | $ | 223,895 | $ | 224,966 | ||||
Schedule of pay-TV satellite fleet | 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 10 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 10 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. | |||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Long-Term Debt | ||||||||||||||
Schedule of carrying and fair values of the entity's debt facilities | As of | |||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||
Carrying | Carrying | |||||||||||||
Value | Fair Value | Value | Fair Value | |||||||||||
(In thousands) | ||||||||||||||
7 3/4% Senior Notes due 2015 (1) | $ | 650,001 | $ | 656,501 | $ | 650,001 | $ | 664,321 | ||||||
7 1/8% Senior Notes due 2016 (2) | 1,500,000 | 1,558,500 | 1,500,000 | 1,580,625 | ||||||||||
4 5/8% Senior Notes due 2017 | 900,000 | 927,531 | 900,000 | 933,750 | ||||||||||
4 1/4% Senior Notes due 2018 | 1,200,000 | 1,221,000 | 1,200,000 | 1,245,600 | ||||||||||
7 7/8% Senior Notes due 2019 | 1,400,000 | 1,575,952 | 1,400,000 | 1,589,700 | ||||||||||
5 1/8% Senior Notes due 2020 | 1,100,000 | 1,113,750 | 1,100,000 | 1,100,000 | ||||||||||
6 3/4% Senior Notes due 2021 | 2,000,000 | 2,130,000 | 2,000,000 | 2,157,500 | ||||||||||
5 7/8% Senior Notes due 2022 | 2,000,000 | 2,025,000 | 2,000,000 | 2,055,000 | ||||||||||
5% Senior Notes due 2023 | 1,500,000 | 1,500,000 | 1,500,000 | 1,470,000 | ||||||||||
5 7/8% Senior Notes due 2024 | 2,000,000 | 2,012,500 | 2,000,000 | 2,019,800 | ||||||||||
Other notes payable | 14,701 | 14,701 | 14,701 | 14,701 | ||||||||||
Subtotal | 14,264,702 | $ | 14,735,435 | 14,264,702 | $ | 14,830,997 | ||||||||
Unamortized deferred financing costs and debt discounts, net | (48,974 | ) | (51,473 | ) | ||||||||||
Capital lease obligations (3) | 188,083 | NA | 194,669 | NA | ||||||||||
Total long-term debt and capital lease obligations (including current portion) | $ | 14,403,811 | $ | 14,407,898 | ||||||||||
-1 | Our 7 3/4% Senior Notes due 2015 mature on May 31, 2015 and are included in “Current portion of long-term debt and capital lease obligations” on our Condensed Consolidated Balance Sheets as of March 31, 2015. | |||||||||||||
-2 | Our 7 1/8% Senior Notes due 2016 mature on February 1, 2016 and have been reclassified to “Current portion of long-term debt and capital lease obligations” on our Condensed Consolidated Balance Sheets as of March 31, 2015. | |||||||||||||
-3 | Disclosure regarding fair value of capital leases is not required. | |||||||||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Related Party Transactions | ||||||||
Schedule of transactions with NagraStar | For the Three Months | |||||||
Ended March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Purchases (including fees): | ||||||||
Purchases from NagraStar | $ | 22,498 | $ | 20,203 | ||||
As of | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Amounts Payable and Commitments: | ||||||||
Amounts payable to NagraStar | $ | 13,783 | $ | 14,819 | ||||
Commitments to NagraStar | $ | 9,545 | $ | 12,368 | ||||
Organization_and_Business_Acti1
Organization and Business Activities (Details) | Mar. 31, 2015 |
item | |
Organization and Business Activities | |
Number of subscribers | 13,844,000 |
Supplemental_Data_Statements_o2
Supplemental Data - Statements of Cash Flows (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash paid for interest | $230,081 | $230,120 |
Cash received for interest | 4,217 | 8,762 |
Cash paid for income taxes | 577 | 2,166 |
Cash paid for income taxes to DISH Network | 140,595 | 154,910 |
Satellite and Tracking Stock Transaction with EchoStar: | ||
Investment in EchoStar and HSSC preferred tracking stock - cost method | 327,250 | |
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 | |
Deferred taxes for capital distribution to EchoStar | $31,274 |
Marketable_Investment_Securiti2
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Marketable Investment Securities, Restricted Cash and Cash Equivalents and Other Investment Securities: | ||
Current marketable investment securities | $45,540 | $1,401,145 |
Restricted marketable investment securities(1) | 85,617 | 76,970 |
Total marketable investment securities | 131,157 | 1,478,115 |
Restricted cash and cash equivalents (1) | 1,367 | 10,014 |
Other investment securities - cost method | 327,250 | 327,250 |
Total marketable investment securities, restricted cash and cash equivalents, and other investment securities | 459,774 | 1,815,379 |
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 | 228,795 |
HSSC | ||
Marketable Investment Securities, Restricted Cash and Cash Equivalents and Other Investment Securities: | ||
Other investment securities - cost method | 87,409 | 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 | $11,046 |
Marketable_Investment_Securiti3
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 2) (Satellite and Tracking Stock Transaction, USD $) | 0 Months Ended | 3 Months Ended | |
Feb. 20, 2014 | Feb. 20, 2014 | Mar. 31, 2014 | |
item | |||
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 | $59,000,000 | |
Cash in exchange for shares of series of preferred tracking stock issued | 11,000,000 | 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 3) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Accumulated net unrealized gains (losses) | ||
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss) | $25,664,000 | $43,196,000 |
Accumulated net unrealized gains, net of tax, in accumulated other comprehensive income (loss) | 16,000,000 | 28,000,000 |
Components of available-for-sale investments | ||
Available-for-sale securities, current | 45,540,000 | 1,401,145,000 |
Total marketable investment securities | 131,157,000 | 1,478,115,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 25,668,000 | 43,352,000 |
Unrealized Losses | -4,000 | -156,000 |
Unrealized Gains Losses, Net | 25,664,000 | 43,196,000 |
Contractual maturities of restricted and non-restricted marketable investment securities | ||
Debt securities with contractual maturities within one year | 42,000,000 | |
Debt securities with contractual maturities extending longer than one year through and including five years | 50,000,000 | |
U.S. Treasury and agency securities | ||
Accumulated net unrealized gains (losses) | ||
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss) | 92,000 | -4,000 |
Components of available-for-sale investments | ||
Available-for-sale securities, current | 62,777,000 | 58,254,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 92,000 | 7,000 |
Unrealized Losses | -11,000 | |
Unrealized Gains Losses, Net | 92,000 | -4,000 |
Commercial paper | ||
Components of available-for-sale investments | ||
Available-for-sale securities, current | 11,277,000 | 65,696,000 |
Corporate securities | ||
Accumulated net unrealized gains (losses) | ||
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss) | -4,000 | 5,463,000 |
Components of available-for-sale investments | ||
Available-for-sale securities, current | 1,017,000 | 1,247,403,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 5,608,000 | |
Unrealized Losses | -4,000 | -145,000 |
Unrealized Gains Losses, Net | -4,000 | 5,463,000 |
Other | ||
Components of available-for-sale investments | ||
Available-for-sale securities, current | 17,194,000 | 55,788,000 |
Equity Securities | ||
Accumulated net unrealized gains (losses) | ||
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss) | 25,576,000 | 37,737,000 |
Components of available-for-sale investments | ||
Available-for-sale securities, current | 38,892,000 | 50,974,000 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 25,576,000 | 37,737,000 |
Unrealized Gains Losses, Net | $25,576,000 | $37,737,000 |
Marketable_Investment_Securiti5
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 4) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair value of marketable investment securities in a loss position | ||
Total | $637 | $397,584 |
Unrealized loss on marketable investment securities in a loss position | ||
Total | -4 | -156 |
Debt Securities | ||
Fair value of marketable investment securities in a loss position | ||
Less than 12 Months | 637 | 268,492 |
12 Months or More | 129,092 | |
Unrealized loss on marketable investment securities in a loss position | ||
Less than 12 months | -4 | -100 |
12 months or more | ($56) |
Marketable_Investment_Securiti6
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 5) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | $45,540 | $1,401,145 |
Total marketable investment securities | 131,157 | 1,478,115 |
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 | ||
Available-for-sale securities, current | 62,777 | 58,254 |
Commercial paper | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | 11,277 | 65,696 |
Corporate securities | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | 1,017 | 1,247,403 |
Other | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | 17,194 | 55,788 |
Equity Securities | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | 38,892 | 50,974 |
Fair value measurements on recurring basis | Total | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 232,663 | 6,605,274 |
Total marketable investment securities | 131,157 | 1,478,115 |
Fair value measurements on recurring basis | Total | U.S. Treasury and agency securities | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | 62,777 | 58,254 |
Fair value measurements on recurring basis | Total | Commercial paper | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | 11,277 | 65,696 |
Fair value measurements on recurring basis | Total | Corporate securities | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | 1,017 | 1,247,403 |
Fair value measurements on recurring basis | Total | Other | ||
Fair value of marketable securities | ||
Debt security | 17,194 | 55,788 |
Fair value measurements on recurring basis | Total | Equity Securities | ||
Fair value of marketable securities | ||
Equity securities | 38,892 | 50,974 |
Fair value measurements on recurring basis | Level 1 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 37,675 | 258,281 |
Total marketable investment securities | 86,142 | 93,684 |
Fair value measurements on recurring basis | Level 1 | U.S. Treasury and agency securities | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | 47,250 | 42,710 |
Fair value measurements on recurring basis | Level 1 | Equity Securities | ||
Fair value of marketable securities | ||
Equity securities | 38,892 | 50,974 |
Fair value measurements on recurring basis | Level 2 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 194,988 | 6,346,993 |
Total marketable investment securities | 45,015 | 1,384,431 |
Fair value measurements on recurring basis | Level 2 | U.S. Treasury and agency securities | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | 15,527 | 15,544 |
Fair value measurements on recurring basis | Level 2 | Commercial paper | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | 11,277 | 65,696 |
Fair value measurements on recurring basis | Level 2 | Corporate securities | ||
Fair value of marketable securities | ||
Available-for-sale securities, current | 1,017 | 1,247,403 |
Fair value measurements on recurring basis | Level 2 | Other | ||
Fair value of marketable securities | ||
Debt security | $17,194 | $55,788 |
Inventory_Details
Inventory (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory | ||
Finished goods | $221,499 | $252,101 |
Raw materials | 166,532 | 159,095 |
Work-in-process | 96,570 | 82,350 |
Total inventory | $484,601 | $493,546 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Depreciation and amortization expense | ||
Depreciation and amortization expense | $223,895 | $224,966 |
Equipment leased to customers | ||
Depreciation and amortization expense | ||
Depreciation and amortization expense | 191,753 | 185,723 |
Satellites | ||
Depreciation and amortization expense | ||
Depreciation and amortization expense | 15,261 | 23,201 |
Buildings, furniture, fixtures, equipment and other | ||
Depreciation and amortization expense | ||
Depreciation and amortization expense | $16,881 | $16,042 |
Pay-TV Satellites | ||
Depreciation and amortization expense | ||
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | 14 | |
Owned Satellites | 1 | |
Number of satellites utilized under operating lease | 11 | |
Number of satellites utilized under capital lease | 2 |
Property_and_Equipment_Details1
Property and Equipment (Details 2) | 3 Months Ended |
Mar. 31, 2015 | |
EchoStar XV | |
Property and Equipment | |
Estimate Useful life of assets | 15 years |
EchoStar XVIII | |
Property and Equipment | |
Estimate Useful life of assets | 15 years |
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 $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Long-term debt | ||
Carrying Value | $14,264,702 | $14,264,702 |
Fair Value | 14,735,435 | 14,830,997 |
Unamortized deferred financing costs and debt discount, net | -48,974 | -51,473 |
Capital lease obligations (3) | 188,083 | 194,669 |
Total long-term debt and capital lease obligations (including current portion) | 14,403,811 | 14,407,898 |
7 3/4% Senior Notes due 2015 | ||
Long-term debt | ||
Carrying Value | 650,001 | 650,001 |
Fair Value | 656,501 | 664,321 |
Interest rate (as a percent) | 7.75% | 7.75% |
7 1/8% Senior Notes due 2016 | ||
Long-term debt | ||
Carrying Value | 1,500,000 | 1,500,000 |
Fair Value | 1,558,500 | 1,580,625 |
Interest rate (as a percent) | 7.13% | 7.13% |
4 5/8% Senior Notes due 2017 | ||
Long-term debt | ||
Carrying Value | 900,000 | 900,000 |
Fair Value | 927,531 | 933,750 |
Interest rate (as a percent) | 4.63% | 4.63% |
4 1/4% Senior Notes due 2018 | ||
Long-term debt | ||
Carrying Value | 1,200,000 | 1,200,000 |
Fair Value | 1,221,000 | 1,245,600 |
Interest rate (as a percent) | 4.25% | 4.25% |
7 7/8% Senior Notes due 2019 | ||
Long-term debt | ||
Carrying Value | 1,400,000 | 1,400,000 |
Fair Value | 1,575,952 | 1,589,700 |
Interest rate (as a percent) | 7.88% | 7.88% |
5 1/8% Senior Notes due 2020 | ||
Long-term debt | ||
Carrying Value | 1,100,000 | 1,100,000 |
Fair Value | 1,113,750 | 1,100,000 |
Interest rate (as a percent) | 5.13% | 5.13% |
6 3/4% Senior Notes due 2021 | ||
Long-term debt | ||
Carrying Value | 2,000,000 | 2,000,000 |
Fair Value | 2,130,000 | 2,157,500 |
Interest rate (as a percent) | 6.75% | 6.75% |
5 7/8% Senior Notes due 2022 | ||
Long-term debt | ||
Carrying Value | 2,000,000 | 2,000,000 |
Fair Value | 2,025,000 | 2,055,000 |
Interest rate (as a percent) | 5.88% | 5.88% |
5% Senior Notes due 2023 | ||
Long-term debt | ||
Carrying Value | 1,500,000 | 1,500,000 |
Fair Value | 1,500,000 | 1,470,000 |
Interest rate (as a percent) | 5.00% | 5.00% |
5 7/8% Senior Notes due 2024 | ||
Long-term debt | ||
Carrying Value | 2,000,000 | 2,000,000 |
Fair Value | 2,012,500 | 2,019,800 |
Interest rate (as a percent) | 5.88% | 5.88% |
Other notes payable | ||
Long-term debt | ||
Carrying Value | 14,701 | 14,701 |
Fair Value | $14,701 | $14,701 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 87 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||
Feb. 12, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2008 | Mar. 31, 2015 | Mar. 09, 2012 | Mar. 02, 2015 | 31-May-12 | Jul. 31, 2009 | Dec. 23, 2013 | Apr. 29, 2014 | |
item | item | item | |||||||||
Spectrum Investments | |||||||||||
Number of wireless spectrum licenses | 176 | 176 | |||||||||
Dividend paid to DOC | $8,250,000,000 | $8,250,000,000 | $650,000,000 | ||||||||
Dish Network | |||||||||||
Spectrum Investments | |||||||||||
Payment to acquire certain wireless licenses | 712,000,000 | 5,000,000,000 | |||||||||
Dish Network | Wireless | |||||||||||
Spectrum Investments | |||||||||||
Number of wireless spectrum licenses | 176 | ||||||||||
Remaining balance amount paid for H Block spectrum licenses | 1,672,000,000 | ||||||||||
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 | DBSD North America and TerreStar Transactions | Wireless | |||||||||||
Spectrum Investments | |||||||||||
Modified 700 MHz Interim Build-Out Requirement (as a percent) | 40.00% | ||||||||||
Modified 700 MHz Final Build-Out Requirement (as a percent) | 70.00% | ||||||||||
Accelerated period to meet Modified 700 MHz Build-Out Requirement on failure to meet Modified 700 MHz Interim Build-Out Requirement | 1 year | ||||||||||
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 | ||||||||||
Dish Network | DBSD North America | |||||||||||
Spectrum Investments | |||||||||||
Percentage of equity acquired | 100.00% | ||||||||||
Northstar Spectrum And SNR Holdco | Dish Network | AWS 3 Auction | |||||||||||
Spectrum Investments | |||||||||||
Total investments | 9,778,000,000 | 9,778,000,000 | |||||||||
Northstar Wireless or Northstar Spectrum | Northstar Manager LLC | |||||||||||
Spectrum Investments | |||||||||||
Controlling interest owned by other companies | 15.00% | ||||||||||
Northstar Wireless or Northstar Spectrum | AWS 3 Auction | |||||||||||
Spectrum Investments | |||||||||||
Bidding credit | 25.00% | ||||||||||
Gross winning bids | 7,845,000,000 | ||||||||||
Net winning bid | 5,884,000,000 | ||||||||||
Equity contribution | 133,000,000 | ||||||||||
Northstar Wireless or Northstar Spectrum | AWS 3 Auction | Northstar Manager LLC | |||||||||||
Spectrum Investments | |||||||||||
Equity contributions as percentage of purchase price | 15.00% | ||||||||||
Northstar Wireless or Northstar Spectrum | American II | |||||||||||
Spectrum Investments | |||||||||||
Ownership percentage | 85.00% | ||||||||||
Northstar Wireless or Northstar Spectrum | American II | AWS 3 Auction | |||||||||||
Spectrum Investments | |||||||||||
Commitment to make loan as percentage of purchase price | 85.00% | ||||||||||
Equity contributions as percentage of purchase price | 15.00% | ||||||||||
Equity contribution | 750,000,000 | ||||||||||
Loan receivable | 5,001,000,000 | ||||||||||
SNR Wireless or SNR Wireless Holdco | SNR Wireless Management LLC | |||||||||||
Spectrum Investments | |||||||||||
Controlling interest owned by other companies | 15.00% | ||||||||||
SNR Wireless or SNR Wireless Holdco | AWS 3 Auction | |||||||||||
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 | ||||||||||
Equity contribution | 93,000,000 | ||||||||||
SNR Wireless or SNR Wireless Holdco | AWS 3 Auction | SNR Wireless Management LLC | |||||||||||
Spectrum Investments | |||||||||||
Equity contributions as percentage of purchase price | 15.00% | ||||||||||
SNR Wireless or SNR Wireless Holdco | American III | |||||||||||
Spectrum Investments | |||||||||||
Ownership percentage | 85.00% | ||||||||||
SNR Wireless or SNR Wireless Holdco | American III | AWS 3 Auction | |||||||||||
Spectrum Investments | |||||||||||
Commitment to make loan as percentage of purchase price | 85.00% | ||||||||||
Equity contributions as percentage of purchase price | 15.00% | ||||||||||
Equity contribution | 524,000,000 | ||||||||||
Loan receivable | 3,503,000,000 | ||||||||||
Satellite transponder guarantees | |||||||||||
Spectrum Investments | |||||||||||
Guarantor Obligations, Maximum Exposure, Undiscounted | 296,000,000 | 296,000,000 | |||||||||
Hopper litigation | Maximum | |||||||||||
Spectrum Investments | |||||||||||
Number of days to store HD primetime programs recordings | 8 days | ||||||||||
Technology Development Licensing | |||||||||||
Spectrum Investments | |||||||||||
Number of reexamination petitions pending before patent and trademark office | 2 | ||||||||||
Do Not Call Litigation | |||||||||||
Spectrum Investments | |||||||||||
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. | |||||||||||
Spectrum Investments | |||||||||||
Claim amount | $270,000,000 | ||||||||||
Lightsquared Harbinger Capital Partners LLC | |||||||||||
Spectrum Investments | |||||||||||
Business days allowed to terminate existing agreements | 3 days |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details 2) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | |||
Jul. 25, 2014 | Jul. 08, 2014 | Sep. 30, 2014 | Mar. 31, 2012 | Dec. 23, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | |
item | item | ||||||
Lightsquared Harbinger Capital Partners LLC | |||||||
Loss contingencies | |||||||
Number of claims asserted by Jacksonville PFPF | 5 | ||||||
Lightsquared Harbinger Capital Partners LLC | Mr. Ergen | |||||||
Loss contingencies | |||||||
Number of claims asserted by Jacksonville PFPF | 3 | ||||||
Lightsquared Harbinger Capital Partners LLC | Director Defendants | |||||||
Loss contingencies | |||||||
Number of claims asserted by Jacksonville PFPF | 1 | ||||||
Lightsquared Harbinger Capital Partners LLC | Minimum | |||||||
Loss contingencies | |||||||
Claim amount | $500,000,000 | ||||||
Personalized Media Communications Inc | Minimum | |||||||
Loss contingencies | |||||||
Claim amount | 150,000,000 | 500,000,000 | |||||
Personalized Media Communications Inc | Maximum | |||||||
Loss contingencies | |||||||
Claim amount | 450,000,000 | 650,000,000 | |||||
DISH Network L.L.C. | Do Not Call Litigation | |||||||
Loss contingencies | |||||||
Claim amount | 270,000,000 | ||||||
Claim amount from state plaintiff | 23,500,000,000 | ||||||
DISH Network L.L.C. | Do Not Call Litigation | Maximum | |||||||
Loss contingencies | |||||||
Claim amount from federal plaintiff | $900,000,000 | ||||||
LightSquared transaction shareholder derivative actions | |||||||
Loss contingencies | |||||||
Number of shareholders who filed lawsuits | 5 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | |||
In Thousands, unless otherwise specified | Feb. 12, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Feb. 12, 2015 | Oct. 14, 2014 | Mar. 28, 2014 |
item | ||||||
Related Party Transactions | ||||||
Dividend paid to DOC | $8,250,000 | $8,250,000 | $650,000 | |||
Number of wireless spectrum licenses | 176 | |||||
Subscriber-related revenue | 3,586,094 | 3,473,208 | ||||
Broadband, Wireless and Other Operations | ||||||
Related Party Transactions | ||||||
Expenses associated with services | 4,000 | 3,000 | ||||
Dish Network | ||||||
Related Party Transactions | ||||||
Dividend paid to DOC | 8,250,000 | 1,500,000 | 650,000 | |||
Subscriber-related revenue | $4,000 | $5,000 |
Related_Party_Transactions_Det1
Related Party Transactions (Details 2) (USD $) | 3 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Jan. 01, 2015 | Dec. 31, 2012 | 31-May-13 |
item | |||||
Related Party Transactions | |||||
Satellite and transmission expenses | $184,680 | $148,127 | |||
EchoStar | |||||
Related Party Transactions | |||||
Satellite and transmission expenses | $175,000 | $138,000 | |||
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 | ||||
Agreement Renewal Option Term | 3 years | ||||
EchoStar | EchoStar XV | |||||
Related Party Transactions | |||||
Notice period for termination of agreement | 30 days |
Related_Party_Transactions_Det2
Related Party Transactions (Details 3) (USD $) | 3 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Sep. 30, 2013 | 31-May-10 | 31-May-13 | Dec. 21, 2012 | Dec. 31, 2009 | Sep. 30, 2012 | Dec. 31, 2008 | 31-May-12 | Jan. 02, 2012 |
item | item | |||||||||
EchoStar XVI | ||||||||||
Related Party Transactions | ||||||||||
Agreement Renewal Option Term | 6 years | |||||||||
103 degree orbital location member | ||||||||||
Related Party Transactions | ||||||||||
Payments to the related party | $23 | |||||||||
Net book value of asset | 20 | |||||||||
Capital distribution | $3 | |||||||||
EchoStar | Certain Sports Related Programming Broadcast Agreement | ||||||||||
Related Party Transactions | ||||||||||
Agreement term | 10 years | |||||||||
EchoStar | EchoStar VIII | ||||||||||
Related Party Transactions | ||||||||||
Notice period for termination of agreement | 30 days | |||||||||
EchoStar | EchoStar XVI | ||||||||||
Related Party Transactions | ||||||||||
Agreement term from commencement of service date | 4 years | 10 years | ||||||||
Agreement Renewal Option Term | 6 years | |||||||||
Additional term of renewal option | 5 years | |||||||||
EchoStar | Telesat Transponder Agreement | ||||||||||
Related Party Transactions | ||||||||||
Agreement term with third party | 15 years | |||||||||
Number of DBS transponders available to receive services | 32 | |||||||||
EchoStar | DISH Nimiq 5 Agreement | ||||||||||
Related Party Transactions | ||||||||||
Agreement term | 10 years | |||||||||
Number of DBS transponders currently used | 32 | |||||||||
EchoStar | QuetzSat-1 Lease Agreement | ||||||||||
Related Party Transactions | ||||||||||
Agreement term with third party | 10 years | |||||||||
Number of DBS transponders available to receive services | 32 | |||||||||
Number of DBS transponders currently used | 24 | |||||||||
Number of transponders subleased | 5 | |||||||||
EchoStar | 103 degree orbital location member | ||||||||||
Related Party Transactions | ||||||||||
Agreement term | 10 years | |||||||||
Agreement term from commencement of service date | 10 years | |||||||||
EchoStar | TT&C Agreement | ||||||||||
Related Party Transactions | ||||||||||
Required notice period for termination by the reporting entity | 60 days | |||||||||
EchoStar | 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 $) | 3 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Jan. 02, 2010 | Feb. 23, 2010 |
Related Party Transactions | ||||
General and administrative expenses | $200,446 | $179,584 | ||
EchoStar | ||||
Related Party Transactions | ||||
General and administrative expenses | $20,000 | $20,000 | ||
EchoStar | Product Support Agreement | Minimum | ||||
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 | Gilbert Lease Agreement | ||||
Related Party Transactions | ||||
Notice period to exercise option to extend agreement | 3 years | |||
EchoStar | DISH Online.com Services Agreement | ||||
Related Party Transactions | ||||
Term of renewal option exercised | 1 year | |||
Agreement term | 2 years | |||
EchoStar | DISH Online.com Services Agreement | Minimum | ||||
Related Party Transactions | ||||
Required notice period for termination by the reporting entity | 120 days | |||
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 | |||
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 | |||
EchoStar | Application Development Agreement | ||||
Related Party Transactions | ||||
Minimum 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 of agreement | 180 days | |||
Notice period to exercise option to extend agreement | 1 year | |||
Minimum notice period for termination of agreement | 30 days | |||
Notice period required to extend the agreement term | 180 days | |||
EchoStar | Santa Fe Lease Agreement | ||||
Related Party Transactions | ||||
Notice period to exercise option to extend agreement | 1 year |
Related_Party_Transactions_Det4
Related Party Transactions (Details 5) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Apr. 29, 2011 | Jan. 31, 2012 | Dec. 31, 2011 | |
installment | |||||
Related Party Transactions | |||||
Cost of sales - equipment, services and other | $39,448,000 | $25,226,000 | |||
Dish Network | 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 | 200,000,000 | ||||
Estimated percentage of annual future payments payable by the company | 95.00% | ||||
Litigation settlement number of annual installments | 6 | ||||
Contribution from related party | 10,000,000 | ||||
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 | Receiver Agreement | |||||
Related Party Transactions | |||||
Notice period required to extend the agreement term | 60 days | ||||
Purchased set-top boxes and other equipment from EchoStar | 223,000,000 | 294,000,000 | |||
EchoStar | Patent Cross-License Agreements | Dish Network | 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 |
Related_Party_Transactions_Det5
Related Party Transactions (Details 6) (USD $) | 3 Months Ended | 0 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 20, 2014 | Feb. 23, 2010 | Feb. 20, 2014 | Dec. 31, 2014 | |
Related Party Transactions | ||||||
Subscriber-related expenses | $2,096,143,000 | $2,015,673,000 | ||||
Amounts payable to NagraStar | 254,568,000 | 236,122,000 | ||||
Satellite and Tracking Stock Transaction | ||||||
Related Party Transactions | ||||||
Percentage of economic interest in the Hughes Retail Group | 80.00% | |||||
EchoStar | ||||||
Related Party Transactions | ||||||
Non-voting interest redeemable period from fifth anniversary of the exchange agreement | 60 days | |||||
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 | |||||
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 | 1,000,000 | 1,000,000 | ||||
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 | 1,000,000 | 1,000,000 | ||||
NagraStar | ||||||
Related Party Transactions | ||||||
Purchases from NagraStar | 22,498,000 | 20,203,000 | ||||
Amounts payable to NagraStar | 13,783,000 | 14,819,000 | ||||
Commitments to NagraStar | 9,545,000 | 12,368,000 | ||||
EchoStar and HSSC | Satellite and Tracking Stock Transaction | ||||||
Related Party Transactions | ||||||
Liabilities Transferred | 59,000,000 | 59,000,000 | ||||
Cash in exchange for shares of series of preferred tracking stock issued | 11,000,000 | 11,000,000 | ||||
Capital transaction | 356,000,000 | |||||
Cash in Exchange of Shares Issued | 11,000,000 | 11,000,000 | ||||
Capital Distribution to Related Party in Connection Purchase of Strategic Investments | 51,000,000 | |||||
Tracking stock prohibited transfer period | 1 year | |||||
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% | |||||
DISH Investors | EchoStar and HSSC | ||||||
Related Party Transactions | ||||||
Tracking stock prohibited transfer period | 1 year |