Dish Network 2009 Annual Report Download - page 115

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-25
Long-Lived Satellite Assets. We evaluate our satellite fleet for impairment as one asset group and test for
recoverability whenever events or changes in circumstances indicate that its carrying amount may not be
recoverable. While certain of the anomalies discussed above, and previously disclosed, may be considered to
represent a significant adverse change in the physical condition of an individual satellite, based on the redundancy
designed within each satellite and considering the asset grouping, these anomalies are not considered to be
significant events that would require evaluation for impairment recognition. Unless and until a specific satellite is
abandoned or otherwise determined to have no service potential, the net carrying amount related to the satellite
would not be written off.
8. 700 MHz Wireless Licenses
In 2008, we paid $712 million to acquire certain 700 MHz wireless licenses, which were granted to us by the FCC
in February 2009. To commercialize these licenses and satisfy FCC build-out requirements, we will be required to
make significant additional investments or partner with others. Depending on the nature and scope of such
commercialization and build-out, any such investment or partnership could vary significantly. Part or all of our
licenses may be terminated for failure to satisfy FCC build-out requirements. We are currently performing a market
test to evaluate different technologies and consumer acceptance. In conducting our annual impairment test in 2009,
we determined that the estimated fair value of the FCC licenses, calculated using the discounted cash flow analysis,
exceeded their carrying amount. Based on this assessment, this asset was not impaired as of December 31, 2009.
9. Long-Term Debt
3% Convertible Subordinated Note due 2011
On October 5, 2009, we repaid our $25 million 3% Convertible Subordinated Note due 2011.
6 3/8% Senior Notes due 2011
The 6 3/8% Senior Notes mature October 1, 2011. Interest accrues at an annual rate of 6 3/8% and is payable semi-
annually in cash, in arrears on April 1 and October 1 of each year.
The 6 3/8% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100% of their
principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid
interest.
The 6 3/8% Senior Notes are:
x general unsecured senior obligations of DISH DBS Corporation (“DDBS”);
x ranked equally in right of payment with all of DDBS’ and the guarantors’ existing and future
unsecured senior debt; and
x ranked effectively junior to our and the guarantors’ current and future secured senior indebtedness up
to the value of the collateral securing such indebtedness.
The indenture related to the 6 3/8% Senior Notes contains restrictive covenants that, among other things, impose
limitations on the ability of DDBS and its restricted subsidiaries to:
x incur additional indebtedness or enter into sale and leaseback transactions;
x pay dividends or make distribution on DDBS’ capital stock or repurchase DDBS’ capital stock;
x make certain investments;
x create liens;
x enter into transactions with affiliates;
x merge or consolidate with another company; and
x transfer or sell assets.