Dish Network 2012 Annual Report Download - page 72

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
transactions occurred in contemplation of one another and the expectation that the acquired assets will be utilized as
a single integrated service. The total consideration of approximately $2.860 billion in connection with the DBSD
Transaction and the TerreStar Transaction included $2.761 billion in cash and a $99 million non-cash gain related to
the conversion of our DBSD North America 7.5% Convertible Senior Secured Notes due 2009. Of this non-cash gain,
$78 million was included as a component of “Accumulated other comprehensive income (loss)” within “Total
stockholders’ equity (deficit),” on our Consolidated Balance Sheets as of December 31, 2012. We expense all
transaction costs related to the acquisition as incurred. We have recognized the acquired assets and assumed
liabilities based on our estimates of fair value at their acquisition date as shown below.
Purchase
Price
Allocation
(In thousands)
Cash.......................................................... 5,230$
Current and noncurrent assets................... 5,600
Property and equipment............................ 1,206,663
Goodwill (1).............................................. 119,904
FCC authorizations................................... 1,949,000
Current liabilities...................................... (58,873)
Noncurrent liabilities................................ (367,876)
Total acquisition consideration................. 2,859,648$
(1) This amount is deductible for tax purposes and is included as a component of “Other noncurrent assets, net” on
our Consolidated Balance Sheets.
Pro forma revenue and earnings associated with the DBSD Transaction and the TerreStar Transaction are not
included in this filing. Due to the material ongoing modifications of the business, management has determined that
insufficient information exists to accurately develop meaningful historical pro forma financial information.
Moreover, the historical results of operations of DBSD North America and TerreStar are not indicative of their
potential prospective operations because DBSD North America and TerreStar were in bankruptcy proceedings and
did not have significant operations in periods prior to the transactions. As such, any historical pro forma information
would not prove useful in assessing our post transaction earnings and cash flows.
11. Long-Term Debt
7% Senior Notes due 2013
The 7% Senior Notes mature October 1, 2013 and have been reclassified to “Current portion of long-term debt and
capital lease obligations” on our Consolidated Balance Sheets as of December 31, 2012. Interest accrues at an annual
rate of 7% and is payable semi-annually in cash, in arrears on April 1 and October 1 of each year.
The 7% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100% of the
principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid
interest.
The 7% Senior Notes are:
x general unsecured senior obligations of DISH DBS Corporation (“DISH DBS”);
x ranked equally in right of payment with all of DISH DBS’ 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.
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DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
The indenture related to the 7% Senior Notes contains restrictive covenants that, among other things, impose
limitations on the ability of DISH DBS and its restricted subsidiaries to:
x incur additional debt;
x pay dividends or make distribution on DISH DBS’ capital stock or repurchase DISH DBS’ capital stock;
x make certain investments;
x create liens or enter into sale and leaseback transactions;
x enter into transactions with affiliates;
x merge or consolidate with another company; and
x transfer or sell assets.
In the event of a change of control, as defined in the related indenture, we would be required to make an offer to
repurchase all or any part of a holder’s 7% Senior Notes at a purchase price equal to 101% of the aggregate
principal amount thereof, together with accrued and unpaid interest thereon, to the date of repurchase.
6 5/8% Senior Notes due 2014
The 6 5/8% Senior Notes mature October 1, 2014. Interest accrues at an annual rate of 6 5/8% and is payable semi-
annually in cash, in arrears on April 1 and October 1 of each year.
The 6 5/8% 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 5/8% Senior Notes are:
x general unsecured senior obligations of DISH DBS;
x ranked equally in right of payment with all of DISH DBS’ 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 5/8% Senior Notes contains restrictive covenants that, among other things, impose
limitations on the ability of DISH DBS and its restricted subsidiaries to:
x incur additional indebtedness or enter into sale and leaseback transactions;
x pay dividends or make distribution on DISH DBS’ capital stock or repurchase DISH DBS’ 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.
In the event of a change of control, as defined in the related indenture, we would be required to make an offer to
repurchase all or any part of a holder’s 6 5/8% Senior Notes at a purchase price equal to 101% of the aggregate
principal amount thereof, together with accrued and unpaid interest thereon, to the date of repurchase.
7 3/4% Senior Notes due 2015
The 7 3/4% Senior Notes mature May 31, 2015. Interest accrues at an annual rate of 7 3/4% and is payable semi-
annually in cash, in arrears on May 31 and November 30 of each year.
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