Dish Network 2013 Annual Report Download

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Table of contents

  • Page 1

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  • Page 3
    ...despite the slow growth and increased competition in the pay-TV industry. In 2012, we managed the best churn rate we have seen since 2003. During 2013, we were able to keep churn essentially consistent. Meanwhile, our Hopper Whole-Home HD DVR, now in its third year on the market, continues to be the...

  • Page 4

  • Page 5
    ... ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013 OR Â... TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____. Commission file number: 0-26176 DISH Network Corporation (Exact name of registrant as specified...

  • Page 6
    ... and Financial Disclosure...Controls and Procedures...Other Information...PART III Item 10. Item 11. Item 12. Item 13. Item 14. Directors, Executive Officers and Corporate Governance...Executive Compensation...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder...

  • Page 7
    ...agreements at acceptable rates, or at all, from local network stations. We may be required to make substantial additional investments to maintain competitive programming offerings. Any failure or inadequacy of our information technology infrastructure could disrupt or harm our business. We currently...

  • Page 8
    ...upgrade existing subscribers with more advanced equipment could cause our products and services to become obsolete. We rely on a single vendor or a limited number of vendors to provide certain key products or services to us such as information technology support, billing systems, and security access...

  • Page 9
    ... will not be deficiencies leading to material weaknesses in our internal control over financial reporting. We may face other risks described from time to time in periodic and current reports we file with the Securities and Exchange Commission, or SEC. x x x x x x All cautionary statements made...

  • Page 10
    (This page has been left blank intentionally.)

  • Page 11
    ... largest pay-TV provider. Our common stock is publicly traded on the Nasdaq Global Select Market under the symbol "DISH." Our principal executive offices are located at 9601 South Meridian Boulevard, Englewood, Colorado 80112 and our telephone number is (303) 723-1000. DISH Network Corporation is...

  • Page 12
    ..., we provided local channels in standard definition in all 210 TV markets in the U.S. and local channels in HD in more than 190 markets in the U.S. Receiver Systems. Our subscribers receive programming via equipment that includes a small satellite dish, digital set-top receivers, and remote controls...

  • Page 13
    ...as our pay-TV business to acquire new broadband subscribers. In addition to the dishNET branded satellite broadband service, we also offer wireline voice and broadband services under the dishNET brand as a competitive local exchange carrier to consumers living in a 14-state region (Arizona, Colorado...

  • Page 14
    ... companies have upgraded older copper wire lines with fiber optic lines in certain markets. These fiber optic lines provide high capacity bandwidth, enabling telecommunications companies to offer video content that can be bundled with their broadband Internet access and voice services. In particular...

  • Page 15
    ... limited as technological advances and consumer demand for new features may render the returned equipment obsolete. Installation. We incur significant upfront costs to install satellite dishes and receivers in the homes of our new customers. New Customer Promotions. We often offer programming at no...

  • Page 16
    ...equipment, cabling and power surge repairs for a monthly fee. During 2011, we implemented a new in-home appointment scheduling system. Subscriber Management. We presently use, and depend on, CSG Systems International, Inc.'s ("CSG") software system for the majority of DISH Network subscriber billing...

  • Page 17
    ...operations. New Business Opportunities From time to time we evaluate opportunities for strategic investments or acquisitions that may complement our current services and products, enhance our technical capabilities, improve or sustain our competitive position, or otherwise offer growth opportunities...

  • Page 18
    ... use of other available spectrum. Increasing our available spectrum is particularly important as more bandwidth intensive HD programming is produced and to address new video and data applications consumers may desire in the future. We currently utilize satellites in geostationary orbit approximately...

  • Page 19
    ... information. Degree Orbital Location 111.1 92.85 Estimated Useful Life (Years) 15 15 Satellites Owned: T1...D1...Under Construction: T2 (1)... Launch Date July 2009 April 2008 - - - (1) Launch date and operational requirements have not yet been determined. Based on the FCC's rules applicable...

  • Page 20
    ... beam technology designed for, among other things, HD programming. During October 2013, we entered into an agreement with ArianeSpace S.A. ("Ariane") for launch services for this satellite, which is expected to be launched during 2015. Satellite Anomalies Operation of our DISH branded pay-TV service...

  • Page 21
    ...to video programming, satellite services, wireless telecommunications, broadband, the Internet or other areas of our business could limit or otherwise adversely affect the manner in which we currently conduct our business. If we become subject to new regulations or legislation or new interpretations...

  • Page 22
    ... currently transmit between nine and 13 standard definition digital video channels per DBS frequency channel. Several of our satellites also include spot-beam technology that enables us to increase the number of markets where we provide local channels, but reduces the number of video channels that...

  • Page 23
    ... competition against us from other satellite providers. It may also provide a means by which to increase our available satellite capacity in the United States. In addition, a number of administrations, such as Great Britain and the Netherlands, have requested authority to add orbital locations...

  • Page 24
    ... additional cable programming in exchange for retransmission consent of their local broadcast stations. These requirements may place constraints on available capacity on our satellites for other programming. Furthermore, the rates we are charged for retransmitting local channels have been increasing...

  • Page 25
    ... from expiring on their own terms. In addition, affiliates of certain cable providers have denied us access to sports programming they feed to their cable systems terrestrially, rather than by satellite. The FCC has held that new denials of such service are unfair if they have the purpose or...

  • Page 26
    ... the terms of the FCC's order on network neutrality (even if that order is vacated by judicial or legislative action) and Comcast licensing its affiliated content to us, other traditional pay-TV providers and certain providers of video services over the Internet on fair and nondiscriminatory terms...

  • Page 27
    ... 2012, we agreed to purchase additional MVDDS licenses in 45 markets from an affiliate of Cablevision Systems Corporation ("Cablevision"). We are currently leasing four of these licenses to a wholly-owned subsidiary of Cablevision. We have MVDDS licenses in 82 out of 214 geographical license areas...

  • Page 28
    ...the future make additional filings for the frequency assignments at particular orbital locations that are used or to be used by our current satellite networks and potential future satellite networks we may build or acquire. Our satellite services also must conform to the ITU service plans for Region...

  • Page 29
    ... negotiating collective bargaining agreements at these offices. WHERE YOU CAN FIND MORE INFORMATION We are subject to the informational requirements of the Exchange Act and accordingly file our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements...

  • Page 30
    ... and commercial installations, customer billing and equipment retrieval and refurbishment operations. Mr. Carlson previously was Senior Vice President of Retail Services, a position he held since mid-2006. He joined DISH Network in 1995 and has held operating roles of increasing responsibility over...

  • Page 31
    ...content acquisition and packaging, product management, marketing and advertising sales. Mr. Shull previously was our Senior Vice President of Programming, a position he held since December 2008. He joined DISH Network in 2004 and has held various positions of increasing responsibility over the years...

  • Page 32
    ...pay-TV services, and we face competition from providers of digital media, including companies that offer online services distributing movies, television shows and other video programming. Moreover, new technologies have been, and will likely continue to be, developed that further increase the number...

  • Page 33
    ... to lower cost programming packages, elect not to purchase premium services or pay per view movies or may disconnect our services and choose to replace them with less expensive alternatives such as video content delivered via the Internet, including, among others, video on demand. Higher subscriber...

  • Page 34
    ... installation of more HD and DVR receivers, which are generally more expensive than other receivers. Meanwhile, retention costs may be driven higher by increased upgrades of existing subscribers' equipment to HD and DVR receivers. Additionally, certain of our promotions, including, among others, pay...

  • Page 35
    ... additional cable programming in exchange for retransmission consent of their local broadcast stations. These requirements may place constraints on available capacity on our satellites for other programming. Furthermore, the rates we are charged for retransmitting local channels have been increasing...

  • Page 36
    .... Other pay-TV providers may have more successfully marketed and promoted their HD programming packages and value-added services and may also be better equipped and have greater resources to increase their HD offerings and value-added services to respond to increasing consumer demand. In addition...

  • Page 37
    ... development of new technologies; and the ability to differentiate our products and services and compete with other companies in the same markets. If our products and services, including without limitation, our Hopper and Joey set-top boxes, are not competitive or do not work properly, our business...

  • Page 38
    ...our ability to generate revenue, offer new products and services and remain competitive. We rely on a single vendor or a limited number of vendors to provide certain key products or services to us such as information technology support, billing systems, and security access devices, and the inability...

  • Page 39
    ... our business. Operation of our programming service requires that we have adequate satellite transmission capacity for the programming we offer. Moreover, current competitive conditions require that we continue to expand our offering of new programming. While we generally have had in-orbit satellite...

  • Page 40
    ... affect our operations and revenues and our relationship with current customers, as well as our ability to attract new customers for our pay-TV services. In particular, future anomalies may result in the loss of individual transponders on a satellite, a group of transponders on that satellite or the...

  • Page 41
    ...or EchoStar look at acquisitions and other corporate opportunities that may be suitable for both companies. In addition, certain of our directors and officers own EchoStar stock and options to purchase EchoStar stock. Mr. Ergen owns approximately 47.1% of EchoStar's total equity securities (assuming...

  • Page 42
    ... joint arrangements between DISH Network and EchoStar, we do not have agreements with EchoStar that would prevent either company from competing with the other. We rely on key personnel and the loss of their services may negatively affect our businesses. We believe that our future success will depend...

  • Page 43
    ... 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...

  • Page 44
    ... we are no longer required to operate an integrated satellite component, we are currently planning on using T1 in the commercialization of our wireless spectrum or for other commercial purposes. In addition, T1 is subject to certain Canadian satellite regulations, including, among other things, an...

  • Page 45
    ... various key suppliers and vendors to provide us, directly or through other suppliers, with infrastructure, equipment and services, such as switch and network equipment, handsets and other devices and equipment that we would need in order to operate a wireless services business and provide products...

  • Page 46
    ... which may not be available on acceptable terms or at all. In addition to committing capital to complete the acquisitions, substantial capital may be required to operate the acquired businesses following their acquisition. These acquisitions may result in significant financial losses if the intended...

  • Page 47
    ... in our businesses, construct and launch new satellites, and to pursue acquisitions and other strategic transactions. Furthermore, weakness in the equity markets could make it difficult for us to raise equity financing without incurring substantial dilution to our existing shareholders. In addition...

  • Page 48
    ...of Class C are entitled to ten votes per share; a provision that authorizes the issuance of "blank check" preferred stock, which could be issued by our Board of Directors to increase the number of outstanding shares and thwart a takeover attempt; a provision limiting who may call special meetings of...

  • Page 49
    ... distribution of content over networks owned by broadband and wireless Internet providers, as applicable. For more information, see "Item 1. Business - Government Regulations - FCC Regulations Governing our DBS Operations - Net Neutrality" of this Annual Report on Form 10-K. Changes in the Cable Act...

  • Page 50
    ... of operations. Furthermore, the adoption or modification of laws or regulations relating to video programming, satellite services, wireless telecommunications, broadband, the Internet or other areas of our business could limit or otherwise adversely affect the manner in which we currently conduct...

  • Page 51
    ... us, potentially reducing the amount of services available to our subscribers. The materiality of such a loss of authorizations would vary based upon, among other things, the location of the frequency used or the availability of replacement spectrum. In addition, Congress often considers and enacts...

  • Page 52
    ... numerous DISH service centers strategically located in regions throughout the United States. Furthermore, we own or lease capacity on 14 satellites which are a major component of our DISH pay-TV service. See further discussion under "Item 1. Business - Satellites" in this Annual Report on Form 10...

  • Page 53
    ... liability or damages. Custom Media Technologies LLC On August 15, 2013, Custom Media Technologies LLC ("Custom Media") filed complaints against us, AT&T Inc., Charter Communications, Inc., Comcast Corp., Cox Communications, Inc., DirecTV, Time Warner Cable Inc. and Verizon Communications, Inc., in...

  • Page 54
    ... calls to market or promote its goods or services for five years, and enjoin DISH Network L.L.C. from accepting activations or sales from certain existing independent third-party retailers and from certain new independent third-party retailers, except under certain circumstances. We have also filed...

  • Page 55
    ... subsidiary DISH Network L.L.C. filed a lawsuit against ESPN, Inc., ESPN Classic, Inc., ABC Cable Networks Group, Soapnet L.L.C. and International Family Entertainment (collectively, "ESPN") for breach of contract in New York State Supreme Court. Our complaint alleges that ESPN failed to provide us...

  • Page 56
    ... 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...

  • Page 57
    ... disclosed in our public filings, L-Band Acquisition, LLC ("LBAC"), our 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...

  • Page 58
    ... liability or damages. Norman IP Holdings, LLC On September 15, 2011, Norman IP Holdings, LLC ("Norman") filed a patent infringement complaint (the "2011 Action") against Lexmark International Corporation ("Lexmark") and Brother International Corporation ("Brother"), in the United States District...

  • Page 59
    ...in which it added new claims against us alleging infringement of additional DISH products. On May 1, 2013, Norman filed a fifth amended complaint in the 2011 Action, in which it named Mercedes-Benz USA, LLC, Volkswagen Group of America, Inc., Xerox Corporation, ZTE (USA) Inc., and ZTE Solutions, Inc...

  • Page 60
    ...Companies, Inc., Yahoo! Inc., Wal-Mart Stores, Inc., Vudu, Inc. and ESPN Internet Ventures as defendants. Preservation Technologies alleges that our BLOCKBUSTER On Demand, DISH branded pay-TV and DISH Online services and our Hopper and Joey® settop boxes infringe United States Patent Nos. 5,813,014...

  • Page 61
    ... 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. TQP Development, LLC On April 4, 2012, TQP Development, LLC ("TQP") filed suit against our wholly-owned subsidiary DISH Network...

  • Page 62
    ... LLC ("Voom") filed a lawsuit against our wholly-owned subsidiary DISH Network L.L.C., in New York Supreme Court, alleging breach of contract and other claims arising from our termination of the affiliation agreement governing carriage of certain Voom HD channels on the DISH branded payTV service...

  • Page 63
    ... AND ISSUER PURCHASES OF EQUITY SECURITIES Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters Market Information. Our Class A common stock is quoted on the Nasdaq Global Select Market under the symbol "DISH." The high and low closing sale prices of our...

  • Page 64
    ...information regarding purchases of our Class A common stock made by us for the period from October 1, 2013 through December 31, 2013. Maximum Approximate Total Number of Dollar Value of Shares Shares Purchased that May Yet be as Part of Publicly Average Purchased Under the Price Paid Announced Plans...

  • Page 65
    ...133,443) 2009 $ 2,139,336 8,295,343 6,496,564 (2,091,688) Statements of Operations Data Total revenue...Total costs and expenses...Operating income (loss)...Income (loss) from continuing operations...Net income (loss) attributable to DISH Network...Basic net income (loss) per share from continuing...

  • Page 66
    ...addition, for the year ended December 31, 2011, ARPU has been adjusted by $0.02 to exclude the effect of discontinued operations. ** During the fourth quarter 2012, following the launch of the dishNET branded broadband services, we determined SAC and ARPU, which combined pay-TV and certain broadband...

  • Page 67
    ... the current year presentation. March 31 2013 Other Quarterly Data (Unaudited) Pay-TV Metrics Pay-TV subscribers, as of period end (in millions)...Pay-TV subscriber additions, gross (in millions)...Pay-TV subscriber additions, net (in millions)...Pay-TV average monthly subscriber churn rate...Pay-TV...

  • Page 68
    ...) benefit, net...(126,419) Depreciation and amortization...(230,170) Income (loss) from continuing operations attributable to DISH Network...217,156 Plus: Income (loss) from discontinued operations, net of tax...(1,558) Net income (loss) attributable to DISH Network...$ 215,598 2012 Quarterly Non...

  • Page 69
    ...as our pay-TV business to acquire new Broadband subscribers. In addition to the dishNET branded satellite broadband service, we also offer wireline voice and broadband services under the dishNET brand as a competitive local exchange carrier to consumers living in a 14-state region (Arizona, Colorado...

  • Page 70
    ... other's existing subscriber bases rather than from first-time purchasers of pay-TV services. Some of our competitors have been especially aggressive by offering discounted programming and services for both new and existing subscribers. In addition, programming offered over the Internet has become...

  • Page 71
    ...credits when they lease a Hopper with Sling set-top box and subscribe to America's Top 120, DishLATINO Plus or a higher programming package and commit to a two-year contract (the "iPad promotion"). During the second quarter 2012, the four major broadcast television networks filed lawsuits against us...

  • Page 72
    ... 2011, we completed the Blockbuster Acquisition. Blockbuster primarily offered movies and video games for sale and rental through multiple distribution channels such as retail stores, by-mail, digital devices, the blockbuster.com website and the BLOCKBUSTER On Demand® service. Since the Blockbuster...

  • Page 73
    ... in property such as satellites, set-top boxes, information technology and facilities that support our overall business. However, since we are primarily a subscriber-based company, we also make subscriber-specific investments to acquire new subscribers and retain existing subscribers. While the...

  • Page 74
    ... 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...

  • Page 75
    ... revenue from basic, premium movie, local, HD programming, pay-per-view, Latino and international subscription television services, broadband services, equipment rental fees and other hardware related fees, including fees for DVRs, fees for broadband equipment, equipment upgrade fees and additional...

  • Page 76
    ...Pay-TV receiver systems directly by us to subscribers, including net costs related to our promotional incentives, costs related to our direct sales efforts and costs related to installation and acquisition advertising. We exclude the value of equipment capitalized under our lease program for new Pay...

  • Page 77
    ... retail price of our DISH America programming package, and include the resulting number, which is substantially smaller than the actual number of commercial units served, in our Pay-TV subscriber count. "Broadband subscribers." During the fourth quarter 2012, we elected to provide certain Broadband...

  • Page 78
    ... (loss) attributable to DISH Network...Other Data: Pay-TV subscribers, as of period end (in millions)...Pay-TV subscriber additions, gross (in millions)...Pay-TV subscriber additions, net (in millions)...Pay-TV average monthly subscriber churn rate...Pay-TV average subscriber acquisition cost per...

  • Page 79
    ... part because we increased our programming package price in the first quarter 2013 and did not during the same period in 2012. Churn continues to be adversely affected by increased competitive pressures, including aggressive marketing and discounted promotional offers. Our Pay-TV churn rate is also...

  • Page 80
    ... that returned lease equipment. Our Pay-TV SAC calculation does not reflect any benefit from payments we received in connection with equipment not returned to us from disconnecting lease subscribers and returned equipment that is made available for sale or used in our existing customer lease program...

  • Page 81
    ... assets designed to support the TerreStar MSS business, which ceased operations during the second quarter 2013, and increased depreciation expense from equipment leased to subscribers primarily related to subscriber activations with new Hopper receiver systems. The expense in 2012 was impacted by...

  • Page 82
    ... tax position that was resolved during the third quarter 2013. Net income (loss) attributable to DISH Network. "Net income (loss) attributable to DISH Network" was $807 million during the year ended December 31, 2013, an increase of $170 million compared to $637 million for the same period in 2012...

  • Page 83
    ... (loss) attributable to DISH Network...Other Data: Pay-TV subscribers, as of period end (in millions)...Pay-TV subscriber additions, gross (in millions)...Pay-TV subscriber additions, net (in millions)...Pay-TV average monthly subscriber churn rate...Pay-TV average subscriber acquisition cost per...

  • Page 84
    ... weakness and uncertainty. Our average monthly Pay-TV churn rate for the year ended December 31, 2012 was 1.57% compared to 1.63% for the same period in 2011. Our Pay-TV churn rate was positively impacted in part because we did not have a programming package price increase in the first quarter 2012...

  • Page 85
    ... an increase in gross new Pay-TV subscribers. Our Pay-TV SAC calculation did not reflect any benefit from payments we received in connection with equipment not returned to us from disconnecting lease subscribers and returned equipment that was made available for sale or used in our existing customer...

  • Page 86
    ... on the sale of marketable investment securities of $96 million, partially offset by an increase in impairment charges of $32 million during 2012. See Note 6 in the Notes to the Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K for further information. Adjusted earnings...

  • Page 87
    ... lease programs, operating efficiencies, increases or decreases in purchases of property and equipment, and other factors. The following table reconciles adjusted free cash flow to "Net cash flows from operating activities from continuing operations." For the Years Ended December 31, 2013 2012 2011...

  • Page 88
    .... Our investing activities generally include purchases and sales of marketable investment securities, acquisitions, strategic investments and cash used to grow our subscriber base and expand our infrastructure. For the years ended December 31, 2013, 2012 and 2011, we reported "Net cash outflows from...

  • Page 89
    ... dividend paid in cash on our Class A and Class B common stock. Other Liquidity Items Subscriber Base DISH added approximately 1,000 net Pay-TV subscribers during the year ended December 31, 2013, compared to the addition of approximately 89,000 net Pay-TV subscribers during the same period in 2012...

  • Page 90
    ... our existing customers, mostly by upgrading their equipment to HD and DVR receivers. As with our subscriber acquisition costs, our retention spending includes the cost of equipment and installation services. In certain circumstances, we also offer free programming and/or promotional pricing for...

  • Page 91
    ... or contract for the construction, launch or lease of additional satellites. On February 20, 2014, we entered into agreements with EchoStar to implement a transaction pursuant to which, among other things: (i) on March 1, 2014, we will transfer to EchoStar and Hughes Satellite Systems Corporation...

  • Page 92
    ...2014 purchase obligations primarily consist of binding purchase orders for receiver systems and related equipment, digital broadcast operations, satellite and transponder leases, engineering services, and products and services related to the operation of our DISH branded pay-TV service. Our purchase...

  • Page 93
    ... 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...

  • Page 94
    ... Report on Form 10-K. x Capitalized premise equipment. Since we retain ownership of certain equipment provided pursuant to our subscriber equipment lease programs for Pay-TV and Broadband subscribers, we capitalize and depreciate equipment costs that would otherwise be expensed at the time of sale...

  • Page 95
    ... made at a point in time, based on relevant market data as well as the best information available about the financial instrument. Sustained economic weakness has resulted in inactive markets for certain of our financial instruments, including our Auction Rate Securities ("ARS") and other investment...

  • Page 96
    ... Income (Loss) that would be material to our consolidated results of operations and financial condition. Business combinations. When we acquire a business, we allocate the purchase price to the various components of the acquisition based upon the fair value of each component using various valuation...

  • Page 97
    ... duration of our investments. Our cash, cash equivalents and current marketable investment securities had an average annual rate of return for the year ended December 31, 2013 of 0.5%. A change in interest rates would affect our future annual interest income from this portfolio, since funds would be...

  • Page 98
    .... To the extent interest rates increase, our costs of financing would increase at such time as we are required to refinance our debt or raise additional debt. As of December 31, 2013, a hypothetical 10% increase in assumed interest rates would increase our annual interest expense by approximately...

  • Page 99
    ... and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of...

  • Page 100
    ... in "Additional paid-in capital" on our Consolidated Balance Sheet. The Tracking Stock will be accounted for on a cost basis. The Satellite and Tracking Stock Transaction is further described below: Transaction Agreement. On February 20, 2014, DISH Operating L.L.C. ("DOLLC") and DISH Network...

  • Page 101
    ... 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. PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this...

  • Page 102
    ... by reference to Exhibit 4.1 to the Current Report on Form 8-K of DISH Network Corporation filed October 1, 2004, Commission File No. 0-26176). Indenture, relating to the 7 1/8% Senior Notes Due 2016, dated as of February 2, 2006 between DISH DBS Corporation and U.S. Bank National Association, as...

  • Page 103
    ... Report on Form 8-K of DISH Network Corporation filed April 5, 2013, Commission File No. 0-26176). 2002 Class B CEO Stock Option Plan (incorporated by reference to Appendix A to DISH Network Corporation's Definitive Proxy Statement on Schedule 14A dated April 9, 2002).** Satellite Service Agreement...

  • Page 104
    ... Amendment to Whole RF Channel Service Agreement, dated October 12, 2004, between Telesat Canada and DISH Network Corporation (incorporated by reference to Exhibit 10.22 to the Annual Report on Form 10-K of DISH Network Corporation for the year ended December 31, 2004, Commission File No. 0-26176...

  • Page 105
    ... Restricted Stock Unit Agreement (2005 Long-Term Incentive Plan) (incorporated by reference to Exhibit 99.8 to the Current Report on Form 8-K of DISH Network Corporation filed July 7, 2005, Commission File No. 0-26176).** Separation Agreement between EchoStar Corporation and DISH Network Corporation...

  • Page 106
    ... Exhibit 10.30 to the Annual Report on Form 10-K of EchoStar Corporation for the year ended December 31, 2009, Commission File No. 001-33807).*** NIMIQ 5 Whole RF Channel Service Agreement, dated September 15, 2009, between EchoStar Corporation and DISH Network L.L.C. (incorporated by reference from...

  • Page 107
    ... Launch Service Contract from EchoStar Corporation to DISH Orbital II L.L.C. (incorporated by reference from Exhibit 10.37 to the Annual Report on Form 10-K of EchoStar Corporation for the year ended December 31, 2009, Commission File No. 001-33807). Amended and Restated Investment Agreement, dated...

  • Page 108
    ... Corporation, a direct wholly-owned subsidiary of EchoStar, and DISH Network L.L.C. (incorporated by reference to Exhibit 10.25 to the Annual Report on Form 10-K of EchoStar Corporation for the year ended December 31, 2009, Commission File No. 001-33807).*** Receiver Agreement dated January 1, 2012...

  • Page 109
    ...the Annual Report on Form 10-K of DISH Network Corporation for the year ended December 31, 2013, filed on February 21, 2014, formatted in eXtensible Business Reporting Language ("XBRL"): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii...

  • Page 110
    ... by the undersigned, thereunto duly authorized. DISH NETWORK CORPORATION By: /s/ Robert E. Olson Robert E. Olson Executive Vice President and Chief Financial Officer Date: February 21, 2014 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the...

  • Page 111
    ... Financial Statements: Report of KPMG LLP, Independent Registered Public Accounting Firm...Consolidated Balance Sheets at December 31, 2013 and 2012 ...Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2013, 2012 and 2011...Consolidated Statements...

  • Page 112
    ..., DISH Network Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control - Integrated Framework (1992) issued by the COSO. /s/ KPMG LLP Denver, Colorado February 21, 2014 F-2

  • Page 113
    ... stock, $.01 par value, 800,000,000 shares authorized, 238,435,208 shares issued and outstanding...2,384 Additional paid-in capital...2,588,224 Accumulated other comprehensive income (loss)...173,872 Accumulated earnings (deficit)...(220,701) Treasury stock, at cost...(1,569,459) Total DISH Network...

  • Page 114
    DISH NETWORK CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Dollars in thousands, except per share amounts) For the Years Ended December 31, 2013 2012 2011 Revenue: Subscriber-related revenue...$ 13,764,774 Equipment sales and other revenue...94,855 Equipment ...

  • Page 115
    ... by EchoStar to DISH Digital Holding L.L.C...Net income (loss) attributable to noncontrolling interest...Net income (loss) attributable to DISH Network...Balance, December 31, 2012...Issuance of Class A common stock: Exercise of stock options ...Employee benefits...Employee Stock Purchase Plan...Non...

  • Page 116
    ... due 2011...Repurchases and redemption of 7% Senior Notes due 2013...Debt issuance costs...Repayment of long-term debt and capital lease obligations...Net proceeds from Class A common stock options exercised and stock issued under the Employee Stock Purchase Plan...Cash dividend on Class A and Class...

  • Page 117
    ..., our satellites, receiver systems, third-party broadcast operations, customer service facilities, a leased fiber network, in-home service and call center operations, and certain other assets utilized in our operations. In addition, we market broadband services under the dishNETâ„¢ brand. x Wireless...

  • Page 118
    ... 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...

  • Page 119
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued classified as available for sale are reflected in "Other, net" in the Consolidated Statements of Operations and Comprehensive Income (Loss). We evaluate our marketable investment securities portfolio on a quarterly basis...

  • Page 120
    ... amounts prepaid under our satellite service agreements, are capitalized during the construction phase, assuming the eventual successful launch and in-orbit operation of the satellite. If a satellite were to fail during launch or while in-orbit, the resultant loss would be charged to expense in the...

  • Page 121
    ... from such licensed orbital locations, including revenue attributable to programming offerings from such satellites, the direct operating and subscriber acquisition costs related to such programming, and future capital costs for replacement satellites. Projected revenue and cost amounts include...

  • Page 122
    ...investment securities; 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. x As of December 31, 2013 and 2012, the...

  • Page 123
    ... monthly rate charged to the subscriber. We offer our customers the opportunity to download movies for a specific viewing period or permanently purchase a movie from our web-site. We recognize revenue when the movie is successfully downloaded by the customer, which, based on our current technology...

  • Page 124
    ... to acquire new Pay-TV and Broadband subscribers through third parties and our direct sales distribution channel. Subscriber acquisition costs include the following line items from our Consolidated Statements of Operations and Comprehensive Income (Loss): x x "Cost of sales - subscriber promotion...

  • Page 125
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Deferred Cost of Sales On May 22, 2013, we launched a promotion whereby qualifying new Pay-TV subscribers may choose either an Apple® iPad® 2 or programming credits when they, among other things, commit to a two-year ...

  • Page 126
    ...272,167 38,761 Employee benefits paid in Class A common stock...24,230 22,280 24,804 Satellites and other assets financed under capital lease obligations...1,070 5,857 10,548 Assets contributed from EchoStar to DISH Digital Holding LLC...44,712 - 5. Other Comprehensive Income (Loss) The following...

  • Page 127
    ... (Loss) Balance as of December 31, 2011...Current period activity...Tax (expense) benefit...Balance as of December 31, 2012...Current period activity...Tax (expense) benefit...Balance as of December 31, 2013... Total 82,043 119,652 (12,892) $ 188,803 (24,215) 9,284 $ 173,872 $ $ $ 6. Marketable...

  • Page 128
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Current Marketable Investment Securities - VRDNs Variable rate demand notes ("VRDNs") are long-term floating rate municipal bonds with embedded put options that allow the bondholder to sell the security at par plus ...

  • Page 129
    ... securities prior to maturity. Marketable Investment Securities in a Loss Position The following table reflects the length of time that the individual securities, accounted for as available-for-sale, have been in an unrealized loss position, aggregated by investment category. As of December 31, 2012...

  • Page 130
    ...securities, our evaluation uses, among other things, the terms of the underlying instruments, the credit ratings of the issuers, current market conditions, and other relevant factors. Based on these factors, we assess the risk of realizing expected cash flows and we apply an observable discount rate...

  • Page 131
    ... 31, 2013 2012 2011 (In thousands) $ 157,444 $ 120,558 $ 14,313 26,371 126,932 78,847 (1,919) (2,819) $ 384,856 1,331 99,445 (49,020) 1,383 173,697 263 10,000 (16,557) 221 $ 8,240 Other Income (Expense): Marketable investment securities - gains (losses) on sales/exchanges...Marketable investment...

  • Page 132
    ...In Years) Equipment leased to customers...EchoStar I...EchoStar VII...EchoStar X...EchoStar XI...EchoStar XIV...EchoStar XV...D1...T1...Satellites acquired under capital lease agreements...Furniture, fixtures, equipment and other...Buildings and improvements...Land...Construction in progress...Total...

  • Page 133
    ...912,203 Equipment leased to customers...Satellites...Buildings, furniture, fixtures, equipment and other (1)...148 degree orbital location (2)...Total depreciation and amortization... (1) During the second quarter 2013, we ceased operations of our TerreStar Mobile Satellite Service ("MSS") business...

  • Page 134
    ...118.7 129 NA NA 2015 110 15 (1) See Note 20 for further discussion of our Related Party Transactions with EchoStar. (2) During the fourth quarter 2012, the estimated useful life of these satellites was extended from 12 years to 15 years on a prospective basis based on management's assessment of...

  • Page 135
    ... beam technology designed for, among other things, HD programming. During October 2013, we entered into an agreement with ArianeSpace S.A. for launch services for this satellite, which is expected to be launched during 2015. Satellite Anomalies Operation of our DISH branded pay-TV service requires...

  • Page 136
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued In the event of a failure or loss of any of our satellites, we may need to acquire or lease additional satellite capacity or relocate one of our other satellites and use it as a replacement for the failed or lost ...

  • Page 137
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued On May 31, 2012, the International Bureau of the FCC announced the termination of our license for use of the 148 degree orbital location associated with our DISH segment. We had not had a satellite positioned at the 148 ...

  • Page 138
    ... to us. On March 9, 2012, we completed the DBSD Transaction and the TerreStar Transaction, pursuant to which we acquired, among other things, certain satellite assets and wireless spectrum licenses held by DBSD North America and TerreStar. In addition, during the fourth quarter 2011, we and Sprint...

  • Page 139
    ... to support corporate administrative costs, and other issues impacting the store-level financial performance of our company-owned domestic retail stores. These factors, among others, previously led us to close a significant number of company-owned domestic retail stores during 2012 and 2013. On...

  • Page 140
    ...limitations on the ability of DISH DBS and its restricted subsidiaries to: x x x x x x x incur additional indebtedness or enter into sale and leaseback transactions; pay dividends or make distributions on DISH DBS' capital stock or repurchase DISH DBS' capital stock; make certain investments; create...

  • Page 141
    ... Operations and Comprehensive Income (Loss). 4 5/8% Senior Notes due 2017 On May 16, 2012, we issued $900 million aggregate principal amount of our five-year, 4 5/8% Senior Notes due July 15, 2017 at an issue price of 100.0%. Interest accrues at an annual rate of 4 5/8% and is payable semi-annually...

  • Page 142
    ...thereon, to the date of repurchase. 4 1/4% Senior Notes due 2018 On April 5, 2013, we issued $1.2 billion aggregate principal amount of our five-year, 4 1/4% Senior Notes due April 1, 2018 at an issue price of 100%. Interest accrues at an annual rate of 4 1/4% and is payable semi-annually in cash in...

  • Page 143
    ... on the ability of DISH DBS and its restricted subsidiaries to: x x x x x x x incur additional debt; pay dividends or make distributions on DISH DBS' capital stock or repurchase DISH DBS' capital stock; make certain investments; create liens or enter into sale and leaseback transactions; enter...

  • Page 144
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued 5 1/8% Senior Notes due 2020 On April 5, 2013, we issued $1.1 billion aggregate principal amount of our seven-year, 5 1/8% Senior Notes due May 1, 2020 at an issue price of 100%. Interest accrues at an annual rate of 5 ...

  • Page 145
    ... 15, 2022 at an issue price of 100.0%. Interest accrues at an annual rate of 5 7/8% and is payable semi-annually in cash, in arrears on January 15 and July 15 of each year. On July 26, 2012, we issued an additional $1.0 billion aggregate principal amount of our ten-year, 5 7/8% Senior Notes due July...

  • Page 146
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued 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 5 7/8% Senior Notes at a purchase price equal to 101% of the ...

  • Page 147
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Interest on Long-Term Debt Annual Debt Service Requirements (In thousands) $ 66,250 $ 58,125 $ 106,875 $ 41,625 $ 51,000 $ 110,250 $ 56,375 $ 135,000 $ 117,500 $ 75,000 Semi-Annual Payment Dates 6 5/8% Senior Notes due ...

  • Page 148
    ..., 2013 are as follows (in thousands): For the Years Ended December 31, 2014...$ 78,158 2015...76,007 2016...76,007 2017...76,007 2018...75,982 Thereafter...162,331 Total minimum lease payments...544,492 Less: Amount representing lease of the orbital location and estimated executory costs (primarily...

  • Page 149
    ...: For the Years Ended December 31, 2013 2012 2011 (In thousands) Current (provision) benefit: Federal...$ State...Foreign...Total from continuing operations...Deferred (provision) benefit: Federal...State...Decrease (increase) in valuation allowance...Total from continuing operations...Total benefit...

  • Page 150
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued The actual tax provisions for 2013, 2012 and 2011 reconcile to the amounts computed by applying the statutory Federal tax rate to income before taxes as follows: For the Years Ended December 31, 2013 2012 2011 % of pre-...

  • Page 151
    ... we are currently authorized to repurchase up to $1.0 billion of outstanding shares of our Class A common stock through and including December 31, 2014. As of December 31, 2013, we may repurchase up to $1.0 billion under this plan. During the years ended December 31, 2013, 2012 and 2011, there were...

  • Page 152
    ...14, 2012. On December 1, 2011, we paid a cash dividend of $2.00 per share, or approximately $893 million, on our outstanding Class A and Class B common stock to shareholders of record at the close of business on November 17, 2011. 14. Employee Benefit Plans Employee Stock Purchase Plan Our employees...

  • Page 153
    ...reflects the 2012 Stock Option Adjustment. On January 1, 2008, we completed the distribution of our technology and set-top box business and certain infrastructure assets (the "Spin-off") into a separate publicly-traded company, EchoStar. In connection with the Spin-off, each DISH Network stock award...

  • Page 154
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Exercise prices for stock options outstanding and exercisable as of December 31, 2013 were as follows: Options Outstanding Number WeightedWeightedOutstanding Average as of Remaining Average Exercise December 31, ...

  • Page 155
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Based on the closing market price of our Class A common stock on December 31, 2013, the aggregate intrinsic value of our stock options was as follows: As of December 31, 2013 Options Options Outstanding Exercisable (In ...

  • Page 156
    ... recorded non-cash, stock-based compensation expense for the year ended December 31, 2013, as indicated in the table below titled "Non-Cash, Stock-Based Compensation Expense Recognized." Other Employee Performance Awards. In addition to the above long-term, performance stock incentive plans, we have...

  • Page 157
    ... other company-specific subscriber, operational and/or financial goals was not probable as of December 31, 2013, that assessment could change in the future. The non-cash, stock-based compensation expense associated with these awards was as follows: For the Years Ended December 31, 2013 2012 2011 (In...

  • Page 158
    ... 2011, we paid a $1.00 and a $2.00 cash dividend per share on our outstanding Class A and Class B common stock, respectively. While we currently do not intend to declare additional dividends on our common stock, we may elect to do so from time to time. Accordingly, the dividend yield percentage used...

  • Page 159
    ... or contract for the construction, launch or lease of additional satellites. On February 20, 2014, we entered into agreements with EchoStar to implement a transaction pursuant to which, among other things: (i) on March 1, 2014, we will transfer to EchoStar and Hughes Satellite Systems Corporation...

  • Page 160
    ... 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...

  • Page 161
    ...2014 purchase obligations primarily consist of binding purchase orders for receiver systems and related equipment, digital broadcast operations, satellite and transponder leases, engineering services, and products and services related to the operation of our DISH branded pay-TV service. Our purchase...

  • Page 162
    ... extent we are successful in growing our Pay-TV subscriber base. In addition, our margins may face further downward pressure from price increases and the renewal of long-term pay-TV programming contracts on less favorable pricing terms. Rent Expense Total rent expense for operating leases related to...

  • Page 163
    ...Hopper and Joey set-top boxes infringe the 233 patent. On the same day, CRFD filed similar complaints against AT&T Inc., Comcast Corp., DirecTV, Time Warner Cable Inc., Cox Communications, Inc., Level 3 Communications, Inc., Akamai Technologies, Inc., Cablevision Systems Corp. and Limelight Networks...

  • Page 164
    ... calls to market or promote its goods or services for five years, and enjoin DISH Network L.L.C. from accepting activations or sales from certain existing independent third-party retailers and from certain new independent third-party retailers, except under certain circumstances. We have also filed...

  • Page 165
    ... subsidiary DISH Network L.L.C. filed a lawsuit against ESPN, Inc., ESPN Classic, Inc., ABC Cable Networks Group, Soapnet L.L.C. and International Family Entertainment (collectively, "ESPN") for breach of contract in New York State Supreme Court. Our complaint alleges that ESPN failed to provide us...

  • Page 166
    ... 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...

  • Page 167
    ... disclosed in our public filings, L-Band Acquisition, LLC ("LBAC"), our 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...

  • Page 168
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued On October 29, 2013, the Bankruptcy Court dismissed all of the claims against LBAC and us in Harbinger's complaint in their entirety, but granted leave for LightSquared to file its own complaint in intervention. On ...

  • Page 169
    ...in which it added new claims against us alleging infringement of additional DISH products. On May 1, 2013, Norman filed a fifth amended complaint in the 2011 Action, in which it named Mercedes-Benz USA, LLC, Volkswagen Group of America, Inc., Xerox Corporation, ZTE (USA) Inc., and ZTE Solutions, Inc...

  • Page 170
    ..., leaving us 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...

  • Page 171
    ...Companies, Inc., Yahoo! Inc., Wal-Mart Stores, Inc., Vudu, Inc. and ESPN Internet Ventures as defendants. Preservation Technologies alleges that our BLOCKBUSTER On Demand, DISH branded pay-TV and DISH Online services and our Hopper and Joey® settop boxes infringe United States Patent Nos. 5,813,014...

  • Page 172
    ... LLC ("Voom") filed a lawsuit against our wholly-owned subsidiary DISH Network L.L.C., in New York Supreme Court, alleging breach of contract and other claims arising from our termination of the affiliation agreement governing carriage of certain Voom HD channels on the DISH branded payTV service...

  • Page 173
    ... the MVDDS Licenses using a market-based approach and a probability-weighted discounted cash flow analysis, respectively. Based on market data and similar agreements we have with other content providers, we allocated $54 million of the payments under the multi-year affiliation agreement to the fair...

  • Page 174
    ... of December 31, 2013. The DISH branded pay-TV service consists of FCC licenses authorizing us to use DBS and FSS spectrum, our satellites, receiver systems, third-party broadcast operations, customer service facilities, a leased fiber network, in-home service and call center operations, and certain...

  • Page 175
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued As of December 31, 2013 2012 (In thousands) Total assets: DISH...Wireless...Eliminations...Total assets from continuing operations...Assets from discontinued operations...Total assets...$ 19,713,853 4,625,505 (4,041,934)...

  • Page 176
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Geographic Information. Revenues are attributed to geographic regions based upon the location where the products are delivered and services are provided. All revenue from continuing operations were in the United States. ...

  • Page 177
    ... 1, 2013 for an additional one-year period until January 1, 2014. Effective June 15, 2013, the Management Services Agreement was terminated by EchoStar. EchoStar made payments to us based upon an allocable portion of the personnel costs and expenses incurred by us with respect to any such officers...

  • Page 178
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued benefits). These allocations were based upon the estimated percentages of time spent by our executive officers performing services for EchoStar under the Management Services Agreement. EchoStar also reimbursed us for ...

  • Page 179
    ... 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...

  • Page 180
    ... 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...

  • Page 181
    DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued In connection with the 103 Spectrum Development Agreement, during May 2012, EchoStar also entered into a tenyear service agreement with Ciel pursuant to which EchoStar leases certain satellite capacity from Ciel on the ...

  • Page 182
    ... agreement with EchoStar pursuant to which we receive, among other things, certain remote DVR management services. The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services. This agreement has a term of five years...

  • Page 183
    ...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. For the years ended December 31, 2013, 2012 and 2011, we purchased set-top boxes...

  • Page 184
    ... 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 us and EchoStar based on historical sales of...

  • Page 185
    ... satellite Internet service (the "Service"). dishNET Satellite Broadband pays HNS a monthly per subscriber wholesale service fee for the Service based upon the subscriber's service level, and, beginning January 1, 2014, certain volume subscription thresholds. The Distribution Agreement also provides...

  • Page 186
    ...In addition, we purchase certain broadband equipment from EchoStar under the 2012 Receiver Agreement, as previously discussed. In addition, see Note 21 for further information regarding the Distribution Agreement. As part of the Satellite and Tracking Stock Transaction, on February 20, 2014, dishNET...

  • Page 187
    ... 23,417 $ 21,930 Discontinued Operations Blockbuster. On April 26, 2011, we completed the Blockbuster Acquisition. During the second quarter 2011, EchoStar acquired Hughes. Blockbuster purchased certain broadband products and services from HNS pursuant to an agreement that was entered into prior to...

  • Page 188
    ... in "Additional paid-in capital" on our Consolidated Balance Sheet. The Tracking Stock will be accounted for on a cost basis. The Satellite and Tracking Stock Transaction is further described below: Transaction Agreement. On February 20, 2014, DISH Operating L.L.C. ("DOLLC") and DISH Network...

  • Page 189
    ...., Time Warner Cable, Inc., and Verizon Communications. Although the companies included in the industry peer group were selected because of similar industry characteristics, they are not entirely representative of our business. Total Return Analysis DISH Network Corporation NASDAQ Composite - Total...

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    DISH A Nasdaq-100 Company

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