Dish Network 2014 Annual Report Download - page 142

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-36
Capital Lease Obligations
Anik F3. Anik F3, an FSS satellite, was launched and commenced commercial operation during April 2007. This
satellite is accounted for as a capital lease and depreciated over the term of the satellite service agreement. We have
leased 100% of the Ku-band capacity on Anik F3 for a period of 15 years.
Ciel II. Ciel II, a Canadian DBS satellite, was launched in December 2008 and commenced commercial operation
during February 2009. This satellite is accounted for as a capital lease and depreciated over the term of the satellite
service agreement. We have leased 100% of the capacity on Ciel II for an initial 10 year term.
As of December 31, 2014 and 2013, we had $500 million capitalized for the estimated fair value of satellites
acquired under capital leases included in “Property and equipment, net,” with related accumulated depreciation of
$279 million and $236 million, respectively. In our Consolidated Statements of Operations and Comprehensive
Income (Loss), we recognized $43 million, $43 million and $43 million in depreciation expense on satellites
acquired under capital lease agreements during the years ended December 31, 2014, 2013 and 2012, respectively.
Future minimum lease payments under the capital lease obligations, together with the present value of the net
minimum lease payments as of December 31, 2014 are as follows (in thousands):
For the Years Ended December 31,
2015.............................................................................................................................................................. 77,089$
2016.............................................................................................................................................................. 76,809
2017.............................................................................................................................................................. 76,007
2018.............................................................................................................................................................. 75,982
2019.............................................................................................................................................................. 50,331
Thereafter..................................................................................................................................................... 112,000
Total minimum lease payments.................................................................................................................... 468,218
Less: Amount representing lease of the orbital location and estimated executory costs (primarily
insurance and maintenance) including profit thereon, included in total minimum lease payments............. (220,883)
Net minimum lease payments....................................................................................................................... 247,335
Less: Amount representing interest.............................................................................................................. (52,421)
Present value of net minimum lease payments.............................................................................................. 194,914
Less: Current portion................................................................................................................................... (28,378)
Long-term portion of capital lease obligations............................................................................................. 166,536$
The summary of future maturities of our outstanding long-term debt as of December 31, 2014 is included in the
commitments table in Note 16.
12. Income Taxes and Accounting for Uncertainty in Income Taxes
Income Taxes
Our income tax policy is to record the estimated future tax effects of temporary differences between the tax bases of
assets and liabilities and amounts reported on our Consolidated Balance Sheets, as well as probable operating loss, tax
credit and other carryforwards. Deferred tax assets are offset by valuation allowances when we believe it is more
likely than not that net deferred tax assets will not be realized. We periodically evaluate our need for a valuation
allowance. Determining necessary valuation allowances requires us to make assessments about historical financial
information as well as the timing of future events, including the probability of expected future taxable income and
available tax planning opportunities.
We file consolidated tax returns in the U.S. The income taxes of domestic and foreign subsidiaries not included in the
U.S. tax group are presented in our consolidated financial statements based on a separate return basis for each tax
paying entity.