Dish Network 2015 Annual Report Download - page 117

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-13
carrying amount or fair value less costs to sell. The carrying amount of a long-lived asset or asset group is
considered impaired when the anticipated undiscounted cash flows from such asset or asset group is less than its
carrying amount. In that event, a loss is recorded in “Impairment of long-lived assets” on our Consolidated
Statements of Operations and Comprehensive Income (Loss) based on the amount by which the carrying amount
exceeds the fair value of the long-lived asset or asset group. Fair value, using the income approach, is determined
primarily using a discounted cash flow model that uses the estimated cash flows associated with the asset or asset
group under review, discounted at a rate commensurate with the risk involved. Fair value, utilizing the cost
approach, is determined based on the replacement cost of the asset reduced for, among other things, depreciation and
obsolescence. Fair value, utilizing the market approach, benchmarks the fair value against the carrying amount. See
Note 8 for further information.
DBS Satellites. We currently evaluate our DBS satellite fleet for impairment as one asset group whenever events or
changes in circumstances indicate that its carrying amount may not be recoverable. We do not believe any
triggering event has occurred which would indicate impairment as of December 31, 2015.
AWS-4 Satellites. We currently evaluate our AWS-4 satellite fleet for impairment whenever events or changes in
circumstances indicate that its carrying amount may not be recoverable. During the second quarter 2013, we wrote
down the net book value of the T2 and D1 satellites to their fair value as of June 30, 2013 and recorded a $438
million impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss). For
the year ended December 31, 2015, we further wrote down the net book value of the D1 satellite and related ground
equipment to its fair value as of December 31, 2015 and recorded a $123 million impairment charge in “Impairment
of long-lived assets” on our Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 8
for further information.
Indefinite-Lived Intangible Assets and Goodwill
We do not amortize indefinite-lived intangible assets and goodwill but test these assets for impairment annually,
during the fourth quarter or more often if indicators of impairment arise. Intangible assets that have finite lives are
amortized over their estimated useful lives and tested for impairment as described above for long-lived assets. Our
intangible assets with indefinite lives primarily consist of FCC licenses. Generally, we have determined that our
FCC licenses have indefinite useful lives due to the following:
x FCC licenses are a non-depleting asset;
x existing FCC licenses are integral to our business segments and will contribute to cash flows indefinitely;
x replacement DBS satellite applications are generally authorized by the FCC subject to certain conditions,
without substantial cost under a stable regulatory, legislative and legal environment;
x maintenance expenditures to obtain future cash flows are not significant;
x FCC licenses are not technologically dependent; and
x we intend to use these assets indefinitely.
DBS FCC Licenses. We combine all of our indefinite-lived DBS FCC licenses that we currently utilize or plan to
utilize in the future into a single unit of accounting. For 2015, management performed a qualitative assessment to
determine whether it is more likely than not that the fair value of the DBS FCC licenses exceeds its carrying amount.
In our assessment, we considered several qualitative factors, including, among others, overall financial performance,
industry and market considerations, and relevant company specific events. In contemplating all factors in their
totality, we concluded that it is more likely than not that the fair value of the DBS FCC licenses exceeds its carrying
amount. As such, no further analysis was required.