Dish Network 2015 Annual Report Download - page 174

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-70
“Trade accounts receivable”
As of December 31, 2015 and 2014, trade accounts receivable from EchoStar was $23 million and $31 million,
respectively. These amounts are recorded in “Trade accounts receivable” on our Consolidated Balance Sheets.
“Trade accounts payable”
As of December 31, 2015 and 2014, trade accounts payable to EchoStar was $281 million and $252 million,
respectively. These amounts are recorded in “Trade accounts payable” on our Consolidated Balance Sheets.
“Equipment sales and other revenue”
During the years ended December 31, 2015, 2014 and 2013, we received $46 million, $62 million and $45 million,
respectively, for equipment sales, services and other revenue from EchoStar. These amounts are recorded in
“Equipment sales and other revenue” on our Consolidated Statements of Operations and Comprehensive Income
(Loss). The agreements pertaining to these revenues are discussed below.
Remanufactured Receiver and Services Agreement. We entered into a remanufactured receiver and services
agreement with EchoStar pursuant to which EchoStar has the right, but not the obligation, to purchase
remanufactured receivers and accessories from us at cost plus a fixed margin, which varies depending on the nature
of the equipment purchased. In November 2015, we and EchoStar extended this agreement until December 31,
2016.
EchoStar may terminate the remanufactured receiver and services agreement for any reason upon at least 60
days notice to us. We may also terminate this agreement if certain entities acquire us.
Satellite Capacity Leased to EchoStar. Since the Spin-off, we have entered into certain satellite capacity agreements
pursuant to which EchoStar leases certain capacity on certain satellites owned by us. The fees for the services
provided under these satellite capacity agreements depend, among other things, upon the orbital location of the
applicable satellite, the number of transponders that are leased on the applicable satellite and the length of the lease.
The term of each lease is set forth below:
EchoStar XV. During May 2013, we began leasing satellite capacity to EchoStar on EchoStar XV and relocated
the satellite for testing at EchoStar’s Brazilian authorization at the 45 degree orbital location. Effective
March 1, 2014, this lease converted to a month-to-month lease. Both parties have the right to terminate this
lease with 30 days notice. This lease terminated in November 2015 and EchoStar relocated this satellite from
the 45 degree orbital location back to the 61.5 degree orbital location where it currently serves as an in-orbit
spare.
Real Estate Lease Agreements. Since the Spin-off, we have entered into lease agreements pursuant to which we
lease certain real estate to EchoStar. The rent on a per square foot basis for each of the leases is comparable to per
square foot rental rates of similar commercial property in the same geographic areas, and EchoStar is responsible for
its portion of the taxes, insurance, utilities and maintenance of the premises. The term of each lease is set forth
below:
El Paso Lease Agreement. During 2012, we leased certain space at 1285 Joe Battle Blvd., El Paso, Texas to
EchoStar for an initial period ending on August 1, 2015, which also provides EchoStar with renewal options for
four consecutive three-year terms. During the second quarter 2015, EchoStar exercised its first renewal option
for a period ending on August 1, 2018.