Dish Network 2015 Annual Report Download - page 178

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-74
with accounting principles that apply to transfers of assets between companies under common control, we recorded
EchoStar’s net book value of this asset of $20 million in “Other noncurrent assets, net” on our Consolidated Balance
Sheets and recorded the amount in excess of EchoStar’s net book value of $3 million as a capital distribution.
Unless earlier terminated under the terms and conditions of the DISH 103 Spectrum Development Agreement, the
term generally will continue for the duration of the 103 Spectrum Rights.
In connection with the 103 Spectrum Development Agreement, during May 2012, EchoStar also entered into a ten-
year service agreement with Ciel pursuant to which EchoStar leases certain satellite capacity from Ciel on the SES-3
satellite at the 103 degree orbital location (the “103 Service Agreement”). During June 2013, we and EchoStar
entered into an agreement pursuant to which we lease certain satellite capacity from EchoStar on the SES-3 satellite
(the “DISH 103 Service Agreement”). Under the terms of the DISH 103 Service Agreement, we make certain
monthly payments to EchoStar through the service term. Unless earlier terminated under the terms and conditions
of the DISH 103 Service Agreement, the initial service term will expire on the earlier of: (i) the date the SES-3
satellite fails; (ii) the date the transponder(s) on which service was being provided under the agreement fails; or
(iii) ten years following the actual service commencement date. Upon in-orbit failure or end of life of the SES-3
satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a
replacement satellite. There can be no assurance that we will exercise our option to receive service on a replacement
satellite.
TT&C Agreement. Effective January 1, 2012, we entered into a telemetry, tracking and control (“TT&C”)
agreement pursuant to which we receive TT&C services from EchoStar for certain satellites for a period ending on
December 31, 2016 (the “2012 TT&C Agreement”). The fees for services provided under the 2012 TT&C
Agreement are calculated at either: (i) a fixed fee; or (ii) cost plus a fixed margin, which will vary depending on the
nature of the services provided. We are able to terminate the 2012 TT&C Agreement for any reason upon 60 days
notice.
DBSD North America Agreement. On March 9, 2012, we completed the DBSD Transaction. During the second
quarter 2011, EchoStar acquired Hughes. Prior to our acquisition of DBSD North America and EchoStar’s
acquisition of Hughes, DBSD North America and HNS entered into an agreement pursuant to which HNS provides,
among other things, hosting, operations and maintenance services for DBSD North America’s satellite gateway and
associated ground infrastructure. This agreement will expire on February 15, 2017.
TerreStar Agreement. On March 9, 2012, we completed the TerreStar Transaction. Prior to our acquisition of
substantially all the assets of TerreStar and EchoStar’s acquisition of Hughes, TerreStar and HNS entered into
various agreements pursuant to which HNS provides, among other things, hosting, operations and maintenance
services for TerreStar’s satellite gateway and associated ground infrastructure. These agreements generally may be
terminated by us at any time for convenience.
DISHOnline.com Services Agreement. Effective January 1, 2010, we entered into a two-year agreement with
EchoStar pursuant to which we receive certain services associated with an online video portal. The fees for the
services provided under this services agreement depend, among other things, upon the cost to develop and operate
such services. We have the option to renew this agreement for successive one year terms and the agreement may be
terminated for any reason upon at least 120 days notice to EchoStar. In November 2015, we exercised our right to
renew this agreement for a one-year period ending on December 31, 2016.
Sling TV Holding. Effective July 1, 2012, we and EchoStar formed Sling TV Holding, which was owned two-thirds
by us and one-third by EchoStar and was consolidated into our financial statements beginning July 1, 2012. Sling
TV Holding was formed to develop and commercialize certain advanced technologies. At that time, we, EchoStar
and Sling TV Holding entered into the following agreements with respect to Sling TV Holding: (i) a contribution
agreement pursuant to which we and EchoStar contributed certain assets in exchange for our respective ownership
interests in Sling TV Holding; (ii) a limited liability company operating agreement (the “Operating Agreement”),
which provides for the governance of Sling TV Holding; and (iii) a commercial agreement (the “Commercial
Agreement”) pursuant to which, among other things, Sling TV Holding has: (a) certain rights and corresponding
obligations with respect to its business; and (b) the right, but not the obligation, to receive certain services from us