Dish Network 2015 Annual Report Download - page 84

74
$25 million, $51 million and $77 million, respectively, of which $23 million, $48 million and $74 million was for new
broadband customer equipment.
“Net cash outflows from investing activities from continuing operations” from 2014 to 2015 increased by $7.090 billion.
The year ended December 31, 2015 was negatively impacted by cash outflows associated with our non-controlling
investments in the Northstar Entities and the SNR Entities related to the AWS-3 Licenses of $8.970 billion and
“Purchases of property and equipment (including capitalized interest related to FCC authorizations)” of $1.114 billion,
partially offset by net sales of marketable investment securities of $1.607 billion and a refund from the FCC of our $400
million upfront payment related to the AWS-3 Auction in 2015. The year ended December 31, 2014 was negatively
impacted by purchases of H Block wireless spectrum licenses of $1.343 billion, AWS-3 Auction deposits of $1.320
billion and “Purchases of property and equipment (including capitalized interest related to FCC authorizations)” of
$1.216 billion, partially offset by net sales of marketable investment securities of $2.935 billion.
The decrease in “Net cash outflows from investing activities from continuing operations” from 2013 to 2014 of $2.051
billion primarily related to an increase in net sales of marketable investment securities of $4.291 billion, partially offset
by purchases of H Block wireless spectrum licenses of $1.343 billion during 2014 compared to $328 million during 2013
and $1.320 billion during 2014 related to AWS-3 auction deposits.
Cash flows from financing activities from continuing operations. Our financing activities generally include net
proceeds related to the issuance of long-term debt, cash used for the repurchase, redemption or payment of long-term
debt and capital lease obligations, dividends paid on our Class A and Class B common stock and repurchases of our
Class A common stock. For the year ended December 31, 2015, we reported “Net cash outflows from financing
activities from continuing operations” of $413 million. For the years ended December 31, 2014 and 2013, we reported
“Net cash inflows from financing activities from continuing operations” of $980 million and $1.852 billion, respectively.
The net cash outflows in 2015 primarily related to the redemption of our 7 3/4% Senior Notes due 2015 of $650 million,
partially offset by $204 million in aggregate capital contributions to Northstar Spectrum and SNR HoldCo from
Northstar Manager and SNR Management, respectively.
The net cash inflows in 2014 primarily resulted from net proceeds of $1.992 billion from the issuance in November 2014
of our 5 7/8% Senior Notes due 2024, partially offset by the repurchases and redemption of our 6 5/8% Senior Notes due
2014 of $1.0 billion and repurchases of our 7 3/4% Senior Notes due 2015 of $100 million in open market trades.
The net cash inflows in 2013 primarily resulted from net proceeds of $2.292 billion from the issuance in April 2013 of
our 4 1/4% Senior Notes due 2018 and 5 1/8% Senior Notes due 2020, partially offset by the repurchases and redemption
of our 7% Senior Notes due 2013 of $500 million.
Operational Liquidity
We make general investments in property such as satellites, set-top boxes, information technology and facilities that
support our overall business. Moreover, since we are primarily a subscriber-based company, we also make subscriber-
specific investments to acquire new subscribers and retain existing subscribers. While the general investments may be
deferred without impacting the business in the short-term, the subscriber-specific investments are less discretionary. Our
overall objective is to generate sufficient cash flow over the life of each subscriber to provide an adequate return against
the upfront investment. Once the upfront investment has been made for each subscriber, the subsequent cash flow is
generally positive, but there can be no assurances that over time we will recoup or earn a return on the upfront
investment.
There are a number of factors that impact our future cash flow compared to the cash flow we generate at a given point in
time. The first factor is our Pay-TV churn rate and how successful we are at retaining our current Pay-TV subscribers.
As we lose Pay-TV subscribers from our existing base, the positive cash flow from that base is correspondingly reduced.
The second factor is how successful we are at maintaining our subscriber-related margins. To the extent our
“Subscriber-related expenses” grow faster than our “Subscriber-related revenue,” the amount of cash flow that is
generated per existing subscriber is reduced. The third factor is the rate at which we acquire new subscribers. The faster