Dish Network 2015 Annual Report Download - page 86

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Security Systems
Increases in theft of our signal or our competitors’ signals could, in addition to reducing gross new subscriber
activations, also cause subscriber churn to increase. We use Security Access Devices in our DBS receiver systems to
control access to authorized programming content. Our signal encryption has been compromised in the past and may be
compromised in the future even though we continue to respond with significant investment in security measures, such as
Security Access Device replacement programs and updates in security software, that are intended to make signal theft
more difficult. It has been our prior experience that security measures may only be effective for short periods of time or
not at all and that we remain susceptible to additional signal theft. We expect that future replacements of Security
Access Devices will be necessary to keep our system secure. We cannot ensure that we will be successful in reducing or
controlling theft of our programming content and we may incur additional costs in the future if our system’s security is
compromised.
Stock Repurchases
Our Board of Directors previously authorized stock repurchases of up to $1.0 billion of our outstanding Class A common
stock through and including December 31, 2015. On November 3, 2015, our Board of Directors extended this
authorization such that we are currently authorized to repurchase up to $1.0 billion of our outstanding Class A common
stock through and including December 31, 2016. As of December 31, 2015, we may repurchase up to $1.0 billion of our
Class A common stock under this program. During the years ended December 31, 2015, 2014 and 2013, there were no
repurchases of our Class A common stock.
Covenants and Restrictions Related to our Senior Notes
The indentures related to our outstanding senior notes contain restrictive covenants that, among other things, impose
limitations on the ability of DISH DBS Corporation (“DISH DBS”) and its restricted subsidiaries to: (i) incur additional
indebtedness; (ii) enter into sale and leaseback transactions; (iii) pay dividends or make distributions on DISH DBS’
capital stock or repurchase DISH DBS’ capital stock; (iv) make certain investments; (v) create liens; (vi) enter into
certain transactions with affiliates; (vii) merge or consolidate with another company; and (viii) transfer or sell assets.
Should we fail to comply with these covenants, all or a portion of the debt under the senior notes could become
immediately payable. The senior notes also provide that the debt may be required to be prepaid if certain change-in-
control events occur.
As of the date of filing of this Annual Report on Form 10-K, DISH DBS was in compliance with
the covenants.
Other
We are also vulnerable to fraud, particularly in the acquisition of new subscribers. While we are addressing the impact
of subscriber fraud through a number of actions, there can be no assurance that we will not continue to experience fraud,
which could impact our subscriber growth and churn. Economic weakness may create greater incentive for signal theft,
piracy and subscriber fraud, which could lead to higher subscriber churn and reduced revenue.