Dish Network 2015 Annual Report Download - page 93

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Our cash, cash equivalents and current marketable investment securities had an average annual rate of return for the year
ended December 31, 2015 of 0.4%. A change in interest rates would affect our future annual interest income from this
portfolio, since funds would be re-invested at different rates as the instruments mature. A hypothetical 10% decrease in
average interest rates during 2015 would result in a decrease of approximately $1 million in annual interest income.
Strategic Marketable Investment Securities
As of December 31, 2015, we held debt and equity investments in public companies with a fair value of $259 million for
strategic and financial purposes, which are highly speculative and have experienced and continue to experience
volatility. As of December 31, 2015, our strategic investment portfolio consisted of securities of a small number of
issuers, and as a result the value of that portfolio depends, among other things, on the performance of those issuers. The
fair value of certain of the debt and equity securities in our investment portfolio can be adversely impacted by, among
other things, the issuers’ respective performance and ability to obtain any necessary additional financing on acceptable
terms, or at all.
The fair value of our strategic and financial debt and equity investments can be significantly impacted by the risk of
adverse changes in securities markets generally, as well as risks related to the performance of the companies whose
securities we have invested in, risks associated with specific industries, and other factors. These investments are subject
to significant fluctuations in fair value due to the volatility of the securities markets and of the underlying businesses. In
general, the debt instruments held in our strategic marketable investment securities portfolio are not significantly
impacted by interest rate fluctuations as their value is more closely related to factors specific to the underlying business.
A hypothetical 10% adverse change in the price of our public strategic debt and equity investments would result in a
decrease of approximately $26 million in the fair value of these investments.
Restricted Cash, Cash Equivalents and Marketable Investment Securities
Restricted Cash, Cash Equivalents and Marketable Investment Securities
As of December 31, 2015, we had $82 million of restricted cash and marketable investment securities invested in:
(a) cash; (b) money market funds; (c) debt instruments of the United States Government and its agencies; and/or
(d) commercial paper with maturities of 90 days or less and rated in one of the four highest rating categories by at least
two nationally recognized statistical rating organizations; and/or (e) instruments with similar risk, duration and credit
quality characteristics to the commercial paper described above. Based on our December 31, 2015 investment portfolio,
a hypothetical 10% increase in average interest rates would not have a material impact in the fair value of our restricted
cash and marketable investment securities.
Long-Term Debt
As of December 31, 2015, we had long-term debt of $13.631 billion, excluding capital lease obligations and unamortized
deferred financing costs and debt discounts, on our Consolidated Balance Sheets. We estimated the fair value of this
debt to be approximately $13.267 billion using quoted market prices for our publicly traded debt, which constitutes
approximately 99% of our debt. The fair value of our debt is affected by fluctuations in interest rates. A hypothetical
10% decrease in assumed interest rates would increase the fair value of our debt by approximately $346 million. To the
extent interest rates increase, our future costs of financing would increase at the time of any future financings. As of
December 31, 2015, all of our long-term debt consisted of fixed rate indebtedness.
Derivative Financial Instruments
From time to time, we invest in speculative financial instruments, including derivatives. As of December 31, 2015, we
held derivative financial instruments indexed to the trading price of common equity securities with a fair value of $557
million. The fair value of the derivative financial instruments is dependent on the trading price of the indexed common
equity which may be volatile and vary depending on, among other things, the issuer’s financial and operational
performance and market conditions. A hypothetical 10% adverse change in the market value of the underlying common
equity securities would result in a decrease of approximately $56 million in the fair value of these investments.