Dish Network 2008 Annual Report Download - page 110

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-28
EchoStar XII. EchoStar XII was designed to operate 13 DBS transponders at 270 watts per channel in
CONUS mode, or 22 spot beams using a combination of 135 and 65 watt TWTAs. We currently operate
the satellite in spot beam/CONUS hybrid mode. EchoStar XII has a total of 24 solar array circuits,
approximately 22 of which are required to assure full power for the original minimum operational life of
the satellite. Prior to 2008, eight solar array circuits on EchoStar XII have experienced anomalous
behavior resulting in both temporary and permanent solar array circuit failures. Although the design life of
the satellite has not been affected, these circuit failures have resulted in a reduction in power to the satellite
which will preclude us from using the full complement of transponders on EchoStar XII for the operational
life of the satellite.
AMC-14. In connection with the Spin-off, we distributed our AMC-14 satellite lease agreement with SES
Americom (“SES”) to EchoStar with the intent to lease the entire capacity of the satellite from EchoStar.
During March 2008, AMC-14 experienced a launch anomaly and failed to reach its intended orbit. SES
subsequently declared the AMC-14 satellite a total loss due to a lack of viable options to reposition the
satellite to its proper geostationary orbit. We did not incur any financial liability as a result of the AMC-14
satellite being declared a total loss.
Long-Lived Satellite Assets. Based on the guidance under SFAS 144, we evaluate our satellite fleet for
recoverability as one asset group. While certain of the anomalies discussed above, and previously
disclosed, may be considered to represent a significant adverse change in the physical condition of an
individual satellite, based on the redundancy designed within each satellite and considering the asset
grouping, these anomalies (none of which caused a loss of service to subscribers for an extended period)
are not considered to be significant events that would require evaluation for impairment recognition
pursuant to the guidance under SFAS 144. Unless and until a specific satellite is abandoned or otherwise
determined to have no service potential, the net carrying amount related to the satellite would not be
written off.
8. FCC Authorizations, Intangible Assets and Goodwill
During 2007, we participated in an FCC auction for licenses in the 1.4 GHz band and were the winning bidder
for several licenses with total winning bids of $57 million. We contributed these licenses to EchoStar in the
Spin-off.
During 2008, we paid $712 million to acquire certain 700 MHz wireless licenses, which were granted to us
by the FCC in February 2009. The 700 MHz spectrum is being returned by television broadcasters when
they move to digital from analog signals by June 12, 2009. We will be required to make significant
additional investments or partner with others to commercialize these licenses and satisfy FCC build-out
requirements.
As of December 31, 2008 and 2007, our identifiable intangibles subject to amortization consisted of the
following:
Intangible Accumulated Intangible Accumulated
Assets Amortization Assets Amortization
Contract based........................................ -$ -$ 192,845$ (60,754)$
Customer and reseller relationships........ - - 96,898 (70,433)
Technology-based................................... 5,814 (679) 69,797 (9,478)
Total .................................................... 5,814$ (679)$ 359,540$ (140,665)$
As of December 31,
(In thousands)
2008 2007
Amortization of these intangible assets, recorded on a straight line basis over an average finite useful life of
five years, was $5 million, $40 million and $37 million for the years ended December 31, 2008, 2007 and
2006, respectively.