Dish Network 2011 Annual Report Download - page 105

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-11
Long-Lived Assets
We review our long-lived assets and identifiable finite lived intangible assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate our satellite
fleet for recoverability as one asset group. For assets which are held and used in operations, the asset would be impaired
if the carrying value of the asset (or asset group) exceeded its undiscounted future net cash flows. Once an impairment
is determined, the actual impairment is reported as the difference between the carrying value and the fair value as
estimated using discounted cash flows. Assets which are to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell. We consider relevant cash flow, estimated future operating results, trends and
other available information in assessing whether the carrying value of assets are recoverable.
Other Intangible Assets
We do not amortize indefinite lived intangible assets, but test these assets for impairment annually or more often if
indicators of impairment arise. Intangible assets that have finite lives are amortized over their estimated useful lives and
tested for impairment as described above for long-lived assets. Our intangible assets with indefinite lives primarily
consist of FCC licenses. Generally, we have determined that our FCC licenses have indefinite useful lives due to the
following:
x FCC spectrum is a non-depleting asset;
x existing DBS licenses are integral to our business and will contribute to cash flows indefinitely;
x replacement satellite applications are generally authorized by the FCC subject to certain conditions, without
substantial cost under a stable regulatory, legislative and legal environment;
x maintenance expenditures to obtain future cash flows are not significant;
x DBS licenses are not technologically dependent; and
x we intend to use these assets indefinitely.
We combine all of our indefinite lived FCC licenses that we currently utilize or plan to utilize in the future into a single
unit of accounting, except for 700 MHz wireless licenses (see Note 8). The analysis encompasses future cash flows
from satellites transmitting from such licensed orbital locations, including revenue attributable to programming offerings
from such satellites, the direct operating and subscriber acquisition costs related to such programming, and future capital
costs for replacement satellites. Projected revenue and cost amounts include projected subscribers. In conducting our
annual impairment test in 2011, we determined that the estimated fair value of the FCC licenses, calculated using a
discounted cash flow analysis, exceeded their carrying amounts.
700 MHz
In conducting our annual impairment test in 2011 for our 700 MHz wireless licenses, we determined that the estimated
fair value of these licenses, calculated using the market approach, exceeded its carrying amount of $712 million (See
Note 8).