Dish Network 2011 Annual Report Download - page 112

Download and view the complete annual report

Please find page 112 of the 2011 Dish Network annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 164

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-18
Marketable Investment Securities
Our marketable investment securities portfolio consists of various debt and equity instruments, all of which are classified
as available-for-sale, except as specified below (see Note 2).
Current Marketable Investment Securities - VRDNs
Variable rate demand notes (“VRDNs”) are long-term floating rate municipal bonds with embedded put options that
allow the bondholder to sell the security at par plus accrued interest. All of the put options are secured by a pledged
liquidity source. Our VRDN portfolio is comprised of investments in many municipalities, which are backed by
financial institutions or other highly rated companies that serve as the pledged liquidity source. While they are classified
as marketable investment securities, the put option allows VRDNs to be liquidated generally on a same day or on a five
business day settlement basis.
Current Marketable Investment Securities - Strategic
Our current strategic marketable investment securities include strategic and financial investments in public companies that
are highly speculative and have experienced and continue to experience volatility. As of December 31, 2011, a significant
portion of our strategic investment portfolio consisted of securities of several issuers, and a significant portion of the value
of that portfolio depends on the value of those issuers.
Current Marketable Investment Securities - Other
Our current marketable investment securities portfolio includes investments in various debt instruments including
corporate and government bonds.
Restricted Cash and Marketable Investment Securities
As of December 31, 2011 and 2010, our restricted marketable investment securities, together with our restricted cash,
included amounts required as collateral for our letters of credit or surety bonds and for litigation (See Note 16).
Noncurrent Marketable Investment Securities – ARS and MBS
We have investments in ARS and MBS which are either classified as available-for-sale securities or are accounted for
under the fair value method. Events in the credit markets have reduced or eliminated current liquidity for certain of our
ARS and MBS investments. As a result, we classify these investments as noncurrent assets, as we intend to hold these
investments until they recover or mature. See below for further discussion on the July 1, 2010 fair value election on
certain ARS investments.
The valuation of our ARS and MBS investments portfolio is subject to uncertainties that are difficult to estimate. Due to
the lack of observable market quotes for identical assets, we utilize analyses that rely on Level 2 and/or Level 3 inputs,
as defined in “Fair Value Measurements.” These inputs include, among other things, observed prices on similar assets
as well as our assumptions and estimates related to the counterparty credit quality, default risk underlying the security
and overall capital market liquidity. These securities were also compared, when possible, to other observable market
data for financial instruments with similar characteristics.